Top CEOs focus on five things: Vision, Cash, People, Key Business Relationships, and Learning. In this five-part series, I’m going to explore why these five focal points are the best uses of your valuable time, and how each can help Make BIG Happen for your business.
Quick test: name the five key relationships that are the most important to the success of your business.
If I ask a CEO this question, and the answer is along the lines of, “oh, our top 5 largest customers,” or, “we have a lot of key relationships,” then I know the CEO is failing at a top priority: managing key relationships.
Actually, “managing” isn’t the right word. The CEO has to OWN these relationships. If you delegate your relationship with a key customer to your head of sales, what happens to the relationship if you have to upgrade that employee? In a cash flow emergency, do you want to be stuck on hold, or do you want to be on a first-name basis with the president of your bank?
Here’s a cheat sheet I use to help clients who aren’t in command of their key relationship start connecting with the people who will be instrumental on the journey from good enough to great:
1. Your Banker, Creditors, and Stakeholders
Michael was running a company that was doing about $175 million in revenue. But after a plan for international expansion imploded, the company’s scattershot activities and lack of vision led to a crippling $10 million loss.
Michael was staring down bankruptcy. But luckily, Michael and his partner had cultivated key relationships with their stakeholders, and their banker. This gave them the luxury of being open and honest about their situation. The banker was supportive, and helped Michael’s company as it transitioned to a new COO who was a turnaround expert. Eventually, Michael doubled the business and sold it for $100 million.
2. Your Key Vendors
Here’s a scenario that’s a lot more common than you might think:
As the holiday sales crunch looms, a company waits for a supply order … that never comes.
Why? The vendor found another customer willing to pay a higher premium due to holiday demand.
As a result, the company is unable to fulfill an order to a key customer at the most critical sales period of the year.
How’s that for Merry Christmas?
This is what can happen when vendors see your company as just another name and set of numbers on a spreadsheet. This is what can happen when someone working three floors down from you is managing POs without giving any thought to the person in charge of fulfilling them.
The better your relationship becomes with key vendors, the more reliable they will be, and the better the pricing and terms you can negotiate. But if you go above and beyond to really get close to your vendors, they might share with you what your top competitors are doing, or new industry trends. They might invite you to test new products before they release to others, or maybe even give you exclusivity for a period of time in a territory or product.
3. Your Key Customers
Who are the high-volume, high-margin customers that really matter to your company? Who’s growing? Is there an opportunity for your business to grow with them?
For our client TaskUs, their key customers include Uber and several other high-profile firms.
For our client Rich Balot, who had more than a hundred retail Verizon stores, the key relationship was with Verizon Wireless. We encouraged Rich to get to know senior staff, all the way up to the C-suite, which helped Rich make some meaningful arrangements that enabled him to scale up to more than $1 billion in revenue.
However, don’t neglect the smaller fish in your pond. Some of your customers may only do 10% of their total business with you. How can you bring that up to 50%? 75? More?
And don’t confuse your sales team’s account-managing responsibilities with YOUR relationship-owning responsibilities. Sales people have a habit of leaving, and taking your business with them. Key customer relationships should be with you, not with the people who work for you.
4. Key Government Administrators and Politicians
This will be particularly crucial for some industries. Who are the people who might have some say over issues that are important to you? Who are the regulators who could make or break your business?
If you’re a small business on the way to BIG, think local. The mayor of your small town, the clerk in charge of permits and zoning at city hall – you won’t realize how important these people can be to the success of your business until you need them.
5. Key Future Relationships
As I’ll discuss in the final part of this blog series, learning is another top CEO responsibility. What’s coming next in your industry? Who will be the key players? Can you get in early on the next wave of innovation?
What about your customer base? Nurturing your relationships with key customers is good; hanging the very survival of your business on one or two big purchasers is not. What’s a customer demographic you’re missing? Are you so focused on what you’re selling right now that you’re not thinking about what you have to sell tomorrow?
Put in the time.
Rich Balot took an active interest in Verizon’s brass by texting them on their birthdays and anniversaries, attending sporting events together, and using every opportunity to meet in person to build quality personal relationships.
When I was running Platinum Capital, I jogged through Central Park with the managing director of Bear Sterns. I visited top people at GMAC and Citibank every quarter. I set up joint ventures with real estate firms to whom I wanted to get closer.
Don’t book half-hour meetings with key clients, take them out to lunch. Schedule a round of golf. Invite their families to your kid’s birthday party. Find them at industry conferences and grab a cup of coffee between events. Talk. Connect. Swap CEO war stories. Grow these key relationships, and they’ll help you grow your business BIG.
To be concluded in Part V: The Day You Know It All is the Day Your Business Dies
About Mark Moses
Mark Moses is the Founding Partner of CEO Coaching International and the Amazon Bestselling author of Make Big Happen. His firm coaches over 150 of the world’s top high-growth entrepreneurs and CEO’s on how to dramatically grow their revenues and profits, implement the most effective strategies, becoming better leaders, grow their people, build accountability systems, and elevate their own performance. Mark has won Ernst & Young’s Entrepreneur of the Year award and the Blue Chip Enterprise award for overcoming adversity. His last company ranked #1 Fastest-Growing Company in Los Angeles as well as #10 on the Inc. 500 of fastest growing private companies in the U.S. He has completed 12 full distance Ironman Triathlons including the Hawaii Ironman World Championship 5 times.