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The Out-of-Touch CEO – Part 2

The Out-of-Touch CEO – Part 2

The Hammond Company, a service-based business, found itself struggling to maintain the momentum they had early on.  The issues included:

->  A CEO used to maintaining control, suddenly overwhelmed by having to maintain control of a growing enterprise.

->  A widening gap between what the CEO wanted and how the employees behaved.

->  Employees struggled to take on more responsibility without the necessary authority.

->  A CEO uneasy about giving up decision-making control, which caused employees to question their roles.

->  Employees unsure about their every move who wondered why the CEO didn’t trust them.

->   A lack of focus on company values, which allowed bad behaviors to go unchecked and caused friction among the staff.

->   Lack of a strong strategic growth plan, which cause employees to question the CEO’s ability to manage the chaos and lead the company.

The Hammond Company was on the edge of a staff rebellion and the CEO was on the verge of a burnout.  Will it happen right away?  No.  Many companies continue to expand and grow with the issues outlined above.

Giving up control of different aspects within a company is extremely challenging.  The CEO knew he had to hire quality people and drive strong sales to support higher wages.  His frustration was fueled when his capable employees seemed to shrink from responsibility instead of embrace it.

What did the CEO do wrong?  He overlooked the management piece of a business.  He had no problem handing out assignments, but he neglected to set and manage expectations.

When the team didn’t deliver as he had hoped, his disappointment showed, which caused the team to retract into a cautious, “cover your ass” mentality.  He thought they were unmotivated and unwilling to step up.

The Hammond Company is a classic example of what happens when a “Command and Control” CEO doesn’t change with the shifting needs of a growing company.

WHY MOST SMALL BUSINESSES DON’T WORK

Michael Gerber pointed out in the book The E-Myth, there are three distinct roles every CEO must play at some point in the growth of a company, to differing degrees based on the Stage of Growth the company is in.

The reason most small businesses don’t work is that they are often started and run by a “Technician,” someone who knows how to do the technical work involved in a job, without much thought to two other, equally important roles described in the book, the “Entrepreneur” and the “Manager.”

If you read my previous “Note from Nancy,” when given the choice between the three roles, which would you pick?  Number one was the Technician, number two was the Entrepreneur and number three was the Manager.

While we might be biased towards one over the other, to successfully run a business, they all must play a role.

The Technician is someone – an accountant, computer programmer, cook, etc… – who is an expert in his or her craft.  This often leads these people to go into business for themselves. The technician is happiest doing the work they are good at.

The Manager is the detail-oriented one, who dots the i’s and crosses the t’s, the one who remembers to pay the bills, and wants a well-organized world with no surprises; a world where things happen in an orderly, predictable manner.

The Entrepreneur is the dreamer, the one who sets out to do something new, who reaches for the stars.  The Entrepreneur lives in the future, thinking about what could be (rather than in the present).  The Entrepreneur is often frustrated by how slow the world seems to move.

All of these components are necessary in the leader of a business.  The challenge is – what the business needs changes as it grows.

When you look at a newly forming company, the business needs the founder to spend half of their time in the Technician role, 40% of their time as the Entrepreneur guiding the company and only 10% of the time as a Manager.

Yet by the time the company has grown to Stage 3 (20-34 employees), the founder should only be spending 30% of his time as a Technician, 10% as the Entrepreneur, leaving a full 60% of the time acting as a Manager.

When it comes to the management piece – managing people and process – most founders/CEO’s find them-selves way outside their comfort zone which is why learning a new way to lead is imperative if you don’t choose either of the first two options of bringing in a Manager or selling the business.

A NEW WAY TO LEAD
In Part 1 of the Out-of Touch CEO, we mentioned Curiosity as a trait of all great leaders.  The ability to suspend judgment and really get to the heart of an issue.

Now we add a few more traits or skills for the CEO to develop:

  • Humility
  • Delegation
  • Congruence


HUMILITY:
I would be remiss if I didn’t mention that most of these Command and Control leaders fall into the Dominant category of the DISC model.  Of all the great qualities a High Dominant brings to the table – goal-driven, direct, bold, courageous, risk-taker, big thinker, visionary – there is one quality that is their Achilles’ Heel.

Arrogance.

Strong ego is a hallmark of the dominant, Command and Control leader.  Making tough decisions and having the chops to stand by them is not for the faint of heart. But along with this ego often comes an unwillingness to admit weakness.

They really do believe they know best and can do it all.  Until they can’t.

Many of these leaders push back and insist that they have to rely on themselves because they can’t rely on others.  So I ask, “How is that working for you?”  And they admit it isn’t.

It’s at this point that many of them, the ones that haven’t marched out of the room yet, realize that they need to learn a better way.

Here is a question to guide the leader:

If you were to have a family or health crisis and be unable to show up to work for the next month, what would happen to your company?

If just the thought of that is frightening, then it’s time for another approach, as your strong ego will not always be able to save the day.

DELEGATION:  A few years back, I wanted to embrace the new wave of online lead generation in my business and promptly hired a reputable digital marketing firm that had come highly recommended by a business associate of mine.

After what amounted to $15,000 spent and 6 months wasted, I ended up pretty much where I started – with ZERO leads generated from online efforts.

As frustrated as I was, I went to a friend of mine – another online marketer who worked for another firm to share with him what happened.

I vented and he listened.  At the end of my diatribe, when I was sure he was going to blast the company for their failure, he simply said, “You didn’t delegate this initiative, you abdicated it.”

He was right, as annoying as it was.  I really believed that I could turn over this project to this company, wash my hands of it and within a short time sit back and watch the leads roll in.  Not. Even. Close.

And yet this seems to be a very common refrain of the Command and Control leader:  I told you what I wanted, I left you alone, (I forgot to check in) and when I come back – it’s not even close to what I wanted.

Dave Clough, owner of Power Advisors, says this about the delicate art of delegation:

“Delegation is like a relay race where the handoff is critical.  It is the one doing the handoff who is responsible for a clean exchange.  If you let go too soon, you lose.  If you hold on too long, you lose.  In business handing off before the recipient is ready is abdication; the CEO is too busy or doesn’t care deeply about the task. Holding on too long is micro-management; the CEO is not ready to let it go and trust the one taking it.  The right balance makes for a clean handoff and leads to a successful and timely finish.”

There are many different tools for effective delegation.  If you recognize this might be something you need to improve, look for the Delegation Self-Assessment coming next.

CONGRUENCE:  Sometimes there is a disconnect between what we think and what we say.   Command and Control Leaders who aren’t congruent, who often say what they think they should say to appear open and humble, are often challenged by a team who doesn’t speak up and eventually gives up.

We delve into that in future articles.  Stay tuned!

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