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The Challenges of a Private Company CEO




                       www.ShortTrackCEO.com   ©2010 ShortTrack CEO
JOURNEY OF KEN EDMUNDSON

        •  Serial CEO – Built 3 successful companies in 3
           different industries




        •  Worked with over 1,000 CEOs of SMBs




2	
                         www.ShortTrackCEO.com   ©2010 ShortTrack CEO
FINDINGS

        •  CEOs of companies <$100 MM have common
           struggles

             Professional                           Impacting
             Management                               Market
                               Creating
                            Business Value
            Hiring                                      Company
                     Building Competitive                Culture
                          Advantage

        •  Worse yet, as companies grow, CEO skills must
           evolve to continue building value
3	
                         www.ShortTrackCEO.com               ©2010 ShortTrack CEO
REASON FOR STRUGGLES

        •  3.1 million CEOs of companies between $1
           million and $100 million in US

               Most were trained in something
                            other
                     than being a CEO

                           SALES
                          FINANCE
                        PRODUCT/
                       ENGINEERING
4	
                        www.ShortTrackCEO.com   ©2010 ShortTrack CEO
PROFESSIONAL CEO SKILLS

        •  Most Fortune 500 CEOs developed CEO skills
           over time - before the board hired them


                    Strategy and            Leadership and
                       Vision                 Motivation



                                   CEO


                     Ability to            Understanding of
                      Measure                Operations
                    Performance



5	
                           www.ShortTrackCEO.com           ©2010 ShortTrack CEO
SMB CEOs ARE LEARNING ON THE JOB

        •  To develop skills of a Professional CEO, start by
           asking 4 simple questions

                                                 Who are your
                   Why do you exist?
                                                 customers?
                    Your Foundation               Your Market


                                    VALUE

                    How efficient is            Who works for
                    your business?              your business?

                    Your Operations                Your People



6	
                              www.ShortTrackCEO.com           ©2010 ShortTrack CEO
DIGGING DEEPER


               Is your foundation                 Does your marketing
              able to support your                  strategy work?
                  future vision?




              Can your operational                 Do you have the right
             engine produce timely                  people and are they
              high quality output?                aligned to your vision?




7	
                            www.ShortTrackCEO.com                    ©2010 ShortTrack CEO
SMB CEOs HAVE THE BASICS COVERED

           Foundation                                                       Market
            •  Product / service                           •  Sales force
            •  Purpose                                     •  Marketing strategy
            •  Culture                                     •  Brand strategy
                                                           •  Competitive
                                       Company              positioning
                                        Value



            •  Profitability                           •  Good skills
            •  Capacity                                •  Hiring success
            •  Productivity                            •  Motivation
            •  Cash flow                               •  Accountability

           Operations                                                       People

8	
                                www.ShortTrackCEO.com                           ©2010 ShortTrack CEO
STATUS QUO CREATES IMBALANCE

           IDEAL                               DANGEROUS

          Operations
                                                Operations
            People
                                                   People
            Market                                 Market

          Foundation                                 F




           RARE                                TYPICAL SMB

9	
                    www.ShortTrackCEO.com                ©2010 ShortTrack CEO
RESULTS FROM IMBALANCE

           F                                                              M
                If your foundation is             If your sales and
                 not strong you may             marketing is not strong
                                                       you may

                   Collapse                                Starve



              If your operational
                                                    If you have ineffective
            engine is inefficient you
                                                        people you may
                      may

                    Choke                                  Suffocate
           O                                                              P
10	
                               www.ShortTrackCEO.com                      ©2010 ShortTrack CEO
QUESTIONS PROFESSIONAL CEOs ANSWER

            F                                                             M
                     Even if your
               foundation was viable                Are you influencing your
                 yesterday, will it be              market or is your market
                  viable tomorrow?                      influencing you?




               Do you have the right                    Does the validated
                 balance between                       assessment of your
              investing in today and                 people guarantee you’ll
             investing in tomorrow?                  achieve your public and
                                                         private agenda?

