Business Management zone
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CEO's Diary: Under control
The CEO is hoping things stay that way for the next two weeks
July 23 - If there were any problems here today it seems like no one told me. My inbox was remarkably quiet. Have people learned to stop cc'ing me? No one came through in a panic - although East at least was looking kind of stressed as he headed out to some urgent session which he said need not trouble me as he popped his head round the door to say goodbye. And Newc assured me that he and North had the sub-contractor recruitment that is looking key to getting things rolling completely under control. And I decided not to ask him how he knew.
Sometimes it's just best to go away knowing that for the time being you're not meant to do anything about the place. I hope that's true for the next fortnight.
* * *
July 20 - I'm getting demob happy. On the penultimate day before holiday I have two desires. The first is a smooth handover of responsibility for key issues. This is not too hard now. The management structure we have makes it clear who should deal with what when I'm away. We even have contingencies for both East and I being away. Newc then becomes acting deputy CEO, with clear instruction about when to escalate an issue. So I stress less about this as time goes on.
I do stress more about clearing my own issues. There seems absolutely no reason at all why I want to get things off my desk on the day or so before holiday when in some cases they have been mouldering there for too long anyway. But the incentive for a clear out is always strong pre-holiday so that the residual to do list is as small as possible on return.
But even that is less important than it used to be. Office is a better assistant to me if I'm candid than #3 ever was in this respect because she insists on knowing what I'm up to and what issues need attention before they can pile up around me. And she's first rate at suggesting who I can dump them on.
But habits die hard. And so I did spend time de-briefing with her today. I couldn't with #3 - she's already away. But I have to say that I do feel remarkably good about going away this time. It's been an amazingly fruitful year to date and the team is functioning well.
It's true they could also contact me whilst I'm away. The family destination is Yorkshire - which has on occasion over the last few weeks seemed a less than inspired choice, but it's also a favourite and clearly within contact distance. But I’ll tell you. It had better be serious before they call.
* * *
July 19 - Some things you expect to deal with. Some you don't. Today's unexpected was Mrs CEO. She’s furious that we have put our newly signed off accounts on the web site. What the heck (or words to that effect, she can be quite Anglo-Saxon when she feels like it) was I thinking of, she demanded? Didn’t I know this stuff is private?
Time has taught me not to respond too fast to these diatribes. She just has to let her pent up venom out. And I have come to realise that rarely is that venom really aimed at the issue she's ranting about. It has more to do with general frustration and anger with her ex-husband, me, the world at large and anything else that has come within her sight-lines.
So when she'd let rip enough I did point out that in fact what I'd put up was available to anyone on enquiry at Companies House for a quid, in which case I thought we might emulate the policy of larger companies and in fact put the accounts up for all to see on our site at no charge. She was of course incredulous. She thought we were filing abbreviated accounts with Companies House. I made clear that she had indeed once been a director of a small company, but that was some time back. And I also assured her, although she clearly didn’t believe me, that it really is the case that large companies do put their accounts on their web sites. She was not convinced until I talked her through finding the M & S results on their site.
Then I explained that the reason large companies did this was to increase the confidence people had in trading with them. Of course there's regulation as well in there (I think), but it's much more than that. If there's a good story to both sell and tell why not do so? Our accounts are rock solid and should mean that anyone who sees them will think we have a good chance of delivering on our promises. Doesn't she want me to exploit that for our benefit?
She had no answer. That's usual. These things usually end with her saying something like "I'll think about it" and then ringing off. So it did on this occasion. But I think I've won. And I also think I'm right. It bafflers me why more SMEs don't put their accounts on their web sites. Any answers?
* * *
July 18 - The next batch of product from Belgium had a problem when matched with our kit. I was furious. They're out of contention now. I'm back in the market for a new alternative supplier. Newc's on the job. It's the sort of thing he's good at.
But it doesn't stop me feeling annoyed at the time wasted to date.
* * *
July 17 - I mentioned the Chamber of Commerce last week. I've mused on this. I won't be able to do it convincingly. It just won't be possible. So I won't.
