CEO's Diary: Geek

The CEO takes pride in his work

November 30 - A morning trip out to look at one of the sites we've installed the new product at.

I guess it's not spectacular. Most people won't give it a second look. But it's neat, effective, well installed and smart.

I don't care if it makes me a sort of geek to take a pride in what we do, but I felt really chuffed to see this stuff there and know that this was the result of an idea I had a while ago whilst walking the dog.

The site manager seemed pleased. He praised our team. That's good enough for me.

I'll have a drink to that tonight to start the weekend.

* * *

November 29 - another day planning (in between all the distractions that any day in the office can supply).

East, Newc and I spent a long time considering what it was reasonable to think sales might be next year, and from where they were likely to arise. Of course, we'll get this wrong but you can't plan resources unless you do this exercise.

We really do not think that any orders of the size we've secured this year are likely. That said though, the enquiry pipeline (which we do monitor almost constantly) has not appreciably slowed at the moment, and nor has its quality. This gives us a dilemma. If we were really imagining new work of the scale we've enjoyed we'd need to ensure we kept some of the sub-contractors we've been using happy, and as much as possible in work with us once the large order in the West is fulfilled. But if we don't we'll have to allow this team to disperse and just hope one could be reassembled again if need be.

We've decided to allow for dispersal. There's no point securing work at low margins just to deny competitors access to some good subcontractors who know what we do. We'll just have to assume no one else will be so busy that we couldn't find them when needed.

In that case we fall back on the core team of employees for delivery purposes. This led to much discussion on strengths and weaknesses, both of the teams (which followed on nicely from the bonus reviews) and their kit.

On kit we made a decision to extend the life of vans. These are more reliable these days. We just aren't seeing the need to replace them in three years. We're going for four, and considering five for those that do short mileage as some do, especially in the East. If the only thing that needs replacing to make five years reasonable is the drivers seat it may be worth it.

We're going to train more. This is a better use of our money than replacing our IT kit (for example). There's a lot of productivity to be had out of what we've got.

We're going to throw a wedge of money at new product ideas, including prototype development, because this does seem to be the time to invest to stay ahead of the game.

And we're going to keep our eyes open for a company like Newc's. There has to be someone else willing to accept a fair price to buy managerial freedom of the sort he now feels he enjoys compared to being sole director of his own show, which he hated.

We think that's the basis for a plan. It deals with the present and the future and shows commitment at a time when the market is uncertain. It's not revolutionary, but we didn't intend that. Evolution will do.

I'm confident we can deliver solid earnings based on that, and maybe more. It may be uninspiring to some, but that's a fair measure of success in my book which in many ways answers the question about what I believe being a CEO should do that was posed to me two or three months ago.

Certainly the team are happy. It would be nice if the shareholders were as well. But they're wholly unpredictable.

* * *

November 28 - It's bonus time.

We pay salaries early in December and bonuses are going with them.

I know we have to be able to justify these. Some are easy. They are based on measurable criteria. Some are not. They are manager judgement. I set my own manager's bonuses. They set their staffs.

But I read all the justifications, just in case, and to learn who is doing what.

And in 5% of cases I have to double check that they really mean what they say. Which takes forever, and removes any joy from the process.

It's a process which I always find thankless anyway. When did anyone last say thank you for a bonus? Not in my living memory.

* * *

November 27 - Not much point in deciding on priorities for next year if I haven't appraised how we're going on new business developments.

Like everyone, I guess I should be cautious about real growth. Who knows what is going to happen in the current market? I'm not optimistic that many people are going to be making unforced investment. Thankfully, working in a regulation driven market (as we do, if I'm candid, and for which reason I'm less anti-red tape than some I know) forced investment is a feature of what we do. But it only really happens when people buy, sell of refurbish buildings and will this be less frequent next year? I don't know.

What I do know is we can extend what we do. Newc has been driving the supply of the new product range I'm keen on. There's enough data now from the two trial contracts to prove several things. The first is that in terms of management effort right now this is a waste of time, but that's inevitable. There's a big learning curve in here.

