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Guest: Jim Kenefick, Founder and Managing partner of Working Excellence, a company of strategic architects and sustainability experts that works with leadership teams who want to achieve greatness.
Episode in a Tweet: Scaling your business means you have to mix your own special brew at the leadership level. Here’s how to do it.
Quick Background: The path from pre-revenue start-up to a successful million-dollar business is tough. Getting from that first million to $5 million can be even tougher. And if you want to scale BIG, to $10, $50, or even $100 million or more? Well, that takes great leadership.
On today’s show, Jim explains how CEOs can build a team and a learning culture that will transform good companies into great ones. And then we follow that with a discussion on how you can finance your company’s rapid growth.
Transcript: Download the full transcript here.
Key Insights on Building a Team for BIG
1. Can you scale your A, B, Cs?
My coaches encourage clients to rate their leadership teams – annually, at least – and replace anyone who doesn’t score high. Jim emphasizes this practice too, but he also advises that CEOs think about how those letter grades relate to their scaling goals.
“I think it’s both qualitative and quantitative, and also about the stage of the organization,” Jim says. “A company at $5 million, $10 million, $25 million, the type of leadership in management that you need is very different at all those levels. An A player at a $10 million company could be a B player at a $100 million company.”
The easiest way to keep your team in line with your ambitions is to hire people who can get you where you want to be tomorrow. CEO Coaching International client TaskUs just crested $100 million in revenue. Good enough? Not for TaskUs: they went out and got a COO who has worked at a billion-dollar company.
2. Learning is more important than titles.
Upgraded business cards and placards are much more valuable to individual team members than they are to your company. Don’t be so quick to surround yourself with “vice presidents,” or worse, bump someone into the C-Suite who isn’t ready.
However, Jim does believe companies should promote from within when possible. They key is identifying the high potentials who have the ambition, drive, and willingness to learn that could turn him or her into a real leader … if you don’t jump the gun.
Cautions Jim, “We’re always very careful about giving out titles in the early stages of companies. Let’s not give out that CFO title if we don’t have to. I always create a learning environment. You may not be the CFO of a $100 million company today, but you have the opportunity to learn and grow, and when we become a $100 million company, you’re ready to step in and handle the role.”
3. Own your core values before – and after – you outsource them.
Outsourcing is often an important tool for expanding your capabilities and achieving meaningful scale. But you can’t trust a team that’s potentially thousands of miles and multiple time zones away with your brand if you don’t have strong core values in place and a way to communicate them.
“You want to own your core values,” Jim says. “The core value of what you’re delivering is key. Instill those in your employees in the initial stages as you grow.”
Once you hit your initial scaling goals, consider ways to bring those outsourced tasks back in-house, or to increase oversight as you set your sights on a bigger target.
“If you’re a tech company, you might say, ‘Now that we’re at $5 or $10 million, we really want to bring in one person to manage the marketing partners that we have,’” says Jim. “As you get to $10 or $15 million, maybe you want to bring in a CPA or Director of Finance to manage the outsourced partners. I think, in today’s world, there’s kind of a hybrid approach where you’re bringing in key members to either manage your outsourced partners, so the CEO or management team don’t have to, and then you can grow the business and just add key executives into certain core competencies.”
4. Find the right kind of chemistry.
Few things can throw a company off track quicker than a squabbling leadership team. But it’s important to draw a distinction between a bunch of bulls charging around in your china shop, and a group of high-performers pushing each other – and the CEO – to make the company better.
“Healthy chemistry is having individuals that are opinionated and respectful, and appreciate that there can be many right answers to a question,” Jim says. “If you have a senior team that are all A players, then I think it’s healthy and normal to have disagreements. Then at the end of the day, whether it’s the CEO or the board or a consensus that makes the decision, it’s implemented. If it works, fantastic, if it doesn’t work, that’s okay, too, but you move on, you make changes. I think a successful company makes a lot of different changes. They’re always tweaking. You need to have a successful chemistry to implement those changes.”
1. Rate your team. Anyone who isn’t performing at your current level will be a stumbling block as you try to climb higher.
2. Identify overachievers. A current employee motivated to grow along with your company could be as valuable as five-star hire in the long run.
3. Mix your own special brew. If you hire the best people, their chemistry will be good for growth – even when they disagree.