And how every company can afford one.
By JP Kalmeijer & Rich Koontz
Running a business is too often a solitary effort; many business owners feel that
they have to drive the business on their own power and very often face critical
external and internal challenges single-handedly. They have never felt they have
had the time or luxury to surround themselves with a strong Executive Leadership
team across all key areas of their company – marketing, financial, operations, &
technology.
Consequently in almost all of these companies lacking this strategic leadership,
opportunities are squandered, efficiencies are missed and necessary changes are
not implemented quickly enough.
This article wants to make 3 key points:
a) Every business should have at least 2-3 C-level roles focused on developing and
implementing strategic changes for the driving the growth and profitability of the
firm
b) Every business can afford it; it is just a matter of the right ‘dosage’ – full-time,
part-time, advisor, or board member
c) In fact each of these CxO roles will frequently become ‘self-funded’ in the first 3-9
months by indentifying and capturing growth or operational efficiencies that will
other-wise be missed.
First of all let us define the difference between a Senior Managerial leadership role
and a C-level one, be it a Chief Financial Officer, Chief Marketing Officer, Chief
Technology Officer or any other CxO role. This is important because any organization
of respectable size will have multiple managers in its ranks to supervise staff and run
departments.
The key differences – between a CxO and a Manager – are Focus, Expertise and Skill
set of the individual. A manager can run a department or even a business unit,
whereas a CxO will have a strategic outlook, a longer planning horizon, breadth of
expertise, and strong communication skills required to build a profitable business.
Typically a business owner or even a President will spend the majority of his time
running the business, focusing on the biggest most burning issues at hand for the current
success of the business. He will be assisting the VP of Sales with finding new clients and
closing business, working with Operations to honor the commitments made to customers,
helping the Human Resources department with the latest employee issues. He will be
sitting down with Marketing to approve the latest brochure or website and huddle with
the Finance Manager over the latest cost projections. He is running the business to
ensure success today. He is reacting to the leadership needs at hand.
Critically lacking in this routine leadership activity is spending time – pro-actively -
with a similarly focused group of executives on developing and implementing plans
required to accelerate the business’ future growth and profitability:
- Anticipating the changes in the market to develop and implement multi-year
product plans and market strategy
- Planning and optimizing cash flow, working capital and profitability
- Planning and optimizing operational processes – both costs and cycle time
- Planning and implementing growth strategies for existing clients
- Planning and implementing direct and indirect sales strategies
Any business owner – who takes the CEO part of his role seriously – should have at
least 2-3 ‘intellectual sparring partners’ to develop and implement a strategic plan for
building and growing their business. Together, as a multi-faceted Executive Leadership
team, they will tackle the key strategic issues identified in a 3-5 year plan, keep the
organization focused on the opportunities and priorities identified for long-term
success, and ensure company is run in such a way to stay ahead of competition.
The most common errors for most owners and CEOs from developing these Executive
Leadership team is postponing the decision until they can afford to hire a full-time
CxO for the for the area most ‘critical area’ to the business – that is the one with the
most problems and challenges today. However this ‘just-in time’ CxO approach still
leaves the same strategic thinking gap across the business in the all of the other key
business areas.
Recently some of the more innovative companies across several industries have
adopted a more efficient and higher ROI solution for building their Executive Suite: the
‘Leveraged CxO’. This Leveraged CxO is proven leader with the right level of
expertise, vision and skill set to impact the business immediately as a Chief Marketing
Officer, Chief Technology Officer or Chief Financial Officer – but is hired for flexible
number of hours per month, based on the size of the business and scope of business
change required to become the market leader.
In subsequent articles we will discuss what impact a well attuned CxO can have on
very specific areas of the business, like Finance, Operations, Marketing and IT, along
with the potential ROI from this critical changes and the different types of ‘staffing’
models available to each business owner for implementing right Leveraged CxO
model for accelerating their business’ growth and profitability.