Second, in technical terms this is not that hard. Third in regulation terms (because this is another regulation driven product) this stuff is key, and people are very keen to get it right. Liability is attached to failure. We have to know what we're doing.

Fourth, although we priced competitively on pure margins we did well. On labour margins not so well, but again we're back to a learning curve here.

That means I have enough data. Now I need a decision. Do we do more, do we continue subbing design and liability risk, or do we buy facilities in house? Either way do we sub manufacture for now but install ourself, or do we put the whole lot out?

I'm conflicted on this. I know (and some people here remind me quite often) that whilst I like to think of myself as being keen to devolve responsibility I'm actually a bit of a control freak. I suspect most senior managers are. It means I want to have everything under my control. The reality is that this makes little sense. The team have already been through this and we can see no logic to manufacturing this stuff right now. That's the easy bit and we don't have the space to do it.

But a decision has to be made about whether we recruit or not. I know I'm going to want to do that. So it's in the plan. Next year may be uncertain, but I'm going for growth anyway, and good people always pay. If we can induce the people who're subcontracting for us on board I think we can have a real go at this market.

I hadn't decided on this when I started to write this blog. It's one of the pluses of doing it.

But I still haven't decided if Newc is the man to manage this, or will it need someone else? I'll leave it under his wing for now. But I'll have to bear it in mind.

* * *

November 26 - No resolution on the North. They say they've heard my offer and will put things in writing.

Newc is now shifting sub-contract people west to help Promo. Since the north is actually near done I've asked Newc to now align with Promo more. What it seems to me is that I appointed the right day to day man, and the wrong commercial person in Promo. My immediate answer is to parachute Newc in as mentor.

And for all his rough edges Newc is good at that. He does bring people on. That's what I need. Mentoring is not having a chat every few months. Newc even enjoys it. We've agreed we'll set a programme between us. We're not even sure we'll tell Promo it's happening. That might undermine him. We'll just use this contract as cover and will invest the time to see what we can draw out of him.

The plus of all this happening at this time of the year is that at least no one is on holiday. We can manage.

There's one other plus in this place. Because the shareholders can't agree on how or when to take their profits earned in excess of that stipulated in the shareholder agreement we have cash. That's good news right now. But for that comfort zone these two problems would be hitting us, hard.

Mind you, it's one of those things I don't take for granted. The shareholders are always told when we dip into "reserve" funds which are the sums I think should really be theirs. There's not a lot they can do about it. But I think I have a duty to tell them.

And right now cash flow is on my mind. Our next financial year starts on 1 March. I'm working on headline targets for the year to come, and some ideas on how we can meet them. Call it budget purdah if you like, but I want some time to work on this before the new #1 arrives. I might need it.

* * *

November 23 - At last, some respite. Amazingly good interviews with PAs yesterday, and an outright winner.

One would have been an ideal secretary. No problem with that - they're really valuable. But the one I have gone for (to now be known as PA) wants to be something more. In fact, she quite brazen about it.

She's a graduate, she's done a number of jobs, is in her later twenties and seemed over qualified for the task. So I challenged her as to why she would want to be my PA. Her answer was simple. She wants the role for two years. Then when she's learned what she can she wants to go out and set up her own business. She thinks shadowing a CEO in the meantime is her best chance of learning about business.

As an interview answer it was audacious. She got the job.

It helps that I like her too.

I suspect I won't be alone.

* * *

November 22 - Just too much work and a certain rather depressing football match drew me away from the diary yesterday.

The good news is that #1 has agreed all terms for starting her employment with us. It's a real relief.

The next good news is I'm interviewing this afternoon for a PA. Office says I'll like them.

The bad news is also good. The customer in the north rang. He had the report. He acknowledged it and said he wanted to discuss a solution. As he put it, he says we didn't do what was required, and we say we did. We can agree to differ and settle or we can drag this out.

