Who's
Going to Make the Cut?
As you reimagine your business, you are
going to have to figure out how many of the people you have now can move the
company forward. Get ready for some tough choices.
General managing partner, G2T3V and Chicago High Tech Investors @tullman
Now is the time to start thinking about how to move your
business forward. The process starts by forgetting about the past, because no
one has ever succeeded in the past. However great “the good old days” were,
they’re gone forever and not coming back. As you start to reimagine your
business -; not rebuild or restore it -; the hardest single issue is going to
be people. Maybe that’s always the case. And the hardest questions and most
difficult choices are going to be about some of the most senior people in your
business, those who’ve been there from the start.
As I always like to remind my peers, gray hair is a sign of age,
not necessarily of wisdom. But to be clear this isn’t about anyone’s age as
much as it’s all about their energy, skill sets and expected contributions to
the new order. I realize it’s a touchy conversation, but as someone who’s
personally been in the trenches for more than 55 years, I can tell you that
it’s never been a more critical one to have.
To make things even more difficult, the senior managers
are going to be the ones helping to make many of the recommendations and
decisions about who stays, who comes back, and who departs. It goes without
saying that none of these folks - even the kindest and most charitable among
them - will be rushing forward to suggest that their own names need to be on
the cut list. Shouldn’t be a surprise - it’s just human nature. As my mentor
Bill McGowan used to say: These guys have great loyalty to their businesses,
but their number one loyalty is to their own tush.
To be brutally honest, some of the long-serving
will need to go because virtually every company in the country that’s
still around post-Covid-19 is going to be suffering from another equally
debilitating ailment, and that’s top-heaviness. Too many generals and not
enough infantry. Worse yet, not only do they not make any hay, they actively
get in the hay-making way. Or, as we describe it in the insurance business,
they’re a large part of the concrete layer that increases and solidifies every
year as businesses scale and grow. Not only does the barrier expand, it also
stifles and smothers talent, innovative thinking, and essential changes that
might otherwise rise to the top.
Here’s a flash. In your newly imagined, scaled down, and streamlined business, with fewer people, fewer new initiatives, and a much clearer and simplified vision of where you need to go, you don’t need all of them anyway. Loyalty and longevity aren’t sufficient justifications and you’ll never make your business a success if you try to keep them all. In a new world where constant change is the only constant, you need to keep the people who can execute and deliver, whatever their ages.
This will not be a pretty process, but these decisions are among
the most immediate and important ones you’ll need to make on the way back. You
need to understand that while it’s simple and fairly painless (except for the
victims) to fire a bunch of the little people and the newbies, it’s bad for
your culture and your company in the long run. Keeping B and C players at the
top of the business is a great way to make sure that your upcoming A players
will be looking for the nearest exit.
Keep in mind that those front-line folks may be small but they’re mighty, and mighty important. They are the closest ones to your customers and - especially now when comfort and consistency are key concerns - the most important connection to them. Clients and consumers know and love Freda at the front desk and haven’t got a clue about Fred upstairs. Those people sitting in the private offices may have once had their day and made their way. And got rewarded for it. But today some of them are expensive, slow and often out-of-touch with the new ways that business will be done, and the new tools and technologies required to succeed. No business can afford people who are operating on autopilot and working much more from habit and convention rather than reason and new ideas. They’re likely the ones to be preaching patience in an impatient world. Schmoozing doesn’t get the software written.
The best way to think about the hard personnel choices that need
to be made is to recall the earliest days of the business when a few key people
not only did their own thing, but jumped in and helped get everything else done
that needed to get finished by the day’s end. Ask yourself how many steps and
how many hands were in the workflow then and what the flow and the org chart
look like now. Too many businesses today have managers with no one to manage.
Executives who write memos and directives, but not sales and purchase orders.
Tech teams adding overhead and complexity to existing software systems to
satisfy their needs and desires without regard to any demand on the part of
real users and customers. Examples are easy to find if you’re willing to
look.
The term of art is called zero based budgeting. What, exactly,
does it take to get the business in the door and the product/service out the
door every day? Everyone and everything else are on the bubble to begin with
and need to justify his, her or its existence. This is about now, not tomorrow
or next year. Having a bench may be critical for a weightlifter, but you don’t
need a big bench of people sitting on the sidelines waiting for work. Having
agency research departments or new CPG product development teams when you’re
struggling to make ends meet and pay the rent just won’t cut it. Luxuries like
that can come later.
PUBLISHED
ON: SEP 8, 2020
