Having it both ways
How to run a small business like a Fortune 500 company and a big business like a start-up
By Michael Feuer
October 2006
From time to time, we all want to be something we’re not. When I ran a Fortune 500 company, I would bemoan the trials and tribulations of dealing with layers of management, outside and inside auditors, attorneys and regulators.
On the flipside, when I started the company, I frequently fantasized about what it would be like to be the CEO of a huge organization, with executives doing the heavy lifting, legions of lawyers, and all kinds of accountants to calculate and analyze things.
So where is the happy medium, when you can have your cake and eat it, too? In my case, after transitioning from a start-up to a medium-sized and then to a multibillion dollar company, I realized you can have it both ways, running a company the same no matter its size, number of employees, or geographic breadth.
Sweat the little stuff while focusing on the big picture. Recognize your customers’ needs, preferably before they do, and execute your plan efficiently and effectively with a sense of urgency.
In a small company, you keep your ear to the ground, usually know the answers before others even ask the questions, and watch the cash every day. Equally critical is understanding the trends, your employees’ concerns and your competitors’ strengths and weaknesses.
In a Fortune 500 company, it’s not much different, except that your reports and profit and loss statements are delivered to you in fancier binders.
Big, small, or in-between, you must frequently hold both formal and informal updates with your key people. Size should never be a factor governing the flow of critical information. Opportunity many times comes disguised as a negative, and your job, no matter the size of your company, is to develop that sixth sense to recognize the issue and then take action.
You must structure lines of reporting and methods of operation no matter the organization’s size to allow you to keep your pulse on the business in real-time. It doesn’t take long to have a business turn south with a vengeance.
Some may say if you’re staying on top of the business, you’re a micromanager. I say, “Bunk.” If you’re in charge, then take charge.
When things go wrong because someone let something fall through the cracks, nobody is going to remember that you were The Great Delegator. During the first 18 months of my company, I required every store to call my home seven nights a week to give me sales figures, which I recorded in a ledger.
This was easy when we had two or three stores, but it became more of a time commitment when we got to 25. However, this ritual enabled us to rapidly grow by managing cash flow, with an emphasis on accounts payable down to the last few dollars.
Every night, I knew what vendors I could pay the next day. Micromanagement? You bet, and proud of it. This protocol not only accelerated our growth but set a management style for executives to operate in a similar know-what’s-happening fashion. After our next surge of growth, I reluctantly took my wife’s strong suggestion to stop the nocturnal phone calls and graduated to a headquarters answering machine for stores to call, followed by computerization.
As we broke through the ranks from small to large, the procedures weren’t much different, other than the daily cash management was delegated, and my senior executives and I reviewed the numbers at the beginning of every week.
The devil is in the details. That doesn’t mean that the CEO has to manage the details, but if not, he or she must be sure that the person delegated to do so has at least a mild case of paranoia and a smidgen of fear of failure, which keeps the best managers on top of their game.
To prevent small, garden-variety problems from accelerating to biblical proportions, you must manage the process and be tuned in to the flow of factual information on a real-time basis. The delicate balance comes into play in knowing how and when to run the place like a Fortune 500 company and when to run it like a ma and pa store, depending on the circumstances.
One size never fits all, and events and circumstances dictate your tactics. This means that you, as the boss, must instinctively understand when to be an observer and when you must get your hands very dirty, very quickly, to survive, to succeed or to excel.
Michael Feuer is co-founder of OfficeMax, which he started in 1988 with one store and $20,000 of his own money, along with a then-partner and group of private investors. During 16 years as CEO, he grew the company to almost 1,000 stores with sales approximating $5 billion before selling it for almost $1.5 billion in 2003 to Boise Cascade Corp. In 2004, Feuer launched another start-up, Max-Ventures, a venture capital operating firm that focuses on buying control and/or making substantial investments in retail-oriented businesses and businesses that serve retail. Reach Feuer with comments at mfeuer@max-ventures.com.
