Author: Elisa Spain

A few weeks ago in my blog about Leading Isn’t Easy, I talked about the hard choices we sometimes must make as leaders. Especially those choices where neither outcome is a good one.

As we continue this series on Governance Design, I am reminded of my 2014 theme for my Vistage groups, “All That Matters Is Culture”.

For this reason, once we define our business objective, for me the most important question is, “What are the cultural implications of our goals?”. If we are intentional about our culture, and ruthless about enforcing it, everything else will follow. And it isn’t easy.

Sometimes we have high performing employees who don’t fit the culture. So hard, to say goodbye to someone who is getting the job done, sometimes, doing it better than anyone else, brings in the big deals but just doesn’t fit. She may be a bully, or he may cut corners or spread negative energy.

When it is an employee, we can often rationalize to ourselves that the performance of the team will improve when the person who doesn’t fit is gone. The net result will be higher performance overall.

But, what if it is a customer who doesn’t fit the culture? Here we are talking a real dollar impact if we separate. This brings us back to Leading Isn’t Easy.

Recently, I had to make this hard decision. It became clear to me that a long time member of one of my groups didn’t fit the core values of the group. This member contributed in many positive ways and yet, I knew that to take the group to the next level, it was time for this member to go. After a few sleepless nights, we had the Fierce Conversation, and I have already begun to see the change. What I realized was, to achieve the business objectives and the long term growth, the temporary dip in revenue was worth it.

Elisa K. Spain

This week begins a new series on the topic of governance in growing businesses.

Governance is not a term typically used by business owners and business leaders. Rather, we hear this term most often in the context of corporate boards, both public and private.

Yet, Wikipedia defines corporate governance as, “the system of structures, rights, duties, and obligations by which corporations are directed and controlled.

• Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment.
• Governance is a mechanism for monitoring the actions, policies and decisions of corporations in alignment with the interests among the stakeholders.”

In short, governance is the DIME method that I have talked about previously. Design, Implement, Monitor and Evaluate.

Beginning with “D – Design”.  In my experience, businesses initially develop without much regard to design. And as Vistage speaker Jim Alampi reminds us, while bootstrapping works up to a point, as businesses reach critical milestones of growth, what we were doing up to now, doesn’t work anymore. At this point it is time to pause and ask two sets of questions:

First, the 5 key internally focused questions:

1. What are our business objectives?
2. What are the cultural implications of these goals?
3. What are the financial implications of these goals, revenue, expense, cash and capital needs?
4. What structure and infrastructure, i.e. key functions and processes are needed to achieve our objectives?
5. Who on our team is qualified to fill the key roles? Who may not fit? Who will we add?

And, equally important are the 5 key externally focused questions:

1. What is happening in our industry? Competition, innovation, regulation?
2. What is happening amongst our customers? Growth, consolidation, innovation?
3. What are the gaps that provide opportunities for us?
4. What are the threats to our continued growth?
5. What diversification opportunities exist?

Elisa K. Spain