Hedging Your Bets

Big Red Car here.  For the record the A/C has been on in The Boss’s house in the last 24 hours.  Just saying.

Today it will be, oh, about 80F this afternoon.  Love that global warming.

So The Boss has been at the CEO coaching looking toward two years now.  He’s learned a lot.  Amongst his brilliant CEO clients are folks who have made the journey from being struggling, gangly startups to being solid growing businesses with escalating revenues and real profits.  In some instances, the transformation has been magical.

Big point:  You will not always be a scrappy startup and able to blame your lack of attention to detail on the chaos that is startup land.  Sometime you are going to be expected to attend a wedding and actually know how to dance.  Take the dancing lessons and plan your business NOW!

The big discriminator

The big discriminator amongst those who make the turn is attention to the quality of their basic planning of the enterprise.

When you are working on a product as the driver of your business, it is perfectly fair to say — “Well, when we get the product just right, we can focus on the delivery system, the business.”  Building the company CAN wait on perfecting the product.  It just can’t wait forever.

OK, that is fair but requires a bit of reality — the building of the company is going to provide the marketing conduit to bring your product to market where the customers with real money are lying in wait to buy your product.

At the core of all of this is the necessity to extract the Vision, Mission, Strategy, Tactics, Objectives, Values and Culture from the recesses of your big brain.  You have to put it on paper as a prelude to building your company or business.

Again, this is not as necessary when you are doodling on the product but once you are ready to bring it to market it is essential that you have a plan that is at least as good as the product.

The thrill of victory

It has become so common amongst The Boss’s clients to see the thrill of victory that it has almost become an identical process.

When CEOs do get their product right and they do get their plans right and they communicate the plans to their team — there is a huge multiplier effect.

CEOs will enunciate this in terms of the favorable performance of the team, the efficacy of an off site planning meeting or the sense of relief that it all brings to the CEO.

More than one CEO has said — “Hey, I’m sleeping better.  Have a discernible lower level of anxiety.  I am doing so well that I just don’t want it to stop.”

The agony of defeat

Failure is part of the entrepreneurial experience.  Sometimes failures are small and sometimes they are cataclysmic.  We all learn from failure.  Capitalism is as much driven by creative destruction as it is by success.  Success, of course, is more desirable and tasty.

In much the same way that The Boss has seen success built from scratch, he has witnessed failure waiting in the shadows to pounce.

Sometimes failure is simply because the hypothesis or idea that was to drive the business engine was just not good enough.  Rarely, really.

Sometimes it is because the entrepreneur cannot attract funding or the funding is not in time.

Sometimes it is because the entrepreneur has not made the transition between a good idea — a working prototype — and a sustainable business.

In many of these instances — regardless of the reason — it is often a lack of planning which is the culprit.  Because the CEO did not have a plan for the business, the product may have succeeded and the business was killed in the cradle.

If this were not so, the Big Red Car would not tell you this.

Hedging your bets

So, brilliant CEO, the key to all of this may simply be hedging your bets.

How you ask?  By ensuring that you do the preparatory work to ensure that when you product is successful, your company is also successful.

How do you do that, Big Red Car?  You ensure that you have worked through the Vision, Mission, Strategy, Tactics, Objectives, Values and Culture of your company.

While the Big Red Car really wants you to do this with a degree of completeness and commit it to writing — it is OK just to get it out of your brain and on paper if you are willing to spend a couple hours per week working on it thereafter.  Negotiate with yourself but negotiate both sides.

The folks who are running vibrant and profitable business who have lived through startup torture — they’ve done this in some form or fashion and continually work on it almost daily.  When you start hiring folks, you’ve got to have a plan to tell them what they’re buying into.  No plan and you will be hiring folks who add to the chaos rather than make order from the chaos.

This is not a pill which will make all of your problems go away but it is a view of thing which will contribute greatly to you joining those folks who are spending their time considering what to do with the profits.  A very nice problem to have.

And, guess what —YOU are every bit as smart and deserving of such success.

But, hey, what the Hell do I really know anyway?  I’m just a Big Red Car.