Fiscal Responsibility: Understanding your club’s financial position

Published by The Canadian Society of Club Managers in CMQ (Summer, 2015)

It’s been said that money “makes the world go ‘round” and looking around the room at many clubs often reveals an impressive display of successful members who have accomplished much.  Money is typically equated with success, and generating it over the long term isn’t just about bringing in sales, as sustainable results are often much more about managing the “bottom line”.  This can only be done by keeping a watchful eye on expenses, among other things, which isn’t always as easy as one would think.

Most club managers know, on at least an intuitive level, that finance is an important aspect of running a successful club.  But, with so much to do to ensure that service offerings are great, staff members are doing what’s required, and facilities are in top shape, financial management tends to find itself on the backburner.  If left unattended for too long, it becomes the proverbial pot that boils over.

There is a lot that club managers need to know when it comes to keeping tabs on a club’s financial position, and although most have at least some knowledge, how much is truly understood?  There are many areas to address, including managing cash flow, tracking expenses, budgeting, and understanding which areas are making money (and those that are not!).  Although it might be relatively easy to monitor information on a frontline basis (such as in the case of food costs), understanding where a club is at on an overall basis, and where it’s heading, isn’t so easy.  Seasoned leaders wouldn’t dream of lacking skills and attention in the finance area, as they truly understand that the buck stops with them!

Trouble in the Club

In a competitive world, it’s critical that all businesses have products and services that customers want and for which they will pay (the more, the better).  In the case of clubs and similar establishments, it’s also important that they are places where people want to be.  As a result, there is often a lot of time and effort expended on achieving this ideal; however, in the process of doing so, there are things that can get lost in the shuffle.  One of those things is money.

Like the successful members that keep clubs in business, their managers need to be equally savvy in making the most of the financial opportunity.  This means being on top of a club’s financial position at every moment, as well as having a good sense of what the way forward looks like.  In order to do so, it’s not just about a casual perusal of what accounting staff produce; rather, it’s about setting and maintaining expectations around how the accounting and finance function is established and operates, in a consistent manner.  Technical skills are important, but the approach and belief that financial management truly matters are equally important.

Failing to do so can lead to a host of problems, including incomplete (or incorrect!) information, staff members that lack the necessary accounting skills to do the job properly, and poor application of policies and procedures.  The result is too often financial information that isn’t worth the paper it’s printed on, despite the fact that club managers rely on it to manage a critical aspect of their operation.  This is a frightening scenario with potentially disastrous outcomes.

Leading Large

Remember the saying, garbage in, garbage out?  It’s never more true than in the accounting world.  Skilled leaders recognize the importance of the accounting and finance function, and wouldn’t make the common mistake of downplaying it as “not that complicated”.  Here’s how to ensure that you’re well equipped to lead the financial aspects of your organization:

  • Recognize what you don’t know. The biggest mistake that a leader can make is to marginalize accounting as “just processing” or “not that important”. It is true that accounting departments do record transactions and pay bills, but there is so much more that can be achieved from a value perspective.  This means: (i) knowing how to process transactions correctly; and (ii) developing and producing reports that communicate the right information in an appropriate manner.  Many accounting functions do not do this well, leaving leaders with a false sense of security, especially those without a finance background.  Recognize that this is a learned area and don’t assume that you “know enough”.
  • Hire the right people. Many leaders have difficulty understanding the type of help they need in the accounting area, mostly because they don’t understand the particular roles or what accountants actually do (closely followed by marginalizing the importance of the accounting function!).  People who work in this area, especially those with professional accounting designations, such as the CPA, understand that there are standard roles and tasks and that candidates can differ significantly based on their particular experience and qualifications.  Getting the right people in place usually means seeking the input from someone who understands this, so don’t go it alone.
  • Insist on timeliness. Financial information has its highest value at the point in time when it actually happened.  Like that delicious cream sauce that can quickly lose its appeal, financial information isn’t particularly helpful if it arrives a month or two after when it mattered.  Organizations can find reasons to delay generating financial information to when they get around to it; insist on timely month end reports, ideally delivered to you two weeks after the end of the previous month.
  • Ask questions. Financial reports are complex, especially for untrained readers. In order to fully understand what a financial statement or report is communicating typically takes years of education and practical experience.  Receiving information and filing it away is of little value; rather, the usefulness is in conducting a thorough review with your accounting manager, understanding what the club’s financial position is, and taking these findings to a front line level with your management team.  The process doesn’t stop with receiving the report; that’s only the beginning, as the real opportunity is to make the necessary adjustments to generate better results going forward.  This is how sustainable financial performance is achieved.
  • Utilize advisors well. Experienced advisors can help to improve the financial performance of your organization through various means, including reviewing current results and recommending improvements, assisting with budgeting and forecasting, and training your senior team (many of whom might not have a finance background) to better understand financial management.  The outcome is this: a higher level of financial acumen across the board and better results.
  • Invest in professional development. As a club manager, you hold the key to putting your organization in a position to move forward with strength.  If the accounting and finance area is not functioning well, get help!  Make a commitment to improve your skills in this area and let it permeate throughout your team, as it is an investment that will benefit your organization, as well as your own career.

