Riding a Dead Horse (not really)
There are some subjects that are difficult to approach positively. This seems to be one of them.
Every CEO occasionally finds himself or herself riding a dead horse. It could be that new product program that is consistently delayed and where the projected cost to manufacture is much higher than the original estimate. Or that new employee whose performance is so far below what you anticipated three months ago during the final interview. Or it might even be your entire company. Maybe you’re worn out, ready to move on, and have never really created the entity that you envisioned when you founded it.
Regardless of the situation, you feel the right decision in your gut. Your gut understands that you are riding a dead horse and that the only appropriate next step is to dismount.
Contrary to my opening statement, this negative post really does have a silver lining. Dismounting creates a better situation. Killing the new product program frees up resources that can be more profitably applied elsewhere. Terminating or reassigning the failing employee eliminates drag on the organization and allows the individual to find their true niche – either within or outside your organization. Selling your company to a strategic buyer who has the resources or market position to make it a success is good for you, your employees, and probably the overall economy.
The timely dismount can be every bit as potent for your company as any new initiative might be. So, how are your feet stuck in the stirrups?
Remnant of 1990s war in Croatia
I recently returned from a journey to Eastern Europe. I briefly visited towns in Hungary, Croatia, Serbia, Bulgaria, and Romania. The tour caused me to reflect more seriously than ever on the freedoms and opportunities we enjoy in the United States.
We took a photograph of a bombed out building in Vukovar, Croatia, located on the Danube River. Someone had placed beautiful blooming flowers in several openings of the building where windows used to be. The symbolism was intense.
My professional life for the past fifteen years has been devoted to working with leaders of privately owned businesses. Most small to midsize businesses cycle – from relatively good times to relatively poor times. Occasionally a business is devastated. Even in “normal” times, my clients face difficult challenges. Some are fighting serious diseases while still running their businesses. Others are unable to pay themselves a salary for months at a time due to negative cash flow. Some are angry with and frustrated by lending institutions who offer little or no support. Still others must struggle through broken family relationships that are exacerbated by the demands of the business.
So it’s not surprising that businesses are sometimes figuratively blown up. Maybe more surprising are those occasions when, out of the ashes, something beautiful emerges. Individual perseverance and guts, and the unbending support of family or friends or customers or suppliers, produce bright color where only gray existed before.
Now, back to Eastern Europe. Having met and heard the stories of a number of people who once lived behind the Iron Curtain, I am struck by the power of having the freedom of choice. I’m more appreciative of having a system of checks and balances in a government that sometimes seems to be gridlocked. I’m grateful to live in a country where any entrepreneur has the freedom to choose his own next step. Doors may not be wide open at every decision point, but at least the doors exist.
Has your business ever seemed like a mere shell of the structure it once was? And you’re still standing? Then my photo from Vukovar is for you!
I bought the dehumidifier in 1979, and it lived in three different homes over the years. When I finally decided to retire it, the machine was still working! That is, when I plugged it in, the compressor began running. If the temperature of my basement was below about 75 degrees, the coils would freeze up. The simple on/off switch no longer worked. The control knob for adjusting the humidity setting did not work. When running, it was very noisy and threw off a lot of heat. But it still removed moisture from the air when the conditions were right.
The new unit I bought 35 years after the purchase of the old one works better. It removes more moisture, more quietly, radiating very little heat, under almost all operating conditions. And I can run a hose to the basement sump for continuous draining. With the old unit I had to empty the bucket twice daily because the plastic hose connection was stripped long ago and leaked.
I know CEOs who, like me, stick with the old technology too long. The ancient computer operating system causes all kinds of interrupts and lost productivity. The phone system is cumbersome for customers as well as employees. The printer/copier/scanner still prints, although the paper feed jams regularly and the scanner feature has never worked right.
Inertia and penny-pinching sometimes combine to make us stupid. Running a great business requires relatively current technology. What’s your dehumidifier?
It’s not just lonely, but also unique at the top. You must hold yourself accountable for certain responsibilities that cannot be delegated to others. The challenge is that, if you’re like most CEOs, you also hold yourself accountable for many items that could indeed be delegated.
If you are buried in the weeds of your business 24/7, your business will eventually bury you. Yes, most CEOs must devote significant time to working within their business. But if you haven’t already developed the discipline of spending at least 2% of your time each month (about a half day) stepping back and working on your business, your business is likely to continue to run you rather than the other way around.
What are those unique accountabilities that only you can assume?
- Establish your vision of where the company needs to go, and communicate it clearly and frequently.
- Find and retain employees who can help get you there.
- Lead the creation and routine updating of company goals, strategies, and action plans that will help get you there.
- Protect the corporate assets (physical and financial) while making sure you are using them to help get you there.
- Assure that the various parts of the company are coordinated and working together to deliver customer value at a profit, and to help get you there.
In a sense, being CEO has a lot to do with attitude and perspective. Consciously accepting this higher level of accountability is a way of your ultimately exiting your business on your terms.
Why not keep score for a few months? Copy the list of accountabilities and keep them close by. Make a daily or weekly note of your estimated time spent in each of the five areas. Hold yourself accountable – or get somebody else to do so – for tracking how much time you actually spend on these important areas. Then make appropriate adjustments.
It’s been my experience that many CEO’s either omit or give short shrift to three major parts of their annual business plan. The first is how they wrestle through Critical Success Factors. These links between the upfront analytical sections of your plan and the downstream implementation sections provide a solid reality check against your objectives. They also force you to consider all reasonable alternative strategies for achieving your major objectives. Continue reading
In the holiday season just past, I often heard one of my favorite Christmas songs. The lyrics incorporate three questions:
- Do you see what I see?
- Do you hear what I hear?
- Do you know what I know?
While the poetry and melody surrounding the three questions are lovely, my mind occasionally drifts to the application of these questions to the life of the CEO. With regard to your employees, be aware that they do not see what you see; they do not hear what you hear; they do not know what you know.
This is an especially relevant point at the beginning of a new year. Continue reading
Have you ever thought about how important your understanding of motivation is to your success as a CEO? Consider…
Effective selling requires understanding why a particular customer is “shopping”.
Effective marketing demands effectively communicating why your company does what it does.
Effective leadership requires your understanding why your partners and employees get out of bed to come to work in the morning.
Most important of all, why do you put so much energy into your company? And how clearly have you communicated this purpose to your audiences?
The better grip you can get on why, the better CEO you will be. Suggested reading: Start with Why by Simon Sinek.