Is this a play on words or one of the most important questions you need to ask yourself in 2011?
Verne Harnish, author of Mastering the Rockefeller Habits published in 2002 a compelling book that every small to mid-sized business owner, president or CEO running a company in 2011 should read. Harnish stated there are three barriers to growth:
1. The need for the executive team to grow as leaders in their abilities to delegate and predict
2. The need for systems and structures to handle the complexity that comes with growth
3. The need to navigate market dynamics that mark the arrival in a larger marketplace
Delegating requires trust, trust suggests risk and that’s the challenge for us all. We would rather do it ourselves so it gets done right. Revenue and profit growth can only come from leverage, getting others to do what you once did in order to free you up to spend your time on strategic issues. Developing a monthly, quarterly performance contract with each of your direct reports is essential in predicting revenues and profits. As the leader you need to free you time up to be the leader and visionary.
Tom Venable, SVP Sales and Marketing with Rainmaker Systems focuses on keeping things simple and shared the following over dinner last week. Venable breaks down employee into three silos:
- Make it
o HR’s role is to make human capital deliver
o Operations role is to deliver product or service to required customer expectations
- Count it
o Accounting’s role is to see that costs are a function of reverse selling
o Warehouse and distribution take what is counted and see that it gets delivered
- Sell it
o Marketing creates leads
o Sales creates customers
o Outstanding performance Is driven by aptitude multiplied by attitude
Systems and structures are like the chicken and the egg, which comes first? Most small businesses fail because they don’t find the right tools and implement them.
Malcolm Goldsmith wrote in his book What Got You Here, Won’t Get You There that there are annual known revenue barriers at 5, 20 and 50 million that will challenge even the best managed companies. In 2010 in a down market, Vistage members Eric Stumberg, CEO of TengoInternet and Cindy Richter CEO of Vanguard Fire in Austin, Texas integrated their financial, sales and marketing with expensive software in order to streamline their companies.
Developing a predictable pipeline enables you to improve your forecasting and manage your cash flow. You must know where you are today, this month, this quarter and are you on target for this year’s goal.
Kraig Kramer, Vistage speaker focusing on KPI’s (Key Performance Indicators) believes you need to have monthly snapshots both rearview and dashboard. His website has very meaningful formulas for your use.
If you are awake at 2am in the morning struggling with leadership, decision-making and isolation (or if you don’t know what you don’t know) search for a Vistage chair in your city and see if there is a peer group for you.
Have a prosperous 2011.