All posts by incceo

Do you Need a Board of Advisors?

It’s a question many CEOs start asking when their company reaches a certain size: Is it time for me to look for an advisory board?

It’s worth noting that the question relates to creating an “advisory board” which is very different than a board of directors or fiduciary board, which involves legal obligations.

In deciding whether you need an advisory board or not, you need to start by deciding what you want your board to help you with.     contact is we help you grow

 

Continue reading Do you Need a Board of Advisors?

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How to Scale Your Company By Shifting From Talent to Systems

 

Eventually you can’t count on superhero employees and have to deploy systems if you want to scale.

In the earliest days of most companies, entrepreneurs can’t afford the systems that exist in bigger companies. Instead, entrepreneurs rely on hiring super-talented people skilled in doing everything from serving clients and delivering products to closing the books.

Continue reading How to Scale Your Company By Shifting From Talent to Systems

How to Try Before You Buy a Company

While lots of mergers fail, and if you had to pick one reason – it is companies rushing in without really vetting the potential match.

It seems there is news everyday about a proposed merger or acquisition between two companies. While buying another company is certainly a viable strategy for helping your company achieve your long-term vision, the statistics about the failure rate of acquisitions is certainly sobering. One KPMG study found, for example, that 83% of all M&A deals end in failure.talk to us

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As a Leader, Everything Matters

Kids and employees have an amazing ability to pick up on when our behaviors don’t match up with our words.

For those of you who are parents, you will be all too familiar with the fact that we tend to say one thing, but do another – which is something our kids are great at pointing out. Kids have an amazing ability to pick up on inconsistency, especially when our behaviors don’t match up with our words. join_now

Continue reading As a Leader, Everything Matters

Are Your Employees Firefighters or Snow Cones?

Every business has the occasional fire. When it hits, you should have plenty of people who we call “Firefighters” while avoiding folks we label “Snow Cones.

“Every business, from successful startups to well-established corporate giants, hits a rough patch or two. It’s just a part of doing business.

But if you’re going to weather those storms as an organization, you’ll need people who can handle the heat and won’t melt under pressure. In other words, you should be hiring plenty of who we might call “Firefighters” while avoiding bringing on folks we might label “Snow Cones.” Let me explain.join_now Continue reading Are Your Employees Firefighters or Snow Cones?

Moats and Machines: How Warren Buffett Analyzes a Business

Warren Buffett knows great financials are critical to the success of any business, they are really just outcomes from having a strong “machine” and an impenetrable “moat” for your business.

When you ask most CEOs about their vision for their business, they usually give you an answer built around metrics like number of customers, market share, or profitability.

But what I would argue is that while all of those numbers are critical to the success of any business, they are really just outcomes that result from having a strong “machine” and a “moat” for your business.contact us now Continue reading Moats and Machines: How Warren Buffett Analyzes a Business

Are You an Owner or an Operator: Why You Might Need To Fire Yourself?

A word of caution for any entrepreneur who has founded a business and remains active in it: you might need to fire your CEO – yourself.

Of course, every owner of a growing business knows what it’s like to play multiple roles. But let’s focus on the distinction between two of them: owner and CEO.

Continue reading Are You an Owner or an Operator: Why You Might Need To Fire Yourself?

Three Ways to Grow: Build, Partner, Or Buy

Every year, I speak with nearly a thousand CEOs in detail about their companies. One of the key topics that I talk to all those CEOs about is their strategy for achieving future growth. Whether that’s expanding a business geographically, or even by entering new emerging markets, every CEO has a choice about how to achieve that goal of growth.

It turns out, regardless of what your growth goal is, you have three options to get there: Build, Partner, or Buy.

Let me explain what I mean by each of these options.

  1. Build.

Your first option when it comes to implementing your growth strategy is to launch the new project yourself by investing your own resources and talent to build it. Building also involves learning, as there are certainly things you don’t understand about the new space and you will be learning on the job. Building has several key advantages, including the ability to have total control. There is also the fact that whatever gains you accrue through your growth are all yours to collect. That’s not to say that deciding to build doesn’t come with some risk as well. It generally takes more time than the other options, it is possible to make big mistakes due to the lack of knowledge I referenced and you have to invest all the capital, so it isn’t cheap.join_now

A great example of a company that pulled off a successful Build growth strategy is Loctite, the adhesives company. Several years ago, the company decided that its growth goal was to double its sales. And to do that, the company made the decision to double its sales-force. In other words, they chose to invest in building their growth by hiring, training, and investing in new sales people that doubled their sales force – which is what created a lot of risk until that new sales team started to become productive. But in the end, it proved to be a wise investment as the company more than doubled its sales in just a few years.

  1. Partner.

A second option when it comes to putting your growth strategy in motion is to find another company to partner with who can help you reach your goal. In his popular book, Blueprint To A Billion, author David Thomson analyzed the seven factors that enabled companies to reach a billion dollars in annual revenue. And almost all the companies Thomson studied had what he calls a “big brother” partner, meaning a larger more-established company that helped them get into places and markets they couldn’t reach on their own. The best partnerships also leverage the different strengths each partner brings to the table, such as resources, talent, or market access.

