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I stumbled on the questions I wrote about last week circa 2013-14. Fresh from our first round of funding (Series A to fund EZ Texting’s acquisition), I grappled with budgeting issues and creating ‘asks.’
Before professional money came on board, my co-founders and I had run very much like an egalitarian commune. We presented our ideas, communicated in a shorthand that long-time collaborators develop, and if the idea made sense, we’d invest.
With funding came new leadership, and new leadership brought new ways. Budgeting as a tactical exercise was fresh, and the frameworks many. Layer over this that I had an operational role responsible for cost centers, and I found it challenging to tie operating leverage to top-line growth. These questions helped clarify and prioritize my asks.
Over the years, I’ve shared it with others, and they’ve found it helpful as a personal centering exercise before the minutiae of a budgeting process usurps them.
Scoring Yourself
Either you are a competent, influential, and competitive manager or you are not. Like the Pass/Fail courses in college, the answers are binary. Yes, you know how your business works, or no, you don’t. Yes, your peers rely on you for budgeting advice, or no, they don’t. Yes, you are best-in-class, or no, you’re not.
A ‘Yes’ is a call to improve, while a ‘No’ is a call to action. Yet, there is a way to score it on a graded scale and see where you need to focus.
The Grade
If you answered yes to all three questions, you deserve an A. If you answered yes only to questions 1 & 2, you get a B, and if you answered a yes to question 1 but not others, give yourself a C. If you answered no to question 1, then no grade.
Try not to split hairs over marginal grades like A- or B+. This is a conversation with yourself, the least you can do is to cut through the bullshit. In the same vein, park your imposter syndrome. As much as answering these questions are about your track record, they are not about you. It doesn’t matter if you feel you’re faking it, but that you are candid and analytical about your job performance.
The A Grade
You’re killing it. You’ve answered yes to all questions. You’re published & acknowledged in peer-reviewed journals and speak at trade conferences. Your company is making headlines for its performance as well.
It’s near impossible to be recognized for personal accomplishments if the company isn’t doing well. It’s hard to call yourself a brilliant tactician if your side loses. I’m not talking about the career-saving spin you say on LinkedIn but the conversation you have with yourself. If it is true you’re running the best, then how come the company isn’t doing too hot? I’m not saying there could be extenuating circumstances (ask Bob Iger when he tried to distance himself from Michael Eisner after being his COO for ten years), but is that the case here?
From a budgeting perspective, a Grade A shows a mastery of time management. Not only is your team delivering on everything they promised, but you also have the time to pitch, present, and share their accomplishments. You have slack in your day to do more because you’ve built an autonomous, cohesive, high-performance team.
As a planning exercise, ask what your team needs to keep up the pace and maintain high standards? What do you need to ensure they don’t fall off track? Is the formula working, or does it need tweaking? Is there a big audacious goal or project that they should tackle?
An A grade is a call to do more, not rest.
The B Grade
You’re a competent leader and a good team player. Congratulations, you get to keep your job.
A “B” is an excellent launchpad to get to grade “A.” This is where the budgeting exercise pays off. Before you get to cruising altitude that’s grade A, see what it takes to even get to that flight level. It helps to set clear goals.
If you’re in PeopleOps, you could decide to compete in a Best Places Survey. If you’re a CTO, one good measure would be the number of Open Source contributions your team makes. How many meaningful patents were filed? How much time your team spends on R&D versus cleaning up tech debt? If the experts say a Kent Beck, a Grady Booch, or a Gene Kim looked at the quality of work product, would you get a thumbs up?
C Grade and Below
Commend yourself on the courage of your candor. Few embrace the truth, especially when the person who needs convincing is yourself. As Richard Feynman once said, you must not fool yourself, and you are the easiest person to fool. You have successfully fought off that temptation.
At the same time, the score shouldn’t be the result of unchecked imposter syndrome. It shouldn’t be because you’re hard on yourself or other self-flagellating behavior that many suffering from imposter syndrome exhibit. If you need help dealing with imposter syndrome, start here.
If you have given yourself a “C” or a “No Grade,” it means you know you’re in a tough spot and you want to improve. This “Want” is step 1 to get out of the danger zone.
A C means you’re treading water. You don’t know your business, don’t have an effective team, or are understaffed. Your peers don’t come to you for help, and no one outside the company knows you, if at all.
Chances are you got into this situation because your department didn’t get the attention it needed, or no one was doing the work, so you picked it up because it still needed to get done. So while the hot potato may be yours, you may not be the reason it is hot.
The best advice I’ve ever gotten is, “When the going gets tough, the smart get help.” Even if there isn’t a critical urgency, you are very much in the danger zone–get help and get out of the danger zone. Budget what that help will cost and make its funding your top priority.
Finally
These questions are not a substitute for a rigorous budgeting process. Budgeting is a team activity and preferably under the guidance of trained professionals. I was lucky to be surrounded by financial pros who were willing to teach me the ropes of the different kinds of budgeting. One of them, now a CFO of a public company, even fashioned himself as a financial fitness trainer. So find your trainer, and learn the different budgeting methods. See if you like zero-base budgeting as much as I do.
Before that, use these questions as a guide and think about budgets and how you spend money. It will make you a better capital allocator and a better business leader.