I don't like being caught off guard by negotiating without notice, so I deliberately said I had not got the report by me and would need to get it. Winning five minutes thinking time is always important in these situations. It restores the equilibrium of advantage.

Calling him back I asked if we could go through the cases. He was flippant. He didn't want to. We'd just disagree. I pursued, a bit. Why was that, I asked. He again sought to parry the question. There were too many details that could bog us down to make it worthwhile.

OK, I said, how do you want to go forward? He was instant in his response. 15% on all disputed cases was his reply. I was not amused. But responded with a simple question, saying as he'd presumably done the sums, what did this represent in cash terms? That was, of course, somewhat less than 15% of the whole contract value but still came to near 5%.

There was no way I was agreeing that. So I simply noted it and responded in two ways. I offered to negotiate on rate, or the number of sites. I did not mind which, but would prefer one only and had apreference for the latter. I felt there was clear room for agreeing that some sites must fall entirely out of the equation. On the remainder we might then be able to settle.

This was the first occasion when I felt I got the upper hand. He knows, and I know, that there is no real site-based claim. So I could agree 15% of nothing without problem. It gave him a problem, and he floundered. So you will settle, he asked? Yes, I agreed, I would in the interest of ongoing relationships and without conceding liability on the need for rectification as well, but not at that rate or for that number of sites.

What's your offer he asked. I made clear, this was not an offer, it was just a means of resolving an issue. I suggest a sum 20% of that he'd asked for. He went away.

I suspect we'll settle on 2 to 3%. It's a poor deal, but I can live with that. But I still hate this way of doing business. Why can't people just be honest?

* * *

November 20 - After a few weeks of internal focus I hardly seem to be at the office at the moment.

Agreed with Newc that he could deliver the report to our northern client, which he did in person today. I gather it was a fairly brief meeting. We're following it up later in the week.

At HQ we had a curtailed management meeting and then Promo and I headed off to his client to propose a new supply schedule - we're pretty confident that we have the sub-contractors we need to deliver the goods now.

That at least was a success. They seemed happy.

But I have made no real progress with Promo. I'm concluding he's not up to this job. This is a major management problem. It's not even one I can train him into. I chose the wrong man.

What do I do about that?

For the time being its a matter of hold steady until this contract is in - which he can do. Delivery is not his issue. Customer relationships and communication upwards are. Which seems to be a self confidence issue. He feels out of his depth and nothing I can do seems able to correct it.

I'll add it to the list of worries.

* * *

November 19 - Some may have noticed that I'm inclined to write the odd word of two (well, about 350,000 on this diary alone since it began, I estimate). But I'll tell you, nothing gets more words out of me than a drop of anger.

Newc and I have been working all day today on a report for our northern customer showing that, to be candid, all their claims are complete rubbish.

Of course, we're more subtle than that. But they chose to ask for a discount by going down this route, and I'm not willing to play ball with such a bogus claim.

I still accept we'll be suffering a retrospective discount, but I won't have it that we don't deliver quality, and I reckon if we can show that's not the case they may have to reduce any claim.

That's the aim.

Now, do I show it to lawyers or not? I'm not inclined to. They'll just charge a fortune for platitudes and I'm in a fight. Platitudes aren't needed.

* * *

November 16 - Out at an industry bash last night. I hate these things, but the Chairman insists I must do them, so I went. The people I sat with were terminally dull. I gathered nothing of use from any of them, but have to admit in the preamble and aftermath did manage to mingle well. The daft thing is, I might hate these things but I'm also aware I'm quite good at them, even if my ability to remember the names of those I might is challenged, frequently.

And given the day that preceded it I'm unsurprised it was challenged. As if for diversion from the north, I spent a lot of time with Promo on the contract he's managing. It's clear he's out of his depth. The issue is not just an awkward customer (although that's not helping). Promo needs management resources and he needs more people to fulfil this one.