           O                                                              P
11	
                                 www.ShortTrackCEO.com                     ©2010 ShortTrack CEO
SMB CEOs ARE SEARCHING FOR SOLUTIONS

                                                                                        - CEO Mindspace


                           Objective – To improve my business in a definable timeframe
                                                  So what are my options?



          Self                                                                             Peer
                              Seminars      Training Consultants                                         Mentors              Gurus
         Study                                                                            Groups

                                                                    Pay them to learn




                                                                                                                                View from top
         books to filter




                                                                                                          Question the
                                             development
                                             Specific skill




                                                                                           experiences




                                                                                                                                 of mountain
                                                                     your business
                                New ideas
          1,548,279




                                                                                                           answers
                                                                                              Share



12	
                                                          www.ShortTrackCEO.com                                      ©2010 ShortTrack CEO
SOLUTION DESIGNED BY CEOs
           - CEO Mindspace
                                                 Imagine the power of
                                                aggregating all of these
                                                   pieces together


         Objective - To improve my
          business in a definable
                 timeframe




13	
                                 www.ShortTrackCEO.com       ©2010 ShortTrack CEO
ShortTrack CEO SYSTEM

         •  Business management system for leadership
            teams of companies < $100 million
                   FOCUSED ON BUILDING COMPANY VALUE




                DEVELOPS THE SKILLS OF PROFESSIONAL CEOs

14	
                          www.ShortTrackCEO.com        ©2010 ShortTrack CEO
HOW THE ShortTrack SYSTEM WORKS
                        12 MONTH JOURNEY

                 SEASONED CEO WORKS WITH TEAM

             FOUNDATION, MARKET, PEOPLE & OPERATIONS

             12 MODULES DELIVER TOOLS FOR EXECUTION




               HELD ACCOUNTABLE AND TRACK RESULTS
15	
                          www.ShortTrackCEO.com    ©2010 ShortTrack CEO
SYSTEM FOCUS




16	
                    www.ShortTrackCEO.com   ©2010 ShortTrack CEO
FOUNDATION
                      •  Why you exist
                        –  Company purpose
                        –  Core company values
                        –  Is your company culture working for
                           you or against you?
                        –  Public agenda
                        –  Actions reinforcing core company
                           values
                        –  Objective SWOT
                        –  Celebration & reward system
                        –  Clear understanding of how leadership
                           team is motivated to enhance




17	
                      www.ShortTrackCEO.com               ©2010 ShortTrack CEO
MARKET




                  •  Who buys from you
                      –    Competitive positioning
                      –    Competitive advantage
                      –    Brand strategy
                      –    Pricing strategy
                      –    Distribution strategy




18	
              www.ShortTrackCEO.com              ©2010 ShortTrack CEO
PEOPLE




•  Who makes it happen
         –  Strengths & weaknesses
         –  Managing emotions
         –  Cognitive orientation in
            business and society
         –  Motivation
         –  Interaction with others
         –  Emotional quotient

19	
                                   www.ShortTrackCEO.com   ©2010 ShortTrack CEO
OPERATIONS

•  Your efficiency
         –  True performance
            measurement
         –  J curve management
         –  Forecasting accuracy
         –  30/90 vision
         –  Return on Operations
         –  Cash flow management




20	
                               www.ShortTrackCEO.com   ©2010 ShortTrack CEO
MEASURING VALUE - THE ULTIMATE METRIC
         •  Return on Operations (ROO)
            –  ROO %
            –  Private company derivation of Return on Capital Employed (ROCE)
            –  Defined and created after 10 years of research into the applicability of ROCE
               for private companies
         •  ROO
            –  Business interest rate, what % the business returns to the shareholders
            –  Measures effectiveness of CEO
            –  One of the few numerical measure that spans all industries; therefore can be
               used to assess any business in any industry of any size
            –  Can benchmark against peers
            –  Insight to how well the business is creating value
         •  Derivation of Return on Capital Employed (ROCE)
            –  Developed over 70 years ago by the DuPont Company
            –  Originally designed to provide business executives with a clearer, more
               valuable insight to their performance
            –  Widely used by Fortune 500
21	
                                    www.ShortTrackCEO.com                 ©2010 ShortTrack CEO
HOW WE TRACK YOUR BUSINESS