Having been involved with numerous senior level management recruitments over the years, leaders who understand both what their organization does and the financial aspect of doing so are in high demand.  The supply is short.  Stepping up your financial acumen is good for the club, but it’s undoubtedly great for those who lead.

COVER STORY: Managing People- Understanding the strengths and weaknesses of your team

As featured on the cover and published by The Canadian Society of Club Managers in CMQ (Winter, 2015)

It’s obvious that people make the business world “go round”, and clubs are no different.  The complexity associated with people only increases when you enter the senior ranks, as club managers are typically faced with staff related tasks and relationships that include many components: recruitment, motivation, role definition, performance management, and broader supervision are only a few.  These areas must be considered specifically in terms of team members in senior level roles, which typically have a significant impact on an organization (positive or negative), more complex tasks, and a limited talent pool from which to draw candidates.  Perhaps, the result of this complexity is that the human resource aspect of a club management role often isn’t addressed as fully as it should be.

There is a lot that club managers need to consider and understand when it comes to dealing with staff members, particularly in terms of their senior team.  This includes knowing when action is required, in terms of hiring, firing, supervising, and simply providing support and giving people room to do their job.  Such an uncommon talent, of what to do and when to do it, can best be cultivated through personal awareness and practice, while keeping in mind the ultimate goal of creating a senior team that has the right skills and experience and well crafted roles, as well as a balance of support and direction.  Sound unachievable?  Think of it as something to strive for and an opportunity to seek out practical advice that can help to guide the process.

As discussed in the last issue, there are fundamental skills that successful senior leaders typically exhibit and consistently practice, in terms of the approach that is taken to fulfil their role on a personal level.   Here’s more about the why making a concerted effort to manage people well is so important at the leadership level.

Trouble in the Club

Like many businesses, clubs are busy places. When the list of tasks is longer than what can be reasonably achieved in a day (or a week, or a year), it’s human nature to focus on the areas that represent a “comfort zone” of where we feel most competent in terms of our ability to make progress.  This often doesn’t include human resource matters!

Human resource related responsibilities, such as recruitment, performance management, and coaching can be time consuming and often represent the proverbial “can that gets kicked down the road”, particularly in busy times.  There is considerable risk in this practice, in terms of both strong and marginally performing team members.  Too often, marginal performers are allowed to continue in their role (“he/she isn’t doing that badly…”), while the “stars” become frustrated by a lack of progress and obvious inequity amongst team members (and who can blame them? No one likes to have to compensate for a marginal performer).

The big risk, which is often surprising to leaders, is that their best performing team members will leave the organization, due to frustration, a lack of fairness, and better career options, leaving behind the marginal performers.  This is a disaster in the making for any club manager, especially when a reputation of not dealing with problem situations is created within the candidate pool of potential employees.  Not to mention having to manage a club full of less than stellar staff members!

Leading Large

Skilled leaders know how and when to take action when it comes to managing people and never let this important area slide.  They recognize that the rewards are many, including better performance that benefits the organization and an improved sense of fairness or equity within the senior team.  Here’s how to get the managing people aspect of a senior leadership role right:

  • Hire slowly, fire quickly. This advice might sound obvious, but, too often, it simply isn’t followed. Be sure to take the necessary time to fully understand the particular role that needs to be filled before undertaking the recruitment process.  Once this has been done, let the needs of the organization and the role guide the candidate recruitment and selection process.  Similarly, when a team member is not working out as expected, act on a timely basis and take the appropriate performance management steps.  Carrying a marginal, weak, or disruptive staff member doesn’t help the organization or the team.
  • Lead with quality, not quantity. Managing people effectively at a senior level isn’t about hovering or offering up frequent (but unnecessary) advice, it’s more about understanding the stage of development of each team member, their strengths and weaknesses, and when to provide support.  Empowerment, creating opportunities for tangible learning, and the quality of the coaching message are what matters.
  • State the obvious. Although some leaders might think that knowledge or information should be obvious or implied, people like to be in the know and understand what is expected of them at all times.  New initiatives, key results and targets, strategic direction, and opportunities to improve are all important areas to share with a senior team, so don’t keep them guessing.
  • See situations as they really are. It might seem hard to believe, but some leaders operate on the basis that if it is possible to resolve a particular problem, it will be done, regardless of the actual ability of the team member to do so. This dangerous practice is analogous to the “out of sight, out of mind” concept, so be sure that your expectations are realistic and identify areas where training and support are needed.
  • The sky is the limit. Experienced leaders recognize that when they are fortunate enough to have a real star on their team, they perform best by having the freedom to do their job, within organizational guidelines and policies.  These people consistently generate great results, are reliable, and will ask for assistance when required.  Let them do their job and don’t meddle, as a much better strategy is to use your time to work with team members who are not as savvy.
  • Recognize that a big part of a leadership role is coaching. At its essence, leading is all about assembling a team that can successfully execute on its business plan, to the benefit of the organization at hand.  Senior roles are less about doing the front line work and more about helping others to be successful in their role.  Making this a reality requires coaching, feedback, and support on an ongoing basis.

