Leaders: The people who shape the business

by Oct 26, 2021High Growth Businesses, Leadership

This is the third installment in a series on Building a High Growth Business and scaling it up. Click Here for Part One and Part Two and Part Four.

THE PEOPLE

Section A: The Leaders that shape the business

For a business to be successful, one of the most important things it needs is a great support network from all the people involved, both inside the company and out. This includes; the founders, early investors, customers, suppliers, advisors, partners and shareholders. 

As a business leader, it’s always important to evaluate the people in your business from time to time especially as the business grows. For you to know if you need to make a few changes, as far as people are concerned, it’s important to ask yourself 2 simple questions:

  1. Are you Happy? I.e. Do you really enjoy going to work; as well as working with the people involved in your business?
  2. Given a chance, would you enthusiastically retain all the people involved in your business going forward, knowing what you know now? 

If you answer any of the above questions in the negative, it means there are underlying issues with the business relationships that you have. If these issues are not addressed head-on, they will slowly but surely continue to fester and drain you emotionally, leaving you with little to expend on the execution, strategy and even the cash aspects of growing your business.

To address the big role that People play in your business, we will focus on three aspects:

  1. The leaders,
  2. The team and
  3. The managers

The leaders.

Here, we will look at how to think through your own personal relationship goals as well as setting specific accountabilities for the different business units and functions. This will help you to quickly recognize and prioritize the challenges that involve the People in your business and your life.

The Team.

The one question that bugs most leaders is: How do you attract and hire top talent? In this section, we will explore how a strong marketing function can help you recruit top talent and how to sift through them to select the A players you need to scale your business. 

The Managers.

We will look at 5 management practices that when applied will keep everyone productive, engaged and happy. We will also address how to continuously educate your people so that the company does not outgrow them. 

Having to constantly replace people because they haven’t kept up with the growth of the company is not only time-consuming but greatly stalls the business growth as the new hires have to go through learning the business’ culture and how you want things done.

 

THE LEADERS

Management guru Peter Ducker aptly noted that “the bottleneck is always at the top of the bottle.” Although it might seem like a gross oversimplification of the challenges within an organization, it’s true. Most challenges in a company point to issues among or with the leaders at the top. The example of how to run things is always set by the leaders. That is precisely why the bottleneck metaphor is so appropriate. 

Whether they like it or not, the leaders are the success (or failure) model. As such, they should always strive to provide a shining example for others to model. It’s important for them to be very clear on their own personal goals, carefully defining their own accountability and outcomes as well as the processes that drive the company forward.

As the company grows, the most difficult decisions will often be the ones that involve people and their changing roles in the organization. This is especially true for the leadership team. Egos clash, loyalties are tested and personal friendships are strained, making these decisions even more difficult. 

For you to withstand these pressures and operate at your best as a leader, you need to first focus on yourself before focusing outwards to the team, business and all other stakeholders.

Creating a Personal Plan as a Leader.

To create a life of fulfillment for yourself and drive the organization forward, there are 4 main guiding decisions that you as a leader should focus on in your personal life. These are:

  1. The quality of your relationships, 
  2. Achievements that have a real impact, 
  3. Rituals and routines and 
  4. Wealth.

You can use the chart below to help create a personal plan for you and other leaders in the organization.

 

The Quality of Your Relationships.

In the end, for most people, what matters most in life are two simple things:-

  • the depth of relationships with friends and family and 
  • the people you’ve helped along the way. 

In this respect, you can set yourself up for a fruitful future by being deliberate in connecting with the key groups of people with whom you want a lasting relationship. These important relationships include family and friends from various communities in which you are involved in. 

Ted Leonsis, in his book ‘The Business of Happiness: 6 Secrets to Extraordinary Success In Life and Work’ notes that there is a strong association between one’s state of happiness and the number of different communities in which you are actively involved with.

To start you off in this quest to create meaningful relationships, start by writing out a list of about 50 people you think are important in your life or that you would like to have in your circle. Don’t worry if you can’t think of more than a quarter or half of that.

The next step is to try and attach a reason to your relationship. Once you do, you will find it easier to put in the deliberate work needed to grow and sustain these relationships. You can then set a specific workable schedule to reach out and spend time with them.

As you do this, it’s also important to evaluate the people in your personal and professional life who are destructive; people who literally drain the life out of you or distract you from your higher goals. These are the relationships you need to end gracefully.

Achievements that have a real impact

Many business leaders find that even after reaching different critical milestones in their quest to grow the company, they still feel like they haven’t made a real difference in the world. They feel as if something is missing as if there could be more.

