Founder to CEO: Chief Integrator
Making Sure Everything Works Together for Good
In Traction Gino Wickman introduced the concept of an integrator within a business. In his words “the integrator is the person who harmoniously integrates the major functions [sales/marketing, operations, and finance] of the business.” He makes the point that companies may use different titles for this role: e.g. CEO, president, chief operations officer, or general manager. Whatever title she wears, the integrator is the person able to “run the organization, manage day-to-day issues that arise, and integrate the three major functions. The integrator is the glue that holds the company together.”
Given that description, it may seem like a no-brainer that the founder would be expected to play the integrator role as the business begins to scale and as the founder takes on the CEO role. Leaders should naturally understand this is part of their role and embrace it, right?
Well, maybe not. In Traction, Wickman identified a second role — that of visionary. In his words: “The visionary and integrator couldn’t be more different. In a small to mid-size company, the visionary is typically the owner, co-owner, or founder. … The visionary typically has 10 new ideas a week. Nine of them might not be so great, but one usually is, and it’s that one idea each week that keeps the organization growing. … They’re great solvers of big ugly problems (not the little practical ones), and fantastic with important clients, vendors, suppliers, and banking relationships. … By contrast, integrators are typically very good at leading, managing, and holding people accountable. They love running the day-to-day aspects of the business.”
Many founders are visionaries by nature. Their company was started because they envisioned a future that didn’t yet exist and pulled together a team to make it a reality. In this series we’ve already written about the need for the founder/CEO to continue to be the chief visionary as the company scales.
As the company scales, it becomes critical that the founder/CEO also recognize that they are ultimately responsible for the integration of every aspect of the business. For visionary founders, this is not obvious, natural, or easy.
Integration Changes as a Company Scales
At an early-stage startup, integration typically isn’t a problem. Often roles aren’t formally defined, and everyone does whatever is necessary to keep moving forward. The company may be constantly experimenting, trying new products, new value propositions, new business models, and new operating models. Nothing is set in stone. Best of all, there’s complete visibility across the team. Everyone knows what everyone else is doing and the team establishes a natural chemistry where each person plays their part in making things happen.
As the company grows, organizational silos begin to form. Opacity develops between silos. New team members don’t know everyone else, much less what everyone else is doing. Experiments may still happen, but they often aren’t synchronized and the potential for balls being dropped increases.
Someone needs to make sure that all parts of the business are working in concert to ensure that customers are being served, revenue is being collected, expenses are being managed, and the business is growing in a healthy manner. Everyone — investors, customers, and employees — will look to the CEO when those things don’t happen, so ultimately the CEO is the chief integrator. If that’s not his strength, then he needs to make sure someone else is playing that role on his behalf.
How an Integrator Integrates
In a recent article, I identified seven dimensions to a business operating system. I believe that these seven dimensions translate into fourteen critical tasks involved in effectively integrating the various functions across a growing enterprise.
#1. Establish clear organizational roles and responsibilities.
Wickman calls out the need for what he calls an Accountability Chart. The Accountability Chart looks like a standard hierarchical organizational chart, but within each box, instead of a person’s name there is a list of five major roles for which the person in that box is accountable.
Accountability is critical. In The Advantage, Patrick Lencioni specifically emphasizes the need for peer-to-peer accountability. Leaders need to know that their peers are counting on them if the company is going to work as an integrated unit.
#2. Fill the organization with people who are a great fit for the company and for their role.
In Good to Great, Jim Collins uncovered that the first step in taking a company from good to great was to get “the right people on the bus (and the wrong people off the bus).” The definition of “the right people” will be unique to each company. The right people for your company need to be able to thrive within your culture and work well with others on your team.
They also need to be great for their role. Wickman borrows the term Unique Ability from Dan Sullivan to describe an employee’s area of greatest skill and passion. When your role and your unique ability are aligned “you experience never-ending improvement, feel energized rather than drained, and, most of all, you have a passion for what you’re doing that presses you to go further than others would in this area.”
#3. Identify the processes most critical to delivering your value proposition and achieving your business model.
As your business grows, there will be more and more processes that emerge as part of getting work done, but there are likely only a handful that are absolutely essential to making your business truly work. Most processes are necessary and can’t be ignored, but only a few are what differentiate you from competitors and enable you to operate profitably. Focus on making these exceptional.
#4. Put your best people on these processes. Clearly document them and continuously seek to improve them.
