“That’s insane!” I said to Bob. “You’re spending twenty hours a week on accounting? That can’t be right.”
“That’s right,” Bob said. “And this week I’m going to spend thirty hours.”
Revenue in Bob’s company was at $8 million, and Bob and I were reviewing where his time was going. To put it mildly, spending twenty or thirty hours a week on accounting as a startup CEO is insane.
“Why are you doing the accounting yourself? Someone else can manage this for you,” I said.
“I haven’t found anyone that can do it as well as i can,” Bob said.
You need to delegate every task that doesn’t require your expertise.
“Have you ever heard of ROBT?” I asked Bob.
“No,” Bob replied.
“I wouldn’t think had since I just made it up,” I laughed. “It stands for Return on Bob’s Time. In other words, your job as CEO is to optimize your time.
“You can be busy every day and accomplish nothing That’s where I think you’re at.”
“In other words, I have to be careful what I’m spending my time on,” Bob said.
You can’t grow if you don’t delegate.
“Let me introduce you to Tina. Tina was my Controller. She’s awesome,” I said. “She can help you get everything sorted out in finance, so you don’t have to be spending all this time on it.”
“Wow,” Bob said. “That would be great.”
That night, I emailed Tina to make sure she was okay me introducing her to Bob (she was). Then, I sent an introduction email to both of them.
Two weeks later, Tina was digging into what was going on in Bob’s finance organization. The results were immediately positive.
“I had no idea that someone else could do all of this,” Bob said. “It’s been eye-opening.”
Bob is brilliant. He’s built his company up to have the potential to being one of the dominant players in his industry. The company has the potential to achieve revenues of $1 billion.
And to grow, you have to build a management team around you.
Yet, Bob really struggled with the concept of building a management team around him. He just wasn’t passionate about recruiting and he failed to see the utility in what I was preaching.
I tried various ways to get Bob to see the importance of building a management team around him. I tried explaining that, if Bob didn’t build a team around him, then he’d never get to $1 billion.
I tried having Bob go through the exercise of figuring out what people he would need to meet his next milestone of $100 million in revenue. Even though Bob correctly identified the people he needed, it still didn’t get him motivated.
It wasn’t until Bob charted his time, that we achieved a breakthrough. Bob grouped what he was working on into different areas. Then I asked Bob to put each group into one of three categories:
- High priority
- Medium priority
- Low priority
Bob was spending about 80% of his time on low and medium priority tasks. That’s when Bob realized that things had to change.
I said, “The hypothesis is that if you spend the majority of your time on high priority tasks, you will become more productive, and the company will continue growing.”
Bob said, “I agree.”
“However, I must caution you that revenue is a lagging indicator of success,” I said. “You will see things improve. You will see your time to work on strategic tasks that only you can do improve. However, the revenue will lag.”
“First, I have to hire the team,” Bob said.
“That’s right,” I said.
“Why did it take so long for you to figure this out?” I asked Bob.
“I’ve never built a company before,” he said. “I’ve never been an executive before. I was just doing what I thought was right.”
Now the work begins for Bob. I believe he’ll be successful because he’s one of the most motivated and talented entrepreneurs I’ve ever worked with. Now, that he’s figured out the importance of building an executive team, he’s on his way.