THE NEW YEAR


Planning BIG: 5 Things Your Biz Needs to Get Growing Forget the economy — your business can prosper if you get out of your own way. By Steve Firszt


cievable and customer records were in his head, backed up by some documentation filed “somewhere.” No wonder he wanted me there for two days. And no surprise that, when it came time to implement the changes I would recommend, he was too busy to do any of them. This story might be funny if it were not so universally true. Small companies often stay small because of the owner’s inability to let go and delegate. The organization of such an owner-centric company looks something like this…


This kind of organization can never grow past the owner plus 7-8 employees, because no one person can effectively manage many more “direct reports.” This is the growth barrier that I see working with companies across the US. Many get “stuck” at the 7-8 employee size, never able to grow past it and often — be- cause the owner is taxed to be responsible for so much — unable to sustain that size organization. They don’t grow. They shrink. This is confirmed by the data. The census counts about 4.6 million firms with fewer than 10 employees — just over 75 per- cent of all employer firms, and about the same number that do under $1 million in annual revenues.


RE-SHAPING YOUR ORGANIZATION FOR GROWTH That 75 percent of U.S. firms don’t grow past $1 million an-


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nual revenues may seem sobering, but it doesn’t mean yours has to be one of them. You will need to escape the owner- centric dilemma, if you haven’t already. You’ll need employees who know how to accomplish the daily work of the business. You may need business management skills that you, the owner, do not currently possess. Mainly, you’ll need to shape an or- ganization that attracts and retains both good employees and profitable customers.


erhaps your company has already achieved $1 mil- lion or more in annual sales. I say perhaps because it’s not an easy thing to do. In fact, according to the most recently-published census data www.census.


gov, fewer than 25 percent of all employer firms in the U.S. produce annual revenues of greater than $1 million. And only half of those — just over 12 percent of U.S. companies — do more than $2.5 million annually. While small businesses make up the vast majority of U.S.


firms, small businesses are, well…really small. The main reason for this is not the economy, or competition or lack of opportunity. These are challenges that every business must overcome, regardless of size. The main reason businesses re- main small lies at the very top of the organization. Or should I say, the center of the organization.


THE NON-DELEGATOR A few years ago, I was contacted by a business owner in


the northeast who wanted to engage me as his management coach. I explained that I initially visit a business for a full-day assessment, and thereafter work with the owner remotely, meeting regularly online and by phone. The owner wanted


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more. He wanted me to visit his business for two days. “I’ve got a lot of stuff I’d like you to help me fix, Steve.” This sounded intriguing — a business with more complexi- ties and issues than any I’d worked with before; a business that wanted to get twice as much done during my visit. As I was to learn, however, we needed two days because this was a busi- ness that took twice as long to do just about anything. Over the course of my visit, I discovered that Bob, the owner,


was at the center of virtually every company activity. Our talks were interrupted constantly — by customers, by his admin as- sistant, by his field staff. There were non-stop questions that apparently only Bob could answer. When an answer wasn’t good enough, Bob would stop our work so that he could do, himself, what needed to be done. He even took me to a jobsite, where I got to watch him work for an hour. It wasn’t a high-level customer meet or anything at all strategic. No, I got to watch him fix a technical problem his technicians had been unable to resolve. Bob’s epicentral management style was a bottleneck to progress. He was so busy “keeping up” he couldn’t even plan his day. The bookkeeping software he’d purchased was imple- mented only to the extent that his assistant knew how — and she didn’t know enough. Accounts Payable and Accounts Re-


Here are some of the best ways I know to do that…


PROVIDE EMPLOYEES CLEAR DIRECTION. One of the big- gest mistakes entrepreneurs make is expecting their employees to be like them. You know, unafraid to work without a script. Unafraid to take risks. Unafraid to miss an occasional paycheck. Sorry. If employees were like you, they’d be owners, too. But they’re not like you. They like and need to know what is expected of them. This paragraph from the Verne Harnish book, “Mastering the Rockefeller Habits”, is the best statement I have ever read on the subject: Employees “need to know what marks they’re supposed to be hitting. They want to understand how they can conduct them- selves… They appreciate a reminder when they goof up. And they want to know the rules aren’t a moving target…” It wasn’t until I had children that I began to understand just how differently employees, compared to entrepreneurs, think about things. Tell a child to do something, and they ask, “Why?” You tell them why, they ask, “How?” And if you don’t tell them exactly when you want them to do it, it doesn’t get done. (Inter- estingly, children never ask, “When?” They somehow know that


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this is their “out”, if “When” is not specified.) Think about your company. Is the Who, What, Why, How, and When of their work clear to each employee, each day? If it isn’t — if there is any ambiguity, or if you’re asking them to figure it out on their own, don’t be surprised if you don’t get the out- come you desire. Your employees need your help to succeed.


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HAVE GOALS AND SHARE THEM. One of the biggest breakthroughs for my company was learning to quan- tify what we hoped to achieve. Over my first five years


as company president, we went from minimal planning (“How much cash do we need this week?”) to comprehensive annual and monthly targets for sales, GP


, net profit, and cash. Compa-


ny-wide goals were broken down into operating targets for each of our stores, which in turn allowed us to create quotas for each department and each salesperson. These goals allowed us to clearly enunciate another thing


employees love to know, namely, where is the company going? It allowed us to make demands without sounding unreason- ably demanding. And over time, it helped us refine all our daily processes: what we needed to do, and how we needed it done. Every month, we would have a meeting to compare actual sales and GP results to the goals we’d set. The results weren’t always “on plan,” but the culture was both rewarding and motivating. You might not expect that employees would care, but they do. There is another interesting benefit to all this. Employees hate chaos. They will always seek a more orderly environment (remember, they don’t think like owners). Goals — and regular communication to discuss them — bring order. Employees will be less attracted to other opportunities.


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MAKE TIME FOR STRATEGY. Strategy is the exclusive do- main of high-level management. Brand strategy, marketing strategy, organizational strategy, financial


strategy. The epicentral owner is so often overwhelmed by the needs of the moment, s/he never has time to think about these things. But the growth-oriented company will stall without it. Prior to my final year as company president, my family and


I moved 235 miles north of my company’s heqadquarters. For over a year, I drove those 235 miles to work every Monday, stayed three nights in a hotel, and returned home on Thursday. Necessarily, I had to completely remove myself from daily operations. Close to 100 percent of my time was spent on strategic issues. It was the most productive year of my career. Every division of our company grew. We made record profits. I recommend to all my clients that they set aside some stra- tegic time each and every week. Don’t move out of town to make it happen, just get in the habit of devoting a scheduled period of time each week to closing the door, turning off the phones and e-mail, and thinking about what needs to happen to help your company grow. I call this the “pause button”. You’ll be amazed at what con- sistent strategic pauses can help accomplish.


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