Leaders are often judged by the company they keep, and integral to this is people.  Understanding who your team members are, in terms of ability and developmental requirements, as well as what their role is puts you in the best position to support their success.  Don’t miss out on this important opportunity.

Coming to a City Near You!

ThinkstockPhotos-153961287I’m pleased to be on the road again this Fall with the Distinguished Advisor Workshop (DAW). Our Family Business & Year End Tax Planning sessions will take place in Winnipeg (Oct 27), Vancouver (Oct 28), Calgary (Oct 29), and Toronto (Nov 2), so be sure to confirm your spot today!
My sessions are all about building a more independent company; from business planning in a manner that resonates well with investors, to taking the right steps to increase capacity to generate growth beyond what a business leader alone can achieve. As an experienced advisor, I’m able to bring practical strategies to help leaders overcome the typical growth related challenges and setbacks that occur along the way.  This is powerful leverage for achieving success in a competitive world!
As part of our session, we will ask participants to identify the “one big thing” that they could do to help make their company more independent. Have you considered this lately?

Leading Large: Big skills in the leadership space

Published by The Canadian Society of Club Managers in CMQ (Fall, 2014)

So, you’re a club manager; that’s great!  Anyone who’s ever tried to move up the ranks in their career understands just how difficult it can be to progress.  It doesn’t matter if it’s your first management position, a move to a more senior role, or larger club, each and every step comes with new challenges (and some days, it seems like there are nothing but challenges in sight!).

What’s interesting is that many of the obstacles that managers face, especially at the senior level, have little to do with the “technical” aspects of the job, such as overseeing events or updating a club’s offerings.  Rather, it’s the leadership related aspects of the role that can be difficult, leaving new or less experienced managers at a loss in terms of how to find resolution.  Many of us have struggled through such “learning experiences”.

What might be surprising (and, perhaps, comforting), is that there are fundamental skills that successful, senior level people typically exhibit and consistently practice.  Such abilities are not characterized by complex business practices or high brow academia; rather, they are more about the approach that the individual takes to fulfil their role on a personal level and are essential to generating a positive outcome.  Characteristics such as, solid communication, high role engagement, and collaboration are all important skills that are typically exhibited by seasoned senior level managers, providing a powerful assist to generating success.

Accomplished leaders know that failing to do any of these things could result in a host of problems, including weak performance and low staff member engagement, running the risk of negatively impacting the broader club environment.  Despite this reality, too many fail to utilize these vital skills, especially those in the mid-level ranks with expectations to progress further.  What these people don’t realize is just how much a lack of attention to the leadership aspect of a role can limit their upward mobility (and might even result in being labeled as not having the potential to progress).  Or, even worse, there are those who ascend to the senior level ranks based on their technical ability alone, but fail to be successful due to poor leadership skills.

A better approach is to take the initiative to understand how successful senior leaders approach their role and start to adopt these behaviors; now.  Consistent practice of these skills will not only differentiate you from others in your peer group and generate better results today, but will also help to prepare you for climbing the ladder tomorrow.  In this series, we will consider several important skill areas that will help you to lead large.  Let’s get started with the first skill: communication.

Trouble in the Club

Have you ever tried to advance an initiative or project with a group that just doesn’t seem to be moving forward?  Group members seem confused about their responsibilities.  A lack of clarity over who is supposed to do what reigns, and, after a while, no one seems to care much.  Meetings are held, but at the end of an hour or two, no one is quite sure what the next steps are.  Subsequent conversations are repetitive (with the same few bits of content), little is accomplished, and enthusiasm starts to fade.  Sound familiar?

