Organizing this mess
A first-hand look at the way I plan on categorizing my business activity to help make sure we stay focused on the goals and have internal accountability.
For those of you that know me personally, you have probably figured out by now one key fact. When it comes to my professional journey (I use the term professional very loosely here) I like to be involved in different things. It’s just who I am. I am currently an entrepreneur, a CEO, a CFO, a writer, a public investor, and a very small time angel-investor - and I am just getting started. The next few years are going to be a crazy adventure for me. I’ll be in the arena one way or the other.
This willingness to wear a bunch of hats does at times lead to challenges in my job as CEO at GCS. Hopefully, the pros outweigh the cons, but I would be foolish to not admit that it can, at times, make things messy. My leadership team rarely is in full agreement on anything but I feel confident they would agree with me on that. One of those challenges is trying to figure out if we are devoting the right effort, in the right amount, to the right place, at the right time.
For a little context, at GCS we are product builders, which seems simple enough. However, what is not simple is knowing how to distinguish between the products we build for others (current paying customers), versus the products we build for ourselves (future paying customers), versus the effort needed to facilitate any of that (hiring, contracts, training).
It is, at least for us, incredibly NOT straightforward. There are about 1000 factors that can change this decision and with 19 employees, 10 customers, multiple products, and a CEO who can be a bit quirky, it’s a damn mess.
One of the things I wanted my newsletter to do was to shed insight on the actual journey, not the twitter version of it. I want to build, create, and invest in public. It may help a single person and that in itself is worth it. I’m not scared to get a little egg on my face in the process.
So you, my faithful readers, are getting first-hand insight on how I plan to reorganize my company efforts to help the leadership team stay accountable. You are reading this before I tell the team. We are in this together, like it or not.
Here’s is how I am now going to think of all the work we do, as well as the work I do going forward. This may seem counter-intuitive to some, but remember, we are working to be a company that sells more of our own products vs creating products for others. That distinction matters.
The first category we will use is called Direct Work. This is work that directly benefits the products that GCS offers. For it to be direct, it must be a straight-line benefit. For us, this is, among other things, effort building our current product portfolio, sales & marketing, and People Ops (hiring, training, recruiting).
The second category we will use is called Indirect Work or can be thought of as a curved line. This is work that more-or-less indirectly benefits the company. For us, this would be building and supporting products for other people or generating billable revenue. The thought here is that the profits created in this effort should indirectly benefit our other efforts.
The third category we will call Overhead Work or dotted-line work. These are the jobs that must be done just to keep the ship afloat. In our world, this would be contract negotiation, insurance, payroll, and doing billing.
Simple enough right? I hope so. People tend to really over-complicate business. If it’s too simple to explain over a beer, it probably needs to be reconsidered.
One caveat to this. You may notice that nowhere in my breakdown includes effectiveness or results. For example, you may wonder (the team will ask this) how do we know that the work we do on our product will have a direct benefit? What if it goes nowhere? The answer is, you never know, no matter if it is direct, indirect, or overhead.
Leaders can get misguided and think that every activity generating profit directly benefits the company but it’s simply not true. After all, how many times does more profit simply equate to a bigger boat for the CEO, a leadership team-building trip to Vegas, or allow a manager to be lazy with some other decision now that they have more money? Sometimes when we win a huge client deal this money goes into our product, sometimes the ownership group just gets to have a nice Christmas. That is the harsh truth. Anyone who tells you differently is lying.
So for now, we ignore the bottom-line results. There are lots of ways we track that as stakeholders and most involve balance sheets and P&L statements. If that was all that was needed, I wouldn’t be writing this article today. For now, we focus on what our objectives are and we have unwavering trust in each other that good things will happen if we do. If we end up short, we will do so with effort, trust, accountability, hard work, and optimism. I can live with that.
If you know a business owner, team leader, or professional who may benefit from this, please post it or share it directly. There is absolutely no reason to do this alone so let’s build together!
Photo by Charles Deluvio on Unsplash
keep on writing my friend. trust, teamwork, effort and determination ...i love it