Month: February 2022
The Most Underestimated Aspect of a Successful Company
This might surprise you if you’re not a business owner. But if you’re a successful business owner, you’ll know what I’m talking about. Read on: The most underestimated aspect of running a company is being disciplined about only bringing people on your team who naturally share your core values. This means that their work style must be compatible with yours.
Many people tend to focus only on finding people who have the right skills, experience, or resume so you know they can effectively do the job you’re hiring them to do. That is, of course, important also. We cannot hire people who cannot effectively and consistently perform excellently at the jobs you hired them to do. But most of my clients’ issues with their people have to do with the fact that they don’t share the founder’s and leadership team’s core values.
I had one client, the founder and CEO of a construction company, who identified taking ownership as one of his company’s core values. But when I started working with them, most of the people in the company tended to check off their daily checklists without taking ownership over ensuring the success of their parts of the business. Whenever he needed them to do anything or implement an improvement we were working on, the founder felt like he had to pull, push, and drag them along. It was draining and exhausting.
Dan Sullivan from Strategic Coach talks about how the number one thing you need in team members is that they come with “batteries included.” They join the team already equipped with their energy, motivation, ideas, and commitment. They don’t drain your energy. Working with them gives you energy.
Because my construction client continued pushing for excellence and growth and didn’t let his team members’ negativity and lethargy stop him from pursuing what he wanted to see from his business, all of those energy-draining people felt more and more friction as they tried to maintain the status quo of their roles. Fighting change and resisting ownership over their results became more and more taxing and unpleasant until they all eventually left on their own. With a number of right-people hires, he now has a team full of people who came with batteries included.
It is possible to have people who fit your core values. You don’t have to resign yourself to having a team full of people who don’t. And anyway, the people you have to let go or leave will be happier and feel more successful in other organizations where they do match the core values.
But There’s More: What I Wish I had Known Before Starting My Business
Of course, having team members who naturally hold your core values is what I consider to be the most underestimated quality of successful business, but before you even hire your team, consider these five things that I believe every entrepreneur should hold in good stead before even stepping into the leadership role. I’ll cover them briefly here.
Have disciplined persistence. You win by staying in the game longer than anyone else. Identify the types of actions that get results and then set measurables to ensure you or your team take a minimum number of those actions every week, month, or quarter. Then later, rinse, and repeat. One of the clients knew that for every 100 target market prospects their salespeople emailed, they got five pitch calls and converted about 40% of those into clients. That’s two clients for every 100 emails. It’s not rocket science, but if you take the right actions consistently over a long period of time, you’ll ultimately see cumulative results you can’t imagine right now.
Help first. Don’t wait until people give you leads before you give them something. Help people out before they do anything for you. When you make this a habit, people don’t resist setting up conversations with you because they see from experience that you want to help them without asking for anything in return. I created and still maintain a weekly metric to track the number of referrals I make to others. It keeps me focused on helping others. It ultimately comes back to you anyway because people remember you as a good person who wants to help others and not just a selfish salesperson.
Be authentic. Don’t try to hide the things you don’t know or pretend like you never made a mistake. It comes across as fake, overly slick, and sales-y. In my Win Win podcast, I ask my guests the questions I feel skeptics about their industry or product would ask. It makes the conversation more authentic and helps them by giving them the chance to address the audience’s implicit questions preemptively. They build more authority and trust that way.
Launch and learn. Things will never be perfect before launching them, and you’re likely to be even further from perfection if you delay testing what you’ve built against the reality of actual use. When I launched fractionalleadership.io as a vetted Fractional Leader referral platform, I immediately set it up using Google forms, Google Docs, Google Sheets, etc. I didn’t want to waste time and tens of thousands of dollars it would have taken to create that automation without even testing which processes worked in real life with actual business owners and Fractional Leaders. Get your MVP (minimum viable product) and launch and learn!
Start with a process. When you start building your business, you’ll be tempted to do things in a way that works at the small scale you have at the beginning. Wherever practical, document your processes and make them scalable. Imagine if you went on vacation on a cruise ship for a week without any access to Wi-Fi or cell phone service. Can the systems and teams you put into place keep your business running without you? For example, instead of your team having to get pricing from you for each pitch or proposal, set up a rubric they can use on their own to do the pricing and pitch without you.