This type of situation can arise due to a number of factors; however, one of the main problems is always communication.  This includes everything from having clear meeting agendas, to how the discussion process is managed, to meaningful documentation of decisions and next steps.  In the absence of being diligent about the process, it’s really just “meeting for the sake of meeting”.  How discouraging.

But, it’s even worse than that.  Consider this: every day, thousands of hours of staff and management time are wasted by working on initiatives that lack the clarity, communication, and practical steps to move forward.  As disturbing as this is, it’s an opportunity for you to take a leadership role and cast some much needed light on a bleak situation.

Leading Large

Put yourself on the leadership path by making a conscious effort to always strive to be understood, investing in the practice and attention to detail where required.  As a result, not only will you develop important leadership skills, you will also make a meaningful contribution to improve how your club functions.  However you look at it, that’s money in the bank.  Here are some tips:

  • Let simplicity reign. Anyone can make something sound complicated, and too often, they do.  Stand out from the crowd by demonstrating the ability to take something that is complicated and make it understandable to others.  Any situation can be distilled down to a simple concept that others can easily absorb; make it your talent to find it.
  • Make clarity the objective. Applying a deliberate level of focus to delivering your message in a way that is as clear and understandable as possible can greatly enhance the likelihood that it will be easily understood by others.  The concept is simple, but developing the necessary skillset to do so isn’t; make it your goal to get there.
  • Less is more. Excessive wordiness and hiding the heart of the matter in too much chatter and anecdotal information doesn’t facilitate good communication.  Use words selectively and seek to get from Point A to Point B efficiently; make it your practice to not leave others in the conversation behind.
  • Focus on writing skills. Like it or not, real benefit exists in taking a business writing, grammar, or presentation course to improve your communication ability. A practical option is to spend more time working directly with people who write well or volunteering to take on tasks that have a significant communication component; make a commitment to pursue one of these options for tangible skill development.
  • Document what matters. It’s obvious that no one really enjoys the process related aspects of meeting planning, such as developing agendas, taking minutes, or updating project plans; however, these are important components of the management world. Set yourself aside from the pack and raise your hand next time these types of tasks are being assigned; make it your own opportunity to learn and excel.
  • Forward, march! Leaders are always thinking about the next steps or the “why does this matter?” aspect of everything that they do; make it a personal strength to hold the attention of others by keeping communication practical, relevant, and action oriented.

The funny thing about communication is that it can quickly become contagious.  Some of your team members might actually start to improve their communication skills just by following your example.  Just look at who’s leading now!

Getting Started: Preparing for the world of entrepreneurial adventure (Managing Money)

ThinkstockPhotos-481992234Published by CPA Canada in CareerVision

Although you might think you know the meaning of the phrase “the buck stops here”, working with a start up company will reveal an entirely new definition.  Call it life or death, the last quarter, the final frontier; money matters in a way that it never has before, and is a topic that will find its way into most conversations, from morning til night.

In comparison, most who work in the corporate world think about money in just a handful of ways: the paycheque (and when it’s coming), annual raises (and the likelihood of getting one), what the next job pays (and is it worth the trouble), and perhaps, whether the company has a budget for a particular initiative or event.  Most of these interactions seem distant, somewhat detached, and of a lesser frequency.  In a lot of ways, there is a relative amount of stability in these periodic musings.

Working with a start up or, what investors often refer to as “early stage”, company can be an exciting place, but it’s important to fully consider what’s involved before making the switch.  In this series, we will do exactly that, so you can make an informed choice, and perhaps, benefit from placing a greater emphasis on developing some of the skills that will serve you well in advance of when they’re actually needed.   So far, we’ve considered the implications of risk and the ever expanding job description.  Let’s move to the issue of money.

Why it Matters

Start up companies are often born from ideas, not to mention the endless enthusiasm of the entrepreneurs who lead them.  As with building a new home, start ups have a tendency to need everything, from supplies, to people, to technology.  These are basic costs that are often funded by the founders and typically have little to do with attracting customers.  Before long, a young bank account can find itself empty, and often much more quickly than expected.

With some of the novelty having worn off, (but, enthusiasm not dampened), entrepreneurs start to more fully appreciate just how much is involved in attracting and maintaining customers.  Familiar phrases at this stage include “long sales cycle”, “it’s more work”, and “not what we expected”.  Converting leads into sales and having the resources to fulfill the needs of customers require money, and guess what?  It’s often needed in advance of receiving customer payments, which makes the need for cash flow management (and actual cash) all the more critical.

Those who work in the start up world need to find comfort with this “edge of the razor blade” existence, otherwise what they’re trying to build probably won’t be around for very long.  The reality of being in this situation can be a shock to the enthusiastic system of those who truly believed that the world couldn’t live without their product.

