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Guest: Jeff Tennyson, the CEO of Lima One Capital, one of the country’s leading lenders to real estate investors. Jeff is also an entrepreneur coaching client of CEO Coaching International.
Episode in a Tweet: It’s the founder’s company, but it’s the hired gun CEO’s job to make BIG happen.
Quick Background: Growing your own company is challenging. Growing someone ELSE’s company challenges CEOs to apply their skill sets in very different ways. Instead of building your own culture, you’re inheriting the founder’s. Instead of seeing your own vision of BIG, you have to make sure you and the founder see eye-to-eye. And while, at your own company, you might have struggled to hold yourself accountable, as a hired gun you won’t be CEO for very long if you’re not meeting the founder’s expectations and maintaining a growth trajectory.
On today’s show, Jeff Tennyson shares his three-step framework for stepping into a founder CEO’s shoes while still making the job your own.
Transcript:Download the full transcript here.
Keys to Executing a Founder’s Vision from Jeff Tennyson
1. Understand the past and present situations.
Jeff believes that the job of a hired gun CEO is “change agent.” But before you start charting a new course forward, it’s important that you see where the company has been and where it’s currently heading.
“The history and culture of what you inherit is important,” Jeff says, “particularly to that entrepreneur who created it. We have to seek to understand the Why. Why are they in the situation they’re in, what’s created these issues, why is there a need for new leadership?”
Jeff actually begins this process before he even agrees to take a CEO position. He’s developed a decision tree matrix that he works through when he’s considering an offer. Culture is one of the highest points on that tree, one of the first barriers a company has to clear before Jeff works his way down to other considerations. The challenge for hired gun CEOs is to find companies whose cultures are worth buying into while also giving the CEO an opportunity to put his own values in action as well.
“The two founders of Lima One were Ex-Marines,” Jeff says. “They had built a culture around discipline and accountability, much like a Marine culture. So, the military background, the Marine culture, was really important. That’s why I didn’t come in and eliminate Veteran’s Day as a holiday, which is kind of a strange holiday for a mortgage company. We also had a culture of hiring people right out of college and training and developing them. I liked that culture, but I wasn’t necessarily totally pleased with our training and development, and I knew we could fix that. So, you’ve got to identify the gaps and decide are these things that can be fixed or are they impossible paths and it’ll just be a revolving door of CEOs.”
2. Define your expectations and resources.
All CEOs need to answer the question, “What do I want?” This is more of a collaborative process for hired gun CEOs who have to make sure their vision aligns with the owner’s vision and the company’s resources.
“You have to sit down with the entrepreneur and understand what the owners want,” Jeff says. “As hired guns, we can never forget that we ultimately have an owner. Everybody has a boss, whether it’s your board or whether it’s your shareholders. We all have bosses and you’ve got to understand what the owners want. Do they want growth? If that’s the case, let’s put the things in place to do it. Do they want an exit? Do they need liquidity? What are the things that the owner really wants to drive?”
After Jeff took the job at Lima One, his coach, Sheldon Harris, helped him and the company’s founder work through the CEO Coaching International Crystal Ball Exercise. Together, they imagined the future they wanted for the company and identified the processes Jeff would put in place to make BIG happen.
“That was very enlightening for my founder and I,” Jeff says. “We began thinking through, what do we want this company to be like? You’ve got to understand the reality of what you actually can do. Do you have the capital you need to do the things the owners expect you to do? Are you in the right location? Can you recruit, train and get the right number of people in place to do that? You have to make sure you’re managing expectations.”
3. Focus on execution.
While the hired gun and the founder should share a vision for the company’s future, execution is the CEO’s responsibility. Jeff uses a 90-100 day plan to give him and his leadership team real ownership over how the company is going to hit its BIG targets.
Jeff says, “I tell my executive team, for the next 90 days, you’ve inherited a department or organization, something that you have the full right to assess, review, and either embrace or propose changes. In that 90-day period, I’m going to come to you with a couple of things. I’m going to assess the marketplace and the business I’ve inherited. I’m going to assess the people, typically an ABC rating. Do we reassign them? Do we give them training and development to keep them where they need to be, or do we need to eliminate them for a variety of reasons? Then, I put forth a plan based on the discussions we’ve had about where we want to go, what we’re trying to do, what we’re trying to accomplish.”
At the end of those 90 days, the plan is no longer something that Jeff and his leaders have inherited. It’s the plan that they’ve fine-tuned and that they’re responsible for executing.
“At this point, it’s all about execution,” Jeff says. “In most cases, a hired gun CEO is going to be brought in to fix problems and create growth. The one thing that I’ve always tried to really focus on is make sure the organization has a growth mindset. When I got to Lima One, we started with an offsite meeting that my coach helped facilitate. We developed objectives and things we wanted to accomplish and made sure we identified, what are the systems that are broken? What are the processes that need to be addressed, and very tangibly worked through that. Then we implemented a measurement accountability system.”
Jeff supports this planning and accountability by creating quarterly objectives and key results (OKRs). At the beginning of the quarter, everyone on his leadership team presents their proposed OKRs to the group. Once approved, they are reviewed each month (or more frequently), and coded red, yellow, or green based on how well they’re progressing. Sometimes, objectives carryover to the next quarter. Sometimes, they get killed mid-quarter. But more often than not, they get done in the current quarter. What matters to Jeff is that his team keeps the focus on executing and improving.
“We have to keep in mind as hired CEOs that what got you there is very valuable,” Jeff says. “But you can’t just assume that’s going to get you to where your new owner wants you to go. We have to have a bit of humility about ourselves to make sure that we’re really performing on changing, executing, and growing the company.”
1. Make sure there’s a fit. If you can’t enhance the company’s current culture, then the founder will be looking for a new CEO.
2. Set realistic targets. Get on the same page with the founder or you’ll be setting each other up for disappointment.
3. Own the plan. You and your leadership team have to design and manage the processes that will realize the owner’s vision.
Transcript: Download the full transcript here.
About CEO Coaching International
CEO Coaching International works with the world’s top entrepreneurs, CEOs, and companies to dramatically grow their business, develop their people, and elevate their overall performance. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 600 CEOs and entrepreneurs in more than 40 countries. Every coach at CEO Coaching International is a former CEO or President that has made big happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $1 billion, and many are founders that have led their companies through successful eight and nine figure exits. CEOs and entrepreneurs working with CEO Coaching International for three years or more have experienced an average EBITDA CAGR of 59% during their time as a client, more than five times the national average. For more information, please visit: https://www.ceocoachinginternational.com