Big decisions in small companies

Demian Entrekin · August 31, 2009 · Short URL:

Balancing a wide variety of agendas and biases

 From time to time, small companies are faced with decisions that significantly alter the status and trajectory of the business. These decisions often revolve around topics such as M&A, funding or strategic shift.  The company will have various perspectives that drive the framing of the decision.
  • Product guys and technology guys tend to think everything is about the product. Their view is that the rest of the business revolves around the product, and the product is the center of the universe.  In their view, no one could do anything without the product.  Product guys can tend to think that sales folks are venal and corrupt.  Product guys focus on core technology, long term technical viability, flexibility and elegance, and the user experience.  They are motivated by building something cool.
  • Sales guys tend to think everything is about the sales team.  Their view is that they drive the revenue, and that everything else is just an expense or a necessary evil.  Sales guys can tend to think that Technology guys are geeks who are goofy, out of touch, and un-cool.  Sales guys feel that they can sell anything, and that one product is as good as another.  They also tend to think that their product isn’t good enough and they know what it should do better than anyone else based on the current deals in their pipeline.  They are motivated by the chase and the deal.
  • Marketing guys tend to think everything begins and ends with the marketing strategy.  They focus on competitive positioning, differentiation, segmentation, and effective campaign management.  Without the MRD and the PRD, all is chaos.  Marketing guys tend to break out into strategy guys and tactical guys.  Strategic marketers pick the market, define the solution, plan the go-to-market plans, and everything else is just execution.  They can tend to look toward the horizon and lose the immediate.  The CEO in a small company is often the chief marketing guy.
  • Services guys tend to think everything begins and ends with the customer relationship.  They focus on the customer perspective and the customer agenda.  They feel like they are often stuck with delivering on a promise made by other people and a product made by other people and they have to stitch it all together.  They are often the bearers of bad news and they take the heat for other people’s mistakes.
  • Finance guys and investment bankers tend to think everything is about money.  Revenue, expenses, cash flow, funding rounds, etc.  For these folks, the entire story begins and ends with the financial statements.  Everything else can often end up relegated to the status of curious little details.  For better or for worse, it’s the finance guys who tend to drive the critical company decisions, because they tend to own the most amount of stock and they control the funding.  Finance guys can have little or no operational experience. They are, therefore, the most dangerous group of them all. They tend to make decisions based purely on money.
  • The CEO must recognize that all of these views are both correct and incorrect.  The CEO must figure out how to balance all of these views and respect them all, while recognizing that he does not have strengths in all of these areas.  The CEO must have an honest self assessment of his skills and where he needs good partners.  The CEO must balance the views of Product, Sales, Marketing, Services and Finance.  The CEO must be objective, balanced, and focused on the present and the future at the same time.  The CEO must avoid decisions based on emotion but on a sober, non-ego-driven view of risk and reward.  The CEO must also be able to demonstrate passion.  They CEO must blend vision with execution.  
Major decisions tend to take two to three years to develop and take shape, and so the CEO must drive the key decision makers to strike a balance between long term commitments and the ability to make adjustments if things are not working.  Some might call this hedging your bets, but the CEO must place the bets.
(Image source: donnasalazar)

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