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CEO's Diary: KPI time

31st Oct 2007
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Man at desk

The CEO defines the accountants role using KPIs

October 31 - The thought occurred to me that I really do know how to delegate control of the accounts department and provide management independence if that is my wish. I have to use Key Performance Indicators as the statement of objective of what I want achieved and then let the team manage how they deliver them.

Given that we use KPIs already why didn't I think of this before? Well, because I feel the KPIs are mine I suppose. I don't think that's why #3 is leaving (I'm pretty sure) but I guess it hasn't helped.

And it's something I'm going to have to correct if I want the new role to work. And I really can't see why it shouldn't. After all, the way I do things is not the only right way (much as I'd like to think it is, as we all do in our heart of hearts).

Defining the KPIs is not hard. Invoices have to go out on time. Cash has to be collected, stock has to be controlled. The control environment has to be maintained. The accounts have to be produced. Cash has to be kept within agreed parameters. Suppliers must have their agreed terms honoured. Regulatory requirements have to be met. Auditors have to be happy. Requests for data from users have to be fulfilled within agreed time scales. It's not rocket science. But it has certainly helped me in the drafting of the job spec for the role, which I have revisited over the last day or so.

I think I'm ready to go with this recruitment now.

And I've given up the idea of AJ. She'd probably do it my way. I'm not sure that's right.

And in the meantime we have placed the PA job with an agency. And I've rumbled why Office liked the "girl" candidate who I rejected. She was no threat to her. Well I'm not sure that's a valid decision criterion, for exactly the same reason as I've opted against seeking AJ out. Sometimes being challenged is exactly what is needed.

It's what I need, anyway. I think it's good for me.

* * *

October 30 - Interview day for the short-listed PA's.

I thought Office had done a good job with the first round selection process. She asked to see five, four turned up and two made it to see me. I was sort of disappointed that the man I had selected did not get past her - but I'll trust her when she says he'd have annoyed me every moment of very day with his cocky self assuredness for which there was no apparent foundation.

I did the interviews today, one-to-one. I'm not a fan of interview panels if they can be avoided. That's what the stages are for, in my opinion.

I do though try to be fair. First of all I always start the interview talking about what I want, so the candidate has a chance to assess me. I do in fact make explicitly clear that this is what I'm doing. I want them to decide if they want to work here, because that's just as important as us deciding we want them. I always hope it gives them a chance to relax and at the same time create a framework on which they can comment - and I look to see if they do. I'm keen on good listeners.

My next stage is to talk through with them feedback from the first stage, and in particular to ask to them to comment on any weaknesses we think we have identified before making it clear that I then want them to sell me the things they think they have going for them which mean I should ignore those issues. Finally, it's open question time.

So how did it go?

Well, not well. Try as I might I couldn't see myself gelling with either of the candidates. One was just too much a girl. I'm not being patronising - I just got the idea she had not grown up and was really not heart and soul into giving her time at work to work (I don't want more, but I think that's fair). The other seemed good, but her IT tests were not really up to scratch.

The result? No appointment. Not today. Now I have to decided whether to go through the applications we have again, to readvertise or go to an agency. I think it might be the latter, much as I regret the cost.

I could tell Office was a bit disappointed - she rather liked the one I called a girl. But in the end this one had to be my choice.

* * *

October 29 - Back from holiday. And the place ran well without me. There seems not a shadow of doubt about that.

Which only contributes to the continuing stream of consciousness I have been pursuing on just what the role of the CEO is. That consideration was fueled by an article I read in the Observer (which is not a usual read for me) when away. A chap called Simon Caulkin wrote that:

Few people would want to live in a planned economy, but almost all of us work in one'. Corporate dictatorships (as 99.9 per cent of companies are in the last resort) are quite good at getting people to carry out orders. The downside is that the dictator, however brilliant, is too far removed from what's happening at ground level for the orders to be reliably timely or right.

Powerful, isn't it? I've never really thought that companies are planned economies, but what else is the five year plan, budget and the rigid reporting hierarchies that are so commonplace? Funny that most of us in business recoil in shock from any idea of planning by government and yet are obsessed by it in our own working environments. I guess that's what this chap is getting at.

