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Managing resources for growth

Module 5: The seven responsibilities of a leader

One of the seven responsibilities of a leader is to manage the company’s resources – and make sure that other people manage those resources efficiently and effectively, too. Some CEOs think this means managing the balance sheet or cash flow. But a company has many more categories of resources than just financial ones.

Employees

One of the most important resources – perhaps the most important resource – is your employees. The trick is to hire people who match your values and have the capacity to perform at a high level in their functional area (e.g. sales, marketing, IT) and then manage and lead them to high performance. In other words, communicate what is expected of them, delegate appropriately, provide the tools and resources needed for the job, and acknowledge when they meet or exceed expectations.

Customers

Customers are both a source of revenue and a source of new product or service ideas. It may take time to find your ideal customers, but when you do, you should be able to develop a recurring – and increasing – revenue stream. If you go out and talk with those customers, they will tell you what they need and want – and what they would value. If you turn their ideas into actual products, then you will have a first customer, will likely get testimonials, and may even get references to other customers.

Customers are both a source of revenue and a source of new product or service ideas

Vendors, suppliers and partners

Vendors, suppliers and partners are an important resource because you count on them to provide the raw materials and/or the components that you use to create – and then sell – your unique product. Building good relationships with them is critically important. A delay of a month or two in receiving supplies could result in your company being late to market and missing sales targets. If you don’t supply vendors with products and appropriate marketing material, they could substitute another company’s product for yours and sell it, making you redundant from their perspective. You need to figure out how to manage relationships, bind suppliers to you and make your product top-of-mind if you want your company to grow.

Your company’s brand

Some CEOs don’t understand that their brand is a powerful resource that needs to be developed, and then protected. As the marketplace becomes more competitive, companies have learned that the strength of their brand and reputation can help attract and retain customers, employees, business partners, and even investors. Since brand and reputation are often tied to emotions, trust, and gut feelings, you need to protect your brand. One way is to educate employees, customers, suppliers and vendors about your brand and what it stands for. Consistent delivery of the brand promise, internally and externally, reinforces reputation and generates brand equity. It’s a store of goodwill that can help your company weather crises and reputation-damaging situations.

Finances

Last, but certainly not least, CEOs need to manage the company’s cash flow, profit and loss, balance sheet, reserves, as well as relationships with the bank, investors, and any other financial organisation providing capital for growth. Cash flow is the life blood of the company. It doesn’t matter if sales in the pipeline are ready to close, or invoices are about to be paid. If you don’t have enough cash in the bank to pay your current bills, you are technically bankrupt.

If you want to finance the growth of your company, you will either need to invest your own money, reinvest profits rather than taking them out as dividends, borrow against future earnings, or find investors who will invest money in exchange for equity (and usually some level of control).

Figure out how to manage relationships, bind suppliers to you and make your product top-of-mind

As the company grows, successful CEOs have learned that they need to hire executive team members to help them manage their company’s resources (attract and retain great employees (HR), develop, market and sell products or services that customers value (CMO), manage operations (COO), and maximise finance (CFO). Build a team that will enable you to manage resources efficiently and effectively, and empower them to help you grow the company.

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