Managing Your CEO –

And How CEOs let Themselves be Guided

 By: Rich Kramarik

 A lot has been written over the years on managing your manager.  But, does it all apply to CEOs or business owners and their direct reports?  The answer is “it all depends.”  It depends on how much ego is in the executive office and the competency of the CEOs employees.  It depends on accountability and research.  It depends on the use of wisdom not knowledge or experience.  Then, most of what is written is about how to manage your manager to manage you.  In this article we are going to talk about how to manage your CEO to manage the business better. 

 Our focus in this article is advice to the employees who report to the CEO or business owner.  We realize that this is not fair to our CEO readers so we also include the counter point advice for the CEO in dealing with the employee who takes our advice. 

 How to Manage Your CEO Toward More Business Success

 The CEO must make decisions that are in the best interest of the company. Members of the organization each play important roles like marketing, sales, development and manufacturing. In those roles, it is important that the CEO hears their best advice. The employee must first provide focused advice from their perspective in the organization. Secondly, the employee should also be able to appreciate and participate in discussions from the CEO’s perspective. The best CEO’s expect solid advice while allowing employees to engage in the CEO decision making process. In carrying out your employee role:

 Be the expert – don’t give in to the guesses of the CEO.  The CEO must be decisive and make timely decisions.  But, sometimes the CEO gets caught up in the moment and expediency takes control and advice, research, and experts are ignored.  Don’t back down when you know you are right, the success of your company depends on your ability to persuade the CEO to listen and act on your expert advice.  Support your advice and actions with valid research.

 Do sound research – don’t just go with your past experience.  Even experts can learn new things.  Times change, the market changes, the products and services change, competition changes, the financial picture changes.  Continually build your experience by doing research.  Get the latest information to use to make your decisions and advise the CEO.  Especially if you know the answer or the right approach, do the research.  Always be talking to your clients, competition, and your sales force.  Support your expertise with sound judgment and sound research.

 Use the “experts” who report you – don’t ignore the experts you hired for their expertise.  Just as the CEO should listen to you, you should listen to your staff.  The person making judgments and recommendations should always be the person closest to the issue, situation or client.  That’s usually your employees.  Armed with the best know how and research from your staff, you are better able to help your CEO and your company make better decisions, lead the market, and grow.

 Stand your ground – don’t give in to the CEO when you know you’re right.  That’s a tough one!  If your CEO is worth his salt, he wants to hear your ideas and decisions not an affirmation echo back from you on his ideas and decisions.  You will be heard if you provide value or better alternatives.  You will be heard when you provide the justification and research support for your alternative.  You will be heard after you have built a track record of successful advice or decisions.  But, be careful – good creativity and research is not sufficient.  Your advice and decisions must also be cost justified, feasible in terms of company resources required, and they must be able to show results in the time frame required by the company.

 You can do different than the CEOs direction as long as you are right – don’t get it right and you get fired.  Sometimes decisions or objectives have been delegated to you by the CEO.  Along with the delegation there is often direction from the CEO on how it should be accomplished.  If you have a better, faster or cheaper way to get it done – go for it.  You can be the hero and earn yourself some big recognition and maybe even a big bonus.  But, don’t forget the consequences.  If you’re not successful the CEO will probably let you off the hook once or maybe even twice, but after that you may find yourself on the street because you didn’t follow the CEOs direction.  You may hear the career killing statement, “… you’re not a team player…”

 How CEOs Let Themselves be Guided by Their Competent Managers

 In order to be the most effective and make sound decisions, you want to enable and empower your employees to be strong advocates in the roles they play in the organization. At the same time, you need to draw them into conversations with you to help you talk through the pros and cons of decisions you are making. To get the best from your employees:

 Delegate – don’t think you need to do everything yourself.  I have seen CEOs of large companies that believe that they need to make all the decisions.  So, I see them choosing the colors on the marketing brochures, auditing travel expenses to see who is traveling too much, wanting to go on the sales call where it is planned to close the sale and the worst, wanting to go to every client meeting.  These CEOs have not learned to hire good people and get out of their way.  Allow yourself to be guided by hiring good people, delegating to them and getting out of their way.

 Trust your employees – don’t forget you hired them to do a job because they were the best you could find for the job.  Yes, it’s true that many times the CEO makes a mistake and hires a person not quite suited to the job.  Yes, it’s true that many times the CEO does not move quickly enough to correct the mistake.  But, when you have the right person, after you delegate, you should trust that they can get the job done.  Most times they are closer to the action than the CEO, and better positioned to make the best decision and win the best outcome.  If the employee gets it wrong – it’s a great learning experience.  Adults learn by making mistakes.  Let your employees make little mistakes so they can learn how to make the bigger decision.  Trust them to get the job done and they will not let you down.

 Get your staff to do solid research – don’t think you have all the answers.  Your employees must be doing solid research to get their jobs done.  Sales people need to do research on competition and client needs.  Marketing people need to do research on events and now email marketing.  Product people need to do research on the latest product advances in the market place.  As CEO you don’t have the time nor most likely the skills to do this research.  Get your staff to do it.  Trust your employees to give you a good summary and the best recommendation possible based on the research.  Demand that every decision is supported by sound judgment and sound research.

