Business Managment

Fire for Sucess

My wife keeps asking me to share some of my business management experience.  Frankly, I never think of myself as a manager although I have managed people most of my life and I actually did a pretty good job at it if one looks at the results.  So here goes: I have been advising a young CEO who is also a dear friend about how to grow his very successful internet company.  Last year he and his partner decided to bring in some experience talent.  Young companies get to this point if they are successful.  Many times their company is the largest company they have ever been in and they do not have the experience.  As a business gets larger it often gets more complex and there are many decisions that have to be taken every day.  The CEO can no longer handle it and his initial management team can not do it either (usually).  A good example of this is in the area of Sales Management.  Selling and managing a sales organization is not the same thing. When I started up a business in Israel in 1974 to do medical computer systems, I was the only sales person and I was great.  I got a million dollars the first year.  I got two million in the second year.  But I got the same number in the third year and realized that I need sales people.  The initial effect of that was an actual decline in sales as I spent my time trying to train them about the product and because I did not know how to manage them.  Things eventually got better.  My friend hired a very experienced person from a large company to run sales but he did not work out.  There are many reason for this but the result was that my friend began to question is own competence about hiring.  I remember going through this myself early in my career.  I made several bad hires. I went to my boss and said, I thought I might not be a good manager since I hired badly. He asked what I thought my ratio of good to bad hires was and I said 50%.  He then told me that I was doing better than he was.  That is when I learned that being skilled at recognizing a bad hire and taking action to remove that person was a very important skill (my friend demonstrated that as well).  You have to be able to fire if you are ever going to be able to hire.  And over time you will probably get more skilled at the hiring side but frankly it is very hard to hire senior people.  They would not be senior if they had not developed the skills that will convince you that they are the right person.  But there is no choice.  Companies that grow quickly have to hire senior people.  But this is an effective board can be a big help.  They can help check out the person because they usually have more experience and contacts. 

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