In October 2011 I looked back on that first year and the even more difficult weeks and months that followed as I settled in to my new role as the CEO at FCP Euro. At the time we had just surpassed 10 million in revenue but we were struggling with profitability and severely under-capitalized, desperately needing to make major people, technology and infrastructure investments to stay relevant in a quickly changing competitive landscape. The culture was quickly deteriorating and I was spending most of my time tactically executing and firefighting, not seeming to make any meaningful financial or operational improvements.
So I started asking myself- “As CEO, how should I be allocating my time?”
Fast forward 6 years later to present day; FCP Euro has reached 30 million in annual sales, we’ve got a healthy balance sheet, a strong market position, and a thriving company culture. Thanks to a good mentor and some discipline I’ve finally got my orientation correct.
The Role of the CEO
The role of CEO must be one of charting the course for the company while constantly evaluating and weighing its implications across all dimensions (financial, competitive, human, regulatory, etc.). As in all executive roles, there is a balance between today’s exigencies and the commitment to the formulation and pursuit of a long-term strategy. The higher the executive rank, and the greater the depth of teams being led, the less time an executive should spend on short-term challenges and the more time he should spend on medium to long term planning and execution.
A ship being sailed and steered by a commander is always a good analogy: A commander who is strong on the oar might help get the boat to the other side faster, but probably will be off course by 1,000 miles (which could be fatal).
Another analogy is one of fire-fighting: many executives fall prey to the romance of being a great fireman (“No crisis can defeat me! Watch again tomorrow and you’ll see another round of heroic deeds!”) instead of the romance of being a great leader who steers his company around storms and rarely through them. This happens because a well-run organization becomes less thrilling day-to-day, and successful people tend to be adrenalin junkies who need their fix.
All start-up company executives need to make this transition as the company progresses (and starts to hire more staff). Heroic fire-fighting should start to get reduced and replaced by thoughtful planning and execution that in turn relies on teams of people who are empowered to handle the tactical day-to-day blocking and tackling.
CEO Time Allocation
The time allocation I’ve adjusted my orientation to is roughly as follows (not carved in stone anywhere):
Day-to-day = 15%
Current fiscal year = 35%
Longer term strategy / market position = 50%
A critical, but often overlooked key to effective CEO time management is carving out time to think, as opposed to constantly reacting. During that thinking time, you’re not only thinking strategically but also thinking proactively and longer-term. You’re literally thinking about what is important versus what is urgent – and those aren’t the same. Trying to strike that right balance is key to success in any executive level role.
Most early-stage company CEOs are 60/30/10 (day to day/current year/long term strategy) and with coaching are trying to get to the above 15/35/50. Having the right executive team is a key part of that, of course, and the same is true for each executive