Get Started

Building a new relationship with cash can be difficult, especially when it’s unexpected.  The good news is that you can plan for it, making the transition less daunting.  Here’s how to get started:

  • Review your expenses: Take a look at your current expenses to fully understand what they are (you might find some surprises during this process!).  Identify items that could be cut or reduced, and think about the lifestyle changes you could make, if necessary (is now really the time to get rid of your roommate?).  This will provide you with a baseline of information and some alternatives for when you’re ready to enter the start up world.
  • Build a war chest: Cash in the bank provides both security and options, and saving in times of a steady paycheque is seldom regretted in the future.  Recognize that working with a start up could (and likely will) result in unexpected expenses and an uncertain income stream, so take advantage of cash flow while you have it.
  • Take cash flow management to a new level: Cash flow forecasts are often something that is part of an accounting education; mechanical, at best, with less emphasis being placed on accuracy and outcomes.  Start ups live and die by their cash flow, and if you haven’t managed money in an environment where results are everything, expect a white knuckle ride.  Take the opportunity to get some practical experience by managing your own cash flow and see how well you do.
  • Expect the worst: You might be wondering where the “plan for the best” portion of this phrase went; no need to mention that, as entrepreneurs have it covered!  You can be a valuable resource by planning for the downside that will happen, particularly in terms of money.  Be sure to build in contingencies for delays and potential customers that will change course midstream.

One of the main reasons why young businesses fail is simply because they run out of money, and this can have little to do with the quality of the product or service that they provide.  Surprisingly, growth actually requires cash.  Learning how to work with money in advance of having to do so is a bonus on all levels: improving your comfort level (or managing your anxiety), providing realistic information, and increasing the likelihood that the company will survive.  You hold the key to ensuring that the buck stops on solid ground.

New Beginnings

Since leaving my executive role in the venture capital industry in 2008, I’ve been busy. After selling our business, I returned to my consulting roots, bringing along the valuable lessons I learned as a venture capitalist: all about building great companies. The result has been practical solutions for a host of entrepreneurs and business leaders, and I’ve approached my work in the way that I would appreciate as a client, having played a key role in growing, managing, and exiting a company myself.

Somewhere along the way, I was inspired to raise my voice and share some of the many experiences I’ve had, through articles, courses, webinars, books, and presentations. I’ve found that I have a lot to say, and my catalogue of published work has expanded as a result. Clients tend to find that the scenarios I write about seem oh, so familiar, with some wondering if I’m writing about them. The truth is, there are many similarities in what leaders encounter in the course of building a business, a fact that tends to be reassuring. It’s this experience that I’ve been able to tap into, bringing practical solutions to resolve issues and support future growth.

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Fast-forward to 2015, when I realized that it was high time to re-launch my website, to capture the experiences I’ve had and the knowledge I have to share. I’ve organized my website to reflect the main areas in which I focus: Work (business advisory services), Speak (presentations and seminars), Learn (courses, books, and webinars), as well as lots of information about my background. In this blog, you will find an archive of some of my published work, with lots more to come going forward.

Like the “behind the scenes” photo I’ve included here, we’re bringing a whole new style to the business advisory world! Being in business is all about opportunities, and in a competitive world, someone should benefit; why not your company? So, welcome to my website; I invite you to have a look around and be in touch to discuss how I can help your business.

Getting Started: Preparing for the world of entrepreneurial adventure (Responsibilities)

Low angle view of young businesswomen with laptop discussing while standing on terrace against sky

As published by CPA Canada in CareerVision:

If you’ve ever come across someone who works with a start up company, chances are, they will tell you how exciting it is. The thrill of building something new, perhaps, with products and services that the marketplace hasn’t seen before, not to mention the fun associated with dreams of hitting it big. It’s not uncommon for entrepreneurs to accentuate the positive, as they view start-ups as what being in business is all about. “In on the ground floor”, “there from Day 1”, “Microsoft before it was Microsoft”, risk/reward mentality. What could be better than that?

Although working with a start up or, what investors often refer to as “early stage”, company can be an exciting place, it’s important to fully consider what’s involved before taking the leap. Those who haven’t spent much time around the start up world might be surprised to find out what the flip side of opportunity looks like. In this series, we will consider exactly that, so you can make an informed choice, and perhaps, benefit from placing a greater emphasis on developing some of the skills that will serve you well, in advance of when they’re actually needed.

In Part 1, we considered the issue of risk. Let’s move to what just might be the dark side of the start up world; the ever expanding job description.

