Influence and change
Discussion
I'm really interested in opinions and experience in bringing change.
I'm a Director in a small business, there are 3 of us and staff, but the CEO has overall control. He founded the business 20 years ago, I joined as an employee 13 years ago.
CEO, my Boss, is also a friend. He's a very Type A kind of Guy, he's not aggressive, but he can be very hard to talk to. Anything that's said either bounces off or there's an excuse/reason/story why he's right.
The Business runs okay now. This is the 3rd iteration, the previous 2 Ltd. Cos had to be liquidated because of poor trading debt and mismanagement. We're finally in a position where we're profitable and just about liquid. This is at least in part because the 2 'new' Directors are more involved with the business side. There's always something though, we reached 'plain sailing' and thinking about the future a few months ago, only to find out we owed a previous supplier tens of thousands that they'd "forgot to bill" but I suspect the CEO "didn't want to pay".
We joke he has 4 jobs, the job he does here, the job he's involved with in a community project, a job when he's running a BNI chapter and a job in his other micro-business that operates from our building. We schedule meetings to try to work though things and he's gone out to do something. He runs around all day firefighting and doing this or that. He refuses to communicate other than in person or via the phone, doesn't take of give notes, writes nothing down.
He's easily enthused by the latest thing, the latest podcast, the latest business group, the latest marketing scheme but soon loses interest and forgets about it.
Our Service, what we actually do for clients is very good. What we're bad at is everything else. We have zero structure, no clear goals, no goals at all other than the Boss's "next year we'll be millionaires".
We use about a dozen core systems, few of which integrate. To give an example of what's like, it took me 7 days of bouncing between the CEO and my Co-Director trying to get various systems to work properly, just to tell a client why will bill them what we do. I could write 1000 words on that saga, but it was dismissed as a 'one-off' but he doesn't seem able to see it's just the latest 'one-off' of thousands.
A month ago, we were very lucky to be given a day's Business Consultancy, paid for by a product provider. They were very polite and diplomatic but, we need to rebuild the structure of the business from the ground up. Agree on a vision the 3 of us agree with and build from there. Plus, a very detailed roadmap to follow. It's absolute gold dust. It took a week to praise a copy of it from the CEO. On the face of it, he sees the value. Really, I think he dreads it. He sees it as losing control and freedom. He's picked out bits that are interesting to him, but their value is negligible without core changes.
How the f
k, do you change that?
I'm a Director in a small business, there are 3 of us and staff, but the CEO has overall control. He founded the business 20 years ago, I joined as an employee 13 years ago.
CEO, my Boss, is also a friend. He's a very Type A kind of Guy, he's not aggressive, but he can be very hard to talk to. Anything that's said either bounces off or there's an excuse/reason/story why he's right.
The Business runs okay now. This is the 3rd iteration, the previous 2 Ltd. Cos had to be liquidated because of poor trading debt and mismanagement. We're finally in a position where we're profitable and just about liquid. This is at least in part because the 2 'new' Directors are more involved with the business side. There's always something though, we reached 'plain sailing' and thinking about the future a few months ago, only to find out we owed a previous supplier tens of thousands that they'd "forgot to bill" but I suspect the CEO "didn't want to pay".
We joke he has 4 jobs, the job he does here, the job he's involved with in a community project, a job when he's running a BNI chapter and a job in his other micro-business that operates from our building. We schedule meetings to try to work though things and he's gone out to do something. He runs around all day firefighting and doing this or that. He refuses to communicate other than in person or via the phone, doesn't take of give notes, writes nothing down.
He's easily enthused by the latest thing, the latest podcast, the latest business group, the latest marketing scheme but soon loses interest and forgets about it.
Our Service, what we actually do for clients is very good. What we're bad at is everything else. We have zero structure, no clear goals, no goals at all other than the Boss's "next year we'll be millionaires".
We use about a dozen core systems, few of which integrate. To give an example of what's like, it took me 7 days of bouncing between the CEO and my Co-Director trying to get various systems to work properly, just to tell a client why will bill them what we do. I could write 1000 words on that saga, but it was dismissed as a 'one-off' but he doesn't seem able to see it's just the latest 'one-off' of thousands.
A month ago, we were very lucky to be given a day's Business Consultancy, paid for by a product provider. They were very polite and diplomatic but, we need to rebuild the structure of the business from the ground up. Agree on a vision the 3 of us agree with and build from there. Plus, a very detailed roadmap to follow. It's absolute gold dust. It took a week to praise a copy of it from the CEO. On the face of it, he sees the value. Really, I think he dreads it. He sees it as losing control and freedom. He's picked out bits that are interesting to him, but their value is negligible without core changes.
How the f
k, do you change that? You don't. He founded the business & it's his. It's a very, very common trait amongst people who have done that & people coming in as employees don't understand why the owners never want to relinquish control or equity. They'll pass it on to incompetent family (sons/daughters) but not to outsiders.
