What do you get when you spend 40 years in and around entrepreneurship? In my case, 10 black, three-ring binders are an important part of the answer.
Let me explain. I lived my first 20 years of self-employment as an entrepreneur, building College Pro Painters. I spent the next 15 as a venture capitalist, with a few of those years at the helm of Arxx Building Products, one of the investments in our VC fund. Since stepping down as CEO of Arxx five years ago, I've worked as (or, at least, evolved into) a "trusted advisor" to entrepreneurial businesses. And for each of the companies I've worked with, I've compiled a synopsis of each business in a black, three-ring binder.
I recently leafed through those binders in search of the best business lessons of my past 40 years. My discovery: there are five fundamentals of running a successful business, and they live where the rubber meets the road. None of them are earth-shattering, but they can be tricky to apply.
1. Focus, focus, focus
It's easy to say, yet so hard to do. I recently read a book on the Facebook story, and this principle leaps out above all else. Facebook placed relentless focus on building a user base, campus by campus, and continually making the program friendlier. As wild as I feel for saying this, Mark Zuckerberg was right not to put short-term focus on raising revenue.
To put the importance of focus into greater relief, consider Paul Martin: a superb finance minister but a weak prime minister. In the former role, Martin focused like a laser beam on reducing the deficit and building surpluses. As prime minister, he dared not disappoint any people, so he ended up disappointing most people.
A CEO I've known for a long time told me that his biggest job is to be Dr. No. Only by turning things down does he let people know what really is important.
My brother Paul, a longtime entrepreneur who is now a consultant in Vancouver, tells me that the biggest problem he sees in business is that people start many things but finish few. "I'll get to that next week," they say. Next week never comes. His advice? "Complete something."
2. Time management
It's the kissing cousin of #1. We have two finite resources in any business: time and money. We budget the heck out of money. Time is even scarcer, but we treat it more shabbily.
How a CEO spends his or her time is the biggest signal to staff of what is really important to the company. A good technique for aligning your actions with your priorities is colour-coding your time planner with those priorities in mind. One of the CEOs I work with, Jeremy Behar of Cirrus Consulting Group in Toronto, knows good people are the key to the growth of his business. So, he shades hours in his day planner green to denote the time he will spend recruiting people or developing his existing employees. That way the task stands out visually to him.
Another trick is to be proactive, applying Steven Covey's "put the big rocks in first" principle. Go through your calendar months ahead and mark some "green space" in every week to block off time to tackle your most important priority.
3. Horses for courses
Or, as Jim Collins wrote in Good to Great: "Get the right people in the right seats on the bus." But how can you tell when you have the "right people?" It's never easy. My first boss, Scott MacDiarmid at General Foods, used to tell me the thing he liked about me was that when he asked me for "A," he got A or A-plus, and on time; he never got a B or C with an explanation. In business, table stakes is understanding what is asked for and delivering it. Greatness is taking it one step beyond that, being proactive and what I call a "life force" in the business. Someone who is an "energy multiplier," not a drain. It is so great for entrepreneurs when they feel that they are "not alone" in trying to grow the business or push the envelope.
On the other hand, when the person is not right, you will know. But, like most entrepreneurs, you might be "slow to fire." Don't be.
4. Clarify roles
This is all about getting the right seats on the bus. Everyone needs to know what they, and they alone, are responsible for. The "one throat to choke" philosophy is still a good one, although perhaps a bit graphic. At Cirrus, a little box appears under each person's name on the org chart, containing that person's top three deliverables and metrics. This allows strategies and plans to be quickly checked against principles #1 and #2: do the tasks reflect the focus of the business, who will perform those tasks and how will anyone know those tasks are being performed?
5. Measure, measure, measure
Make those top three deliverables the key performance indicators for each manager. Put them on a one-page "dashboard" and review it regularly and relentlessly. An example is the weekly RAG (results at a glance) at College Pro, which remains that company's most read report. When my stepson Jon was a star manager there, he used to check the RAG every day to compare his performance to his targets and that of his peers. When you get the numbers right, the numbers don't lie—and everyone knows it. Good people will self-manage to make their numbers.
Are these principles simple? Yes. Easy to stick to? Maybe not. Tack this page on your wall, and consult it frequently. If you can't follow this diet, find a coach or advisor who can help you. It works.