{"id":700,"date":"2015-04-23T12:37:55","date_gmt":"2015-04-23T12:37:55","guid":{"rendered":"http:\/\/www.mba-mondays-illustrated.com\/?p=700"},"modified":"2024-02-21T21:15:30","modified_gmt":"2024-02-21T21:15:30","slug":"the-management-team-guest-post-from-jlm","status":"publish","type":"post","link":"https:\/\/mba-mondays-illustrated.com\/2015\/04\/the-management-team-guest-post-from-jlm\/","title":{"rendered":"The Management Team \u2013 Guest Post From JLM"},"content":{"rendered":"

\"095-managementteamjlm\"<\/p>\n

Next up on our guest posts on the subject of The Management Team is AVC community regular JLM<\/a>. For those that don’t know, JLM runs a public company and before that built and sold a large real estate operation. He’s also written one of the best guest posts ever on AVC<\/a>. With that intro, here’s what JLM has to say on the topic. I love the way he ends the post.<\/p>\n

\n

Congratulations, you have built a prototype. \u00a0Got it to work. \u00a0Debugged it. \u00a0Even sold a few copies. \u00a0Have some real customers. \u00a0Now you are ready to scale up and make some real money.<\/p>\n

You have crossed that Rubicon from having an idea to having a product and customers. \u00a0Now you have to build an organization, a real company, to manage the entire process. \u00a0Or your fledging little company has to evolve from crawl to walk to run.<\/p>\n

You may look yourself in the mirror and say \u2014 \u201cWell, I know a lot about my product, even its market and competitors but what the heck do I really know about building a company?\u201d \u00a0Can I do this?<\/p>\n

The simple and truthful answer is \u201cYes, you can!\u201d \u00a0If you don\u2019t think so, here are some tips to take you from the garage to the executive suite.<\/p>\n

Bad news \u2014 your generation did not invent sex. \u00a0It does not have to invent the crafting of companies either. Someone else has also done this before.<\/p>\n

Create a clever and insightful graphical representation of the business model which will become your company.<\/p>\n

    \n
  1. \n

    Identify who the customers are and why they will pay money for your product. \u00a0This is the revenue side of the model.<\/p>\n<\/li>\n

  2. \n

    Identify the elements which must be incorporated into your product to create it. \u00a0This is the expense side of the model.<\/p>\n<\/li>\n

  3. \n

    Identify all the management functions which are necessary to transform the ingredients into the product and to educate the customers and to make the sale and to manage the money.<\/p>\n<\/li>\n

  4. \n

    Identify the competitive forces that are lurking in the darkness wanting to destroy you \u2014 the ones that are real and the imaginary ones.<\/p>\n<\/li>\n<\/ol>\n

    Make a drawing of all of this on a single very large piece of paper and then marvel at what you have done. \u00a0Do it about ten times until you have perfected it. \u00a0It keeps getting better each time.<\/p>\n

    This is the company you will have to create. \u00a0The one that can operate this business model. \u00a0The one which can deliver your product to the marketplace and make a buck in the process.<\/p>\n

    Make an organization chart which shows each of the functions that are necessary to operate the business model.<\/p>\n

      \n
    1. \n

      Make it a functional chart and don\u2019t worry that it turns out very close to what every company ever created looks like. \u00a0That is good. \u00a0Remember, you did not invent sex.<\/p>\n<\/li>\n

    2. \n

      Identify the functions which are \u201cessential\u201d and those which are \u201cnice to have\u201d.<\/p>\n<\/li>\n

    3. \n

      Now identify what you can afford and what you can stretch to afford and those which are simply out of reach for the time being.<\/p>\n<\/li>\n<\/ol>\n

      You have now identified your immediate, short term and long term organizational imperatives.<\/p>\n

      Take the business model and the organization chart and color code it to identify your own personal strengths and weaknesses. \u00a0If you have a co-founder, put his up there also. \u00a0Now you have identified those elements of leadership and management that you can provide and those you will have to hire from the outside. \u00a0Be tough on yourselves; don\u2019t undertake a task you hate just for the ego enrichment of it all.<\/p>\n

      Be prepared to hire people who are fabulous in their fields. \u00a0Hire a Chief Financial Officer you cannot possibly afford and tell him he is the \u201cfinancial conscience of the company\u201d. \u00a0Meet with him weekly and never miss a meeting.<\/p>\n

      Now take the business model and the color coded organization chart and create a schedule of how you will build the organization. \u00a0Which functions will be added first and why? \u00a0The business model will tell you what and the color coded organization chart will tell you who and the schedule will tell you when.<\/p>\n

      That is really all there is to it but you will want to consider the following considerations:<\/p>\n

        \n
      1. \n

        It will not be perfect out of the chute. \u00a0You will do some stuff that does not work. \u00a0Just re-engage and do it over. \u00a0It\u2019s going to be OK. \u00a0Really punish yourself \u2014 just kidding. \u00a0Learn to laugh at yourself.<\/p>\n<\/li>\n

      2. \n

        Understand that everything in life is iterative. \u00a0You do something. \u00a0Get better at it. \u00a0Get better at it some more and one day you laugh to remember how na\u00efve you were when you started. \u00a0Ever learn to ski or snowboard?<\/p>\n<\/li>\n

      3. \n

        Do the formulaic and fundamental stuff and get it done but only do what you really believe.<\/p>\n<\/li>\n<\/ol>\n

         <\/p>\n

        Vision, Mission & Values<\/strong><\/p>\n

          \n
        1. \n

          Vision \u2014 big dreams and little dreams all cost the same, so go with the big ones so that if you only accomplish fifty percent, it will still make your Momma proud.<\/p>\n<\/li>\n

        2. \n

          Mission \u2014 simple, direct and jettison every extra word. \u00a0The mission of the Infantry \u2014 \u201cFind \u2018em. Fix \u2018em. \u00a0Kill \u2018em.\u201d<\/p>\n<\/li>\n

        3. \n

          Values \u2014 sweat this one because you will have to live this one. \u00a0If you are going to take risks and run with the bulls, this is where you let everyone know. \u00a0Don\u2019t be afraid to say that \u201cfrugal\u201d is a value. \u00a0I like frugal.<\/p>\n<\/li>\n<\/ol>\n

          Every new employee hears the values part of the company from you and only you. \u00a0Wear a suit and a crisp white shirt and a tie and tie shoes. \u00a0Do it in the first five minutes of their employment. \u00a0They will never forget that. \u00a0Don\u2019t discuss them, tell them. \u00a0Difference between a tattoo and magic marker.<\/p>\n

            \n
          1. \n

            Job descriptions \u2014 don\u2019t hold out for a Pulitzer but put some thought into it.<\/p>\n<\/li>\n

          2. \n

            Copy the absolute best exemplars you can find out there. \u00a0They are out there. \u00a0Be a copy cat. \u00a0Read Drucker.<\/p>\n<\/li>\n

          3. \n

            Make all your decisions about equity upfront and don\u2019t be afraid to say that you have to \u201cearn\u201d it. \u00a0Understand that equity is an element of compensation and sometimes it is not even in the top three.<\/p>\n<\/li>\n<\/ol>\n

            A good comp plan includes:\u00a0<\/strong><\/p>\n