The feedback from my team's performance reviews floored me

Even though we’re only two years old, I started having performance reviews for my team. We talk all the time so I didn’t think it was going to be a major event. I found an appraisal form online and sent it to everyone. It asked for everyone’s input so I thought it would be a good idea.

When I got the forms back from the team, I was upset and concerned by what I read. Everyone said I was a poor and weak leader. They also said I couldn’t make decisions and they didn’t trust me. Finally, everyone said if they were offered another job, they would take it.

This was the first time I heard any of this. Why didn’t people tell me this? I had never been a manager let alone a CEO, so I had no idea whether I was doing a good or bad job.  They must have been discussing this behind my back for some time and used this as a way to give me feedback. I was so upset that I didn’t want to come into the office and I certainly didn’t want to carry out the individual reviews.

It took a while, but we are getting better at using data to run our business

I was taught that you couldn’t manage what you can’t measure, so I was always looking for data to tell me what was going on. My team told me I was data-obsessed and that I believed the data more than I believed them. There was no question in my mind that hard data was one of the keys to success. I knew I couldn’t force my team to use the data but I could teach them how important it was for making sound decisions.

My idea was that two days a week we would look at an issue facing the business and go through the data we had and what data was missing for us to make an informed decision. We started with customer data. What struck me first was that we didn’t share a common understanding of who our customer is. It took several sessions, but gradually people began to have a common perspective. By the end of two months we were able to talk about our customers, their life style and life stage, and how they might use our products and services.

When we looked at operations data (inventory, on-time delivery, finished stock levels, wastage, etc). The reaction to this was immediate. The team saw the problems and started to deal with them. I asked everyone to develop metrics, which we now use everyday. We are far from being a data-driven company but we pay attention to the facts, we use metrics, and we find ourselves asking more and more questions and collecting more data to make better decisions.

Business is for real men

This is my company and my money and I will do what I want. I don’t need Board members and investors telling me what to do. If they don’t like what I’m doing they can leave. I don’t believe in democracy and voting in business. It slows things down and causes confusion. 

The same applies to anyone who works for me. My staff do what they’re told. They can’t question or challenge me. I know what’s best. I got us to where we are. Working for me is simple. Get the work done on time and under budget. I pay better than other companies if my employees perform well. If they don’t do it right, they get fired.

I don’t believe in training and all that soft development stuff. Business is for real men. It’s war.

The employee incentive program I set up backfired for the business

I know metrics are crucial to measuring and running a business. I got some books on entrepreneurship and business and found a set of common metrics startups and business used to measure their performance. I chose eight and added some more to capture a deeper understanding of particular aspects of my business. I then read about linking people’s performance to the metrics and using this to set targets for individual bonuses.

When I chose metrics, I didn’t pay any attention to their interrelationships. I quickly learned I had made a mistake by ignoring these. One of the key metrics was a 10% increase in new customers. Another was a 10% reduction in the investment in existing customers. I increased staff bonuses for each new customer they got. At the end of the first quarter we saw a 35% increase in new business but we lost 5% of our existing customers and only 15% of existing customers used our services more than once.

At the end of the next quarter the we saw another large increase in new consumers but a even bigger churn for existing customers and less than 10% using our services more than once. I brought this to the team and they saw no problems, they were following the metrics-based incentive program and happy with their bonuses.

Our new admin assistant was paying invoices to a fake company

During the first three years of operation, I signed every check and reviewed every bill. The volume increased beyond what I could handle so we hired a full-time administrative assistant. She was a friend of one of our employees and came from a large company located in the city. I was so glad to get rid of this task.

We got our accounts within 10 days of the end of the month. Everything looked OK. One day I was in our bank and ran into the local bank manager who asked how things were going. I told him things were good and we were profitable and growing. I told him we had a new admin assistant who had come from XYZ company. He asked her name and when I told him, he was very concerned.

He asked if we had asked for references. I told him we had and he advised that I start looking at all the invoices and making sure I knew how we were paying. I wasn’t sure why he said this, but it sounded like good advice with no downside.

I spoke to the admin assistant when I got back from the bank and asked to see the invoices from the last month. Right away, I noticed several new names and that one new supplier had sent in four invoices that month. I got suspicious when I asked our operations people about the company and they had never heard of it.

When I went to the admin assistant, she said she just paid the bills managers signed. I took three invoices to the responsible managers. They knew nothing about them. When I confronted the admin assistant, she denied anything was wrong. I called phone number on the invoice and it went to voicemail. The voice on the message was the admin assistant’s.

I fired Alan after he was rude to a customer

This was the third time Alan had been rude to a customer. I spoke to him but he ignored me and didn’t listen to what I had to tell him.

This time the customer wrote to me and told me what had happened and said this was the last time he would do business with us. He bought 3.4% of everything we sold, so I went to see him myself and said I would handle his account. He demanded we fire Alan. I was so mad that when I got back to the office, I called Alan into my office and fired him. I refused to write a reference and just paid him until the end of the month.

Everyone in the office was surprised by my reaction but no one said anything.

I wasn't thoughtful enough with hiring and we had to go through the process twice

We had six people on our team and we need two new people. One for general support and one for project management. I was nominated to do the hiring even though I had never hired anyone before. I made everyone write down what we needed the new people to do. When I read all the replies I wasn’t really clear about what we needed. I didn’t want to bother everyone again so I wrote up my own lists.

We had more than 50 applications for each job. The project managers that applied came from larger companies and described the complex projects they had managed. When I started interviewing them, they asked for a job description, which we didn’t have. Then the applicants started asking questions I didn’t know the answers to. They weren’t things we had thought about in much detail. The interviews didn’t go very well. I did, however, find three people who I thought were good and should be interviewed by the CEO.

The interviews with the CEO were a disaster. She had a completely different view of what the job entailed. Two candidates withdrew their applicants. The third was hard to get ahold of and no longer seemed interested.

We decided to start over. This time we looked at job descriptions for similar startups and positions and got templates of job descriptions off the internet to start with. The team went through these, made changes, and agreed on what we needed. The second time around, things went much better and we hired two great people.

My first hire was negatively affecting staff morale

As CEO of my business, Mary was my first hire and we have been through a lot together. We were very close but as the business and team have grown, we do not spend as much time together.

Last week the team decided that the new software program would go live at the end of the month. Mary did not agree with the decision. She didn’t listen to anyone even though software is not her area of expertise. She argued with everyone. She kept saying she was the first employee and she knew what was right.

I could not get her to see reason. Eventually we had a personal discussion. She told me she no longer trusted me and that I had broken all my promises to her. I simply could not deal with her. Later, I was approached by several members of the team who said it was becoming more and more difficult to work with Mary.

The funding commitments haven't come in; how do I plan?

We presented a plan for a new business incubator. It was the first one that did not focus exclusively on technology. Everyone was incredibly excited and supportive. Funding was pledged through a public-private partnership. The total raise was $500k for the first year and $600 for the second. We had more applicants for staff positions and places at the incubator than we knew what to do with.

Six weeks into the new year, I had only received $75k. I contacted everyone else and they said the money was coming. After 6 months, I only had $200k. Everyone said they were having problems raising the money but it would come. My employees are on consulting contracts because of the uncertainty in funding.

We’ve gotten some extra sponsorship to cover the costs of business contests and weekend retreats. We started to do some consulting to raise some money, but I don’t have enough money to hire qualified staff to meet the demand for consulting projects.

Nine months in, we’ve only received received $400k of the money pledged for the first year. The local government owes us the rest. I have no idea how much of the money pledged for year two will actually come in.

How do I plan for next year? How do we get people to honor their commitments?