Mr Pointy said:
You don't. He founded the business & it's his. It's a very, very common trait amongst people who have done that & people coming in as employees don't understand why the owners never want to relinquish control or equity. They'll pass it on to incompetent family (sons/daughters) but not to outsiders.
I can't disagree. It very frustrating, I'm well paid, conditions and flexibility suit me. I could ride it out until retirement.The frustration of trying to swim through treacle just to do basic stuff, added to the frustration of not achieving what we could, causes so much stress. Being asked to do the same wrong things but harder, expecting a different result hurts my soul.
I think your answer is in here: "He sees it as losing control and freedom. He's picked out bits that are interesting to him, but their value is negligible without core changes."
So focus on the bits that interest him and use that as the argument for requiring the core changes.
It sounds like he has ADHD or something similar hence "He's easily enthused by the latest thing, the latest podcast, the latest business group, the latest marketing scheme but soon loses interest and forgets about it." and it isn't surprising that you said "What we're bad at is everything else. We have zero structure, no clear goals, no goals at all." (In fact, you didn't need to write that bit as I'd already guessed it from what you'd written previously. TBH I'm surprised you're still in business or at least working for that business.)
Anyway, use bullet points to get something to be understood rather than massive paragraphs of text that he'll just skim and assume you meant something that he doesn't want.
So focus on the bits that interest him and use that as the argument for requiring the core changes.
It sounds like he has ADHD or something similar hence "He's easily enthused by the latest thing, the latest podcast, the latest business group, the latest marketing scheme but soon loses interest and forgets about it." and it isn't surprising that you said "What we're bad at is everything else. We have zero structure, no clear goals, no goals at all." (In fact, you didn't need to write that bit as I'd already guessed it from what you'd written previously. TBH I'm surprised you're still in business or at least working for that business.)
Anyway, use bullet points to get something to be understood rather than massive paragraphs of text that he'll just skim and assume you meant something that he doesn't want.
It's unfixable, so you either put up with it and adjust your karma so that the problems don't bother you any more, or leave.
The reason it is unfixable is because the CEO needs to recognise what he's good at (sounds like sales, ideas, clients ?), and hire for the bits he isn't (a COO). That doesn't seem likely.
But even if it does happen, the COO needs to be empowered to be the CEO in those aspects. Your CEO won't let that happen, or will micromanage and reverse decisions, and eventually any competent COO will bail.
The reason it is unfixable is because the CEO needs to recognise what he's good at (sounds like sales, ideas, clients ?), and hire for the bits he isn't (a COO). That doesn't seem likely.
But even if it does happen, the COO needs to be empowered to be the CEO in those aspects. Your CEO won't let that happen, or will micromanage and reverse decisions, and eventually any competent COO will bail.
P-Jay said:
There's always something though, we reached 'plain sailing' and thinking about the future a few months ago, only to find out we owed a previous supplier tens of thousands that they'd "forgot to bill" but I suspect the CEO "didn't want to pay".
This, btw, is absolute bs and will kill your business. Not only do you not know about large issues, you don't know that you don't know.The founder/CEO issue is common for executive directors/MD's.
A very good friend has been MD for two CEO's now. First one she managed to 10x the turnover and get the business in shape for a very profitable sale. The second one she is in the process of and has just begun to resolve (neutralise) a very awkward founder. This only happened because the firm's been bought and so the CEO's ownership diluted to the point he has to let the board run things, without interference.
So, you could buy him out. Or wave the stick of him having to be involved less. Ultimately, whether he wants to sell up at some future point, or retain shares to keep dividend income, he has to realise the board need to have authority.
A very good friend has been MD for two CEO's now. First one she managed to 10x the turnover and get the business in shape for a very profitable sale. The second one she is in the process of and has just begun to resolve (neutralise) a very awkward founder. This only happened because the firm's been bought and so the CEO's ownership diluted to the point he has to let the board run things, without interference.
So, you could buy him out. Or wave the stick of him having to be involved less. Ultimately, whether he wants to sell up at some future point, or retain shares to keep dividend income, he has to realise the board need to have authority.
Sounds very similar to where I am now.
The only way to change is to encourage the owner(s) to be open to change. If they are not, nothing will change.
Thankfully my two co-owners are open to change.
What are he/she/they interested in, relating to the business? Focus on how that can be improved to get buy in.
The only way to change is to encourage the owner(s) to be open to change. If they are not, nothing will change.
Thankfully my two co-owners are open to change.
What are he/she/they interested in, relating to the business? Focus on how that can be improved to get buy in.
Are you and the other person statutory directors? If so, you need to be careful in wrongful trading situations and the voting rights at board meetings of 2 versus 1 would be useful to understand.