The blog is comprised of modified excerpts from Authority Magazine‘s December 2021 article, “Ben Wolf of Fractional Leadership: 5 Things I Wish Someone Told Me Before I Began Leading My Company.”
Fractional Leadership and the Fractional CTO and CIO
If your greatest need or what’s keeping you up at night relates to the proprietary tech products or systems you built and that you sell to your customers, or if you need your out-of-the-box systems up and running every second for your business to run, you may need a Fractional Chief Technology Officer or Fractional Chief Information Officer.
Let’s paint a picture of what that looks like.
You or a member of your leadership team are doing your best to manage a patchwork of freelancers, an Managed Services Provider (MSP), a VoIP provider, and internal or external developers or resources. Still, you don’t have the time, experience, or resources to do this well. It’s taking a toll on your ability to do what you need in other parts of the business. It’s holding you back.
Alternatively, you built a product using freelancers, and you sell usage of that product to your customers. But you’ve now grown the business big enough that the product and your customers’ needs are outgrowing your ability to serve them effectively. You’re one outage or bug away from disaster.
Another scenario is that you need to do a technology-heavy rehaul or turnaround of your operations, but you’re not sure where to start and certainly don’t have the bandwidth to drive and oversee
Do You Need an FCTO, FCIO or Consultant?
So, which role would best serve your business do you need, a Fractional CIO or CTO, or a consultant? Let’s run down the basics for each position.
The Fractional Chief Technology Officer
If you developed your proprietary technology and have an internal or external development team maintaining it, you may need a full-time CTO or a Fractional CTO. Without the right person focused on your product and the systems on which it operates, your entire business sits on very shaky ground.
You need someone who understands the servers on which those systems run, whether server-based or cloud-based. Your critical risks include data security, server reliability and speed, redundancy if something goes wrong, external and internal tampering, and hacking. You likely need someone with experience to take ownership of your technology.
The Fractional Chief Information Officer
Even if you utilize others’ technology, CRM, or ERP, if you’re over 1,000 people or have very complex, customized, or temperamental systems you desperately rely on every second, you may need an FCIO to allow you to sleep at night. You’ll also free yourself up to focus on running and growing your business once your technology isn’t hogging a huge share of your mental and emotional bandwidth.
Technology and Process Consultants
When do you need a technology or process consultant? In short, these professionals are most helpful when your need is more transactional or short-term. Suppose you need to choose and customize a technology once. In that case, a consultant can help you map out your business processes, research and choose the right technology solution for you to buy, and then hand off oversight of the actual implementation to someone internally.
Many technology and process consultants also offer implementation services. This still falls under the transactional or short-term umbrella. They’ll oversee the selection, execution, data migration, and rollout of the selected technology so that you don’t have to. But after that, their work is done.
Suppose you have significant ongoing needs that require strategic, ongoing leadership to oversee or continue improving and iterating the technologies on which you rely. In that case, you should consider retaining an FCIO or FCTO.
What Does the FCTO or FCIO Engagement Look Like?
The order of operations at the beginning of an FCTO or FCIO engagement depends heavily on why the business brings them in. Things look different if they’re there to implement a herculean technology overhaul or significantly level up and then shepherd ongoing operations. But first, they’ll lay some groundwork:
- They’ll likely start off getting a lay of the land by getting to know you and the internal or external technology people you already have in place and exploring the systems you already have.
- They will work with you and your team members to understand your business model and legal or regulatory framework.
- Finally, they will learn from you about your long-term plans, vision, and goals.
This groundwork is critical for an FCTO or FCIO to ensure that your technology serves you not only in the short term but so that they have the information necessary to create a roadmap for the future to ensure that your systems continue to align with and support the achievement of your goals and don’t become an obstacle or liability later on.
Once they have the lay of the land and understand your ultimate destination, your FCIO or FCTO will prioritize the next steps necessary to align your systems with your current and, ultimately, future business.
