Somewhere between Salt Lake City and Grand Junction this January while climbing a scary mountain pass in a four wheel drive it came to us that a way to look at the CEO’s job is as follows:
To determine how much stress the balance sheet of the company and the people that work for it can handle at this time in the company's life.
You may have a different view of it, or a different way to say it that works for you and we would love to hear from you about how you see it, but humor us for a minute.
It appears at times that even at some pretty large companies that the only person who is really thinking about the future of the entire enterprise is the CEO. Everyone else is in their department looking for more resources, and hopefully in the words of Peter Drucker, focused on the next most important task.
What does this mean for you?
It means you need to be relentless in your pursuit of what is true from your direct reports because they may have an inherent bias to keep you on a consistent drip of flattery and fluff. It also means that having a board of directors that can help you think about the company from the outside is vital.
Questions a good board can help you wrestle with are:
• How much debt should we be working with now to grow the business?
• Where are your next threats coming from?
• What innovations are going to allow you to increase your margins?
• Where is your current leadership team in their own personal life cycles?
The rub is that building and maintaining a productive board of directors is a challenge. Too often it is such a hassle that you don’t even have one. CEO’s can often feel like the coach of a professional sports team. The players on the field are your employees, the fans in the stands are the customers, and up in the owner’s box sits the board of directors. Where does the coach stand? Sometimes they stand alone.
Ask yourself the following question: What is the company telling itself right now that we want to be true, that may not actually be true? Many department heads will be talking about growth because they know that is what everyone wants to hear. The challenge is that if the company doesn’t manage its balance sheet and time the growth correctly outside forces can end up owning the business. You may have a growth mandate, but try as we might most of us can’t make water go uphill, so back up your mandate with facts and processes you can trust and measure. This rigor and dialogue can save your business.
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Drew Sanders Blog
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