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As a student of business and as an owner of multiple businesses Undercover Boss is one of my favorite shows. Also, in my consulting practice I have had opportunity to learn how small mid and large businesses are managed and run. In my study I have found a common theme. I learned that the CEO of a company has a lot to do with the satisfaction, happiness and productivity of employees, the health of business and overall greatness of the company. Increasingly, maximizing monetary shareholder value is no longer the only top priority for many companies. Especially for socially responsible ones. Therefore, for the sake of this article, CEOs only focused on increasing monetary shareholder value is not acceptable. In this article I share observations that made me feel that some CEOs must go back to business school. Go back to the core of running a long-lasting great business.
Companies (name not important) included here have been in business for more than 15 years and have revenues of over $150MM. With the exception of one which has revenue of under $70M.
- CEO of a restaurant chain does not know how to cook or serve tables.
- CEO has not visited her flagship (and very first) restaurant in the franchise system in over 10 years.
- A contact center/call center phone system that doesn’t work well and all the employees who use it have complained about it for over 7 years.
- CEO of a women’s fashion accessories doesn’t feel comfortable being a sales person.
- CEO of a toy distribution company has never worked a single day in a warehouse.
- CEO of a pizza chain does not know how to make a pizza.
- CEO of a large retail store chain was unaware that their Point of Sale system is not only old and outdated but that it has an error in calculating sales tax.
There are many more examples that surfaced during the course of the show. Serious employee issues, management issues that borderline on legal problems, serious break in communications, lack of employee training, lack of proper implementation of policies and procedures, and much more. It is a valid argument that there are only so many hours in a day however it is not acceptable to have serious systemic issues in a company that go undetected for 10+ years.
My theatre professor once told me that if you want to become a great director or producer you must learn how to do laundry and iron costumes and do hair and makeup. What he meant by it is that the most effective and great leaders of people and businesses must develop a hands-on appreciation for all the underlying jobs that make their business successful. You may not become an expert at designing and building sets but you should know what it takes to use a circular saw. You may not be the best picker in the warehouse but you should know how the handheld picker computer works, intimately. Those are the things that differentiate between an okay CEO who makes money for the company and a great CEO who is loved by employees, partners, and customers. Those are the CEOs who inspire life-time employees and convert life-time customers into advocates.
A great leader inspires employees to do great, innovate, feel proud, be loyal, solve problems, be happy and satisfied, feel dignified, and grow your business. It’s their responsibility to create the right culture and an healthy environment for people to thrive. All this is only possible by knowing your people, having empathy, understanding, and compassion. A leader without followers is not a leader.
Amazon requires their leaders to spend a few days in a warehouse. I know of a CEO of a software company who learned how to test software and write code. I know another CEO of a trucking company who got his commercial truckers drivers license. Mark Cuban learned how to code.
In a commoditized market its becoming increasingly difficult to differentiate based on products. Service and Customer Experience (CX) are solid ways to win. However, without keeping a close tab on all aspects of your business the quality of service diminishes over time and CX gets matched and then surpassed by competitors. Pretty soon that results in mediocre sales growth and unimpressive cashflow.