Either way it has only fuelled my feeling that as far as possible managers here must have scope to move of their own volition when needed, and with consultation being my role in the relationship unless the well-being of the organisation is at threat.

I think I'm already pretty much letting Newc and East do this. North and Promo are too new to be confident in that role, but North will get there - and will need to because of the physical distance of his domain from what I can see regularly.

But the big question in the light of #3's imminent departure and the need for a new accountant is how can they have some freedom to manage in this way, especially when I am the former holder of their post?

I'm struggling with that one. And I'm wondering if my continuing interest in AJ having the job if she can be induced to take it is because she had the spirit to make her own mark whilst working within the team. I have a strong suspicion that's the sort of person I want.

* * *

October 18 - I thought recruiting one person was enough. But now I need another.

#3 has decided it's time to move on from being head accountant here. She's setting up her own business with her husband. I have known of their passion for their hobby for a long time. Now it's going to be their business too (always a mistake in my opinion, but it's her choice).

She's on three months notice but what we agreed was that we'd recruit asap, and she'd stay part time to help with a handover and the year end next February, if we want. I think we will.

We have no heir apparent in the department this time. I will be recruiting.

It's not what I wanted before going away. But there's never a good time for these things, and let's be honest, #3 has seen me through thick and thin here and been amazing. She owes me nothing. I have a big debt to her.

Better organise a leaving bash then.

But right now I have to think about what we want in a replacement.

One person immediately springs to mind. Anyone recall AJ? If she's progressed her career since leaving here she's just who I'd want in the role. There's one or two around here who would agree - but largely because she was the heart throb of this place whilst here. More important, she had all the qualities to do the job if she's now got over the personal issues bugging her when she left.

It's a long shot, but I'm going to get Office to find out.

And then I'm going to forget it next week.

* * *

October 17 - I know I always seem to be saying this, but the CEO and his family are off on holiday on Friday. Half term is upon us again.

I find that more than three months without a break pushes me beyond my limits. OK, so it's only 11 weeks this time. Who's splitting hairs? I know my style is to give the job (and much else in life) my all and then I need to stop, play football (badly), take the dog for long walks and eat and drink with my family to recharge the batteries. And that's what we're going to do. So as usual my prayer is for dry weather on the East Coast to which we seem to gravitate because no one in the CEO tribe can face the idea of leaving the dog behind or the prospect of long drives to the continent when Suffolk, Norfolk and Yorkshire can between them provide all the entertainment a person can ever reasonably ask for (despite what I said about Norwich the other day when having to visit for business purposes).

All of which right now seems somewhat remote. There's more than two days to go. And I have the first CVs for PAs on my desk. Well, probably not the first. Office has weeded these before I got to them. I have to admit its some indication of my trust in her that I'll let her do this, but I did also ask that she leave the door quite wide open. On this occasion I'm open to the candidate who's coming off the wall. Sure, an extraordinarily efficient secretary would be of use, I admit. But this is a PAs role. I want someone with commercial judgement as well.

I admit though that I'm pretty brutal with CVs. I have one job to fill and so only need one candidate at the end of the day. I can see no logic interviewing eight in the vague hope that one might be right. In this case we've decided to have pre-interviews of five with Office next week and that she'll pass on a short list of three at most for me to see on my return. Today I managed to pick two worth seeing - one of whom was male, a graduate and clearly understanding that this role is as much about being a commercial assistant as anything else. He can also word process well if he produced the CV. But we check that. No one gets into a job here without doing an IT test. It's amazing how many people fail it on quite basic things. In this case we're looking for someone who can produce a report, format excel and produce a powerpoint. They will have to jump through a hurdle on each before they make second interview. I'd be driven mad by someone who shouldn't do these things, which I consider basic.

* * *

October 16 - Tuesday is management meeting day.

I like to give these monthly gatherings serious time. Not that I want long meetings - that's never the intention. I insist on all reports being tabled in advance so that time at the meeting can be spent on discussing the issues, not hearing the reports. Heaven help those who do not comply - we all jump on them now.

The time is allocated to presentation of ideas. Today the focus was on development in the North and how to deal with an office there and what all felt about it. Given that this impacts on IT, admin, accounts, selling, scheduling and staff admin this seemed too big not to share.