Jim Collins identified three practical disciplines involved in getting the right people in the right seats. One of those disciplines is “Put your best people on your biggest opportunities, not your biggest problems.” Great people want to do great things, and your best people will work tirelessly to turn your greatest strengths into powerful advantages.
But as your company continues to grow, more and more people will be involved with those critical processes. Everyone needs to know how to do each process well and consistently from their first day in that role to their last. But never be content with the advantages you have today. Compete with your own standards of excellence to continuously widen your advantage.
#5. Deeply understand the systems the drive your business.
A system is defined as “any collection of things that interact together to produce some sort of behavior of the whole.”, and systems thinking is defined as “a holistic way to investigate factors and interactions that could contribute to a possible outcome.” Whether you recognize it or not, you have many systems driving your business. Unless you understand how the decisions and actions in different parts of your business are contributing to the company’s performance, then you are setting yourself up for unpleasant surprises and difficult to diagnose failures.
#6. Wisely leverage technology to improve how your systems work.
Often, when we hear the word “systems” we think first of computer systems, and technology has certainly driven tremendous efficiency and effectiveness improvements across businesses. But it’s far too common for a business leader to say, for example, “we need an ERP system”, causing technology leaders to evaluate and choose the “best” ERP system on the market. This can result in the business systems having to adapt to work with the ERP system, when it should be the other way around.
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Instead, start with your understanding of the systems in your business. Identify opportunities for improvement that might be well served by technology. And then look for technology solutions that specifically fit your business systems and that can deliver the types of improvements you need.
#7. Identify no more than five types of meetings that are critical for all business leaders to regularly attend.
For many business leaders, it can seem like they spend all their time in meetings. While meetings are essential — that’s where much integration work happens, and critical decisions are made and shared — too many meetings create confusion and fatigue. Identify a handful of meetings that are critical to integrating operations across the company and therefore require the entire top leadership team. This might include a long term planning meeting, a short term planning meeting, a regular operations review, ad hoc topical meetings, and an “all hands” broad communications forum.
Each meeting should have a clearly defined purpose, which then clarifies the required participants and a consistent agenda. Have the right people in the room who can communicate the information necessary to make decisions, and who are the right ones to make those decisions. Run the meetings in a disciplined way to accomplish the meeting purpose and to redirect any off-purpose topics to other forums.
#8. Establish a healthy cadence for those management meetings.
For each type of meeting maintain the right cadence so that information is flowing and decisions are being made at the right pace for your business at this moment in time. Meeting too frequently will often lead to non-essential topics creeping in to fill agenda time. Meeting not frequently enough can lead to failing coordination between groups and not having enough time to cover important agenda topics.
Many mature businesses do long-term planning annually, short-term planning quarterly, and have monthly operations reviews. Earlier stage companies often find that “long-term” planning needs to happen quarterly, short-term planning monthly, and operations reviews weekly. Determine what works best for your organization.
#9. Establish guidance to enable decisions to safely happen as low in the organization as possible.
Every day, employees across your company are making decisions. Some are small decisions with very little consequence. Some are large decisions with huge implications. Most fall somewhere in between. How can you help employees make the right decision as often as possible? Just as importantly, how do you enable those decisions to be made without involving lots of busy and expensive layers of management?
A well developed and communicated strategic framework can go a long ways towards helping team members make the right decision.
Nordstrom’s website explains “Since 1901, we’ve been committed to providing our customers with the best possible service — and to improving it every day.” Every employee knows that customer service comes first and part of that is accepting any returns without question. Famously, the company celebrated when an employee unquestioningly refunded what a customer remembered spending on the tire he was returning, even though the company had never sold tires.
Similarly, Ritz-Carlton’s credo says that a Ritz-Carlton hotel is “a place where the genuine care and comfort of our guests is our highest mission.” In his book From Impressed to Obsessed, Jon Picoult tells an amazing story of he and his wife experiencing that care, which led him to discover that every employee is authorized to spend $2,000 per guest to resolve an experience failure. Ritz-Carlton team members are thus clearly guided in making decisions that align with the company’s strategy.
If everyone in the company knows what the company is all about, they will feel empowered to make decisions that are aligned with that vision and strategy. But sometimes that’s not enough. I’m not a fan of mountains of policies, but sometimes a clearly defined policy will help employees make the right decision. We’ve already talked about the importance of clearly defined and communicated processes, and those often help employees make the right decision. All of these guide rails help employees make decisions on their own, quickly and responsively, and without having to involve others in the company.
