TRANSKRIBEERI 🔗
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Hey founder, do you ever wonder what makes those CEOs that seem to be able to afford all the right A players in their team and seem to be able to take unplugged vacations and not have to worry about coming back to a big mess and can't afford to fully fund their retirement accounts and pay themselves what they want?
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What are they doing differently?
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What is it that they know that you don't?
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And how can you change maybe what you're doing to end up where they are?
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Again, my name is Jennifer Todd.
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I'm a CPA.
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I'm your profit informants expert advisor.
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And this is founder and get your life back.
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And uh on today's episode, we're going to talk all about what I've noticed the smartest CEOs do differently and how you can start acting and doing those things the same way that they do so that you get the results that they get or better.
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Um, so one of the things that I notice is that, you know, we're always told as founders that we should be able to think quickly, make fast business decisions, and um to be able to lead on a moment's notice.
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And I think that kind of does us a disservice, especially people such as myself, who the first answer out of my mouth is normally not the right one.
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I am a long-term thinker, I'm a processor.
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So in the moment, I'm not typically going to give the best answer.
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And I wonder if that is the same for you.
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Some people are very quick and can quickly process and respond and come up with the correct answer off the top of their heads.
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But even in my CPA firm, when one of my employees would come to me and ask me a sticky situation question, usually my knee-jerk reaction was not the right one.
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And why is that?
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Well, oftentimes it's filled with emotion, uh, your initial reaction, whatever that is, and you haven't had time to think long term about it, to process it.
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And so one of the things that I'm going to, again, debunk is that we don't always have to be the fastest thinker in the room to be able to make the best business decisions.
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As a matter of fact, I would argue that when you are making critical business decisions, it's important to take your time to slow down and really consider three important factors in your business.
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So we're going to talk about those today.
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And also how that affects the rest of your business, the people inside of your business, your team, your stakeholders, your customers, and so forth.
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So let's start off with the first thing.
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When we slow ourselves down and really process our business decisions, we want to look at probably three different criteria on the surface at a minimum.
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And the first one is going to be how is this going to affect the bottom line of the business?
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So, not top-line revenue.
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If you remember back to I think episode two, I talked about how growing top line revenue at the expense of bottom line profits is just a dumb business decision.
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It's going to run you into the poorhouse.
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And not just in the short term, because sometimes we need to take a hit on short-term profitability if something is going to be a long-term investment and it's going to pay off in the long run.
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So you want to be able to look at it from a short-term and a long-term prospect.
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So, what does that mean?
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That means can we afford it right now?
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So that's your short-term profitability.
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Do you have a way to pay for something, whatever it is that you are trying to make a decision on?
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Whether it's a new hire, whether it's a piece of software, whether it's a business consultant, or whether it's giving somebody a raise, an investment, or it could be something that you're cutting.
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So maybe we're cutting a service line, we're cutting a product, an offer, we might need to let a toxic customer or client go.
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How is that going to affect your profitability today and also long term?
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Um, and then what's the timeline for that?
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How will you make up for any uh losses in the short term?
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And uh be really, really critical on this because oftentimes I find that myself included, business owners are overly optimistic in how much they think they're going to be able to make or how quickly they're gonna be able to make up for losses in their business by taking some sort of new or different action.
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So we need to be realistic and really look at this profitability in, I would say, worst case scenario.
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And don't be overly optimistic when you're answering this.
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Now don't be scared and super risk averse as well, but be reasonable.
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Um, maybe ask another person, you know, discuss it with your CFO, discuss it with your CPA, your business coach, that sort of thing, your spouse, whoever it is that has a stake in the money in the business, you're you're gonna want to discuss it with them and
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really be critical of your judgment on that.
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The second question that those smart CEOs consider when making a business decision is how is this going to affect the team?
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Do we have the team in place to carry out whatever it is we're considering?
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Uh, are we going to have to cut staff?
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So, again, if we're adding a new line, a new offer, do we have the people to fulfill it?
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If we're cutting service lines, if we're cutting customers or clients, who is going to have to be cut if anybody from our team?
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So, how are your decisions going to affect the team?
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And not just the individual, but the team as a whole.
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And then your business, because remember, what I always say is your business is a system.
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So everything is related and connected.
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So a decision on profitability and on the effect on the team, those are connected.
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And it affects your whole business.
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So if it's a negative effect on one of those two factors, it's going to affect the business as a whole in a negative way.
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For an example, from my life, I can think of a time back when I worked for a big CPA firm before I started my practice.
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Um, it was very customary at the end of tax season, you know, early May, to start cutting headcounts because you no longer needed the people uh to go through crazy hours in tax season.
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And so I can remember one May, there was a mass firing in our firm, and there were some good people that were let go.
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And it really shook morale for the people that were left behind that survived the cuts, they were really feeling vulnerable.
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They felt like, well, if these certain people who were doing all the right things were incredibly smart and talented, were so easily let go and so expendable, how is my job safe?
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And so there was a real psychological safety factor that was, you know, happening in that firm.
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It wasn't long after the first tranche of people being let go that they let partners go.
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So they actually fired a bunch of partners from this big firm.
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And I think these were long-term strategies that they were deploying at the time.
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And so the ones that were watching all of this happen and were kind of surviving it, they didn't really know what was going on.
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And so there was a real negative effect on the team.
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There was also an effect on profitability and also productivity.
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So again, everything is connected in your business.
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What eventually ended up happening for this firm is a lot of loyal team members ended up leaving on their own because they felt like they weren't in a safe environment to grow their careers.