Ultimately, you've been there a long time, and like many employees, you seem to be worrying about it more than him. This may be right, however, if you're a statutory director.
The first question to ask is what are your alternatives, as this significantly impacts how you deal with current role?
Also, be careful of what you wish for, swapping the current chaos versus a big ship that e.g. has a process to order paper clips may not be much better for you!
Ultimately, you've been there a long time, and like many employees, you seem to be worrying about it more than him. This may be right, however, if you're a statutory director.
The first question to ask is what are your alternatives, as this significantly impacts how you deal with current role?
Also, be careful of what you wish for, swapping the current chaos versus a big ship that e.g. has a process to order paper clips may not be much better for you!
I have been a NED at two founder led businesses - quite small, in the £10m - £25m turnover range.
Both were difficult roles as ultimately nothing would change without the founder's approval and we would flit from one idea to the next. One thing I tried to do in both was to grow decent executives from within to enable the founder to step back from the business - but this is a very slow process.
Some good advice above - in particular your role (and liabilities) as a director and the potential dangers of not fully understanding your cash position (for example).
Both were difficult roles as ultimately nothing would change without the founder's approval and we would flit from one idea to the next. One thing I tried to do in both was to grow decent executives from within to enable the founder to step back from the business - but this is a very slow process.
Some good advice above - in particular your role (and liabilities) as a director and the potential dangers of not fully understanding your cash position (for example).
NDA said:
I have been a NED at two founder led businesses - quite small, in the £10m - £25m turnover range.
Both were difficult roles as ultimately nothing would change without the founder's approval and we would flit from one idea to the next. One thing I tried to do in both was to grow decent executives from within to enable the founder to step back from the business - but this is a very slow process.
Some good advice above - in particular your role (and liabilities) as a director and the potential dangers of not fully understanding your cash position (for example).
Succession/exit planning is often the only way such situations change: the founder/majority owner needs to (probably gradually) realise that the iron fist method of control impairs their ability to exit and/or value that might be crystallised. Both were difficult roles as ultimately nothing would change without the founder's approval and we would flit from one idea to the next. One thing I tried to do in both was to grow decent executives from within to enable the founder to step back from the business - but this is a very slow process.
Some good advice above - in particular your role (and liabilities) as a director and the potential dangers of not fully understanding your cash position (for example).
Another reality is that people who raise difficult subjects, even with the best intentions, need to tread carefully…it doesn’t always go well!
LooneyTunes said:
Succession/exit planning is often the only way such situations change: the founder/majority owner needs to (probably gradually) realise that the iron fist method of control impairs their ability to exit and/or value that might be crystallised.
That's a huge point. I've helped/advised on a couple of exits and having the founder move aside to enable this - the acquirers are buying the future team - is very important.NDA said:
LooneyTunes said:
Succession/exit planning is often the only way such situations change: the founder/majority owner needs to (probably gradually) realise that the iron fist method of control impairs their ability to exit and/or value that might be crystallised.
That's a huge point. I've helped/advised on a couple of exits and having the founder move aside to enable this - the acquirers are buying the future team - is very important.You see the same issues when you're looking at growth stage companies too. A pretty compelling argument to owners/founders if there's a desire for growth is that even if they believe people won't do the job quite as well as they would, well that's OK: have two people doing the job you would have done yourself and, even if they each only manage 2/3 of what the owner/founder would, you're still well up.
The other argument that can work is around building in resilience for the owner's family. They've built something great, but sometimes unexpected things happen. Better to have a team running a business if that did happen...
Fascinating pen picture of a CEO who has internal challenges.
But from a psychological view, there seems to be little that will prompt self-reflection, as current company seems to be doing OK.
If he's had 2 previous 'failures' that's 2 opportunities for working himself out. Or seeking help to work himself out. His behaviour sounds like he's stuck in childhood; getting lots of excitement & validation; but without taking responsibility for his impact on others.
'Work as therapy' is pretty common IMHO (coach and trainee psychotherapist here) but the parts that support his work (sales skills, tenacity, enthusiasm) are not so amazing that they do away with the need for parts that reflect, plan, develop, change.
As notes above, I'd also say - be very careful; your CEO friend may unwittingly make life (more) difficult for those around him.
But from a psychological view, there seems to be little that will prompt self-reflection, as current company seems to be doing OK.
If he's had 2 previous 'failures' that's 2 opportunities for working himself out. Or seeking help to work himself out. His behaviour sounds like he's stuck in childhood; getting lots of excitement & validation; but without taking responsibility for his impact on others.
'Work as therapy' is pretty common IMHO (coach and trainee psychotherapist here) but the parts that support his work (sales skills, tenacity, enthusiasm) are not so amazing that they do away with the need for parts that reflect, plan, develop, change.
As notes above, I'd also say - be very careful; your CEO friend may unwittingly make life (more) difficult for those around him.
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