22	
                   www.ShortTrackCEO.com   ©2010 ShortTrack CEO
ShortTrack CEO TEAM
     •  Collection of experienced professionals with a
        proven track record
          –  Managing businesses from internal CEO and executive roles and improving
             businesses as external consultants

     •  Ken Edmundson
          –  CEO of Edmundson Northstar
          –  30 years executive experience
          –  Built 3 successful businesses in 3 different industries

     •  Nick Setchell
          –  CEO of Practice Strategies, creator of Fiscal Focus
          –  22 years executive experience
          –  International Award winning Vistage speaker

     •  Jim Sagar
          –  CEO of Moderandi, creator of Marketing M.O. and Growth Panel
          –  14 years of executive experience
          –  SMB marketing expert


23	
                                         www.ShortTrackCEO.com               ©2010 ShortTrack CEO
CEO LEARNINGS
           “We need to build                           “I don’t have to
            our competitive                            get bigger to get
              advantage”                                    better”

           “I’ve been     “We’re choking     “I have the
         looking at the from too many J     wrong people
             wrong           Curves”         leading my
           numbers”                           company”
                   “I’m revamping my entire
                      marketing strategy”
                     “We need to be held accountable.”


24	
                           www.ShortTrackCEO.com              ©2010 ShortTrack CEO
Learn More
           –  www.ShortTrackCEO.com




         Download Free eBook
           –  www.shorttrackceo.com/professional-ceo-ebook/

         Download Brochure
           –  www.shorttrackceo.com/wp-content/uploads/shorttrackceo_brochure.pdf

25	
                                    www.ShortTrackCEO.com                  ©2010 ShortTrack CEO

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The Challenges of a Private Company CEO