The strong feeling was not to pass on more to the North than was needed. So whilst sales invoicing can all be done on line, and creates no problem anyway, purchasing will remain at head office, partly for control reasons. Invoices raised in the north will be scanned for approval (a quick process these days).

Admin of all hours though will go north - this makes sense and is necessary. Scheduling also becomes a local operation now - again totally sensible. But fleet issues remain under the control of head office again - because we have more buying power and experience.

This seemed to keep everyone happy - but took ages. This is about (as I might rather indelicately put it) making sure who is peeing on what patch. Such things are always sensitive. Best to have them out in the open in my experience.

* * *

October 15 - Impatience got the better of me. I went to see our supplier today to talk through with them what I wanted our kit to do now. It was clear that they thought I was putting in an 'idle curiosity query' on this issue which could be dealt with sometime. I was not, and we're worth enough to them to allow me fairly quick access, so I exploited that to sit down with them. Sometimes nothing can work as well as seeing someone face-to-face.

The plus was that once they realised I am serious they were keen as well. To show how keen I said I was willing to fund some of the development - but expected them to do so as well. Money talks. We spent three hours bashing ideas around. They are going to get back to me asap. I brought Newc along as well. He has to buy into this too as person responsible for development in the country. As usual he does. If only everyone could ask "what's the problem?" the way he can.

On this one I seem to be delivering what my mentors want pretty quickly. Actually, as yet I have no idea if this is what they want, but I wouldn't have done this but for them.

I do seriously suggest the process. It's valuable.

PS - For those of a romantic persuasion - the wedding went like a dream - and she did look beautiful

* * *

October 12 - Still waiting for people to react to my urgent requests, and I'm bunking off early today. The whole family have to go travelling this afternoon to attend a wedding tomorrow.

Now I admit I'm a romantic at heart - and rarely get through a wedding without a little dampness in the eye. Marriage is a gesture of faith.

I can't help thinking that's a bit like my relationship with this place. Not quite, because pretty much I'm here for better, not worse. I suspect if it's the latter I'll be out. But the fact that it's a journey is like a marriage. And sure as heck there will be some bumps on the way.

That said though - this company will never be as beautiful as tomorrow's bride - who must be the most stunning first time bride in her later 40's the world's ever likely to see.

And you needn't tell my wife - she's unlikely to be jealous of my sister.

* * *

October 11 - I had a brainwave on the way into work this morning. I was musing on Tuesday's discussion and the need to think about manufacturing and it struck me - we should go green. Well, at least we should go more energy efficient.

Quite a lot of our kit is now 'self monitoring'. In other words, we can check it remotely because it tells us if it's unhappy, and then we have to go and find out why. This has worked well. Efficiency has increased. False reports are acceptably low. Often we can check these with a phone call - usually they mean the plug's been turned off!

But there's an obvious issue. The kit is on all the time. And it only reports occasionally (it's not crucial to check in real time, continuously). So the obvious point occurred to me. Why not use the chip on board, which has a clock on it (of course) to close the system down between checks and simply go live when needed, so saving power, probably extending chip life and looking good on the energy and efficiency front - and so very green?

I was like a kid with a new bike by the time I got to work thinking about this, and I found I'm right. The kit does not do this now. So, having talked to a couple of our people we rapidly put in a request to our main supplier to ask if this is possible.

And now I'm waiting to find out. Seems like they don't share my sense of urgency.

Maybe they're right. Maybe this isn't revolutionary. But it's a product development in the right direction. That can't be bad, can it?

* * *

October 10 - Yesterday was a panic. Just as I was going to write something we discovered that the afternoon's storms had caused a flood in the warehouse / assembly area and it was all hands on deck to minimise damage.

Then it was my meeting with the Chairman and my friend, during which some time was devoted to the subject to stealing other people's ideas. I suspect you can guess why.

But we did get to mine. These were well received - they think they are what we can manage. But having got to the point of saying I wanted stable growth they began to penetrate again. What does that mean? Growth in what? Top line, bottom line, people development, market status, business value, or?