What I will do though is repeat an exercise I ran a couple of years ago when I used a summer vacation intern to do a project for me. We have another such intern right now, and they have the task of reviewing the market of the company with which I am fixated (to maybe overstate the case) to see just how it really works, who the players really are, what the market's really like and whether there really is room for us in it.
Get a good student from a good university and this is an applied example of something they should be doing on their business studies degree as far as I can now tell. It's good for them. It's cheap market research for me. And I think it's a small part of our commitment to training new people, which I think worthwhile.
So they're up and running for the summer.
* * *
July 16 - This place feels like the last week of term. Holidays start in earnest next week. For me included because although I know it's not long since the last one but I sure as heck feel in need of it. That fact and the recent sales successes have resulted in the feeling that the foot is off the pedal, at least on the sales side. What North, East and Promo cannot sort out though is how to slow down the rate at which new kit is going out there. Precisely because summer is quiet, this is an ideal time for us to install in many of the new sites we're going to be servicing. People can be diverted to the task without fear of distraction from either sales activity or as much maintenance as usual, where faults and call outs always seem lower in the summer.
Staff availability is an issue though. Office already thinks she’s recruited a few people as a result of her efforts, but they aren't ever up to grade immediately, and East has asked me if he can sub-contract. I don't like doing this for simple reason that it can result in quality problems which come back to haunt us later. And we never believe in using sub-contractors for maintenance as relationship building is a key part of that job. But since he and his colleagues are adamant that we need to do it in this case I have had to agree. They know my feelings. But I'll trust them.
* * *
July 13 - The Chair was in today. For the whole day. I wanted to bounce ideas off him. I'm still hankering after the business I have a passion to buy. This is not a wholly rational feeling, I admit, especially given the growth that will be managed here over the coming months. But what I've reasoned is that this can be a medium term objective.
The Chair gave me a medium term goal in that case. I have to get to know its CEO / owner. He lives not far from me, I know. What the Chair told me was that he knew he was into local chamber of commerce issues. His instruction was clear. If I am serious, I have to get to know him and win trust through a viable route. As he put it I have two options. I either massively improve my golf (which is a non-starter for family reasons and my complete inability to raise enthusiasm for spoiling a good walk) or join the Chamber.
That excites me little more. I think I'm a reasonably sociable chap, but I'm not "clubbable" as I think the saying goes. It's just not my style to wish to meet socially with a bunch of other business people outside hours for the purpose of lobbying the council, bragging and raising a bit of cash for charity. Now I know that I probably seriously malign a lot of good people by saying that. But if that's what the Chair really thinks I've got to do to win this one he's set a high hurdle for my enthusiasm to clear. Am I that interested? Couldn’t I just call him and ask if he wants to sell?
* * *
July 12 - It would be easy to believe if this diary were to be a true representation of my life that it's more glamorous, stressful and focussed on particular issues than it often is.
Oh, that it were. The reality is days like today. We had a health and safety group meeting this morning, which I chair as I think that's important to give this issue the prominence it deserves. Ditto the IT group meeting this afternoon, which focused heavily on our phones contracts and how to optimise communications versus efficiency and cost.
Candidly, neither got the juices really flowing. They're important. I think my attendance at both was of worth. But I admit I have now moved to enjoying the cut and thrust of commercial activity more than this sort of vital but important internal stuff.
I'd love to think I can divest myself of all this stuff. But the reality is I can't, for two reasons. One is that champions must be seen to be champions. The second is that the team is already stretched and I can't take all the juicy bits. That's life, as they say.
* * *
July 11 - The Belgians have been to examine the products they supplied and to offer explanation for so many being DOA or duff when used.
I'll give them credit. They brought another batch which they guaranteed 100% right - but that was not the issue. The concern was why the initial batch were poor and they seem to have convinced our technical guys that this can all be attributed to one cause arising from the minor change in spec to their standard product to meet our need that their product be capable of substituting that of our main supplier. I'm told, and I'll just have to take their word for this, that this is because of a change in the load rating of one component that they got wrong, leading to failure. They promise they've now corrected this, and in fairness the replacements with the alternative loading did all work.
