8 Key Patterns of Successful CEO’s:

Every President of their business wants to be successful. Here are 8 patterns that describe successful CEO’s:

1) A person who respects others

2) A leader that attracts top talent

3) Someone who really knows where and how their business makes money

4) A forward looking leader

5) A manager that establishes specific performance objectives

6) A leader who is sales oriented

7) One who possesses an appropriate level of detail

8) A President who attracts and listens to good outside advisors

If you employ these 8 patterns, chances are you’ll run a highly successful business.

Next week’s blog: Why New Businesses Fail:

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Don’t Be Blind to Embezzlement Signs:

Jan Quintrall of Spokane’s Better Business Bureau wrote an article in the Spokesman Review a few years ago regarding embezzlement signs. Here they are:

1) The person that reconciles bank accounts cannot be the one who writes the checks.

2) The person who opens the mail, receiving checks or processing the credit card batches should not be the person who makes the deposits

3) Do spot audits with your CPA. Honest employees won’t object.

4) Do background credits check on any employee who will be handling money or products prior to hiring.

5) Cross-train and move duties around every once in a while.

A final note: it’s almost always the “trusted, long-term employee” who embezzles. Remember, they know your system and if procedures aren’t air-tight, they know how to circumvent them.

Next week’s blog: 8 Key Patterns of Successful CEO’s:

You Need an Advisory Board:

Even a small company needs an outside advisory board. An advisory board can clarify strategic direction as well as provide diverse opinions on how to handle thorny issues. And, someone who is not an insider in the company will generally have a more dispassionate view than employees who have a vested interest in the outcome.

Yes, I know what you’re thinking. “How can I afford a board of directors when I’ve only got 8 employees?” The answer is, if done correctly, you won’t have to pay them anything other than perhaps a lunch now and then!

Get to know other President’s of small companies from different industry groups. Ask them to join you in an ad hock advisory group that will be available whenever one of you has an issue. These President’s will probably jump at the chance to have someone else’s advice because they face problems just like you do and many times they have questions on what’s the best course of action to take.

This informal group doesn’t need to have monthly meetings or any other structured arrangement. Generally speaking you will only need to get the advice from one or two of the members and it can be done over breakfast or perhaps on the golf course.

We all know that running our companies can be a lonely job. Well, this loneliness can be alleviated by having other President’s who face the same issues you do. And, guess what? You’ll probably make a few lifelong friends in the process.

Next week’s blog: Don’t Be Blind to Embezzlement Signs:

Overled & Undermanaged???

Remember the old saw that “leaders do the right thing and that managers do things right?” Well according to Henry Mintzberg in Business Week, today’s businesses are overled and undermanaged.

Strategies that end up being successful should not be conceived at the “top”. Rather they should grow throughout the organization via a kind of distributed leadership. Studies show that vital information is typically transmitted to a CEO informally, oftentimes orally, rather than in formal reports. Leaders who are removed from day to day managing aren’t going to get these messages.

Management can be messy and requires an enormous amount of work by the leaders of business. If, you as President, don’t spend the appropriate amount of time managing, don’t count on your managers to spend the necessary time managing either. A prime example would be Ken Lay at Enron. While Ken was out hobnobbing with world leaders, his President, Jeff Skilling was driving the company into bankruptcy.

According to James G. March, “Leadership involves plumbing as well as poetry”. So, remember, the best leaders are good plumbers as well.

Next week’s blog: You Need an Advisory Board:

Customer Classifications

Take a careful look at your customer list. Some of them are great customers. Some are just so-so. And, some of them may not be worth keeping.

It will help your business if you start classifying each customer in one of 4 categories:

1) Customer. This is a customer who has bought one of your products or who you performed a one-time service for.

2) Repeat customer. Here is someone who was impressed enough with your offering to buy again.

3) Referral. Here is a customer who was so satisfied with what you sell that they are willing to let you reference them to new prospects.

4) Advocate. This is the top of the food chain! This customer recommends your business to others without ever being asked to.

If you want to build a powerful business, you need to develop plans and actions that move each of the first 3 levels into level 4. Because level 4 is where your business gets the brass ring.

Next week’s blog: Overled & Undermanaged???

Why Should Anyone Follow You?

Needless to say, if you’re the leader of your business, you’ve got to have followers. So, you’d better know what it takes to lead effectively.

A Harvard Business Review article several years back lists the basic ingredients of vision, energy, authority, and strategic direction. But….if you’re going to be an inspirational leader; one whom people will want to follow, you’d better also include the following four principles:

1) You need to selectively show your weaknesses. By exposing some (and the operative word here is some) vulnerability, you’ll reveal your approachability and humanity.

2) You need to rely heavily on intuition to gauge the appropriate timing and course of your actions. “Soft” data will help you know when and how to act.

3) You need to display a “tough empathy” leadership style. Inspirational leaders empathize passionately and realistically with people. And, they care intensely about the work their employees do.

4) You need to reveal your differences. This way you’ll capitalize on what's unique about yourself.

If you employ the following principles along with basic strong management practices, you will excel at inspiring your people; in capturing their hearts, minds and souls.

Next week’s blog: Customer Classifications

Which Business Should You Start?

So, you’ve decided to go into your own business. Hopefully, you’ve taken the personal inventory test from Blog #1 and you fit the necessary personality traits that will improve your chances for success.

Now, which business will be the right one for you? Consider the following 4 basic principles:

1) A business that matches your expertise. Do you really know the ins and outs of the daily workings of the business you plan on entering? If not, on-the-job training can lead to ruin.

2) A business that has an identifiable niche. Any fool with some disposable income can start a gift shop in the mall. And, most of those fools end up broke! Before you plunk down your hard earned money, ask yourself “what is the unique selling proposition (USP) of this business? If you have an USP, you’ve got a great chance for success.

3) A business that offers sufficient margins for profitability. I’m not talking about a product that you mark up 100% and think a 50% margin must be great. Instead you need to fully understand all of your direct and indirect costs. And those costs must be less than your sales prices. This means knowing completely what all of your expenses are and whether or not you can sell enough product or service to leave you with a profit at the end of the day.

4) A business that offers the potential for recurring revenue. It’s a heck of lot easier to make money in business if you have repeat customers. Otherwise, you have to sell a very high end, expensive product or service in order to make a profit. Generally, an expensive product or service has a long sales cycle which, unless you’ve got a very rich uncle, can drain your capital and cause bankruptcy.

If your business has these 4 basic principles, you have a good chance of being successful.

Next week’s blog: Why Should Anyone Follow You?