The ‘Hotshot Rule’ and Other Simple Tools for Keeping Tabs on Your Business | Tech News

As companies scale, leaders lose touch and problems and opportunities are missed. Here’s how to stay on top of things.

BY Leigh Buchanan – 26 Jun 2018

PHOTO CREDIT: Getty Images

Employees are a leader’s best source of information. The people closest to the action know the right thing to do long before the CEO does. But whether it’s an opportunity to sell customers more or to deliver products with less, many employees lack the language, insight, or expertise to properly articulate the situation. And most lack the authority to do something about it.

The challenge is to compress the amount of time between employees knowing and the leader knowing. That, says Kat Cole, is how you fix problems and seize opportunities. Cole, who started in the food industry as a Hooters waitress, is COO and president of Focus Brands, which owns Cinnabon, Auntie Anne’s, Moe’s Southwest Grill, and other franchises. As an adviser to startups in hyper-growth, she warns founders about the dangers of losing touch. “It is unbelievable how quickly founders can get disconnected from their businesses when they are having great success,” she says.

To keep your finger on all the necessary pulses, Cole advocates creating feedback mechanisms for every person or team involved in something critical to the business. At its most basic, that means regular check-ins. “Just agreeing on the frequency with which you expect to communicate and the detail with which you expect to receive and deliver information removes 70 percent of the frustrations and problems that come from scaling,” she says.

The productive pop in

Staying connected also means committing time to the front lines. When Cole was president of Cinnabon she worked entire shifts in the stores. She made the rolls. She took out the trash. She talked to employees and customers and observed their interactions. “Often leaders go in, shake hands, make themselves visible, and then leave feeling good about themselves,” she says. “That’s not what works. Go deep. Don’t graze the surface. You have to be there long enough to see the truth.”

But the boss’s presence can rattle employees. Many leaders visit only when there’s something good to celebrate or bad to investigate. So an unexpected appearance sets off alarms. Cole recommends telling employees that you intend to pop in from time to time and with what frequency, so they view your presence as being business as usual.

In B2B companies, front-line visits may mean sitting in on meetings. That takes diplomacy: The leader doesn’t want to upstage customer-facing employees or appear to be monitoring them. Cole recommends alerting employees if you want to attend a meeting and presenting yourself to the client as an observer. Her preferred language: “Hi. I’m the founder. I heard there were customers in the building and just wanted to let you know how important you are to us. And I would love to listen in to learn about your needs.”

If the leader notices a problem or opportunity during the meeting and the timing isn’t critical, she should keep quiet until afterward and bring it up with the employees, Cole suggests. “You want to protect their integrity and positional authority,” she says. “Then they can bring it back to the table as though it is their idea.”

If the window for action is short, however, the leader can voice her thoughts in front of the client, Cole says. “But do it in a shoulder-to-shoulder collaborative way instead of saying, ‘Oh, my salespeople clearly did not bring this up, and now I am.'”

The three questions

In addition to observation, direct questions are a good way to learn what’s going on. Cole has three she likes to ask. The first, “When do we say no?” may reveal a pattern of similar customer requests that the business routinely turns down–a possible missed opportunity. “What do we throw away?” elicits examples of waste. A software feature only 5 percent of clients use. A pickle-on-the-side that diners leave on their plates.

The third question is “What would you do if you were me?” That prompts ideas, “but it is also a culture-building question,” Cole says. “It is about demonstrating a type of listening leadership that tells people you care.” When suggestions aren’t feasible–doubling everyone’s salary, for example–the leader can explain the economics behind the company’s compensation plan. “It can be an opportunity to drop a little business education,” she says.

The Hotshot Rule

Checking in regularly with employees is critical. But leaders should also check in with themselves, Cole says. She warns entrepreneurs that successful people are often blinded by their own progress. As assumptions prove true and problems resolve, their sense of urgency wanes and a dangerous complacency takes over. Consequently, she says, “it is important to have some exercise to keep pulling yourself out of your current environment and re-seeing your business with fresh eyes.”

Cole’s favorite tool is The Hotshot Rule. She asks founders to think of the most impressive business leader they know and to then imagine that person taking over their companies. “I ask them, ‘What is the one thing that leader would do differently in their first day on the job?'” she says. Viewing their companies from the hotshot’s perspective, flaws immediately become apparent. “They realize somebody who is awesome would find this unacceptable,” Cole says. “And they take action on it.”

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