Why it Matters

Yes, mother told you there would be days like this; that is, days that don’t end due to what seems to be an endless task list of urgent “to do” items. It’s true that early stage companies attract individuals for their particular skill areas, such as engineering, sales, and a host of technical capabilities. All of these areas are essential to developing and moving a young upstart forward. What isn’t often part of the discussion is the long list of “other duties as assigned”, which could include tasks that you might consider to be well below your pay grade. This isn’t quite the same as your corporate job; you know, the one that actually has a description.

The bottom line is that start-ups have limited resources, in terms of people, time, and money. When things need to get done, there isn’t the luxury of delegating lesser tasks to a staff group or putting up the cash to resolve it. In a world of empty bank accounts, the buck stops with those who are around what is often a small table. Running errands, formatting documents, making the coffee, or cleaning up the workspace are necessary, and although it might sound funny, it’s amazing how foreign all of this can be after spending a few years in a large, established company. And in addition to these required, but time wasting tasks, you’ve also got to get your real job done; urgently!

Get Started

Working for a start up is an adjustment; there’s no two ways about it. And although the need to pitch in and do what’s required might sound petty, it’s surprising just how much of a shift this can be from what might be the norm in the corporate or professional services world.

Here’s how to get started:

  • Mindset is key: The secret to doing menial things well is having the right attitude. Check yours to ensure that you’re not looking down on tasks that you might consider as “someone else’s responsibility”, but rather, taking pride in a job well done and a willingness to help. Once you do, you’ll start to notice how many people are not willing to do so.
  • Organize where possible: Although you can’t plan everything that will come your way, it’s amazing how much actually can be organized when you make the effort. Look at the responsibilities that you have on a daily, weekly, and monthly basis and plan how and when to get the work done. When the unexpected comes along, the majority of what needs to get done won’t get derailed. This approach is one that will serve you well wherever you go and is a tactic of the highly productive.
  • Set short term goals: Keeping a keen eye on what needs to be achieved in a day, for example, can be helpful in planning your time and checking in to ensure that your task list stays on track. This approach can also be used to create the “positive pressure” and sense of urgency that deadlines tend to generate, creating windows of time for completing some of the more less than stellar items.
  • Plan for setbacks: Start ups tend to have more than their fair share of setbacks, with lots of time being spent at Square One. Recognize this, and take progress for what it is, as there will be days when the only success you’ll be able to point to is those menial tasks. Learn that even these are worth something.

There’s a certain pride that comes from the achievement of what isn’t exactly glamorous; the marathons, the mountain climbs, the cross country treks. In order to survive the start up journey, it’s important to recognize that it’s not the quick sprint to success that entrepreneurs tend to imagine. But, like many of the climbs that have characterized your path thus far, it might just be the time of your life.

 

Getting Started: Preparing for the world of entrepreneurial adventure (Risk Management)

Businessman smiling with his own reflection at the escalator

Published by CPA Canada in CareerVision

So, you want to work at a start up, or maybe, with that young company that looks like it’s going finally to raise some investment capital.  What could be more exciting than that?  Or, you might be at a place in your career where we’ve all been: one of seeking out new opportunities and fields where the grass is greener.  But, before you leave that corporate job, there are a few things you might consider, because, well, how to put it?  Working for a start up is different.  Is that bad?  You ask.  Or, is that good?  You wonder.  Well, the reality is, it could be both, but really, it’s just different from the world of larger, more established organizations.

Although working with a start up or young (what investors often refer to as “early stage”) company can be an exciting place to be, it’s important to consider some of the other aspects of the opportunity fully before making the switch.  Those who haven’t spent much time around the start up world might be surprised to find out what the flip side of opportunity looks like.  In this series, we will consider exactly that, so you can make an informed choice, and perhaps, benefit from placing a greater emphasis on developing some of the skills that will serve you well, in advance of when they’re actually needed.

Let’s start with the issue of risk.  Although risk, in general terms, can be one of those theoretical areas, when working with a young company, its existence is not only evident, it’s very much real.

Why it Matters

Start up companies, or those in the early stage of development, are usually not short of ideas, enthusiasm, and ingenuity.  Their world is often one that is emerging, including new technologies, new ways of doing things, and new markets.  The reality is, that although start ups can sometimes lead to success, they more often than not lead to failure (or, more gently put, a learning experience).  This might sound like an obvious statement, however, many who are involved in the start up world become so focused on the opportunity that the downside doesn’t matter much.  In reality, however, it is always there.  A lack of experience (or attention) can result in not seeing the downside for what it really is, including the risk that is associated with it.

Get Started

One of the things about risk is that the greater you understand it, the greater the opportunity to overcome it.  Too many entrepreneurs fail or refuse to acknowledge its existence, resulting in circumstances that too often cannot be overcome (and leaving many wishing they could turn back the clock).  In addition, the stresses of living in a risky world, day in, day out, can be too much to bear.

