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The Ugi ball in action (COURTESY OF UGI FITNESS)
The Ugi ball in action (COURTESY OF UGI FITNESS)

John Warrillow

Why Ugi should not hire a CEO Add to ...

Deb Karby is starting to feel overwhelmed.

As the de facto chief executive officer of Ugi Fitness Inc., she is responsible for the logistics of getting the company’s product from its Chinese manufacturer to its North American customers, balancing the books, protecting its intellectual property, running the office, and managing employees.

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And that doesn’t leave much time for creating the marketing strategy, which is something she really loves to do.

It’s not like Ms. Karby can lean on her two co-founders, Mel Finkleman and Sara Shears, to pick up much of the slack. Ms. Finkleman has a newborn baby at home and is down to 20 hours a week, and Ms. Shears has her hands full managing the Ugi studio they’ve just opened.

So the high-stress challenge of running their startup falls to Ms. Karby. Exhausted, she is now recommending to her partners that they hire a CEO.

I think it’s natural to want a saviour to swoop in when things get hard, but I also think it would be one of the biggest mistakes Ugi could make.

I know how Ms. Karby feels.

In four instances, I’ve tried to bring in a CEO-level individual to run a company of mine because I was beginning to find the details overwhelming.

In each case, my senior hires were happy to debate strategy with me, but never actually did much of the nitty-gritty work I was trying to relieve myself of.

Each time, I eventually ended up regretting my decision to try to fix all of our problems with one big hire.

The three Ugi founders all work in the business and have strong views on the vision of the company. Ugi is still very much a startup with strategic decisions to make, like whether or not to open a retail location or produce an infomercial, that are being debated by the partners in real time.

In my opinion, a CEO would never have the kind of freedom he or she would need to actually run Ugi and instead would spend his or her time appeasing the partners. Maybe a CEO would make sense when the company strategy is not flip-flopping weekly, but right now they need to battle through the next few years on their own.

I think it is natural to try and want to fix all of your problems with one senior hire but it is unlikely that the Ugi founders would find someone who could run Ugi with as much passion and knowledge as they have. There is simply no replacement for the survival instincts of entrepreneurs who have put everything on the line.

Instead of hiring a CEO, my suggestion to the Ugi team is to follow a four-step process for hiring from the bottom up:

Step 1: List your tasks

Write up a list of all of the things you do in a week. Document everything, from taking out the garbage to troubleshooting your finance system to selling customers.

Step 2: Stack rank for competency

Next, reorder the list with the jobs that you are best at on top, and the things you are least competent at on the bottom.

Step 3: Create discrete job descriptions

Take the tasks at the bottom of your list and write up mini job descriptions for each discrete task and the competencies needed to complete them.

Step 4: Hire from the bottom up

Instead of hiring a CEO, focus on hiring someone to handle the chore you are least competent at performing. Then move to the second least competent task and so on until what’s left in your job description are things you’re good at and enjoy.

Each task on your list will not require a full-time employee. Oftentimes, especially for a new company, the lowest-ranked tasks can be managed through a freelance relationship, contract employee or hourly worker.

At Ugi, Ms. Karby feels out of her depth dealing with the logistics of being a manufacturer. If she broke the tasks down, she would find there are consultants she could hire to oversee a Chinese production run. There are other freelancers that Ugi could hire on an hourly basis who specialize in managing the logistics of shipping from China to the United States.

When you look at each job on your list individually, they become more manageable. It’s only when you take a founder’s list of tasks as a whole that you contemplate delegating your entire role to a hypothetical saviour who is almost always just a fantasy.

Special to The Globe and Mail

John Warrillow is a writer, speaker and angel investor in a number of start-up companies. You can download a free chapter of his new book, Built to Sell: Creating a Business That Can Thrive Without You.

Join The Globe’s Small Business LinkedIn group to network with other entrepreneurs and to discuss topical issues: http://linkd.in/jWWdzT

Follow on Twitter: @JohnWarrillow

 

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