By Beth Miller, an EO Elumni and Overdrive contributor
As an EO elumni and a Chair for Vistage International, one of the biggest benefits that peer groups can provide for a business owner is accountability. Often, small to mid-size business owners don’t have someone they are truly accountable to. They may have a few industry mentors or an advisory board, yet are they truly accountable to them?
So what can happen when an entrepreneur lacks a system of accountability? Here are the three top problems I have seen leaders face when they don’t have an accountability system for their performance:
1. Budgets: Budgets seem to be one of those items that are often not part of the early stage of a company’s process. I think this is because most small business owners don’t come from a financial background. They often have sales or product experience so they’re not comfortable developing or managing budgets. As a result, the item that’s missed by most small companies is a cash flow budget and forecast. We all know that cash is king! The worst thing that can happen to a business owner is to wake up one day and realize he/she doesn’t have enough cash to make it through the end of the month.
The buck stops with you! Who makes sure you stay on track financially, and isn’t being paid to tell you what you want to hear? I had a client once who found out that his Controller was hiding the fact that the company was running out of cash because he didn’t want to deliver bad news! Don’t let this happen to you.
2. Team: Having the right people on the bus is critical to executing your strategy. Small businesses often have to rely on a small team, so it is even more important to make sure that you have the right people. I have found that many business owners hold on to mediocre team members for way too long. Who can you count on to challenge you about your team? Who doesn’t have history with your team members and can make an unbiased view?
Recently a client of mine was surprised to hear about all the problems a key executive was causing. It wasn’t until after her departure that people started sharing the incompetency of the former executive. Who can you count on to tell you the truth in real-time?
3. Focus: Focus is another challenge for many small business owners. Entrepreneurs often have the “shinny object” syndrome, easily being distracted by an opportunity that looks good but may not align with their vision for the future. It is important that you stick with your plan and pivot when needed– not when it “looks good.” Be purposeful about your pivots. If you are constantly changing direction and not sticking to your core, confusion can set in. Who will challenge you on your direction or lack thereof? You can be sure it won’t be those relying on you for a paycheck.
So who can you count on to make sure that you establish and follow through with your financial plan, that you have the right people on your team to drive your vision, and that will keep you on track and focused? If you have difficulty answering this question, consider joining a peer group like the Entrepreneurs’ Organization, or find an executive coach.
Beth Armknecht Miller’s passion for learning, and dedication to helping others, are strands woven throughout her distinguished career, which continue to guide her work with Executive Velocity, a top talent and leadership development advisory firm.