The CFO is often the first to recognize the high cost of chaos. It does not appear as a line item in the financial statements. But, a CFO recognizes the warning signs. Performance, productivity, and profit fall below expectations. Rick McPartlin, co-founder and CEO of The Revenue Game, believes the cost of chaos runs as high as 30 percent of gross revenue in many organizations. That means that if you are a $50 million company, you are wasting $15 million year after year.
Chaos means confusion: both individual confusion about what we are trying to accomplish, and team-wide disasters when people are confused about how we will accomplish it.
A CFO brought me into an organization where chaos reigned. The shareholders were happy with the return on their investments because revenue grew year over year. The company enjoyed a steady supply of new customers. By all appearances this was a very successful company.
However, the CFO was able to detect those early indicators that are always present but rarely captured. He saw that their method of driving new customer growth was unsustainable. He saw that the leadership was aging-out without new leaders being developed from within. He saw that, while they were successful, the chaos, the pace and intensity for this level of success was also not sustainable. He worried that key leaders would burnout or die before building a more sustainable business model. Their success was coming at a very high cost and he knew this model was unsustainable.
The Halpin Companies team started working with this leadership team to gather information and identify alternative approaches.
Fairly quickly, using our methods, we identified a potential future CEO from within the ranks. At first, the current leadership team was disdainful of our recommendation but this candidate did emerge over time as the key player with the greatest leadership capacity. He currently serves successfully in that CEO role.
More importantly, we were able to work with the two top layers of leaders and, based on our recommendations, build a more inclusive and transparent approach to driving new customer relationships.
Through mentoring by the senior leaders and using this more inclusive approach the former #1 sales person was able to build a dozen sales executives with his same level of success.
Using our processes he was first able to articulate his values – he cared deeply about their customers. He then started to articulate his sales approach – he was an extraordinary listener. We then helped him document and communicate his organic sales approach in meaningful and easy to understand ways. Over time, in one-on-one mentoring sessions, he trained each of his key people to replicate his success.
Not everyone had the same capacity but 14 or his 22 colleagues were able to step up. As a result the company grew by 300% in a few short years because of this velocity.
The CFO was thrilled, the shareholders were thrilled and more importantly, this construction-related company was able to sustain the economic downturn and continues to thrive today.
Six of the other colleagues self-selected out of this company with their dignity intact. Why did the go away? They saw that they could not be successful in the new business model. Two other leaders came to the leadership team and asked to take a step sideways or even backwards. They knew intuitively that they could not be successful in the new business model, given their own strengths.
When you harness the power you already have within your organization, the results will be extraordinary. Often our clients experience growth in shareholder value in amounts that were never imagined or forecasted. Building alignment, inclusiveness, and transparency drive success.
The Halpin Companies has been facilitating transitions in organizations of all sizes and levels of complexity since 1995. Our proven methods create work environments and corporate cultures where shareholder value grows consistently. Learn more about our methods at www.HalpinCompany.com
For a complimentary consultation, contact Katharine Halpin at 602-266-1961 or K.Halpin@HalpinCompany.com