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And they ended up either going out on their own or partnering with each other or going to another firm because the way it was handled just was not good.
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So when you're making hard decisions in your business, you have to make sure that you're accounting for how this is going to affect the team because your team affects your whole business.
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The third criteria that you want to consider when you're making a huge business decision or a critical business decision or even any business decision is how's it going to affect your customer?
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And that's because organizations that put their customers at the center of everything that they do are the ones that are the most successful in the end.
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And when you make customer experience, one of the main criteria in your business as a success factor, as things that you measure against your progress, your delivery, your pricing, all of these things are affected.
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So the best CEOs always consider how is this going to affect the customer?
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Even if it's an internal decision that you don't think is customer-facing, you want to think outside the box and realize that your team members talk to your customers and things slip out.
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I can tell you from being in a position where I work with a lot of like bookkeepers and CFOs and people that are non-owners inside of a business.
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Well, I hear all of their complaints, I hear all the things that are not going well inside of the business.
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Your employees talk to outsiders.
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They also talk to your customers.
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I don't know.
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I'm sure you can probably think of times where you've been in a place and an employee starts ratting out their employer for whatever reason because they don't want to look like the bad guy in the customer's experience.
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So it's very easy for a team member to start saying negative things just to take the spotlight off of themselves when a customer's experience is not going well.
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Um, so internal decisions, they will trickle out to be customer-facing.
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There's no way you can stop it.
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Um, and eventually, again, every decision you make inside of your business affects your customers in one way or another.
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So, how is this going to affect our
customers?
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So, you want to start thinking in those terms, those three things.
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Profitability, bottom line, how's this going to affect the team?
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And you can extend that out to other stakeholders if you think that there's another stakeholder that could be affected.
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And that's a really like advanced level of decision making that's going to take you even to the next level inside of your business.
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Your team and your customers and yourself, you are the three most important stakeholders in your business.
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Um, after that comes, you know, everyone else, your vendors, your community, and all of that.
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In my opinion, you may think differently, but I definitely think without a team and without customers and without you, you don't have a business.
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So you have to have at a minimum those three things.
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And so they should always be the most important stakeholders.
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So those CEOs that can afford to get out of the weeds and to run their business like an executive and not like a cheap everything officer are the ones that always make their decisions from that threefold lens and maybe take it a step further and think even further outside of the box as far as like stakeholders and really being critical and not overly optimistic on their projections.
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And I would caution against being overly optimistic on all three of these criteria.
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Oh, this won't affect the customers.
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Guess what?
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You don't know.
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And a really good way to find out is to ask them, ask a test sample, maybe, of your best customers, or maybe a blind, you know, um, survey or something like that before you try something new or make a big change inside of your business, because we cannot always anticipate the reaction of a customer, how they're going to feel about some major decision inside of your business.
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So it's really important those three keep popping up: your profitability, your team, and your customers.
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We can't get away from them.
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Again, founder, if you've listened to any other episode of this podcast, you know that you should always consider yourself.
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How is this decision going to affect yourself?
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And if you remember, I said that was one of the very first criteria my first business coach ever told me was you need to start putting yourself first.
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I just did a whole episode on that a couple of episodes ago.
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I know it feels gross to say put yourself first.
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Please go back and listen to that episode because founders have to be considered as part of their business's definition of success.
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And that means you have to be part of the criteria for any business decision.
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How is this going to positively or negatively impact you?
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And again, don't be overly optimistic.
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Don't have to be overly pessimistic, but run all the scenarios inside of your decision and think outside the box what could happen with this decision?
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What am I not thinking of?
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I think this is a great use case for AI.
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And let me give you a little AI tip here.
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AI has a reputation for being a people pleaser and giving you everything and a positive, oh yes, you're you're so right type of an answer.
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And even if you give it special instructions and tell it to critique you and don't automatically agree with me, it still does.
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So one a really good tip that I heard is position it to your AI chatbot that your friend has come up with this idea and you're not really sure, you're feeling like it's not really a great idea.
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And so you want to, you know, help this friend out making this decision.
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So take it off of you and say it's it's someone else's decision.
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Now, I will tell you, chatbots are kind of smart, and I've tried this before with my own self, and they figure out it's me because they know the chatbots I go through with them a lot with my strategies and stuff and brainstorm a lot inside of um large language models.
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And um, so it's not always foolproof, but sometimes you can ask it also, what are some factors I'm not considering here?
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What are the blind spots?
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And that's a really great way to expand your thinking and not be overly optimistic, but also not necessarily be overly pessimistic as well.
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I encourage you to take this advice to heart.
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The best CEOs think long term and they consider those three at a minimum pillars inside of every decision: profitability, your team, and the effect on your customers.
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And of course, the effect on you as the founder.
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Without those criteria, you are going to be short-sighted in your business decisions.
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So don't always think that you have to be quick to decide.
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And also remember that not deciding is basically a decision as well, because you're just not acting.
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So that too is a decision to not decide.
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So I'm curious to know if you found this helpful at all and how it might help you inside of your business, how it would help you make better decisions.
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And if there's anything you would add to that criteria, let me know in the comments or send me a text message at 1-804-599-4400.
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And or on the podcast webpage itself, you can send me a message as well.
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So you can find the link on the podcast page.
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But thank you so much for listening today.
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And as always, founder, I'm here to help you get your life back.
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You deserve it.
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So enjoy the day.
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Thanks for being here.