They've saved themselves by the skin of their teeth, I think. But we're not going to be as optimistic about them as a key supplier as yet. They'll have to be tolerant for a while longer now before batch order sizes reach the levels I'd expected. But I will want the discounts I negotiated. This problem has been their fault. Not mine.
* * *
July 10 - We had a VAT inspection today. I never get very worried about these. We really do try our best to make sure that we're on the right side of things, and to be honest, we're not that complicated a company (I reckon) in VAT respects. It's not as if we do that much import, let alone export. And we have no partial exemption issues or the like, which I know cause problems.
So I rather presumed I could leave this one to #3. I was therefore surprised when she came to see me asking for help. Her language was more colourful than usual because the VAT Inspector was apparently trying to reconcile income as per VAT returns with income per the accounts and was certain that our recognition of income in advance on maintenance billing was some sort of tax point fiddle. She'd explained until she was blue in the face and was now resorting to me.
So I met with him and agreed with his proposition, of course it was a fiddle. That has to be so because it is always a fiddle to bill people before you do the work, but that's what we do with some (not all) customers. As a result we get paid on average pretty much at the time we do the work. So we win as a result. And so, I pointed out, did he as the VAT man because we declare the VAT when we bill and recognise it later in the accounts. In other words we are paying VAT early.
This made him very happy. He was right - we were fiddling. That made his day. But he won nothing as a result. With which I was quite happy. Except that #3 and I then spent some time moaning about some people’s lack of understanding of double entry.
* * *
July 9 - After a good start to our financial year June was a warning of things to come. Margins fell. That always happens with us when we expand because new site work is always at lower margin than our on-going maintenance and support work. Still, I was surprised that it happened in June. I didn't think that the shift had already started that way. I was wrong. Even before the new work the cumulative impact of servicing new work signed up this year shifted workload that way in the month as managers took seasonal advantage (rain apart) to get exterior work done on new sites.
It's a trend that will continue. I spent time with #3 working through the consequences as this is a real shift from what we forecast. The shareholders will need to be warned. Volume will compensate, but top line impact will take a while to flow through as a result of our latest sales drive. Being forewarned of this I have told them and the management team. I don't expect negative impact, but the ex-Mrs CEO is unpredictable because she always shows such things to her accountant who is (to be polite) someone who does everything in life by numbers and seems to hate variances. Managing that expectation is therefore a key job in my life.
* * *
July 6 - Since this seems to be the last weekend when the whole management team happen to be around for about two months the whole team are going out for dinner tonight, plus partners. Those with distance to travel are being put up as well.
I think this important once in a while, with the emphasis on the latter. Do it too often and it imposes too much on the rest of life, and I at least have no enthusiasm for that. But once in while it really works, simply to get to know people better.
It also always helps to know a little about people's partners too. It makes the enquiries after their well-being more genuine. It also lets me understand the constraints on life, even if it's only the need to be home on some days of the week because there is a duty to their partner to be so. I can live with that. Although my wife now works part time (one advantage of being CEO and one constraint imposed by our youngest, which tipped life back in this direction) I recognise the need for everyone's partner to have an existence which requires some flexibility on our part to allow it to happen. 100% company people are not a good thing.
* * *
July 5 - We got a trial batch of the kit from Belgium in this week to justify the decision to use them. We use these things in quantity so 100 was a small order. And you'd have thought they'd get them right on that basis.
So I was shocked to be told that 9 had failed simple delivery tests. Normally we wouldn't do this to all in a batch - it makes no sense. In fact, when we're confident testing is only done when used - and the expected failure rate is very low.
I was told as I'd negotiated this and I tried not to go ballistic. And I just about managed to remain sub-stratospheric, but they got the message. One of their people comes here to explain the fault on Monday or they can kiss goodbye to this one. Diversity of supplier is of no benefit at all if you can’t rely on one of them.