Get started on the right foot by putting risk in its place from the beginning:

  • Seek out risk management opportunities: Risk management is a learned skill, so if you’re currently working with a large or well established organization, it can be a good opportunity to learn how to identify and manage risk.  This represents valuable knowledge to address risk in future roles, and your start up partners will thank you for it.
  • Conduct an honest assessment: Since working with a young company could (and often does) mean uncertainty in a number of areas, ask yourself honestly if this is an environment that fits well with your lifestyle.  Can you adapt to an uncertain income stream?  Does moving away from a stable environment create feelings of discomfort?  What will you do if the business isn’t successful?  Ask the tough questions now and be mindful of both your logical and emotional perspectives.
  • Plan for the unexpected: In advance of moving into an environment of higher uncertainty, take advantage of where certainty does exist.  Saving, completing professional development programs, and seeking out learning opportunities all can be done well in a stable environment and can be something to lean on in leaner times.
  • Balance risk and reward: Although it’s true that young companies can be risky places, they can also have rewards, including new experiences, an opportunity to contribute significantly, and commercial success.  You might even also get the chance to own part of the company to share in future financial performance.   The key point is that risk and reward should be considered in balance, as seeing a situation only for its rewards can lead to trouble.

There might come a time when a start up opportunity presents itself and must be quickly pursued, regardless of your state of readiness.  Based on the inherently risky nature of early stage companies, this can be a mistake.  Rather than becoming frustrated with the situation, why not get started to plan for becoming well equipped to make the leap to playing a key role in a young company?  If this one isn’t right, you’ll be better positioned when the next one comes around.

The Executive Edge (“Must have” skills to get to the corner office)

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Published by CPA Canada in CareerVision

Throughout this series, we have explored a wide range of skills that are integral to performing well at the executive level.  Think of these as positive lessons.  There is much to be learned, however, by watching weak (to downright awful) executives at work.  Think of these as the executive you never want to be.  Look around; they’re out there.

Although it might be surprising, negative lessons have a way of resonating and reminding over the long term, perhaps serving as a guide to keep high potential executive candidates from wandering too far off the path.  Since careers are long and the executive journey often includes many challenges, regular reminders and “check ins” are a good thing.  Think of it as taking the time to gauge we’re you’re at and adjusting, as required.

One of the benefits of not being at the top of an organization is having a ringside seat to watch those who are.  Make this time worth your effort, by learning from both good and bad leaders.  Here’s a rundown of what you can learn from the “anti-bench strength” bunch.

Where it Goes Wrong (and Wrong, and Wrong)

Although there are lots of negative “leadership” examples, there are some fundamental types that you never want to emulate. See how many you can recognize from your career travels thus far.

  • Not sharing the wealth: From taking credit for the ideas of others to making sure that team members never see the limelight for a job well done, these people seem to hold the view that anything (and everything) good that happens in an organization is because of them. Team members might let this behavior go by a time or two, but after that, it too often becomes apparent t hat this type of person is no better than a thief!
  • Not having your back: This person gives the reassured impression that they’re “right behind you” and “on your side”, only to mysteriously evaporate at the first sign of trouble. Loyal to no one but themselves and always looking for opportunities, they’re like that person at a cocktail party who’s scanning the room while they’re supposed to be talking to you! Bottom line, this person can turn on a dime and cannot be counted on for support.
  • Not minding their own business: Simply put, this person meddles in the work of others to no end.  Instead of providing executive support, guidance, and direction when needed, they barge in where they aren’t needed; a disruptive force that, in time, runs the very real risk of creating a dependency between the organization and themselves, making the decision making ability of anyone else obsolete.
  • Not resolving problems: When difficulties arise in an organization, the staff group counts on management to resolve the issue; good leaders understand this.  Executives who kick the can down the road or listen to valid staff member concerns, but fail to take action can quickly lose the confidence of others.  Staff members eventually come to recognize that the leader “won’t do anything about it”, resulting in disappointment, a lack of respect, and, often, departure.
  • Not the learning type: If smart executives understand that knowledge is power and continuous learning at all levels is an investment, weak executives live with their head in the sand.  Put off by smart and keen staff members, this person would rather limit their knowledge, claiming that they “know enough” or that their business “isn’t that complicated”.  Organizations led by this type of person tend to become isolated, antiquated, and stuck in routines.  Over time, they often lose their market position, due to leadership that resists what’s needed in order to keep up with those who know better.
  • Not a nice person: Although it’s true that people can work together without really liking each other, on some level, the most basic of respect and decency are required to develop a relationship that can generate success.  Leaders who are rude, insensitive, or just plain unpleasant to be around are ultimately unable to generate loyalty, no matter how well they do their job in technical terms (and competency is no excuse for bad behavior).  Over time, staff members move on and word gets around that this is a person best left on their own, as it should be!

