Look at this baby from Airstream. What is it going to take for me to put you in this ultimate WFH rig?
Other day I read a statement that said, “You can’t really learn from your success.”
The thrust of the blog post was that a good kick in the teeth is often the packaging for a well taught lesson — fair play to that. Agree completely.
But when reading the “You can’t really learn from your success” sentence, I said, “Hmmm, really?”
This is because I have learned a lot of great things from success. In fact, it is — particularly given the busted teeth, bloody split lip alternative — my favorite way to learn.
Allow me to elaborate on what I call “The Bananas Foster Theory of Embellishment of Success.”
The Banana Trade
Far away and long ago, New Orleans was a center of the banana trade in which South and Central American countries exported their bananas to the United States thereby funding banana republics.
Several years ago, I was advising a fairly inexperienced CEO — a terminal condition that everybody eventually outgrows, remember that — who found himself in the midst of a dispute in the 8/10 range — meaning it would not tank the company, but it would change the speed, trajectory, and azimuth of the company’s future progress. It was important.
There was plenty of regrettable behavior on both sides and there was an important legal issue, but it was a heated and contentious confrontation made moreso by the personalities involved. These personalities were not the CEOs’, but the management of both companies.
Push led to shove and they were on the brink of paying off some lawyer’s lake house.
They had both talked to their lawyers, but no lawyers had been unleashed. It was still solvable.
You’re a startup on your way. You are at that magic 50+ employee level at which you start to pay attention to things like Performance Appraisal. With that level of staffing, you will find out that when the tide goes out, some folks have been swimming naked — meaning not everybody is a super star.
Sure, you remember this — click on to see larger:
If you are the CEO of a startup or small business, the months of November and December are when you must be planning what you will make happen in CY 2021 — and, yes, there will be a Calendar Year 2021 whether you plan for it or not.
You should be following a discipline something like this:
Review 2020 performance — review and discuss with your senior folks with an eye toward segregating the loser from the winners, the saints from the sinners
Based on 2020 performance, create your 2021 plan with input from your senior folks
After a careful review, publish the “preliminary” plan and sit down with your Board to get feedback
Revise the plan
Publish the plan
Brief the plan to the company and get buy in
This can take two weeks or six weeks. It should be started in November, finished in December, and published before Christmas.
I took a few accounting courses in grad school. I once knew my debits versus my credits. Knew all about original issue discounts, goodwill impairment, and other such trivia.
Knew GAAP and FASB. Just showing off now.
I ran businesses for 33 years. I needed to know more about accounting so I hired good accountants, retained good accounting firms, hired a good Chief Financial Officer, got second opinions, and I studied the subject on the mean streets of the business world.
CEOs and founders need to know some accounting — financial accounting, managerial accounting, tax accounting. What I knew saved me a lot of money.
One of my interests is the progression of ratios in a graphical manner — pick a financial ratio and graph it such that you can see the trend at the bat of an eye. That tells me something.
I am sure I have written about this before, but I had chats with a number of CEO type persons over the last month such that I feel I must say it again.
In life, you do not get power, you take power. It is not a difficult concept. CEOs must take charge.
May I tell you a personal story? [I like asking things like that because it makes me seem reasonable, which I assure you I am, but I really don’t care if you give me permission. Here comes the story.]
Once Upon A Time In A Far Away Country
I was anointed by our military to conduct affairs of some considerable importance in a far away land.
Performance appraisal in small to medium companies (including startups) is one of those things that CEOs equate to going to the dentist. Not only do they not like it, they are not good at it.
There are a lot of very odd ideas at play here in the performance appraisal business — 360 degree appraisals which also fold in the guy selling flowers on the street corner — which makes the process a moving target; moving targets are notoriously hard to hit.
The message I bring you today is that a suspiciously simple, well-designed and executed performance appraisal system can be the most powerful personal tool wielded by a keen CEO for inspiration and motivation of individual team members.
It can also be clean, streamlined, and painless.
Let’s take a quick look at where performance appraisal fits within the overall schema of a company’s organizational matrix. Click on the graphic to see it at a larger scale.
What I want you to see is that performance appraisal is at the foundation level of the company’s Vision, Mission, Strategy Tactics, Objectives, Values, and Culture.