3 Crucial Questions for Founders at Year End
In my long career, I have worked alongside many Founder CEOs as their Vice President, People & Talent, with a heavy bent on operations and organization effectiveness. With radical candor, at the end of every year, I challenge the Founder CEO with three thought-provoking, gut-check questions for them to reflect upon deeply and honestly. It has always proven to be an impactful, often eye-opening, exercise as the answers regularly affect the business focus, direction and strategies for the upcoming year.
1. If your key executives interviewed today for their jobs, would you hire them? Without regard to legacy, this question speaks to the future organization effectiveness. No matter how solid your business strategy, it is always the execution that really matters. Do your leaders in critical areas such as product development, sales, finance and operations have the ability to consistently produce the desired outcomes you need today and will need in the upcoming year? Do they have the skills and commitment to handle next year’s business requirements? At some point in every venture the old adage will hold true that ‘what got you here won’t get you there.’ Founder CEOs are often reluctant to address mediocre or plateaued leaders for many reasons, including the fear of alarming investors and shareholders. Avoiding tough decisions today will create dire consequences tomorrow. Remember, problems don’t age well.
2. What are your “real” cash constraints and requirements for next year? In the manpower planning and human capital strategy, knowing your true cash requirements and constraints is key. How are we currently allocating, organizing and prioritizing our resources? What positions must be filled, when and in what order if the business model is to succeed next year? What product focus will drive the most income? What is possible to technically develop next year and how much financial risk does this imply? Where are the gaps?
3. Can you state your strategy simply? This question addresses workforce confidence and leadership credibility. One Founder CEO I know struggles to communicate the business strategy in a straightforward and clear way to the employees. His communication – both in style and substance – is often perceived by the rank-and-file staff as “spin” and the average employee just does not believe it. If you cannot communicate your strategy simply to employees who are involved in the business daily, how can you even hope to articulate it to the outside world who knows nothing of what you do? The implications will have far reaching significance, including key staff retention, recruiting and properly conveying that that the future of the company is bright.
These questions have proven to be powerful and thought-provoking, often resulting in significant insight and changes for the upcoming year. In fact, they are so impactful I recommend considering them regularly, not just annually. Honestly assessing your leadership’s capabilities, a pragmatic look at your financial wherewithal, and challenging yourself about how effective you are to deliver your own strategy will prepare you with better visibility and clarity as you position the business for growth in the upcoming year.