  • 1. The Challenges of a Private Company CEO www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 2. JOURNEY OF KEN EDMUNDSON •  Serial CEO – Built 3 successful companies in 3 different industries •  Worked with over 1,000 CEOs of SMBs 2   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 3. FINDINGS •  CEOs of companies <$100 MM have common struggles Professional Impacting Management Market Creating Business Value Hiring Company Building Competitive Culture Advantage •  Worse yet, as companies grow, CEO skills must evolve to continue building value 3   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 4. REASON FOR STRUGGLES •  3.1 million CEOs of companies between $1 million and $100 million in US Most were trained in something other than being a CEO SALES FINANCE PRODUCT/ ENGINEERING 4   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 5. PROFESSIONAL CEO SKILLS •  Most Fortune 500 CEOs developed CEO skills over time - before the board hired them Strategy and Leadership and Vision Motivation CEO Ability to Understanding of Measure Operations Performance 5   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 6. SMB CEOs ARE LEARNING ON THE JOB •  To develop skills of a Professional CEO, start by asking 4 simple questions Who are your Why do you exist? customers? Your Foundation Your Market VALUE How efficient is Who works for your business? your business? Your Operations Your People 6   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 7. DIGGING DEEPER Is your foundation Does your marketing able to support your strategy work? future vision? Can your operational Do you have the right engine produce timely people and are they high quality output? aligned to your vision? 7   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 8. SMB CEOs HAVE THE BASICS COVERED Foundation Market •  Product / service •  Sales force •  Purpose •  Marketing strategy •  Culture •  Brand strategy •  Competitive Company positioning Value •  Profitability •  Good skills •  Capacity •  Hiring success •  Productivity •  Motivation •  Cash flow •  Accountability Operations People 8   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 9. STATUS QUO CREATES IMBALANCE IDEAL DANGEROUS Operations Operations People People Market Market Foundation F RARE TYPICAL SMB 9   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 10. RESULTS FROM IMBALANCE F M If your foundation is If your sales and not strong you may marketing is not strong you may Collapse Starve If your operational If you have ineffective engine is inefficient you people you may may Choke Suffocate O P 10   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 11. QUESTIONS PROFESSIONAL CEOs ANSWER F M Even if your foundation was viable Are you influencing your yesterday, will it be market or is your market viable tomorrow? influencing you? Do you have the right Does the validated balance between assessment of your investing in today and people guarantee you’ll investing in tomorrow? achieve your public and private agenda? O P 11   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 12. SMB CEOs ARE SEARCHING FOR SOLUTIONS - CEO Mindspace Objective – To improve my business in a definable timeframe So what are my options? Self Peer Seminars Training Consultants Mentors Gurus Study Groups Pay them to learn View from top books to filter Question the development Specific skill experiences of mountain your business New ideas 1,548,279 answers Share 12   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 13. SOLUTION DESIGNED BY CEOs - CEO Mindspace Imagine the power of aggregating all of these pieces together Objective - To improve my business in a definable timeframe 13   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 14. ShortTrack CEO SYSTEM •  Business management system for leadership teams of companies < $100 million FOCUSED ON BUILDING COMPANY VALUE DEVELOPS THE SKILLS OF PROFESSIONAL CEOs 14   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 15. HOW THE ShortTrack SYSTEM WORKS 12 MONTH JOURNEY SEASONED CEO WORKS WITH TEAM FOUNDATION, MARKET, PEOPLE & OPERATIONS 12 MODULES DELIVER TOOLS FOR EXECUTION HELD ACCOUNTABLE AND TRACK RESULTS 15   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 16. SYSTEM FOCUS 16   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 17. FOUNDATION •  Why you exist –  Company purpose –  Core company values –  Is your company culture working for you or against you? –  Public agenda –  Actions reinforcing core company values –  Objective SWOT –  Celebration & reward system –  Clear understanding of how leadership team is motivated to enhance 17   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 18. MARKET •  Who buys from you –  Competitive positioning –  Competitive advantage –  Brand strategy –  Pricing strategy –  Distribution strategy 18   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 19. PEOPLE •  Who makes it happen –  Strengths & weaknesses –  Managing emotions –  Cognitive orientation in business and society –  Motivation –  Interaction with others –  Emotional quotient 19   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 20. OPERATIONS •  Your efficiency –  True performance measurement –  J curve management –  Forecasting accuracy –  30/90 vision –  Return on Operations –  Cash flow management 20   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 21. MEASURING VALUE - THE ULTIMATE METRIC •  Return on Operations (ROO) –  ROO % –  Private company derivation of Return on Capital Employed (ROCE) –  Defined and created after 10 years of research into the applicability of ROCE for private companies •  ROO –  Business interest rate, what % the business returns to the shareholders –  Measures effectiveness of CEO –  One of the few numerical measure that spans all industries; therefore can be used to assess any business in any industry of any size –  Can benchmark against peers –  Insight to how well the business is creating value •  Derivation of Return on Capital Employed (ROCE) –  Developed over 70 years ago by the DuPont Company –  Originally designed to provide business executives with a clearer, more valuable insight to their performance –  Widely used by Fortune 500 21   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 22. HOW WE TRACK YOUR BUSINESS 22   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 23. ShortTrack CEO TEAM •  Collection of experienced professionals with a proven track record –  Managing businesses from internal CEO and executive roles and improving businesses as external consultants •  Ken Edmundson –  CEO of Edmundson Northstar –  30 years executive experience –  Built 3 successful businesses in 3 different industries •  Nick Setchell –  CEO of Practice Strategies, creator of Fiscal Focus –  22 years executive experience –  International Award winning Vistage speaker •  Jim Sagar –  CEO of Moderandi, creator of Marketing M.O. and Growth Panel –  14 years of executive experience –  SMB marketing expert 23   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 24. CEO LEARNINGS “We need to build “I don’t have to our competitive get bigger to get advantage” better” “I’ve been “We’re choking “I have the looking at the from too many J wrong people wrong Curves” leading my numbers” company” “I’m revamping my entire marketing strategy” “We need to be held accountable.” 24   www.ShortTrackCEO.com ©2010 ShortTrack CEO
  • 25. Learn More –  www.ShortTrackCEO.com Download Free eBook –  www.shorttrackceo.com/professional-ceo-ebook/ Download Brochure –  www.shorttrackceo.com/wp-content/uploads/shorttrackceo_brochure.pdf 25   www.ShortTrackCEO.com ©2010 ShortTrack CEO