As a new business owner or CEO, your first day on the job - what we call "Day One" - is crucial. It sets the tone for everything that follows, and recovering from a poor start can take months, if not prove impossible. The decisions you make and the actions you take on Day One will ripple through your entire tenure, shaping the culture, performance, and future of your organization. It is imperative that you approach this day with careful preparation and a clear strategy.
Planning Ahead
Before we delve into the specifics of executing a successful Day One, it's essential to understand that your preparation should begin long before you step into your new role. In the weeks or months leading up to Day One, you must focus on two critical elements:
Value Creation Plan
It is crucial that you have a comprehensive understanding of how you're going to add value to the business. This goes beyond mere operational improvements; you need a strategic roadmap that outlines how you will increase sales, expand margins, develop new products, and ultimately grow cash flow. This is commonly referred to as a Value Creation Plan.
Consider this: when you purchased the business, you effectively paid out all of its current value. Your job now is to create new value, and that requires a clear, actionable plan. Simply implementing new technology or making superficial changes is not enough. You need a strategy that ties these tools and changes to tangible business outcomes.
For example, if you're taking over a manufacturing business, your Value Creation Plan might include:
- Implementing lean manufacturing principles to reduce waste and increase efficiency
- Developing a new product line to capture an emerging market segment
- Investing in automation to increase production capacity without significantly raising costs
- Establishing strategic partnerships to strengthen your supply chain and distribution networks
Understanding the People and Skills
The second critical element is gaining a deep understanding of the people within the business and the skills they possess. It's important to recognize that people and skills, while often conflated, are distinct elements that require separate consideration.
You need certain skills to execute the job and grow the business, but you also need the right types of people. The ideal scenario is to have individuals with both the necessary skills and the right character traits. However, if forced to choose, prioritize character over skills. Skills can be taught, but core traits like urgency, accountability, excellence, curiosity, and genuine concern for the job and customers are much harder to instill.
In the weeks leading up to Day One, invest time in getting to know who's at the company, their skill sets, and their personal characteristics. This knowledge will be invaluable as you make decisions about organizational structure and personnel changes.
The Day One Agenda
Now, let's dive into the key strategies for executing a successful Day One:
Embrace Change, Don't Fear It
There's a common mantra in small business acquisitions called "do no harm." I vehemently disagree with this approach. If you bought a business, it's because you believe you can improve it. The decisions that got the business to where it is today are not the ones that will propel it forward. You've already paid for the current value; your job is to create new value.
On Day One, adopt a shotgun approach. Be prepared to make bold changes and break some things along the way. However, it's crucial to frame these changes correctly to your team. Here's an example of how you might address your employees:
"As your new leader, I want to be clear: we will be making changes. These changes are designed to make your jobs better, to help us grow, and to allow all of us to achieve more with less effort. My goal is for each of you to not only earn more but to leave work each day with more energy for your personal lives. We're going to find ways to scale and grow without requiring you to work longer hours. We're going to introduce the concept of leverage into our operations.
I promise you that every change I implement is intended to make things better and easier for everyone here. That said, some changes may benefit the company as a whole more than they benefit any individual. If you find that a change is making your job harder, I want you to tell me. I'm an expert in systems and value creation, but I'm not yet an expert in the day-to-day operations of this business. I need your feedback to ensure we're moving in the right direction."
This approach sets clear expectations, acknowledges that changes will occur, and opens lines of communication with your team.
Make Personnel Changes Swiftly
One of the most critical lessons I've learned is the importance of making all necessary personnel changes within the first three to four days. It becomes exponentially more difficult to demote or let go of an employee after you've worked closely with them for several months.
On Day One, employees expect change. They're prepared for it. If you wait too long to make these decisions, you risk eroding trust and damaging morale. It's far better to make these difficult choices immediately, allowing everyone to move forward with clarity about their roles and responsibilities.
For instance, if you've identified that your sales team is underperforming and needs new leadership, don't wait to make that change. Bring in a new sales director immediately, rather than trying to work with the existing leadership for several months before making a change. The latter approach not only delays necessary improvements but can also create tension and uncertainty within the team.
Set Clear Expectations and a Compelling Vision
On Day One, it's crucial to articulate a clear vision for the company. What are you building? Where are you headed? Why are you going there? This isn't just about setting goals; it's about uniting everyone behind a common purpose.
