CEOs who have been in business for a long time can remember ERP systems and the early days of desktop accounting and management systems. In those days, work was done in the office, on a giant monitor that sat on our desk.
Today, things look a little different. You can run a quarter billion dollar company from the phone in your hand as you wait in line at Starbucks. By simply reaching into your back pocket, you can communicate with every person in your organization, look at any piece of data, and make a decision – all from practically anywhere in the world. And, for the consumers, purchasing is now just as easy.
Truly the speed of business is faster than ever before, and in a lot of ways, that’s good news. This increase in the speed of business and the nature in which it is done is creating more opportunities for business owners and fractional leaders.
But at the same time, there’s a problem. Often fractional professionals on the C-suite reach across the aisle, only to realize they are butting heads with other C-suite members. This is what Brian Smith calls “a learning curve in the gap to catch up.”
Smith is the founder of IA Business Advisors, an internationally recognized business advisory, consulting, and coaching company, and the best-selling author of the “The I in Team Series”. According to him, leaders on the C-suite need to get more in touch with their company’s reality and what their company means to their area of influence.
The Secret To Bridging “The Gap To Catch Up”
As CEOs scramble to redefine C-suite roles and their areas of responsibility, leaders of organizations must determine how they’re going to tackle this unprecedented change that the business world is experiencing.
“A lot of C-suite people have blinders on,” he said. “They only see what’s in their lane. In the old days, you stayed in your lane, you put your head down, and you got your job done. You had direct reports and everything was pretty black and white, but with the way society has grown, we’ve become a three-dimensional society.
Now we have to be more in touch- two or three steps away from ourselves. And that’s a big challenge for the C-suite.”
According to him, many businesses are experiencing culture conflicts and interpersonal conflicts between the C-suite because there are too many co-mingled responsibilities, overlapping gray areas, and a lack of 3-dimensional thinking.
How Companies Can Make The Move To 3-Dimensional Thinking
The length of time it takes to move a company to engage in 3-dimensional thinking varies from organization to organization. Some organizations that appear structured, with clearly defined policies, set procedures, and processes that work might still experience conflict at the top. Any conflict in the C-suite will always slow things down.
If there’s conflict in the C-suite of an organization, it doesn’t mean that business has necessarily stopped happening. It usually hasn’t. Business may very well still be happening, but with some chaos or some conflict. Organizations like this, experiencing C-suite conflicts at the onset, will take longer to engage in 3-dimensional thinking.
The key, Smith explained, is getting a champion willing to take on the challenge of getting their peers to think more 3-dimensional and consider the weight of their decisions on one another– but finding that champion can be a challenge for any organization.
On the other hand, there are companies that have already embraced/been exposed to EOS or some other foundational business process or operating system. These organizations tend to be quicker to engage because they’ve already gone through a structured change process before. They understand, from experience, the difficulty and the easy parts of such an experience. According to Smith, these organizations are the ones who will approach the change process with a more open mind.
As part of his job to determine what to expect from the individuals within the organization and the culture itself, Smith always begins with psychological assessments. He knows that change within a company is more than structural– it’s cultural. And cultural, behavioral, and identity shifts – whether in our personal lives or in our corporations – are always the hardest transitions for many people to make. When an organization is open to and ready for that kind of change, it’s much easier for them to adapt.
Making The Case For Not Rushing Change
“While I love thought leaders and think they have a lot of value for us, they also have a habit of getting everybody riled up,” Smith explained. “Energy levels are high when thought leaders leave, but back in their offices, people start to crash.”
Leaders feel like they have to implement whatever it was that got people energized so fast, so they can get everybody moving in the right direction. But rushing implementation before people are ready only creates chaos.
In Smith’s first book, there is a chapter entitled “Slow Down” because he believes in the importance of recentering ourselves. We have to ask ourselves, “Why are we doing this? What might be the residual effects of this immediate change I’m demanding?”
“It’s like throwing that stone in the water,” Smith said. “You have to consider what other ripples might happen.”
Thoughts leaders hold the capacity to quickly go from visionary to disruptor unaware. Leaders might think they’re being visionary through their demands of strategy development and tactical application, but they can forget or ignore the way a tremendous amount of change affects everybody that’s downline from them.
When that happens, Smith said, “Before we know it, we’ve become disruptors. Creators of chaos.” That’s why instead of trying to move systems and change people right away, Smith and his team now work to prepare people for change.
“Our client’s ability to be whole, feel positive, and move forward with as little disruption as possible is way more important than my own ego,” Smith said.
Preparing Your Company For Systemic and Cultural Change
“We never go in and tell people to change values,” Smith explained. “What we do is help people to find what influenced them to develop their current values.”
For Smith, from the ERP days to today, implementation of new systems has always brought up two challenges:
- The inefficiencies of combined systems
“We were heavily involved in ERP in merger and acquisition, so it was our job to take two different systems and slam them together,” Smith said. “As that process evolved, we started getting more involved and able to identify business issues. Because we were transitioning those business-tracking systems, inefficiencies would stick out to us.”
