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Setting the direction and planning for growth

Module 5: The seven responsibilities of a leader

As the CEO of your company, you have a choice. You can either react to whatever opportunities happen to come along, or you can be proactive and chart the course you want the company to take. But it’s no surprise that the most successful CEOs are proactive. They identify the markets and customers who want, need and value their product or service, develop a plan to reach those markets and focus their resources on delivering to those customers. Specifically they:

Set the foundation

Strong organisational foundations communicate the company’s mission (our enduring purpose; why we exist) and the company’s values (the terms and conditions by which we get work done), and outline the vision for the company (where you expect the company to be in three years). Strong foundations are like a road map for your company’s successful growth.

Consider the story of an employee telling his CEO how proud he was to see their product go to market. Then he had a flashback to the long, painful hours spent in the lead up to launch. He asked the CEO where the company would be at the end of the next three years. When the CEO couldn’t answer, the employee told the CEO, “I’m never again going to work that hard until I know where we’re going and how my hard work is going to get us there.”

Once you have mapped out the company’s vision, you need to develop an operational plan with goals and strategies for the coming year. This gives employees a preview of the kinds of people you will be hiring in various roles, the products or services you expect to launch, the new markets and customers you’ll be pursuing and the systems needed to grow the company. It lets your employees understand what their work is for, and where it fits into the overall organisational goals.

Communicate the direction

You can’t grow a company if the plan is in your head. It’s essential to get your idea out of your head and down on paper.  It’s amazing what happens when people understand where you want to take the company and can help you assess the risks, costs, benefits, trade-offs, and the best route to get there. The more you communicate the direction you want to go, the higher the probability you will get there.

It’s amazing what happens when people understand where you want to take the company

Make sure they understand how their individual performance is critical to the company’s success

Engage employees

There are many ways to engage employees and help them understand where you want to take the company: a written planning memorandum distributed to everyone; yearly planning retreats; quarterly all-company meeting updates; or even weekly team meetings. But you also need to show them how the various parts of the organisation must work together in order for goals to be achieved. You need to make sure they understand how their individual performance is critical to the company’s success. Expect managers to seek input from their employees when developing their departmental plans, and then expect employees to develop their own work plans, and their performance plans in support of the department’s and company’s plan.

Measure results and provide feedback

It’s critical to set quantitative as well as qualitative goals and to measure achievement of those goals. If the leader doesn’t expect, inspect and provide feedback on how your company is tracking against its plan, no one else will either. You might say, “Even though our industry’s standard is 10% customer churn per year, it’s hard to grow if each year we need to replace 10% of our customers and find new ones. This year our goal is 95% renewal, 5% churn.”

During the year, provide feedback about which department is experiencing more (or less) customer churn than last year and why. Feedback keeps employees focused on targets and thinking about what else they could do to ensure the company reaches its goals.

Expect achievement

People will live up to your expectations. And if you have none, they will live down to them. Leaders need to expect, exhort, cajole, use tough love or positive reinforcement – whatever’s needed to get their managers and employees to understand they are serious about achieving the goals that were laid out in the plan.

Celebrate success

Finally, communicate achievement and celebrate success. Sometimes we get too caught up in the next mountain to climb or another crisis to solve and forget to celebrate our achievements. Your plan should clearly lay out goals, measurement methods and clear definitions of success. Take time to call out individual performance, hold up people as role models, and celebrate departmental and company performance when you achieve your goals. Remember to share some rewards with those who produce.

Remember to share some rewards with those who produce

 

The CEO’s first responsibility is to set the direction of the company, then communicate the direction to everyone so they know where the company is going. Engage employees and hold them accountable. Measure progress, provide feedback on results and celebrate achievement of success. Growing a company is not a one-man show, it's a team sport. You need to recognise those who have contributed to your company’s success!

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