On an ongoing basis, an FCIO or FCTO is your partner and continual resource in driving, overseeing, adapting, and iterating your technology infrastructure or products so that you can sleep at night and focus on growing the other parts of your business. You can rest assured that someone who knows exactly what they’re doing is taking care of the technology side of things.
Critically, this technology leader is a strategic partner and participates with your leadership team in their regular meetings and discussions. Ongoing operations, issue solving, budget, and plans all touch your tech in some way. You want your FCIO or FCTO to hear and be aligned with the other parts of your organization. The rest of the team needs your technology leader’s input regarding day-to-day operations, financial decision-making, and planning for the future.
What to Ask When Hiring an FCTO or FCIO
Once you’ve decided to move forward and hire a Fractional CIO or Fractional CTO, Consider the following when interviewing potential candidates:
- Ensure that you and your potential FCIO or FCTO speak the same language, literally. The terms CIO, CTO, Head of Product, Product Manager, and Chief Information and Security Officer (CISO) all mean different things, and not everyone defines them the same way. Confirm that you’re both talking about the same things when using these terms.
- As always, communicate exactly what you want the engagement to achieve and in what time frame.
- Ensure that they have relevant, demonstrated experience doing something similar to what you need. This particularly applies if your potential FCIO or FCTO has a daunting technology goal like overseeing a new system rollout and data migration or directing the development of a product for sale to your customers.
- Ensure they have industry experience if that is important to you. Examples include when your industry has an unusually specialized business model, complicated regulations that affect technology (like hospital systems or Department of Defense security requirements), or standards that would make the learning curve of someone without that industry experience unwieldy.
Virtually every business, and certainly one in growth mode, requires technology, including hardware, networking, security, internet, VoIP, and various Customer Relationship Management (CRM) software or Enterprise Resource Planning (ERP) systems to run the day-to-day business. If your business is struggling in any of these areas, a Fractional CTO or CIO might be the answer.
This blog is the last in a series that outlines some high-level considerations and offers insight into the five major types of Fractional Leadership: marketing, sales, operations, finance, and technology.
The information is a consolidation of my personal experience as a Fractional Leader (FL), retaining other FLs in businesses I managed or manage, interviews with FLs on my podcast, Win-Win—An Entrepreneurial Community, and my network and relationships with other FLs.
My experience in operations and being a Fractional Leader in companies running on EOS certainly contribute to my knowledge of operations. I am not, however, a subject matter expert in marketing, sales, finance, or technology. I’ve written these topics with reliance on business owners and FLs in those fields — from a 30,000-foot perspective.
Check out my blogs discussing the Fractional Chief Marketing Officer (FCMO), Fractional Chief Sales Officer (FCSO), Fractional Chief Operating Officer (FCOO) and Fractional Chief Financial Officer (FCFO).
Fractional Leadership and the Fractional CFO
Is your company suffering from lack of a clear financial strategy or your revenue isn’t where you want it to be despite having strong marketing and sales and operations leadership? It might be time to consider a Fractional Chief Financial Officer (FCFO).
Generally, there are two main scenarios that could cause you to consider engaging the help of an FCFO.
The first is simply that the person who grew up with the company handling finance is somewhat out of their element at your current scale. Your head of finance is someone who’s not a professional CFO with experience advising and analyzing the needs and unique decision points of a multimillion-dollar venture. They may have learned finance through taking courses, bookkeeping training, YouTube videos, or perhaps they’re a certified public accountant (CPA) or have experience as a controller.
The second scenario is that you’re facing a specific finance-related crisis, challenge, or transaction, such as facing a cash crunch, experiencing low or negative profit margin, suffering from high expenses, outgrowing your finance systems, navigating an audit, raising capital, or preparing for a sale or acquisition.
In either case, your revenue might be between $2 million and $50 million and you recognize that your leadership team lacks the financial experience and expertise you need at this stage.
Do You Need an Accountant or FCFO?
It’s sometimes unclear to small business owners when they need CPA or a Fractional CFO. The first thing to do before moving forward to improve your finance team is to be clear about whether it’s tax and financial advice your business needs or execution of an internal financial overhaul or strategy under experienced leadership to help your company earn or increase its profits.
