Every business owner wants to make more money and maximize profits. The problem is many business owners don’t know what they should be paying attention to. They aren’t sure if the decisions they’re making are helping or hurting. Often, they’re confused, frustrated, and sometimes overwhelmed. Every business owner deserves to have a business with a strong financial future.
One of the most common challenges for any CEO is how to drive accountability deep into their organization. In Jim Collins’s book, “Good to Great”, he talks about how to get the right people in the business and get them in the right seats. Often organizations have more than one person in a seat, or they have empty seats. When there are two people in a seat, each person thinks the other is accountable. With an empty seat, no one is accountable.
I’m working with several clients right now that are growing their organizations, but they don’t have the right people in the right seats. One is a very successful retailer with two owners, but they don’t delegate. They are so busy working in the business, they don’t have time to work on the business. The business has reached a size where multiple functions in sales and delivery should have someone other than the owners in those seats.
I have another organization where no one is accountable for sales and revenue suffers because of it. I have a third client that recently hired a VP of Sales and VP of Operations. These people are beginning to make a difference. But the owner didn’t properly calculate the cost of those hires. So, the company profitability is diminished until these people start paying for themselves.
With no accountability, execution suffers and it shows up in efficiency or effectiveness. Rather than build an organizational chart and job descriptions, I’d like to suggest you create an accountability chart and establish 5 functions that you want each position in the organization to be accountable for, including the CEO. Each layer of management creates the functions that report to them until you get to the employees with no direct reports. Also, it’s a good idea to create your accountability chart with functions first before you put people in them. You may be surprised there is a better person for a particular position than the one occupying that seat.
With an accountability chart in place and functions identified for each position, you’ll have a plan to take your business from confusion to clarity. You can create goals for specific positions to accelerate growth in your business. Finally, you’ll be well on your way to increased profitability and healthy cash flow.