Newc may be nominally in charge of marketing (and he's actually proving pretty good at that - our profile is growing and I like what he's doing), but having him as a spare manager is invaluable. I'm doing the immediate firefighting with Promo whilst Newc helps in the North but the moment he's free he's bringing a team of subcontractors from that job over to help with Promo's roll out. These guys seem happy to be follow the work, and we've found some who are good (and have laid more than a few aside in doing so). It threatens margins a bit (which seems the current tale around here) but we have to get this job out on time - and I think we can.

But I do have a real concern. I'm not really sure Promo is growing into this job. He's a good second in command, but we're asking him to make decisions on his own and it's becoming increasingly obvious that this is not his thing. It's another issue for my agenda. After dealing with the nitty gritty of his schedules, which I'm not sure is an issue I should really be addressing.

* * *

November 14 - Newc has been to see a few of the sites where it's claimed we have caused damages in the north. I can't repeat his comments. They're direct, forthright and (I might add) appropriate.

In one case the supposed "damage" to the property looks to be damp. In another it's so far from the work we did it's ludicrous to suggest we could have done it. Some just looks like wear and tear. He really is sure that this lot are just trying to take us for a ride.

I asked him to be as full in a report as he could be - lots of pictures, measurements and the like. I really don't mind people negotiating fairly - but this is not.

At the same time Promo's team are also running into problems with the big project they landed - but this time it's just Christmas. The customer doesn't want us to be on their premises in the build up to Christmas but also doesn't want any slippage on the project schedule. They can't have it both ways - and we have penalties if we don't finish on time, so it's a case of another tought session coming up. He will certainly need support on this one.

I admit right now there are odd moments when I recall with affection being the FD here and Ops' number 2 - it was a lot less stressful than the current role. But I also admit, I wouldn't want to go back. It's not the way life works.

But there's another thing that doesn't work as planned - and that's project contracts. Even when you think you've covered all angles the plain straightforward cussedness of customers cannot be bargained for.

* * *

November 13 - I've noticed the comments written here about what a lousy boss I've been choosing an accountant from a short list of one and in turn presenting a "yes or no" option to my team.

Well being a more sensitive soul than some might think, I took these words to heart and discussed the issue with East, in his capacity as my deputy.

He laughed at the idea that the process was inappropriate. First of all, as he pointed out (and he was around at the time) the shareholders made the choice on my appointment, and Ops sat in on the interview and probably didn't get a word in. So I have advanced the process considerably. Second, he assured me that those who did the interview of #1 believed me: they did think they had the option to say no and had started the process aware that they could exercise it. They chose not to.

So as he put it, "who's complaining - we got a new number cruncher with minimum fuss - call that a result".

I agree. Well, I don't agree about number crunching, but I know he says that to wind me up. So I ignore him.

* * *

November 12 - Now I have two accountants and no PA, besides a customer who is playing rough. What does one do?

First ignore the PA problem. It will resolve itself. Office is still on the case.

Second, meet #3 and discuss the new situation where we have a replacement for her massively sooner than expected. She knew this on Friday but I had not had a chance to share it with her. She's candid. Now she's decided to go she's happy to cut short her notice. She's suggesting she quits at Christmas and is happy for an overlap. So am I.

The new #1 would like to start asap - but she does not want too long an overlap and sees our problem. Looks like I can negotiate 3 December as the start day to suit everyone.

That's an issue down. Just the rest of the contract to nail now. We'll meet to do that.

As for the awkward customer. North, East, Newc and I had a pow-wow on this. We know they're trying to dupe us and there's universal disgust. North and Newc have agreed to visit a selection of the sites where claim is being made but we made two immediate decisions. The first is to upgrade the quality of our digital cameras so that any picture can be blown up big to show any flaw. The second is to require before and after pictures on every job. We're not being duped again.

I'm livid.

* * *

November 9 – I wanted to be in the office today to discuss what happened on #1, but had no choice but join North in a meeting.

The big customer we won a few months ago, and with whom things had been going well suddenly sprung a surprise on is, making a big claim for damages to decoration to their property which they claim comes from our work.