Usually I'm pretty calm, but I know my own limits and I'm told by both Office and #3 (who are the only ones brave enough to face the issue) that there's a very reliable tom-tom that tells people when I'm in a mood and to steer well clear. Perhaps I should beat it when I need a quiet moment. But I think I'd rather avoid the hassle that usually gets the rhythm going.
* * *
July 4 - I agreed to make an offer to the person bringing a claim against us for discrimination.
It was a small offer £2,500 plus a contribution to costs. I was surprised. They came back for £3,000 and I agreed.
I still resent paying. But I've got enough on now and I could do without this.
Just nailing down contracts for the new work seems like hassle enough, but it is making progress. And thankfully the site surveys, which are going on based on the assumption that the deal will be signed (which I always assume will be the case) are going well and no unforeseen costs are arising as a result. This was, of course, the nightmare that happened on a major contract when Ops was CEO and it is always a concern to me that this might happen again. Thankfully the systems put in place after that debacle has worked since. I always assume that delegation works on the basis of confidence in the right people, good systems and the discipline to use them. It seems to work.
* * *
July 3 - I was wrong. I'd said we'd have a period of reflection but it seems that right now we can't help but win work. It was Promo’s teams turn to deliver yesterday. A deal that had been rated in our forecasts as a long shot of low probability has come in. It’s admittedly at slightly lower spec and price compared to the bid we'd made, but plenty good enough for Promo to accept with only the most cursory check with me.
Thank goodness I said no to the work last week. As it is I admit to now being slightly worried about our capacity to service this work. And the focus really does shift onto a team player who gets little attention here, but is key to what we do. That's Office. Amongst her many roles is recruitment management, and we're going to need to be doing that right now.
I've given her the go ahead to use all the tricks she knows. The first is to use our own staff as recruitment agents. We pay commission to staff who introduce suitable candidates. It's usually £250 for getting someone appointed; another £250 if they pass their trial period and £500 if they survive a year. In terms of efficiency this is a good price to pay as we have good experience of people introducing high quality candidates with a strong retention rate.
Then there's line two of the attack. Like all people we receive applications on a regular basis without soliciting them. If the candidate is good we try to see them even if we have no vacancy. We’ll do this out of hours to make sure we don't inconvenience them. Then if we need people we ask them in again. This also works well.
Only then do we positively recruit in the open market. But I think we might be doing that this time.
* * *
July 2 - Hard to believe we're half way through the calendar year and that holiday season is soon to be upon us. As the last week has shown, I think this might be valuable breathing space. we don't expect to land orders over the summer holiday period, and rarely do. Consolidation is on my agenda now. I'm not even pushing the sales line for the moment.
Of course we'll win routine work - and lost of people will still try to do so for the bonuses they bring, but I've already made clear to the management team that the discretionary element of their bonuses - which is high - can be delivery related, and that this might be key.
I think that's true for me too. Suddenly I think I might be looking more inward within my role than I had expected at this time to make sure the team handles the stress.
Which does remind me of the other traditional problem of this time of the year. We have some people who abuse credit over the summer, claiming people are away. I'm not keen to see that right now. We will be using cash, and I like plenty around.
* * *
For previous installments of the CEO's Diary, see:
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
Number of comments: 3
AccountingWEB.co.uk 23-Jul-2007
Categories: Business Features, CEO's Diary
Times read: 14397
"She had no answer. That's usual"
try that on a diovorce
For a B2B company, I see your point. We are a B2C co with great results, but a qualified audit report due to a difference of opinion between the auditors & directors on a specific part of an FRS.
I'd love to add the accounts to our website, but:
1: would the reason for the qualification be understood by those that read them; and
2: is Joe Public really interested?
Get your PA to call his, and arrange a meeting. I would go with a dual agenda: what does he think you might get out of an involvement with the Chamber, and does he want to sell!
Mostly its more simple and effective to go direct to the problem. Of course, if he does not want to sell, and you really want to buy, you then need some strategies which will help you convince him that he actually does want to sell.
