Midsize Companies Must Prioritize Ruthlessly
March 29, 2014 Editor 0
The world is littered with the hollowed-out shells of firms that tried to do too much and spent too big trying to grow too fast. Many of those firms were midsize companies; they didn’t have the resources of the big firms to sustain setbacks, nor were they scrappy like most small companies, making do with the resources they had.
I have interviewed more than 100 leaders of midsize companies in the last three years and been a CEO coach to several dozen others. Before that, from 1996 to 2006, I was the CEO of a firm that grew to the small end of midsize (Bentley Publishing Group). I have seen again and again the dysfunctions that derail growth of midsize companies – maladies that are not nearly as harmful to smaller and larger companies. One of these: letting time slip-side away.
While poor time management hurts large and small firms as well, it’s especially pernicious at midsize companies. The reason is that they must still move quickly to fend off smaller competitors but must tackle big projects to support growth, deliver enterprise-class service to large customers, and compete with large competitors. All this on a midsized company budget. Every second counts.
Being neither big nor small forces midsize firms to prioritize ruthlessly. To survive downturns and stay focused during upturns, these firms must plan their high-priority initiatives meticulously. And as they do, they need to understand that time is never on their side.
Here’s the story of how one midsize company changed its sense of time.
Despite many successes and the best of intentions, Pennsylvania-based Goddard Systems Inc., national franchisor of The Goddard School preschool system, missed deadline after deadline in 2007 rewriting its franchisee training manual. Franchisors use this training manual as a fundamental tool for capturing best practices and disseminating them efficiently. Over 17 years, Goddard had grown to 200 locations and its old manual was out-of-date, calling for too much one-on-one training for new franchisees and employees. To sustain growth, Goddard had to rewrite the training manual.
But for Goddard’s top management, a new manual was not perceived as critical to keeping their 200 schools operating well. Since they considered other projects to be far more important, the manual wasn’t getting done. When new leader (and now CEO), Joe Schumacher, joined the company in 2007, he recognized the fundamental problem: the Goddard team didn’t appreciate time.
Schumacher made rewriting the training manual a real priority, knowing that rapid expansion was just around the corner. If Goddard didn’t have the new manual, training and new-school performance would suffer. Schumacher assigned the training manual to one of his direct reports: it got done.
In addition, Schumacher required his team to compile strong business cases for all their projects. The process helped everyone differentiate high-priority from low-priority initiatives, and it forced senior managers to identify the resources their projects would require.
Today, the firm has grown to nearly 400 locations, almost double the number from when Schumacher arrived. The management team is continually trained on project management techniques, which Goddard now recognizes as fundamental executive skills.
Time, not money, is the most important resource for midsized firms. In order to create a culture which treats time as a valuable commodity in short supply, leadership must believethis. All the project management in the world will go for naught if the CEO disrespects deadlines. Such behavior must become unacceptable at every level. There are three steps executives at midsize companies can take to get everyone to respect time as a resource.
1. Ruthlessly cut projects until only a handful of critical ones remain. Often midsized companies have the resources to manage only one key initiative at a time. Here’s an awful truth that CEOs of midsized companies must acknowledge: Even if they’re the boss, there are limits to what they can do. Kill your pet projects. When a company tries to do too much with too few resources in too little time, projects will be late if they’re completed at all. Invariably they will be done poorly.
2. Expose the status of core projects, warts and all. The status of crucial projects must be made naked to the entire management team – especially when progress slips. In midsize companies, core projects by definition affect every department since the core of the business isn’t that big. Deadlines that are missed and tasks that run into trouble can’t be known to just a few, for two reasons. First, the people kept in the dark may not be able to execute their assigned tasks at later dates, and getting things back on track could require the senior management team’s collective ingenuity. Second, in many cases, the midsize company senior team holds most of the subject matter expertise. Not only must the project leader — under the supervision of the CEO — inform every team member about the state of each task on a detailed plan, he must also provide his opinion on the project’s progress. That lets each team member know the boss is watching and no one can hide.
3. Promote your best time-managers. CEOs and senior leaders must explain the personal rewards for critical projects executed well and on-time. Well-planned and executed initiatives ought to fuel individual career growth, as well as company growth. Managers must remind their direct reports that promotion opportunities are much greater in fast-growing companies – but that promotions only go to those team members responsible for growth. Advancement and learning are critical motivating factors in midsized firms, who often don’t have stock options (like a Fortune 500) or equity (like a start-up) to offer. But the stick is just as important as the carrot. The consequences of missing deadlines must also be career altering. The leaders of the team should be uncomfortable with the pressure; that discomfort will motivate them to avoid failure.
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