I accepted that this was to be defined but suggested that the aim was to pull away from the pack. I already thought we had the best kit and a good product offering backed up by quality people in this market. So where's the weakness, they asked.

And I had to admit that on reflection there is one. It comes back to that first point, above. How often do I talk about assembly and related issues here? It's been pretty much East's role to look after it at management level, with accounts having serious input on stock control and management. But we've sort of taken it for granted and, rare occasions apart (mainly reactive e.g. when I was forced into action because of the near collapse of our key Belgian supplier two or more years ago) this area is allowed to get on with itself. We see ourselves as suppliers of good kit but with excellent service attached.

Should we be looking at supplying excellent kit? Will that pay? Will it add market differential?

I don't know. But it certainly gave the evening a twist. And a new focus for thinking. If that's what they intend, they succeeded.

* * *

October 8 - I'm meant to be seeing the Chairman and my friend tomorrow night for supper. It feels like I've got to hand my homework in - which in itself probably tells me something about how I feel, from which I should learn. It's obvious I'm not comfortable as yet defending my choices. I'll reflect on that (I wouldn't have even thought of it if I hadn't just written that).

But it's true none the less, they want to know where I've got to in my thinking. Where are we going, in other words. And the truth is I have yet to answer it all.

I have, however eliminated options. Some are obvious. I see no reason for us to shrink in size, let alone go bust. The latter is obvious but the former means there are no obvious candidates to eliminate from what we do right now. Everything is contributing: I think all activity would be harder without what we have. It must be quite useful simply to be sure of that. I bet a lot of people aren't, and can't prove it. I've done some work to show it, but the management information system here is also designed to prove it (or not - in other words I don't rig it, consciously).

Then there's the decision not to go for an MBO. I'm sticking to it. That's not for me. And I'm not sure it would suit many others here either. And no one would buy into just one person's vision unless they were mad (which cannot, of course, be ruled out).

But there is a desire for growth. I'm not alone in that. The management team clearly want to grow the business. It gives opportunities for promotion, makes people feel good and so long as the overall returns are positive keeps the shareholders happy.

The decision here is how to go for it. Organic, or purchased? In closely related fields or more diverse? Again, risk appetite is the core of this. I've proven we can buy. But I'm not convinced unless the units we buy are fairly small - when I see it as a short cut. And I like the idea of spreading out from what we know. Anything wrong with that? I don't think so?

You could say I have, after all this come to a position of 'steady as she goes' with the odd small twist. Maybe I have. I can live with it.

Can they?

* * *

October 5 - Remarkably good feedback to the idea of having a PA.

Office jumped on it - she'd love to give up the job.

I agreed East should be covered as well - not sure there's enough for me alone right now. Although I'm aware of all the conflicts of interest this could cause.

And the role will not be a secretarial one - it is a junior managerial one.

This all bashed out over lunch. Recruiting next week. As ever, we'll try the paper first. I hate paying agency fees.

* * *

October 4 - I know I'm meant to be working out where this place is going. But as I mentioned yesterday, the reality is that I am being horribly distracted whilst trying to do so.

I know customers, suppliers, staff, banks and everyone else who would like a word with me are really important. But how important?

There are times when I regret modern open communications, with direct line dialling, a mobile phone, PDA, email and all the other gubbins that mean people know where you are, and want to be able to talk to you whenever they like.

I'm sure I should be able to turn such things off. But how long can you don that for?

How long can you leave your inbox alone for?

Who do you trust to see it bar yourself? Some stuff is sensitive. I'd love someone just to cull the crap before I get it - but who can I trust to do that?

And do most people need to talk to me?

I'm beginning to seriously wonder whether I need a PA. I've never had one as such - although Office sort of covers for me here, even though she has her own distinct role, and I was used to having staff covering functions when I was FD.

I just seems to me that I may be doing inappropriate stuff.

But can I justify this when others, such as East, also have a very heavy work load and don't have one either?

Maybe we should share one?

I'm thinking (writing) out loud here. It's not occurred to me before now. Literally.

That's the merit of writing this stuff down. If you don't keep a diary you lose a perspective on life. It's why I do this.

Now - I'm going to broach the subject with Office. If anyone will object she will. But I doubt it.