 Use your wisdom – don’t use your experience; use the experience of your staff.  Then use your good judgment – your wisdom – to use the experience of your staff, tempered by their research.  Using your wisdom is not using yesterday’s experience in today’s very different and changing business climate.  Using your wisdom is first understanding the new environment you are operating in, and then choosing the right actions based on the current situation.  Many times this means doing something new, and usually something different from your past actions.

 Hold your employees accountable – ask for the results you expect; don’t just give orders, they may be ignored.  If you don’t follow-up after you have given out an assignment, you are telling your employee that it is not important.  If you tell your employee he is going to be in a lot of trouble if he does not take a certain action and you don’t follow-up, you are telling him he is not going to get into trouble by not doing it.  You hold your employees accountable by following-up on what you asked them to do.  You hold your staff accountable by following-up to verify that they have in fact achieved an objective you set.

 Check your ego at the door – don’t let your ego prevent you from hearing the advice of your staff.  Make it clear to all employees that you are open to hearing their advice and that it is safe for them to speak their minds, even if they are not in agreement with you. Don’t ever jeopardize their trust in your openness. When your employees tell you what to do or that they are going to take a different approach than you suggest, they are not telling you what to do – they are giving you advice.  As above, this assumes you have capable employees in place.  As CEO, you don’t have to take the advice, but you sure should listen to it.  Some also say you have to hear the advice, which means you need to consider the advice in light of other alternatives.  It’s OK if you agree to do what one of your employees says even if it is different than your decision because all that matters is that the company is making the right decision.  The CEO will get the credit if the company makes the right decision.

 In Summary

 The bottom line for employees and the CEO or business owner is the same – communicate ideas, advice and supporting research; listen and hear each other; make the decision or take the action based on the expert in your company – who ever that may be.

 

 

Managing Your CEO Case Story

By: Rich Kramarik

Many of our clients are experts in their field who happen to have started a business.  This means that these CEOs and business owners know they need to learn how to run the business more effectively.  For example computer software engineers who start a software development company, or the Wall Street financial expert who starts a new electronic market.  Ask these experts in their field about sales, marketing, business operations, fund raising and we get very mixed answers.

 We met with a new client for a one day working session to understand his business and evaluate how we could help him grow this business.  At the end of the session we were very frank with him and told him we thought he needed to hire a CEO as the first step.  This recommendation was based on the fact that he did not have business experience or the fire in his belly to drive success.  His response was that he is the CEO and he didn’t need a new one.  He wanted to learn how to do the job of CEO and he wanted our help to learn.

 After two years he has hired a project manager who doubles as the operations manager and a sales executive to drive sales.  So, he now has experts on this staff who can tell him how to sell and manage projects.  But, he still second guesses his decisions because he really does not know how to manage a business.  He does not know how to read financial statements, he does not manage his financials by watching his cash flow, and he does not add in company overhead when calculating project budgets.  The effect is missed objectives, lower than expected revenues, vendors waiting to be paid, and a business that is not really a business but rather a successful series of projects. 

 Have things gotten better?  Sure they have.  His revenues have doubled and his profits are higher than the industry average.  The business could have grown faster and he could have had more staff to help drive even more success.  So, what went well and what didn’t go so well?

 This CEO was open-minded, but he was not willing to listen to the advice of “experts.”  He felt he needed to make all the decisions.  Not just the important decisions – all the decisions.  He didn’t want to put processes in place because he didn’t want to be constrained.  He didn’t want to put together a pricing model because he wanted to have pricing flexibility.  He thought he was a sales expert who always won the businesses by telling the prospects what they needed.  There is a lot more we could talk about, but that gives you the picture of the situation.

 It took a year, but in the end our CEO learned to delegate to his competent staff.  The funny part was that he was surprised that they could do the work and find success.  During that year he also learned to stop telling prospects and clients what they needed.  He started asking questions and his “show up and throw up” style of sales went to the side of the road.  And, among other changes, he started letting the project manager do the project budgets and implement a consistent pricing model.  How did these changes come about?  He started listening to his sales executive and project manager who had been telling him to make these changes for a long time.  The difference was that we were allowed to work with his sales executive and project manager and get them to communicate with their CEO and justify their recommendations with supporting research.  Then these two managers got the CEO involved.  The sales executive took the CEO on sales call to watch the sales executive sell and see the results of the consultative sales approach.  The project manager involved the CEO in project planning meetings and showed him how much faster things went when they used process and templates.  Then it happened over several months of work.  Yes, he started listening to the experts he hired to be on his staff. 

 The results were predictable.  Shortly after we had our first meeting with him his business volume dropped off sharply and he lived through a nine month dry spell with no sales.  Then, after implementing the changes mentioned above, he saw the business volumes grow to a level of double the level prior to the start of the drop off. 

 In summary, this CEO learned his lesson on what happens when you don’t listen to the experts.  Then he learned the lesson on what happened when he did listen to the experts on his staff.  You can do the same.  It’s hard work, it takes a lot of faith and often more time than you expect, buy you can find success and greater business growth by delegating and listening to the experts on your team.

 

Brought to you by:                                                         [BACK]

            Bob De Contreras                                                  
            Rich Kramarik                                                     

 


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