Although many executives who exhibit these behaviors thankfully don’t last long, enough time often passes for damage to be done; to companies, people, and sometimes, even more.  Using interactions with weak leaders to your benefit is extremely worthwhile, as each lesson is a valuable one.

Get the Executive Edge

You have the opportunity to chart the career path you’d like to travel.  Take the time to think about the type of leader you truly want to be, in terms of how you approach and conduct your role.  Technical ability aside (knowing how to do the job is a given), when you think of a leader, who do you see?

The reality is, successful executives know that they are always on the path of their journey and never quite at their destination.  There is much to learn, practice, and do, so take each step out to the very edge of your ability.

The Executive Edge (High Performance Teams)

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Published by CPA Canada in CareerVision

It’s been said that if you’re the smartest person in the room, you’re in the wrong room.  This statement has never been truer than in today’s business world.  As our global environment continues to grow and becomes increasingly complex, so must the many companies that seek to meet the needs of customers and stay ahead of the competition; in the absence of doing so, they will cease to be relevant.  As a result, leading businesses must continuously improve what they do and develop and offer the products and services that best fit with a rapidly changing world and ever discriminating consumer.  There’s no doubt that a high level of bench strength is required in order to do so.

Seasoned executives recognize that one of the most powerful components for generating success is a high calibre team, both at a senior level and throughout an organization.  It is through great minds, creativity, and heartfelt commitment that teams can soar to achieve uncommon things, to the benefit of the company and the consumers that they serve.  In these types of situations, barriers are overcome, new ways to do things are found, and true market leaders are made.  Team members recognize the unique component that they bring, and have the right attitude for encouraging the success of others, realizing that empowered groups can truly achieve more than individuals.  What is critical, however, is a talented leader to bring it all together.

In this series, we have already considered the importance of a number of Executive Edge skills, including generating results, role engagement, and professional development.  Here’s more about why successful executives understand how critical it is to surround themselves with high calibre people, always.

Where it Goes Wrong

One of the biggest threats to putting together a high calibre team is ego, closely followed by insecurity; there’s really no other way to say it.  When business leaders take the focus away from what’s in the best interest of the company and instead dwell on their own personal needs, making the right decisions can become elusive.  This is best illustrated by asking the question “why wouldn’t a business leader want to be surrounded by the absolute best people they can find?”  The answer, too often, relates to their own personal issues.

Although it might seem exciting to have a group of less accomplished people take direction and follow without question, this situation can quickly run its course, especially when competitive challenges, risks, and complicated issues arise (and, they will.  This is the business world!).  A loyal, but poorly equipped team of can quickly end up over its head, with few resources that have the capability to help the company survive the situation.  It’s at times like this when a business leader might look around and see lots of faithful colleagues, but little in the way of actual help.  And, as the ship slowly sinks, the realization that leadership is often judged by results brings into clear focus that success in business is much more about meeting customer needs than personal ones.

Get the Executive Edge

Striving for success on an individual level might be what’s needed to make career progress; however, the senior leadership level is much more about assembling a stellar team and working effectively to generate results.  Here’s how to shift your mindset and get started:

  • Define your strengths. Recognize what your best talents are and articulate them well, as this knowledge will help to identify your best team role. This is no different than determining if you play best at forward, defence, or “in net”.  Make a commitment and move forward from there.
  • There is no “I” in TEAM. Perhaps a cliché, but it’s true.  Being successful as a high calibre team member is understanding what your strengths are and bringing them into the group.  Integrate, participate, collaborate, and achieve results, together.
  • Focus on the business perspective.  Objectives should be derived from what’s in the best interest of the company, and this generally comes from what customers and the marketplace want and need.  Position the business for success and then focus on getting there, without interference from the inside.
  • Recognize the learning benefits. Being in a room with lots of smart and accomplished people is a great learning opportunity, and the knowledge that you gain is portable and can be taken wherever you go.  Think about it: spending your career years in a learning environment is so much better than the alternative.
  • Soar.  Perhaps, the greatest feeling in the business world: supreme success! Earn it, live it, enjoy it, and then, repeat.  This is what successful companies (and teams) do.

The day will come when you will be looking back on your career, instead of looking forward.  Ask yourself what you most want your achievements to reflect.  If real success is at the top of the list, chances are, it will only be achieved if you are able to be part of a “super smart” team that will challenge its members in the spirit of getting to the best result.  If you’ve been there, you wouldn’t have missed it for anything else.

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