If we were to reflect on what we stated earlier, that “for most people, what matters most at the end of their life are two simple things:-the depth of relationships with friends and family and the people you’ve helped along the way,” then, we see that one thing that could help is being deliberate from the get-go by thinking about the real impact your achievements could have, especially in improving the lives of others. If you define this early enough in your career, you can pave the way to a more meaningful life.

The key to defining these achievements is focusing on short, medium and long-term achievements relative to the people you listed earlier. You will soon realize that it might even include having to stop the pursuit of achievements that will take away from the relationships that matter most.

You will then be able to carve out time to work towards a blissful marriage, and not settle for just being happily married. You might take a few hours off each week to focus on being there for that important game or race for your children or might find a way to reallocate funds to a just cause such as feeding the homeless around your neighbourhood or creating a fund to support cancer patients etc.

Rituals and Routines

In a busy world, like the one you find yourself as a business leader, establishing regular routines will really help you to achieve the larger goals in your life. 

Examples of these might include: booking some alone time with each child once a week or planning a weekly date night with your spouse. You might also schedule a regular phone call to a distant family member or friend you wish to reconnect with.

This can also be extended to the people whose presence in your life supports your bigger goals. It could be spending some time with close friends to watch a bimonthly sport event or meeting regularly with a workout buddy, or being part of a business forum consisting of like-minded leaders or even meeting regularly with a peer coach to keep you accountable.

Wealth and resources

Instead of looking at financial wealth as a goal in itself, instead, see it as a resource to support the rest of your personal plan. Apart from determining how much you would like to set aside for retirement, be keen to set goals for the amount of money you would like to donate to the communities and causes that matter to you. 

Decide also, on how much money you would need to support activities with your family and friends. You can take it a step further and map out some experiences you could invest in in the next 12 months or so that will create lasting memories.

By focusing on how your wealth can flow by serving others, rather than just hoarding it, you will strangely find that it will attract even more wealth:- this is nature’s law of reciprocity. The book: “The Soul of Money: Transforming Your Relationship with Money and Life” by Lynne Twist, expounds upon this idea.

 

Establishing Accountability in Various Functions 

Now that we have some direction and purpose, let’s turn our focus to the company.

The next important thing to do is to ensure you have the right people leading various functions of the organization. The company is simply an amplifier of what happens at the senior level which is why we first do a quick employee survey whenever we start working with a company. If the survey reveals that the people in Finance are upset with Marketing, there is likely an issue between those two respective function leaders at the top.

The chart below lists common functions that must exist in all organizations. Even start-ups have all these functions. The only difference is that it’s the founder(s) doing everything. As you scale the business, it’s important to figure out which function you should delegate next.

 

Completing the Function Accountability Chart 

Step 1

The first column lists the different functions each organization must support.

  1. Start with each member of the executive team filling in the first blank column by adding the initials of the person they think is accountable for each business unit or function. If this is outsourced to a firm, Write the name of the main person accountable from the contracted company.
  2. You can add other functions that might be unique to your organization by filling in the blank lines. Eg. another division you support, a subsidiary company or a partner organization that is crucial in your business.
  3. Compare the lists to see if there is an agreement among the members of the leadership team. Interestingly, there often isn’t, even when it comes to who the head of the company is!

Step 2

Once the team has highlighted the people that they think are accountable for each function, answer the following questions:

  • Do you have more than one person accountable for a function?  The rule of thumb is that only one person should be accountable, otherwise, there will be confusion. Having more than one name in a box is a red flag.
  • Does someone’s name show up in more boxes than anyone else’s? In growth companies, it’s not uncommon for leaders to wear multiple hats but if one executive’s name appears 3 or 4 times compared to others, that leader might not effectively manage all functions. This is another red flag.
  • Do you have any boxes with no names in them? This often occurs when someone asks, “Hey, who is accountable for sales?” and the response is, “ All of us.”  This really means ‘none of us’. 
  • Are you enthusiastic about the person you have in each box? If the leader is not getting the job done, then a change may need to be made. It might be that this leader is in too many seats or in the wrong one. It might also simply be a performance issue or that although the leader is talented, they do not fit the culture.

Step 3

The second blank column is for highlighting 1 to 3 KPIs for each function listed. These are meant to be leading indicators, measuring the daily and weekly activities of a specific leader and are meant to drive superior results.

Be careful not to list KPIs for the specific leader listed. Instead, it’s important to zero-rate your KPI decisions. You could cover the names in the ‘Person Accountable’ column, then decide if the KPIs of that function align with the company’s business model.

At this point, you can then consider if the person listed has the skills and aptitude needed to deliver on those KPIs. A mismatch may indicate a potential problem.

Step 4

For the third blank column, the ‘Results/Outcomes’ have a recent, detailed Profit and Loss (P&L) statement and Balance Sheet(B/S) and assign a person accountable for each line item. Once you do this, discuss the same 4 questions we asked earlier about the people listed in the ‘functions’ column.