If the former, an accountant is your best bet. If the latter, it’s an FCFO.
What Does FCFO Engagement Look Like?
Depending on the mandate you agree upon, the Fractional CFO will likely oversee all finance operations, including your bookkeeping, accounting, insurance, banking, tax, and legal functions to ensure that you’re managing your risk and that you’re covered from all angles. However, they’re leadership role is often required to go deeper:
- They will ensure that the appropriate financial staff and technology systems are In place and integrated with marketing, sales, and operations.
- They will overseeing financial reporting, so you and the other members of the leadership team have the data you need to make great decisions. This includes the all-important budgeting process. Approximately 50 percent of businesses close within their first five years of existence. You don’t want to become one of those because you spent more than you could afford, ran out of cash, and couldn’t make payroll.
- Once your organization is healthier and has the tools and practices it needs to scale successfully, they will stay with you until you’re ready for them to help level up someone internally to take on the CFO or Head of Finance role or to help you hire a full-time CFO.
What to Ask When Hiring a FCFO
As with any Fractional Leader (FL), it’s critical that you communicate your desired outcomes and deliverables when hiring an FCFO. By doing so, you can ensure that you both are on the same page. Consider the following when interviewing candidates:
- If you’re retaining an FCFO because of a specific transactional need or type of crisis like an M&A transaction, due diligence, bankruptcy, restructuring, or cash crisis, you definitely want to ensure they have proven experience with that kind of scenario.
- Ensure they have full-time CFO experience before they “went fractional.” Like other kinds of FLs, people must have first gone through the gauntlet of deep CFO service with an organization to earn the chops necessary to spot issues quickly and find solutions in a fractional scenario.
- If the learning curve for your business model is great, ensure that they have industry experience. For example, if you have a home care business that bills Medicaid payors and you need someone who understands that industry so they’re not starting from scratch, make sure that background is there before either of you waste your time.
Like other Fractional leaders, most FCFOs do not want to permanently embed themselves into your organization. They want to get your ducks in a row, financially speaking, so your business can become healthier, and you can thrive and focus on what your business really does for its customers or clients.
This blog is part of a series that outlines some high-level considerations and offers insight into the five major types of Fractional Leadership: marketing, sales, operations, finance, and technology.
The information is a consolidation of my personal experience as a Fractional Leader (FL), retaining other FLs in businesses I managed or manage, interviews with FLs on my podcast, Win-Win—An Entrepreneurial Community, and my network and relationships with other FLs.
My experience in operations and being a Fractional Leader in companies running on EOS certainly contribute to my knowledge of operations. I am not, however, a subject matter expert in marketing, sales, finance, or technology. I’ve written these topics with reliance on business owners and FLs in those fields — from a 30,000-foot perspective.
If your company’s marketing or sales efforts aren’t generating the level of performance you need, check out my blogs discussing the Fractional Chief Marketing Officer (FCMO), Fractional Chief Sales Officer (FCSO) and Fractional Chief Operating Officer (FCOO).
Fractional Leadership and the Fractional COO
As a small business owner, are you at the stage in your company’s growth where you’re experiencing poor cash flow, stagnant business growth, increasing overhead, or low or dipping conversion rates? Perhaps your operations can’t keep pace with your sales revenue or are slow or mistake-ridden. You’ve tried several solutions, but nothing has worked, and you’re not sure what to do about it.
At this stage in your entrepreneurial journey, your company has likely grown big enough that you can no longer afford to continue without senior executive leadership of your operations, and you don’t have the time to fill in. The challenge is that you’re not yet big enough to afford a chief operating officer (COO) with the kind of experience you desperately need on a full-time basis.
Or, in some instances, people are ready to hire (or replace) a COO full-time but know that the selection of the right person is so critical that they don’t want to rush it and are willing to spend the six to 18 months it might take to find the right person. They engage with a fractional chief operating officer (FCOO) on an interim basis because they cannot afford to leave that seat unfilled and lose precious momentum during the search process.