This is absurd. On every site where we have done damage we have a post installation review by their staff signed off to show that all reparations have been completed. But they’re now claiming we are liable on all sites for all damage around our installation until the whole contract is finished, despite getting individual sign off as we progress.

There is no way on earth this can be interpreted from the contract – but of course what they’re really seeking is a big retrospective discount. I hate this sort of thing. It will take long discussion, and you know that at the end of the day something will have to give and it’s just cash they’re going for. But it makes me very pleased we did not take more work from them. In addition, they are shooting themselves in the foot. You can’t win by playing hard ball like this in the long term, I think (unless you’re a supermarket). The service we supply will not be as good now. That’s a matter of fact.

Having said that – East has called me to give feedback on #1. What I do know is she won them all over. Thank goodness. The objections evaporated in the light of the interview. I asked him if I was sure I could phone her and tell her this. He said I could. But I admit I also talked to Office first, just because I wanted to hear what she said. Her enthusiasm was enough to convince me.

#1 is very pleased. That at least has made a good end of the week. But I’m going to be back up North for another session next week on this contract – and that does not please me at all.

* * *

November 8 - I'm out of here, deliberately. The interview for the person I'm already thinking of as #1 is today - and I want it to happen without me being around.

I could have set up a meeting or two with customers. But I haven't. I've been to see a colleague of the Chair who, like him is into training but is going to be more objective about our needs than the Chair could be, given his knowledge of what we're all about.

I need to work out how we can get our message to our customers about how they can get best value from us, and that might need training sessions.
If so, I want to understand how to deliver the message, and who should do it.

By the latter, I know we should. But I want to re-think what it means to be a trainer. I don't think anyone here has training in that so this was the key focus of what I was discussing. How do you train the trainer?

I admit I was impressed - and I think our people will be too if they got to go on a course with this chap. He's inspiring, but unassuming in that he made me, and I think would make anyone, believe that they have the skills to do the job - they just need to bring them out into the open. I liked that. And I can think of several people here who would too, not all of whom are managers. After all, why should they know best?

* * *

November 7 - Explained to East, Office and the existing accounts deputy that I have met a new accountant who has been recommended to me and I want them to interview her. I didn't expect the resistance I got.

Office in particular is not happy that there's a "one candidate, take it or leave it" position as she sees it.

I made clear that's not the case. It's a "one candidate for now and you can reject them if you like situation". If they do then we'll go for an advert, and all the rest of it.

In negotiating terms that worked. In goodwill terms it hasn't. They clearly think I'm imposing (well, I don't think East does, but the other two do) and this is a problem. It's tough to think the candidate I want, who can be secured almost immediately at no cost, and about whom I've agreed I cannot explain the actual source of introduction, is someone two thirds of the interview panel are set against before she even arrives.
But I'll have to live with that. And I'll have to trust she can swing them round because I'll have to keep to my commitment if they say no.

I'll know on Thursday afternoon - they're interviewing her then.

* * *

November 6 - Met the accountant the Chairman knows last night.

You know how it is when you meet someone and in seconds you know that they're the right person for the job? Well, that's what happened here.

She's great. #1 as I'll call her - as we never seem to have had one of them, is a feisty fifty something. Have you seen Carol Klein on a TV gardening programme? If so, you'll get the idea. Masses of energy based on obvious enthusiasm and no little style. I was bowled over, I admit. Within minutes this was no interview, more a friendly chat on how we see things. On which there was a lot of accord.

Of course, I've explained we have to go through our due processes - and that she has to pass our IT tests. But references are guaranteed and she can start whenever we like. I have a funny feeling she and #3 won't want to overlap for long. In that case I suspect #3 might go early. Best that way, if possible.

I'm chuffed. If the others agree this is a big problem solved easily.

Curiously, Office tells me the PA role is still proving to be much harder.

* * *

November 5 - Friday was interesting. And I admit, as ever when talking to people, not as I anticipated.

To get my promise to go out more under way I agreed to visit a customer who East reckoned would appreciate me responding to an enquiry. His logic is, I know, simple. People are flattered by the boss calling, even if we're small compared to them.

