Many of you have heard me say that the key to being a successful midmarket CEO is to carefully manage the elements of your business that have the greatest impact on your company’s value.
And many CEOs have a clear understanding of this and spend countless hours working to improve these areas of their business.
After years or decades, this can get draining. It’s a natural desire to want to be able to maintain your current level of performance while spending fewer hours in the office.
The term I use to describe CEOs who fit this profile is “autopilot CEO.” From my experience, approximately 25% of midmarket CEOs fit this persona. Yet this is not easy to accomplish, especially for “Type A” personalities who by their very nature have a tough time letting go. Not only do you have to overcome your inner conflict of pulling away from the business, but you also have to make the necessary management changes to allow you to do so.
So how do you accomplish this? It’s almost always accomplished by a combination of processes and people – reengineering how your leadership team manages the key areas of the business so that you can manage it, monitor it, and improve it in less time, and even in another location.
The First Key: The Right People
The first place to start is with your people – your key leadership team. Whenever you’re creating processes, it’s critical that you have the right people involved.
The right people will always be aligned with your purpose and values, and have the personality traits and persona to work well with you and your other team members. It’s not just about raw skills; it’s commonplace for a highly competent individual to wreak havoc on a company’s leadership team because of misaligned values or low EQ. As Jack Welsh famously said, “The most dangerous person in your company is not the rude, insensitive, actively disengaged employee, but the one with the talent who does not hold to the values of the corporation.”
If you’re not clear on this, there are numerous high-quality, validated assessment tools and corporate culture measurements that can provide answers. I find that deep down most CEOs know if they have misalignment with a key executive, but it’s often easier to solve the issue with an analysis from an independent third party.
Having the right people in the key managerial positions is critical to being an effective CEO with a reduced time commitment.
The Second Key: The Right Operational Management Tools
The second area of your business to manage is your operational performance, or what we more commonly refer to as our financial or numerical performance.
If you’re only reviewing a monthly or quarterly P&L and balance sheet as your main measurement of performance, that’s not enough; there are too many powerful tools available that allow us to manage our performance in real time with far greater insight than a simple historical look at the past.
Of the numerous key performance metrics that can tell you exactly how well you’re doing as the CEO of a midmarket company, few are listed on the standard P&L or balance sheet. Margin, total revenue and assets are things we commonly review, but they only tell part of the story about how well your company is performing and how much value you’re creating.
Invest in the right financial modeling tools that you and your leadership team can use in real-time to help validate decisions throughout the week, month and year. This will enable you and your team to make better decisions, faster, with more visibility about the financial impact of those decisions when they’re made.
The Third Key: A Compelling Culture
Did you know that companies driven by purpose outperform the market by 384%? (From the book Grow: How Ideals Power Growth and Profit at the World’s Greatest Companies by Jim Stengel, former CMO of Procter and Gamble.)
Somebody has to establish and oversee your company’s culture, values and purpose — and it should almost always be the CEO. Leading with a set of higher ideals is proven to improve financial performance, so embrace this and own it.
While the Fortune 500 spend tremendous time and investment in this area of their business, many midmarket companies spend precious little time here and get caught up in the chaos of day-to-day operations.
There are quantifiable cultural tools that can measure your culture and predict how your company is going to perform in the future, as well as provide indicators as to whether your company has the ability to survive the next 10 to 20 years.
Use these tools to make sure your business is heading in the right direction and to prevent possible catastrophes.
The Final Key: Brand Management
A final area of your business that you need to continue to oversee is your marketing and sales. You probably already have a VP of Sales, and maybe a VP of Marketing, so I’m not saying that you should take over their responsibilities.
What you should oversee is your brand – what it represents, how it’s tied to your purpose, and how you communicate with the market.
If you allow your tactical marketing and salespeople to define this on their own, you will end up with a jumbled mess of a brand that has little chance of achieving true differentiation in the marketplace and owning mindshare. That’s what separates most of the small and midmarket companies from the market leaders.
The Long-Term Benefits
I began this article talking about keeping your company’s performance at a high level while requiring less of your time. After reading my recommendations, it might sound like this is going to require more of your time.
Yes, it will – in the short term.
Instilling processes and organizing your people and responsibilities to get the right leaders doing the right things always takes time to implement.
But once it’s complete, you’ll control the key drivers of your company’s value that you can easily monitor and improve – without requiring 70+ hours per week. And that means adding a lot more life to your work/life balance.