A classic example of a Partner strategy like this paying off in a big way is when a then-scrappy startup called Microsoft partnered with computer giant IBM to sell the MS-DOS operating system on its PCs. IBM put MS-DOS on every single PC they sold. Microsoft, which had the best technology to offer, found a partner who helped it spread that technology through its vast distribution system all over the world – something little Microsoft could never have done at the time. Obviously, we know what happened after they created that beachhead on millions of PCs.

One downside of partnering, however, is that no matter how successful you are you still need to split the gains with your partner. There is also the issue of sharing decision-making and control with your partner – which is a dynamic that some organizations handle better than others.

  1. Acquire.

Your third option in putting your growth strategy into place is to acquire a business in the area you want to expand into. The upside of this approach is that it’s typically a fast way to enter new markets and to acquire new expertise. But there is also potential downside, especially if you don’t know which questions to ask about whether your acquisition target is a good fit with your organization or not. As we know, many acquisitions fail to live up to their financial or performance expectations because the acquiring company hasn’t done its proper homework.

I was working with a fast-growing company in the credit and collections market. They worked with large multi-unit housing complexes to help collect overdue rent from tenants. But the company wanted to grow even faster, so it looked at acquisitions to reach their goals more quickly. The first deal they did was to buy a medical collections firm – which was something far outside their own area of expertise. While their intention to diversify into a new market made sense on paper, the company soon recognized that the acquisition was a mistake because they didn’t know enough about the medical collections industry. Fortunately for them, the company course corrected and recognized that if they were going to acquire, it should be in the housing collections market, where they could strive to be the best in the industry. They ultimately did this and found great success.join_now

The mistake they made was to believe that acquisition was a strategy rather than a tactic to achieve the longer-term goal of growth. In their case, growth in their core market with bolt-on acquisitions.

So, when it comes time for your organization to think about how it needs to grow to meet its long-term goals, choose carefully when it comes to which tactic: build, partner, or buy. Any of these three options might be the answer to helping you reach your goal, just be sure you’re asking the right questions before you pull the trigger – just don’t confuse a tactic for a strategy.

Mercenary or Patriot–Which Should You Hire?

When you’re hiring, think beyond the skills and experience a candidate might have and assess whether you want a patriot or a mercenary.

When you’re thinking about hiring people, especially those in mission-critical-type positions, you need to use caution because the stakes are so high anytime you make a bad hire. But beyond whether they are an A, B or C Player and the skills and experience a candidate might have, you also need to assess whether they are a patriot or a mercenary. Let me explain.talk to us

The Patriot
Patriots are employees who seek to join your company because they believe in your organization’s purpose and mission. They want to contribute to the cause. Maybe they are drawn by what your company does or how you do it because it resonates deeply with their own personal beliefs. This can be a very powerful draw for some job candidates, many of whom might even be willing to make personal sacrifices like taking less pay, relocating their family or even working long hours for the opportunity to be part of your organization. Patriots are also deeply loyal to the organization and tend to stick around even when times are tough and the bullets start flying. We often see startups filled with people like this who choose a job based on its higher purpose rather than higher pay because the organization doesn’t yet have the resources to offer much in terms of compensation.

The Mercenary
Mercenaries, on the other hand, choose their next job based on how it will benefit them as an individual. You can identify a mercenary right away just by looking at their resume, where you’ll find lots of short tenures and plenty of job-hopping – something that’s common in job areas like sales and software developers. That’s not to take anything away from a mercenary’s skills: they are usually very talented and in demand. The tradeoff is that, unlike the patriot, if a mercenary’s personal needs aren’t being met, they are likely to jump ship at the first sign of trouble. Usually, they are just there for the money.

Why The Distinction Matters
One reason its critical to understand whether you are hiring a patriot or a mercenary is that your choice will impact your culture. Patriots are the people who live your culture on a daily basis and do things the way you want them done. Mercenaries, on the other hand, don’t always think the rules apply to them – especially if they are producing results.
While mercenaries can be very valuable to the growth of your company, you need to understand that they also carry a risk to your culture – at least depending on your business model. If you run a bond trading firm, for example, you might rely on a staff of 100% mercenaries – and that’s a good thing. But for most of us, especially those of us who want to build a company and a culture for the long haul, we need to be careful about how many mercenaries we have on staff relative to our patriots.

Consider the example of a company a friend of mine owns that operates in the government contracting space. It’s a tough business that relies a lot on relationships and social networks to be successful. That means that having a top-notch business development person is critical to any company’s ability to land new business. These folks have a very specialized, and valuable, skill-set – which means they can be hard to find and retain.

In the case of my friend’s company, he was fortunate to hire one of the best business developers around. And this guy delivered: he landed several large orders for the company (that he was well compensated for, by the way.)
But it also became apparent that digesting the work involved with those contracts was going to take my friend’s company at least a year to work through before they would be able to go out and bid on any new business.

Guess what happened? My friend’s business developer jumped ship rather than risk earning less by waiting for the company to chase new work.
This is a classic case of what happens when you hire a mercenary versus a patriot, someone who would have been willing to shift roles or jobs in the interim as a way to stay with the company and be part of its success over the long haul.
Both patriots and mercenaries can play important roles in your organization’s success. Just know what you’re hiring up front so you can plan best for the long run of your company.