Is your internal dialog creating company value and your personal net worth?
I met with a business owner recently who shared that he was frustrated with his CEO because he feels they aren't aligned. He expressed that they meet frequently but feels they are often working at odds. My reply was you may have quantity of interaction but may be lacking the quality.
Our conversation led me to asking 2 questions:
1.) Have you both discussed and agreed upon what good looks like in the future for the business?
2.) When you meet, do you have an outline of preset topics to cover that aligns your dialog with the short AND long term plan for your business?
He answered "No" to both questions. I shared with him that herein lies his problem and opportunity for meaningful business improvement.
Unless there is alignment at the very top of the leadership of an organization, you run the risk of lacking alignment. This in turn can lead to people creating motion but not delivering progress or results. And when I refer to aligned, I'm not referring to theoretical, immeasurable elements. Having alignment around things like let us look to sell the business in 3 years and get a great price is not going to drive quality of alignment. Dialoging to reach tangible alignment around the future should be the goal. Tangible goals such as we want to achieve $X millions of dollars upon exit, cash at close with no earnouts required and we want to achieve this within X number of years. Having tangible targets will now faciliate more healthy and productive dialog on how to get there.
Next is to establish a productive mechanism for when an owner meets with their CEO or with senior leadership. Set a broad outline of topics that will allow for covering short term tactical matters but also provide for discussing progress against longer term, value building goals. A common agenda I used to use with the owners of companies where I was the CEO included:
- Red flag items - my opportunity to share status of items that could have major financial or legal impact on the business.
- Customer update - discussion around key issues or opportunities being managed.
- Employee update - discussion around any strategic personnel matters or even health & safety issues.
- Finncial update - discussion around the status of the top 3-5 financial metrics we had agreed we would monitor.
- Strategic Initiative Progress update - discussion around progress being made or inhibitors to progress being addressed.
- Operational/Facility update - discussion of 2-3 key non-financial metrics we've agreed are important for us to monitor
- Miscellaneous items - discussion of things related to calendar, customer visits, travel, etc.
Whether it was a weekly phone call or a face to face meeting, I would work this consistent agenda whether our time together was 30 minutes or a few hours. This helped me and the owner have a healthy blend of tactical and strategic dialog. Having this discipline helped me avoid only discussing "flavor of the moment" matters that would make our time together be tactical only. It elevated our time together to bring quality of dialog.
If you're a company owner or CEO that feels like there is a lack of alignment with your team, either or both of these steps can help you move from quantity to quality of interaction. Making this change can be the difference between working hard and making progress on your journey of building the longer term valuation of your company or working hard and being disappointed one day with the outcomes.