  1. Do you have more than one person accountable for each line item e.g. Revenue?  
  2. Does someone’s name show up in more line items than anyone else’s? 
  3. Do you have any line items with no names next to them? 
  4. Are you enthusiastic about the person you have accountable for each line item?

 

Jack Stack, in his book, ‘The Great Game of Business: The Only Sensible Way to Run a Company’ argues that “the Phoenecian monks left out an important column on the first accounting statements they created in the late 1400s: This is the ‘WHO’ column. There should always be a person who is clearly accountable for each line item, even if it’s middle or lower-level managers when considering a highly detailed P&L and B/S.”

Jim Collins, in his book, “How the Mighty Fall, And Why Some Companies Never Give In”, gives a key insight he discovered while working with executive teams. When he first asked them to introduce themselves, he found that executives from the good companies shared their title whereas executives at the strong and great companies shared what their accountabilities were in a very measurable fashion, eg. “I am accountable for driving revenue into this company.”

 

Establishing Accountability For Various Processes 

Organizations are naturally split along their functions. However, as the business grows beyond 50 employees, it needs to start aligning teams around product groups, projects, industry segments and even geographical locations. This leads to what is called a matrix organization.

The pressure to create the new units as dictated above, usually comes from the customers. This arises from the difficulty they face in trying to get help from the business. They don’t know whom to contact for help and when they finally get someone, there is an endless runaround. They are also constantly bombarded by an endless crush of communication from different business units.

Internally, the employees may not be clear from whom they should take direction. They feel like they have multiple bosses. They might be serving under several business units with a functional head overseeing their activities.

If you don’t get accountability right at this stage, innovation and productivity will slow down and there will be a lot of time wasted from oscillating between decentralizing and centralizing various functions among the business units. 

That is where you need a tool to assess the accountability in your organization.

The Process Accountability Chart 

Process Accountability ChartThis is a chart that lists the people (leaders) accountable for each of the 4 to 9 processes that drive the business. It also indicates how each process will be measured so as to guarantee smooth running of all operations.

Completing the Process Accountability Chart 

Step 1

Gather the executive team together and name 4-9 key processes that drive the business. Some of them e.g. “How do we bill and collect from customers?” – will be similar for most companies. However, there will be a few that are specific to your industry or firm. 

 

Step 2

Next , assign accountability for each of the named processes to a specific person. This can be more difficult than you initially perceive it to be. Since the processes cut across different functions, it might seem like a battle for territory between the functions. It’s good to remind everyone that assigning a person accountability does not necessarily come with increased decision-making authority.

Their main job is to monitor the process (quality, cost and time), alert the team if there are any arising issues and lead a regular meeting to help improve the process. Ideally, this person needs to have some cross-functional experience.

All these process leaders should then report to the head of operations(COO). You might want a Chief operating Officer who is obsessed with process mapping and improvement or one experienced in implementing the Lean Methodology.

 

Step 3

Identify a few Key Performance Indicators(KPIs) to track the processes. Each process should have 3 main indicators; Quality, Time and Cost as indicators to show its health.

One of the most important indicators is Time- in either the the number of hours/days (to produce) or number of hours/days(to deliver)

 

Mapping the process

Once you have completed the chart, gather at least one person from each function touching on the specific process including a few affected customers where possible. 

Using coloured Post- It Notes to represent each function, map out the main steps and key decision points in the current process flow. Step back and analyse the process, to streamline it and eliminate any wasteful steps and removing obstacles. 

 

Finally…. 

In his book ‘The Checklist Manifesto: How to Get Things Right’, Dr. Atul Gawande shares how his research on improving the success rate in surgeries came down to a simple checklist. According to his findings, checklists help with memory recall and clearly setting out the minimum necessary steps in any process. In one hospital, the use of checklists helped prevent 43 infections and 8 deaths and saved over 2 million dollars in costs.

Dr. Gawande adds, “Checklists provide a kind of cognitive net that helps catch mental flaws inherent in all of us- flaws of memory and attention and thoroughness….. I have yet to go through a week in surgery without the checklist leading us to catching something that we would have missed.”

“The strength of your organization lies in the right leadership doing the right things; and the right systems and processes supporting these people to keep the business flowing.”

The strength of your organization

ABOUT THE AUTHOR

Samuel Njoroge writes and speaks about Creativity, Strategy, Leadership and Productivity. 

Through his boutique firm, Azelea Coaching Advisory, he works directly with over 100 business leaders and entrepreneurs each year to help them design the necessary framework to achieve their biggest business targets. 

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ABOUT SAMUEL

Samuel's specialty is designing and breaking down complex projects to really simple steps. 

Email: Info@samuelnjoroge.co.ke
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