The founder of an early-stage biotech company had a dream of someday creating a drug that would treat diabetes. He had developed an innovative drug compound that showed great promise in laboratory experiments, but he knew that getting an actual drug approved by the FDA would be enormously costly and difficult. To achieve his vision, he knew he would need to make difficult choices.
First, he concluded that he would need to give up a sizeable percentage of his equity in the company to attract the initial round of funding. After securing funding, he decided that his top two priorities should be to attract a small team of top scientists for further drug development and to hire a chief operating officer for day-to-day management. After making these hires, he chose to spend the bulk of his time in the laboratory and not to spend time or resources on building a sales force or other tasks not critical to drug development.
As the drug development work progressed, he decided to allocate a portion of his time to meeting with large pharmaceutical companies that could help move the drug from the experimental phase to the more costly later-stage FDA approval process. He knew that his small biotech would never have the resources or expertise to develop this drug by itself. By focusing on his priorities at each stage, the founder was able to hire the necessary staff and make sufficient laboratory progress to attract a large pharmaceutical company to enter a joint venture (and ultimately to merge) with his company. Today, his innovative drug is in the advanced stages of FDA approval, an enormous accomplishment.
To build your company, you need to identify your top 3 to 5 priorities. These are the most critical tasks to achieving your aspirations. Inevitably, you will have to make tradeoffs, and once you have made these decisions, you need to communicate and over-communicate them to your employees so they know how to spend their time. If you haven’t explicitly decided on your priorities or have a list of 9 or 10, you and your people are likely wasting precious time on marginal activities and neglecting the most vital ones. To move your company to the next level, focus on these key choices and then follow through by aligning your time and resources accordingly. I’ve seen this work time and again:
- The CEO of an industrial products manufacturer believed that improving customer relationships and service would be essential to the company’s future. He and his senior managers agreed to spend at least 25% of their time meeting with key customers. In addition, they decided to spend funds beefing up the quality of their sales force. Lastly, they regularly began to celebrate cases in which they successfully diagnosed and solved customer problems. The leaders’ increased customer focus spread through the company and, in the CEO’s view, helped the company increase business despite the weak economy.
- The founder of a mid-sized professional service firm felt it was critical that the company improve its ability to attract, retain and develop superb employees. To make the point, he allocated more of his own time to meeting top job candidates and coaching key employees. He then emphasized this priority to his senior leadership team and made it clear that their promotions and compensation would depend heavily on their success at developing top employees and attracting new talent. These steps helped to materially improve the quality of his team and the firm’s ability to serve its clients.
Do you carve out sufficient time to reflect on your distinctive competencies and determine the critical tasks at which you need to excel in order to build your company? Have you selected the top 3 to 5 priorities and do you regularly communicate them to your staff? Try these steps and I believe you will dramatically improve your leadership effectiveness and the performance of your company.