Start by sharing your mission and vision. Give your team a common enemy to rally against and an exciting future to work towards. For example, if you're leading a software company, your vision might be to revolutionize how small businesses manage their operations, with the goal of becoming the go-to solution for startups and SMEs within five years.
Next, outline the corporate attitudes and personality traits that will get you there. These might include innovation, customer-centricity, and a bias for action. Finally, lay out the strategic objectives that, if consistently achieved, will automatically lead you to your desired destination.
By setting this clear direction, you're doing 80% of the alignment work upfront. You're getting everyone on the same page, speaking the same language, and working towards the same goals. Refer back to this vision consistently in the coming weeks and months until it becomes ingrained in the company culture.
Align Financials and Staffing
Before Day One, you should have a thorough understanding of the company's financials and what's required to achieve profitability and your desired margins. Use this knowledge to determine how many people you can afford and what you can pay them.
Start by defining your Minimum Viable Company (MVC) - the bare minimum number of people and roles required to keep the operation running. For example, you might determine that you need at least seven people: two in operations, one in sales, one in customer service, one in finance, one in HR, and one admin.
Once you've established your MVC, you can start adding additional roles based on available resources. Remember, it's much easier to adjust pay and staffing levels immediately rather than months down the line. Be transparent with your team about these changes:
"Our goal is for everyone to earn more as the company grows. We're going to set base compensation at a level that ensures the company's profitability. From there, we'll implement an incentive structure that allows you to match or exceed your previous earnings as we hit our performance targets."
Extract Valuable Insights
In your first few days, particularly on Day One, you have a unique opportunity to gather insights that may become harder to access as time goes on. Conduct one-on-one meetings with every employee, recording these conversations for future reference.
Ask probing questions like:
- "If you were in charge of doubling this company's size, what would you do differently?"
- "What's the dumbest thing we're currently doing that's holding us back?"
- "What's one small thing the company could do in the next week that would make your personal life better?"
These questions will yield valuable information about potential improvements, existing frustrations, and quick wins that can build trust with your team. They'll also give you insight into what matters most to each employee, helping you become a more effective leader.
Conduct the Four Critical Audits
Starting on Day One and continuing through your first week, conduct four critical audits: Price, Process, People, and Cost. These audits will help you identify and address potential issues before they can derail your plans.
Price Audit: Examine your pricing structure. Are you charging appropriately for your products or services? Is your pricing competitive in the market? Are all costs accurately reflected in your pricing model? Ensure that each unit of production is profitable at your current scale and volume.
Process Audit: Evaluate how efficiently you're delivering your product or service. Are there bottlenecks or inefficiencies in your operations? For example, if you're pricing a service based on 20 minutes of work but it's actually taking 40 minutes due to inefficiencies, you're losing money on every transaction. Look for ways to streamline processes, reduce waste, and improve quality.
People Audit: This builds on the work you've already done in understanding your team. Ensure that you have the right people in the right roles to execute your Value Creation Plan. Identify any skill gaps that need to be addressed through training or new hires. Make necessary personnel changes swiftly and decisively.
Cost Audit: Review all your costs, from raw materials to office supplies. Are your vendors charging you fairly? When was the last time you negotiated better terms or sought alternative suppliers? Look for opportunities to consolidate purchases, extend payment terms, or set up vendor-managed inventory systems to improve your cash flow.
By conducting these audits quickly and thoroughly, you'll set yourself up for success, maximizing margins and cash flow from the outset.
<span id="yellow-highlight" class="rte-highlight" style="background-color: yellow;" fs-test-element="highlight">Your Day One as a new business owner or CEO is a critical juncture that demands careful planning and decisive action. By focusing on value creation, understanding your team, embracing necessary changes, setting a clear vision, aligning your financials and staffing, extracting valuable insights, and conducting thorough audits, you'll lay a solid foundation for future success.</span>
Remember, the goal isn't just to maintain the status quo, but to drive meaningful growth and improvement. Your Day One sets the tone for your entire tenure, so approach it with the strategic mindset and bold leadership that will propel your organization forward. The decisions you make today will shape the future of your business - make them count.