* * *

October 3 - The CEO wishes to advise that if the world would beat a path from rather than to his door he'd have time to make a diary entry today.

But it seems determined in its efforts so normal service might be resumed tomorrow.

Assuming he has not strangled someone in the meantime.

* * *

October 2 - Have you ever been to Norwich? It always seems like a definition of isolation to me.

We have quite a good customer based there who I've been to see today - and it just takes so long and the rail line always seems to be have interruptions. The business is worth having - but its not where I'd locate my head office.

All of which brings me to my theme (as I head back for Liverpool Street simply because there don't seem to be any roads to Norwich at all). Location is important. Our Northern team is growing. As it does do we keep as much as possible in the centre or do we begin to diversify some admin functions to an office there? Will this cause control problems? If so, what?

I haven't had to deal with this for a while and am just trying to get my head round it, because I think I must. North needs support, the number of people he has now requires local admin and scheduling support, and maybe accounting as well. But that's hard if it's only one person, for example. What happens during holidays, for a start?

Any thoughts anyone?

* * *

October 1 - New month, and we started with a review meeting on the contract we won earlier this year which has stretched our northern team to its limits.

As we expected, sub-contractors have been our problem. If you get an overnight slot to work on client premises (and that's often best when we're installing new kit) and people don'[t arrive when planned those waiting for them get upset. To date this has been the biggest problem on this whole project - several installs simply didn't happen because people packed up and went home. Heaven knows why. We try to issue phone numbers in all directions, but with the best will in the world people do seem to like their beds.

At least we don't pay the subbies in this case.

But that apart it's going pretty well, almost on schedule and the kit is seeming to do what the customer wants.

North reckons he's had a baptism of fire. I keep reminding him of the bonus if it's all commissioned on time.

And Office is getting him the people he needs to service the resulting sites. The good bit of that is we will really have a fully fledged team in the North - so much so that we now have an office there staffed all day.

But East is now regretting we didn't go for the contract in the South. I'm not. I think it would have left us over-exposed. That to me is more important.

But we did agree that as we now have some subbies who would definitely carry on with us if we have the work when this job is done we can re-boot the Southern sales programme - especially in East's patch. Promo's got enough on.

Which all sounds fine in theory. It just doesn't ever seem to quite work like that. We'll see.

PS When posting this I realise I've been here in this job for four years, and have been writing this diary for the same period.

I wasn't sure either would last that long.

* * *

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

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

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Replies (5)

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By jtomlin2
03rd Oct 2007 12:40

Not sure about accounting going North
I'm not sure you would want an accounting presence up North. At most you may want to provide dedicated members of your central team to handle internal/external queries from the North (that would help with holiday cover etc). The only exception I can think of would be potentially tasks within an office which require physical presence, if you have an admin office you are likely to want petty cash etc. But these tasks seem few and may be better handled through admin staff and ensuring controls are in place and monitored accordingly.

Just my thoughts

Jamie Tomlinson.

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By listerramjet
09th Oct 2007 11:36

events!
"Then there's the decision not to go for an MBO. I'm sticking to it. That's not for me. And I'm not sure it would suit many others here either".

You have made several entries in your diary that indicate that at least one of your team might be more interested. Perhaps you should think through how events might overtake you if others were to start making the running?

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By listerramjet
11th Oct 2007 12:17

re strategy
It has sounded from some of your posts that your customers are buying innovative service rather than the kit that supplies it. I wonder if your contracts specify SLAs for "up time"?

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By User deleted
01st Nov 2007 16:37

Job Profile
You're exactly right about the role you outlined yesterday. What you want them to do isn't rocket science so you won't get a rocket scientist, just someone who can run an accounts department.

You write about challenge, but there was nothing in there about adding value to the corporate decision making process or challenging the strategic direction of the company from a financial perspective [and no, you can't do that as well as someone else will, because it's your strategy]. Where are the measures for that?

As you say, sometimes being challenged is exactly what's needed...

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By AnonymousUser
01st Nov 2007 11:06

Threat to office?
Could this also be the reason she did not like the male graduate candidate? Is office filtering candidates generally, based on percieved threat to her? How do you resolve this conflict to get what you need, while still leaving office happy?

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