- The resistance of humans
“People were used to doing business a certain way,” Smith said. “We were changing that and it caused behavioral issues. It became our job to prepare our clients for change.”
Smith said he would say to his team, “We know what the solution is…or we think we know what the solution is. Let’s propose.” Whether in sales, HR, operations, finance, or at the top, they quickly earned a reputation for being able to identify solutions to potentially high-impact problems before they happened. Companies began to trust them to help further strategize, further develop business change, further discuss their future, and how that future might work within their new system.
BizVision is the business operating system program that Smith and his team uses to run companies. In a graphic and intuitive way, Smith says BizVision defines the people at a company and gives a snapshot of:
- what they do
- who they do it with
- how they communicate
- what tools they use
- what decisions they make
BizVision helps leaders to understand not only human conflict from more than the psychological or behavioral side. It provides insight into operational conflicts, business process conflicts, supply chain conflicts, customer delivery conflicts, customer service conflicts, and more.
“When we can see it visually, we can understand conflicts more intuitively and help create solutions through strategy,” Smith said. “Then we can incorporate tactics that follow up that strategy in a much more efficient way.”
BizVision allows organizations to automatically calculate “what if” scenarios? What if we added a CFO to the organization? What type of person would be best? What added support staff might the company need? What communication funnels or conflicts might it create? Or what if we tried factional work?
Embracing The Future of Fractional Work
Fractional C-suite management provides an “over-the-shoulder consulting,” as Smith puts it. The fractional CMO will sit behind you, look over your shoulder, and help you. They’ll strategize with you, validate your decisions, and play your devil’s advocate. To Smith, those are all things that define a fractional executive, “but at the end of the day, it’s ‘over the shoulder’.”
Post-pandemic, as the world heads toward decentralized management, the outlook on fractional work is positive. We’ve verified, on one hand, that we can work more remotely and, on the other, that humans need human interaction to maintain a positive culture.
Because of that, Smith anticipates seeing “more use of fractional people and a clearer understanding of the value of those fractional roles.” In the past, some people have shied away from factional work, thinking it was either not dedicated enough or not committed enough. But now, many business owners and CEOs are learning firsthand how quickly a fractional professional can get up to speed and how efficiently they can work in a fractional environment. On top of that, fractional work brings a more affordable solution than full-time help.
If you’re looking to bring on a fractional professional, Smith recommends doing some due diligence and perhaps aligning yourself with a company that can help check certain things for you.
Here’s Smith’s list of where to start:
- Insurance – Consultants should have the right insurance to guard against fraud, and that means having professional liability insurance.
- Referral Source – A good reference should be able to give an objective idea of the work provided, that is, not based on adjectives, but rather on metrics and facts.
- Background check – These days, people are able to manufacture an identity fairly quickly. It’s always important to make sure that a person is who they say they are.
Advice For Future Fractional Professionals
- Make credibility your responsibility.
“If you want to go out and be a fractional person, set yourself up to be credible when you walk in the door,” Smith said. “Don’t take offense when asked to prove your credibility. Part of the value that you bring when you walk through the door is that you can answer those questions quickly. Being able to establish credibility quickly shows your value, that you have thought about these things, and that they’re important to the relationship.”
- Be honest when it’s not a good fit.
“One of the hardest things for an independent consultant or a smaller consulting firm to do is walk away from a deal,” Smith said. “It’s hard to be honest and say, ‘we’re just not a good fit.’ But it’s nice if you can credibly say, ‘But I have a good referral for you. I have a peer who would be a better fit’ That’s a credible statement. It establishes credibility, not only with that client but also with your peers.”
According to Smith, one of the dangers of not walking away from a poor fit partnership is that everybody will become emotional.
“In our line of work, emotions get in the way of making good decisions, ” Smith said. “Emotional decisions create risk – risk for ourselves and risk for our client – and that’s one thing that can damage your credibility. Those risks would have been eliminated if you would have just walked away.”
Smith admits to making many mistakes early on in business because he carried “too many emotions on [his] sleeve.” As soon as you have more than one person, you’re going to have conflict. It’s unavoidable. It’s how we deal with conflict that matters most. Many people turn to self-justification, but according to Smith, “justification moves us in the wrong direction.”
Leadership And Self-Deception from the Arbinger Institute is a book that Smith reads about once every year. It talks about how one person’s action will trigger another person’s action, which will then trigger another person’s action. If we live in these response boxes, we continue to justify our actions. But if we shift our response, we can shift the entire organization.
It’s a concept covered in Energy Leadership by Bruce Schneider. There are seven levels of energy and the energy we bring to our relationships within an organization impacts the entire business. Negative emotions can trigger catabolic destructive energy.
To avoid reacting impulsively and emotionally, you must take time to understand, become aware and elevate your response. When you do that, you can better control upsetting situations and lead at the speed of business.
This article was produced from the interview with Brian Smith featured on Episode 25 of the “Fractional C-Suite Retreat” podcast, a yorCMO podcast hosted by Joseph Frost, yorCMO co-founder, speaker and founder of The Fractional Professionals Association.
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