This is the first in a series of upcoming columns by Mark L. Fagan on the role of the CEO.
Over the past 25 years I have worked with many, many business owners and CEOs. My job most often has required me to understand their businesses, assess myriad risks faced by CEOs and how those risks are mitigated.
In the CEO Evolution series, I will identify and discuss key business drivers and how corporate executives can more effectively manage their employees and maximize their company’s potential by utilizing those drivers.
Increasing profitability and building a stronger internal culture starts at the top. By working with the management team to create a culture of accountability and by emphasizing key business drivers in decision-making, CEOs will begin to see greater efficiencies across the board.
Time, time, time. It is the most precious resource to any business owner – arguably more important than your product, the competitive cost of delivering your product (or service) to the market or the talent of your team.
In an ideal world, business owners and top executives would always be thinking strategy: how to convert time, raw materials and product into revenues in a more efficient manner; how to convert revenues into cash; how to add new customers; how to reduce waste; and how to utilize the entire workforce to its capacity.
The fact is, however, that business owners and CEOs more frequently become involved in the day-to-day functions of their business — things like making sure shipments get out the door and attending to customers. They get involved in the noise of the day and get away from setting and monitoring strategies for growth.
Take accountants, for example. April is just around the corner. We’ve got dozens of tax returns coming in every day. The partners in an accounting firm may be extremely proficient at preparing tax returns and financials. But if those partners sit there preparing returns all day, that means they’re not out there meeting with attorneys and bankers and trying to generate new business.
For owners, CEOs and top executives, it’s more important to develop and focus on the implementation of strategies that can drive business growth, while delegating day-to-day tasks to staff and entrusting those staff to managers.
After that, the next step is evaluation.
Do you and your management team know their progress as compared to the prior month, or the same month in the prior year? Do you, as CEO know how the key business drivers of your company are performing on a monthly basis?
Imagine if you had the time and the tools to review all the critical data about your business and evaluate it on a consistent basis. What would you do with that information? How could you act upon it? How would you learn from it, and how would you plan ways to improve those aspects of your business that are lacking — or worse, deteriorating?
A lot of CEOs will periodically look at some business drivers, but not all of them, and they often won’t evaluate what is causing those numbers to go up or down.
Reviewing these indicators on a weekly or monthly basis — and not just once a quarter or once a year, and being the driving force behind activities to improve them — will enable CEOs and the management team to better understand what is contributing to rising or declining sales figures and how to affect change in the organization.
Managing in this manner represents the best use of a CEO’s time, and will keep the focus on key drivers that directly affect his or her business.
The CEO of a company can do many, many things with his or her time. The best use of that time, though, is to focus on strategic activities and not operational ones. There are others in the company who can take care of day-to-day operations. Let them do their jobs, so that you can devote your efforts to keeping your business on track.
Mark L. Fagan, CPA, is the managing partner of Citrin Cooperman’s Connecticut office. Citrin Cooperman is a full-service accounting and consulting firm with offices in Norwalk, White Plains, N.Y., New York City, Philadelphia and Livingston, N.J. Mark can be reached at firstname.lastname@example.org or (203) 847-4068.