#251: What Does it Take to Be a Good CEO?

On today’s show, we have author, entrepreneur, and CEO Joel Trammell. We’re going to be talking about what makes an amazing CEO. Joel brings his business expertise on various metrics, hiring techniques, and other measurable tips you can use to foster a healthy and happy business culture. After all, the most successful businesses have the best culture and environment for their teams.Not only does Joel talk about what it takes to be a good CEO, he also talks about how you can hire the next CEO when you’re ready to pass on the torch.

Joel teaches leaders how to make their company great and he does so as a chairman at iGrafx and as the CEO of a business management software system called Khorus. Joel focuses on how to build up companies from within. He’s written a book called The CEO Tightrope, which talks about how he took two companies and built them up to a nine-figure acquisition from the foundation up.

We’ll navigate the fives responsibilities a CEO can’t delegate and how to offload the rest of the responsibilities to the right staff, including an argument for using micro-training to ensure maximum retention and job success. CEO is a highly skilled and nuanced role, and directly impacts your success. Since you can’t perform every role in your company as it scales, you’ll be forced to make a tough call between working on your business or in it, and a strong CEO is the right solution to help you position your company for growth. If you’re still playing as part of the orchestra, who is conducting?

What You Will Learn In Today's Podcast Interview

How to effectively get rid of your anxiety about the future by hiring the right people
When you need a ‘real’ CEO and what they’re responsible for
The five things a CEO can’t delegate
How the best CEOs hire rockstar executives in every position, even if they’ve never actually held the role
Why—as the owners of a business—you shouldn’t know every single deal your company is doing
How to give up the right roles—and at the right time—as your business scales and enters different stages of complexity
Why decision making is the “grease that skids the wheels” and enables exponential growth
What micro-training is and why it can increase your percentage of long-term employees
When you need to address your operating models and why it’s contingent on number of employees
Why every employee should know what decisions they can make, and make them quickly
The importance of clearly detailing what good performance is and making a playbook for it for your staff
How small choices (like jeans vs. suits) feed into the overall culture of your company
Valuable tips on goal setting, coaching and accountability—starting with you
The difference between holding people accountable and objective reality

Are You Growing The Value of Your Business

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Are your company's current initiatives intentionally designed to increase the value of the business?
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Do you know the differences between Management, Family Transitions, PE Firms, ESOPs and Strategic Buyers?
Does the business have a written strategic plan on how to achieve the desired normalized EBITDA and valuation?

About the Guest:

Joel Trammell is a chairman at iGrafx where he teaches leaders how to make their companies great. As the CEO of Khorus, a business management software system for CEOs, he continues his work building strong companies from within. He has taken two companies from founding to nine-figure acquisitions by Fortune 500 companies and turned his experience into a book called The CEO Tightrope, which helps owners navigate the CEO position. Joel is also co-founder and managing partner of the private equity firm Lone Rock Technology Group and Chair Emeritus of the Austin Technology Council.

Quotes:

07:50 - “Nobody has really thought about the challenge of being CEO, particularly as it becomes a real job and scales in an organization.” – Joel Trammell

08:29 - “A lot of the CEO job happens in your head.” – Joel Trammell

09:12 - “You need to hand that responsibility off to somebody who focuses on that all day, every day.” – Joel Trammell

10:50 - “From zero to 25 employees, there’s not much of a CEO job.” – Joel Trammell

13:24 - “Ultimate authority still rests with a board of directors.” – Joel Trammell

14:25 - “A lot of people become entrepreneurs because they don’t play well with others.” – Joel Trammell

15:10 - “A CEO doing the job right, doesn’t walk in and just start mandating decisions no one agrees with.” – Joel Trammell

15:15 - “If you really understand the CEO role, you can put the right people in that role and still have ultimate control of that business.” – Joel Trammell

18:05 - “Business is a community. You want to make an attractive community that people want to join, but people can leave the community if things aren’t appropriate to them.” – Joel Trammell

19:10 - “You want to be in a situation where decisions are being made at the right level of the organization. The better you are at that, the faster your organization will run.” – Joel Trammell

24:20 - “No matter what you do, you’re never going to know more about finance than someone who went to school for finance, trained for finance, spent twenty years in finance. That’s not the role.” – Joel Trammell

24:56 - “When you hear ‘holding somebody accountable’, what you should hear is ‘holding people to objective reality.’” – Joel Trammell

29:26 - “If you don’t think you can wake up every day and think first about the people and the organization and how to make them more productive, if your first thought is ‘I like flying airplanes,’ you’re probably not cut out to be the CEO. And that’s okay.” – Joel Flammell

30:00 - “A lot of people think they have to be CEO to not give up control.” – Joel Flammell

32:07 - “It very rarely works out the first time with hiring a CEO.” – Ryan Tansom

35:52 - “You need to micro-train everybody you hire.” – Joel Trammell

38:32 - “You ought to have a six-month view of cash in your business, under at least three different scenarios: What if we sell nothing? What if we sell 50% of what we think we’re going to sell? What if we sell 75%?” – Joel Trammell

40:27 - “The CEO job, done correctly, you should be spending 80% of your time doing what I call ‘managing the future’— anticipating problems, seeing where there are issues, trying to avoid the potholes — and only 20% of your time dealing with the issues of the day or playing whack-a-mole in the organization.” – Joel Trimmell

43:50 - “When you find somebody who's the right person, who has that neurotic desire to excel and be great at what they do, you use money to keep them. You don't use money to incent them.” – Joel Trammell

47:11 - “Your strategy should boil down to a one-page sheet.” – Joel Trammell

54:20 - “How have you made your employees better in the past year?” – Joel Trammell