During last month’s Azione Unlimited buying group Spring Soiree in Nashville, TN, Peter Sieffert, from Swiss Avenue Partners in San Diego discussed how he coaches clients to move away from being reactive in their business ownership and management roles, and more proactive and “hands off.” He acknowledged that it’s typical of many entrepreneurial small business owners to get stuck in the trap of putting out fires rather than properly managing their team and planning strategically.
Sieffert’s company consults with all different sorts of business owners and managers, helping them turn their companies into sellable businesses, raise capital for expansion, acquire other companies, and generally help owners evolve in their roles.
His main point was that owners and managers need to learn to tell the difference between what’s urgent and what’s important, and to stop trying to personally solve every problem. He explained how entrepreneurs typically abhor structure, but that most employees crave it and seek stability, rather than chaos. So how does he get his clients over the hump? By using a system called “RGBY,” for the color codes on a chart he teaches clients to use to organize roles within their companies. After having an owner write down every task within the company, those tasks are then assigned a color code and the various employees within the company then know what color they’re assigned to and what tasks go under each color.
For example, Sieffert assigns the color red to back-office responsibilities such as administration/reception, accounting and finance, HR, IT, legal/compliance, and facilities. These roles don’t generate revenue but without some of them you wouldn’t be able to collect revenue, making them the heart and lifeblood of your business (thus red.)
Operation tasks, such as sales, production, customer service, and training, are assigned to the color green (to represent money/revenue). Strategic tasks are assigned the color blue (representing blue sky thinking). This is where the owner should be spending most of his or her time, as it’s where the strategic planning comes in and how equity is built up within your business. Within the blue category, you work on business planning, market position, channel partner development (creating relationships with builders, architects, and interior designers), and total enterprise value optimization (increasing the value of your business, and writing a strategic plan to share with your employees).
Yellow (the color of a highlighter marker) represents the culture of the company, and encompasses the communication, team energy, and work/life balance aspects of your business. Are your employees’ ideas being heard and put into place? People will burn out if you don’t find room for fun activities from time to time.
Most owners, Sieffert said, spend too much time on red and green tasks, but should be focused almost exclusively on yellow and blue. The objective is to create the structure to get the owner out of the wrong areas and make your company more valuable when it comes time to sell it.