How Does an FCOO Engagement Work?
If you’ve decided that hiring a Fractional COO is the next step for your business, begin with the end in mind. This is the typical mantra of FCOOs. At the beginning of an engagement, they will work with you to learn about your business and determine where you are now and where you want to go.
Once you’ve determined that, they will work with you to map out a plan for getting you from point A to point Z. Depending on the critical issues weighing you down or causing you the most pain, they may tackle people issues, process issues or data issues first.
If successful, your Fractional Leader (FL) will help you grow and scale in a way you could never do on your own. They will ultimately help you interview full-time COO candidates, collaborate with you in the hiring process, and then transition a new COO into the position. Alternatively, using your new structure and processes, you may be able to transition the head of operations role to someone internally. The FCOO can help you train and mentor that person to level them up into the role.
The next step is to decide what type of FCOO is best suited for your business.
What Type of Leader Do You Need?
In terms of size and scale, I’ve seen two major types of businesses engaging the help of a Fractional Chief Operating Officer — small and midsize businesses. There are Doer Leader and Manager Leader FCOOs custom-made for each.
The Doer Leader
If you’re a small business, you probably have five to 20 employees and one person, or maybe no one besides yourself, on your leadership team. You need help with organizational structure, processes, and better data, but you also need someone to get higher-level stuff done. I call the kind of FCOO you need a Doer Leader.
FCOOs of this type typically come at a lower price point relative to Manager Leaders. Business owners often engage them for one day per week or more. Because, in addition to their leadership role, they’re also doing more tactical operations leadership or getting multiple cross-functional projects done, they may work two or two and a half days per week.
The Manager Leader
If you’re a mid-sized business, you probably have 20 to 250 employees and have a leadership team of two or more people. Your primary need is the leadership of someone who’s already built a business as big or bigger than yours and can put into place the structure, data, management systems, and processes your business needs to get to the next level. I call this kind of person a Manager Leader.
This type of Fractional COO typically has experience with larger organizations and engages with their clients at a higher level to determine the proper structure for an organization, define its goals, establish the right metrics to ensure it achieves those goals, and then drive implementation of those goals at the leadership team level.
These FCOOs typically, though not always, work for about one day per week or less. They frequently come at a higher price point relative to Manager Leader FCOOs for the same time commitment because of the more strategic nature of their leadership and their experience running larger organizations.
What to Ask When Hiring an FCOO
As with any FL, it’s critical that you communicate your desired outcomes and deliverables. By doing so, you can ensure that you’re on the same page with your potential FCOO. Consider the following when interviewing candidates:
- If industry experience is essential and you believe the learning curve is too great and would take too long, ensure that the FCOO candidate has the industry experience you need.
- If you need help on a specific kind of activity or transaction, whether that’s an M&A transaction, a due diligence process, a new product rollout, or a new system rollout, make sure you’re satisfied the FCOO candidate has experience with these types of operations.
- Be clear about whether you need or expect them to physically work in your office, whether the engagement will be fully remote, or some combination.
Although each Fractional COO engagement looks different depending on the industry, your style and values, and the organization’s size, they result in improved team health, standardized better processes, real traction toward goals, and less stress. It also means that as a business owner, you can finally regain the feeling of satisfaction and enjoyment from the businesses you founded.
This blog is part of a series that outlines some high-level considerations and offers insight into the five major types of Fractional Leadership: marketing, sales, operations, finance, and technology.
The information is a consolidation of my personal experience as a Fractional Leader (FL), retaining other FLs in businesses I managed or manage, interviews with FLs on my podcast, Win-Win—An Entrepreneurial Community, and my network and relationships with other FLs.
My experience in operations and being a Fractional Leader in companies running on EOS certainly contribute to my knowledge of operations. I am not, however, a subject matter expert in marketing, sales, finance, or technology. I’ve written these topics with reliance on business owners and FLs in those fields — from a 30,000-foot perspective.
If your company’s marketing or sales efforts aren’t generating the level of performance you need, check out my blogs discussing the Fractional Chief Marketing Officer (FCMO) and Fractional Chief Sales Officer (CSO).