So, I agreed to meet our contact in this business and take her out to lunch. She, inevitably brought a colleague. Once pleasantries were over I asked what was concerning them.

There were two things. Price was one (as ever). The second was value. Thankfully, they see them as related issues. But the key issue quickly became clear: yhey have not really appreciated the purpose of the new service we began some time ago, and which I discussed here when we started it, where we began to replace paper reporting with electronic reporting and the archiving of results in a dedicated web space for the benefit of the customer so that they can use it as part of their quality control system.

It was fascinating. They felt we weren't delivering value, but in reality we are delivering vastly more than they expected. Lunch over we went back to their office, and went on line and looked at all the data we had on all their locations ready and available for them to use. They were amazed. They simply didn't realise it was there, was downloadable, and could be analysed by them at will (well, within reason on line and absolutely how they liked if downloaded).

Questions about price vaporised. What they now began to talk about was how to build this into their own reporting, which could quickly and easily show they were on top of this issue in a way they had not imagined.

The result? I never did have to discuss the contract value again. Instead we talked about training and knowledge transfer. Perhaps that's called value pricing, but what it says to me is that we need to be doing more of this. Much more of this, and should really be running training on how to use what we produce.

You can imagine that one or two people might be hearing a bit more about this over the next few days. It pays to go out.

* * *

November 2 - Gone to see customers. Back Monday.

* * *

November 1 - The Chairman and I met for breakfast this morning. In the days when Ops was my boss Friday lunch used to be our talking time, but now I find lunch more useful and more fun.

I admit, I don't like breakfast meetings. They're too stressed. But breakfast with someone you know and get on with is a different kettle of fish.

Today we bashed two themes. The first was the new accountant. I thought I should update him on plans and my thinking. He listened (he's good at that), got us another coffee (I admit, we go for good breakfasts - and much as I like greasy spoon fry ups they rarely do good coffee, so that determines our venues) and then told me he had a person who I thought could fill the role. He makes no promises. He places no obligation upon me. But she is, in his opinion good - but as he said, he's not an accountant, I might not agree. He has known her for a long time. She's of an age I might have a problem with (he said with a smile, since he revealed she's in her fifties and I know he is - as for me, that's just getting a little too person to be revealed, but he knows darned well I have no problem with people of a certain maturity) and she's available. This, apparently is because she's been 'let go' after a takeover of the company for which she was chief accountant / FD. It's often the way.

Would I like to meet her, he asked? Of course I agreed, but informally first and then (making an exception to my rule, noted only yesterday) with an interview panel so that others, not known to the Chair and not knowing she has been introduced by him, can have a say. He thought that fair. He thought I should make clear those terms to her. He thought it highly unlikely she'd want the job on anything but merit.

He's going to arrange.

And then we turned to matter two, which is what am I going to do when I have a new accountant and a PA, at least two or three other senior team members working much off their own backs and therefore all the time in the world free and on my hands?

I laughed. He knows it won't work like that. But he's also right. I'm aware we share an opinion that a great many senior managers immerse themselves in detail to avoid the tough issues in life. Rather like auditors who bash fixed assets to extinction and just about ignore stock (or at least, they did in my day - does it still happen?).

I assured him I have plans. One, I have decided is to be a line manager. In other words, I must take more responsibility for a few customers. Only that way can I know on a regular basis what they really want. And I must take time to be out and about in the market. Visiting, seeing, reading, learning and feeding back to our team.

Does that sound simplistic? I don't think so. On balance it's exactly where I should be, I think. Mixing real knowledge of what we can do and don't do with what customers want and what might be possible. Isn't that the firm basis on which to build vision?

It's taken me time to get to this. But it's my plan. He was happy with it.

Let's see if I can do it.

* * *

For previous installments of the CEO's Diary, see:

October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004
September 2004
August 2004
July 2004
June 2004
May 2004
April 2004
March 2004
February 2004
January 2004
December 2003
November 2003
October 2003