#10. Involve all the right people in making hard decisions.
While it’s great when employees close to the customer make decisions on their own, there are some decisions that truly do need to be made near the top of the organization. They aren’t simple acts of implementing the strategy or following policy. They are significant and intentional changes in direction that will have long term implications for the organization.
For these decisions, it is well worth investing the time and attention of people from across the company to get the decision right. It is important to include those groups that have input necessary to make the right decision (e.g. the costs of different options, or the impact of choosing different options) and those that will be involved in implementing the decision. Involving everyone also contributes to the buy-in necessary for implementation to go well.
Sometimes you may be tempted to leave some people or individuals out of the process who tend to slow the process down or even argue vehemently against the logical approach all other groups support. Don’t give in to that temptation. You should want to hear counter-arguments to make sure that you aren’t missing some important information or perspective. And, especially if that troublesome group is critical to implementation, you want them involved to make sure they understand why the decision was made, why it is so important, and that their voice was valued in the decision.
#11. Make key performance metrics visible to everyone involved in delivering them.
In The Great Game of Business, Jack Stack identified what he calls “The Higher Laws of Business.” Law #9 is “If Nobody Pays Attention, People Stop Caring.” In the book he describes an approach to management that centers around a weekly meeting that he calls “The Great Huddle.” In this meeting, leaders from across the company gather to share the metrics from each of their groups that are contributing to the overall company goal — the one goal that drives everyone’s bonus payout. He writes “our Great Huddles tell people we care. We send the message out every week — we want to know what you’re doing. … If you go out every day, and nobody notices whether your work is good, bad, or indifferent, you’ll stop caring.”
You need to measure performance to know where you stand on the aspects of the business that really matter. You also need to understand what has to happen to “move the needle” on the measures of what really matters. Measure those contributors too, and don’t keep it a secret. Optimally, everyone in the company will understand how their work contributes to the overall success of the company, and they will be able to see how their progress is helping the company make progress.
#12. Establish a culture and practice of learning from, rather than punishing, poor performance.
Not every metric update will bring good news. We don’t always hit our targets. Sometimes our performance even declines. If leaders respond to poor performance reports with anger or blame, then employees will do everything they can to avoid reporting poor numbers (even when their best efforts still fall short of the target). If leaders instead see poor performance as an opportunity to work together to find and fix problems, then employees will be open and transparent about performance issues and will embrace the constructive opportunity to improve.
#13. Actively demonstrate that broadcasting information isn’t the same thing as effective communications.
Many of the tasks mentioned above have either involved or been dependent on effective communications. Most leaders intellectually know that they should be great communicators, but too often they equate that with broadcasting information — in memos, e-mails, blog posts, presentations, etc. Those one-way distributions of information are important, but often not the most important form of communication within a company.
Especially when driving integration, the cross-functional chatter that marks successful teamwork is the most important form of effective communications. Separate teams need to work together — letting each other know what they are doing and how it’s going — throughout every process. It’s like a sports team running a play. Everyone knows what’s supposed to happen and you all start running down the field with the same playbook diagram in your heads, but when something unexpected happens — a teammate stumbles, or an opponent blocks your progress, or you surprisingly have an open shot on the goal — you need to call out to your teammates to adapt and make the most of the opportunity or challenge (or both).
Finally, for many leaders, sometimes the hardest aspect of effective communications is listening. You can’t know it all. You can’t possibly see it all. You need to leverage the many eyes, ears, and creative brains across the company that can help you lead the business to success. Good listening often requires asking good questions. Always be on the lookout for opportunities to hear and learn from everyone across the company.
#14. Mentor leaders who struggle with openly and actively communicating cross-functionally.
In every organization, there are likely to be some leaders who aren’t naturally good at communicating. They are so heads-down on getting their jobs done that they forget to let others know what’s happening. They are so busy being productive that they don’t have time to ask good questions or listen to what others have to say.
Make an extra effort to help these communications-challenged leaders to recognize their weaknesses, to understand the importance of communicating, and to build skills in these areas. Even if you are one of the communications-challenged ones, help others to gain these capabilities — doing so will help you grow more as a communicator than you ever thought possible.
If you embrace these fourteen tasks, you will be well on your way to becoming a powerful integrator! Let me know if I can ever be of assistance.
