EXECUTIVES AT $15 AN HOUR?
The average Orange County, Fl per capita income is less than $30k per year. With 2,080 full-time work hours in a year that equates to $14.42 an hour. The average base compensation for a “C level executive” (CEO, COO, CFO, CIO, CMO, etc.) in Orange County, Fl within a small ($5M) to an emerging middle market business ($75M) can range from $75k to $500k depending upon credentials, experience, and position. An annualized base of $75k to $500k equates to an hourly range of $36 to $240 per hour. How does an Executive’s hourly valuation get degraded from a potential high of $240 an hour to the title’s premise of a $15 an hour valuation?
The role of an executive or senior leader is to strategize, refine, prioritize, and execute upon things that will:
Increase your market share through new customer segments, channels, and expanded value propositions
Enhance the experience, engagement, and retention of your customer base
Decrease the cost of doing business through effective cost containment and workflow efficiencies
Proactively and consistently communicate your brand / image / mission / vision
Cultivate key relationships with suppliers, vendors, and strategic partners to leverage economies of scale and business synergies
Source, coach, and retain top talent and effectively leverage the core strengths of your employees
When your senior leadership team measures their weekly performance in relation to the above bullet points, their value reaches, or can surpass, the higher end of the value scale. These leaders achieve exponential results by balancing strategy, coaching, and execution. High value leaders create scalable systems and processes that enhance enterprise value and don’t let their ego impair organizational performance.
Leaders that do not measure performance in accordance to the bullet points above, operating in “chaos management”, focusing exclusively on the “noise” surrounding day-to-day operations, fall to the lower hourly valuation. These leaders often work “hard” spending more hours at work, have an endless line outside of their door, and often appear rushed and impatient. Instead of allocating talent based on abilities and proactively addressing poor performance, these leaders often do the work themselves.
Just imagine, your $100 an hour GM / COO spending 20 hours a week doing the work of $40k staff employees. Each and every hour this leader does the work of the staff employee they leave $80 an hour on the table. Not only does this represent a hard cost to the organization, there is an opportunity cost of the leadership team not advancing the more strategic elements that enhance organizational value. Left unaddressed, this leadership behaviour can erode the organizational culture and breed non-accountability, staff resentment, and executive burn out.
To optimize the value of your leadership team, you can take the following steps:
Create a balanced scorecard of the top 5-6 objective metrics to measure the overall success of your business. You’re the owner, so don’t “outsource” the definition of success to someone else. Make certain your scorecard is not exclusively profit oriented and reflects the various business system measures or processes within your organization.
Regularly review these results with leaders. Set a handful of specific quarterly goals and track performance against these established goals / budget. Work with your leaders in breaking down these goals to the top 2-3 tactics that will bridge the performance gap.
Create a method to prioritize communication and minimize disruptions. For example, I use “911, 611, or 411” to designate the importance of an issue. “911” indicates that the need is urgent and mission critical, requiring immediate attention. A “411” issue is a “heads up”, an idea, or something that can be addressed/evaluated when convenient. You can use these designations in an email subject line, voicemail message, or in a passing conversation to protect valuable time and resources.
Ask your leaders to address the 6 bulleted statements listed above and continue to encourage a better balance of strategy and tactical execution.
You can reach us at info@flvcp.com or (407) 992-9094 to learn more about performance management and enhancing organizational value.
