{"id":4751,"date":"2013-02-08T12:00:10","date_gmt":"2013-02-08T12:00:10","guid":{"rendered":"http:\/\/www.markwilson.co.uk\/blog\/?p=4751"},"modified":"2013-02-01T23:50:30","modified_gmt":"2013-02-01T23:50:30","slug":"how-to-be-a-ceo-in-10-minutes","status":"publish","type":"post","link":"https:\/\/www.markwilson.co.uk\/blog\/2013\/02\/how-to-be-a-ceo-in-10-minutes.htm","title":{"rendered":"How to be a CEO, in 10 minutes"},"content":{"rendered":"<p><a href=\"http:\/\/www.flickr.com\/photos\/mukumbura\/4052671706\/\" title=\"Look after the pennies and the pounds will look after themselves by Mukumbura, on Flickr\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" src=\"https:\/\/i0.wp.com\/farm3.staticflickr.com\/2680\/4052671706_914d50505b_m.jpg?resize=240%2C192\" width=\"240\" height=\"192\" alt=\"Look after the pennies and the pounds will look after themselves\" class=\"alignleft\" \/><\/a>Recently, I was listening to a CEO give a fantastic\u00a0explanation\u00a0of his job (described as &#8220;how to be a CEO in about 10 minutes &#8211; some free of charge advice&#8221;). Of course, it&#8217;s a massive over-simplification* but, fundamentally, this is what business is about. \u00a0I&#8217;ve left out all of the juicy metrics &#8211; they were confidential &#8211; and I&#8217;m not naming the CEO either but I thought it would be interesting to share the basics, particularly if, like me, you have no formal business qualifications&#8230;<\/p>\n<p>If you run a company &#8211; it&#8217;s a good idea to have a strategy. Often, that strategy boils down to three things:<\/p>\n<ol>\n<li>Run the company properly<\/li>\n<li>Grow the company<\/li>\n<li>Prepare for the future<\/li>\n<\/ol>\n<p>Whilst all three principles need to be applied, 1. needs to be in place before you can focus on 2. and 3., so let&#8217;s look at &#8220;running the company properly&#8221;.<\/p>\n<p>There are three important metrics to consider:<\/p>\n<ul>\n<li>Gross margin<\/li>\n<li>Operating expenditure<\/li>\n<li>Operating profit<\/li>\n<\/ul>\n<p>We&#8217;re all in business to make money (or generate value in another form &#8211; which generally involves raising funds along the way). Gross margin is about customers allowing companies to charge more for a product or a service than it actually costs to create because the company adds value. The amount of margin that customers will allow depends on the types of products or services that are sold &#8211; and some products rely on high volume sales with low margins, whilst others are highly profitable in themselves because they attract a premium price (e.g. if they are in short supply). \u00a0Even if you don&#8217;t know what the margins are, it&#8217;s pretty easy to see which companies are charging a premium and which are not.<\/p>\n<p>So that&#8217;s gross margin. \u00a0The next thing to consider is operating expenditure (OpEx). \u00a0This is the overhead of running a company: premises, people, etc. \u00a0Reducing OpEx is about reducing overheads &#8211; and if you want to know if you are an overhead, consider whether your presence in the workplace has a direct impact on customers. \u00a0If it doesn&#8217;t, then you&#8217;re an overhead&#8230;<\/p>\n<p>You can&#8217;t run a company with zero OpEx, but it needs to be appropriate and under control.<\/p>\n<p>Gross Margin minus OpEx equals operating profit &#8211; and I said earlier that, generally, we are in business to make a profit.<\/p>\n<p>Now, profit is all well and good, but companies need cash in order to function &#8211; and a company&#8217;s cashflow is vital in order to be able to buy materials (to create products and services) and to allocate money for capital expenditure (CapEx) like new equipment and other investments in\u00a0growing\u00a0the company (e.g.\u00a0acquisitions). \u00a0Just like a current account, negative cashflow is not necessarily a problem, as long as the company can be recapitalised (e.g. by its shareholders), or borrow money from a financial services institution (e.g. an overdraft, or a loan). \u00a0At some point the intention is such that the incoming revenues are sufficient and the margin\/OpEx healthy enough that profits grow and cashflow turns positive. At that point, a company can return value to its shareholders, or invest for the future.<\/p>\n<p>So that&#8217;s how to run a company, with a little bit of growth in the mix too (principles like the <a href=\"http:\/\/hbr.org\/2008\/07\/putting-the-service-profit-chain-to-work\/ar\/1\">service-profit chain<\/a> can help too, linking profitability, customer loyalty, employee satisfaction and loyalty and productivity). With the basics in place and a good team on board, planning for the future is about vision &#8211;\u00a0recognising\u00a0upcoming challenges and finding new\u00a0opportunities (maybe even <a href=\"https:\/\/www.markwilson.co.uk\/blog\/2011\/08\/the-theory-of-disruptive-innovation-from-the-innovators-dilemma.htm\">some disruptive innovation<\/a>).<\/p>\n<p>&nbsp;<\/p>\n<p>* At least, I imagine it is &#8211; I&#8217;ve never been a CEO and don&#8217;t expect I will be in the near future either!<\/p>\n<p>Photo Credit: <a href=\"http:\/\/www.flickr.com\/photos\/11738433@N03\/4052671706\/\">Mukumbura<\/a> via <a href=\"http:\/\/compfight.com\">Compfight<\/a> (licensed under <a href=\"http:\/\/creativecommons.org\/licenses\/by-sa\/2.0\/\">Creative Commons<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recently, I was listening to a CEO give a fantastic\u00a0explanation\u00a0of his job (described as &#8220;how to be a CEO in about 10 minutes &#8211; some free of charge advice&#8221;). Of course, it&#8217;s a massive over-simplification* but, fundamentally, this is what business is about. \u00a0I&#8217;ve left out all of the juicy metrics &#8211; they were confidential &hellip; <a href=\"https:\/\/www.markwilson.co.uk\/blog\/2013\/02\/how-to-be-a-ceo-in-10-minutes.htm\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">How to be a CEO, in 10 minutes<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38],"tags":[],"class_list":["post-4751","post","type-post","status-publish","format-standard","hentry","category-inane-waffle"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to be a CEO, in 10 minutes - markwilson.it<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.markwilson.co.uk\/blog\/2013\/02\/how-to-be-a-ceo-in-10-minutes.htm\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to be a CEO, in 10 minutes - markwilson.it\" \/>\n<meta property=\"og:description\" content=\"Recently, I was listening to a CEO give a fantastic\u00a0explanation\u00a0of his job (described as &#8220;how to be a CEO in about 10 minutes &#8211; some free of charge advice&#8221;). Of course, it&#8217;s a massive over-simplification* but, fundamentally, this is what business is about. \u00a0I&#8217;ve left out all of the juicy metrics &#8211; they were confidential &hellip; Continue reading How to be a CEO, in 10 minutes\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.markwilson.co.uk\/blog\/2013\/02\/how-to-be-a-ceo-in-10-minutes.htm\" \/>\n<meta property=\"og:site_name\" content=\"markwilson.it\" \/>\n<meta property=\"article:published_time\" content=\"2013-02-08T12:00:10+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/farm3.staticflickr.com\/2680\/4052671706_914d50505b_m.jpg\" \/>\n<meta name=\"author\" content=\"Mark Wilson\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@markwilsonit\" \/>\n<meta name=\"twitter:site\" content=\"@markwilsonit\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark Wilson\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm\"},\"author\":{\"name\":\"Mark Wilson\",\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/#\\\/schema\\\/person\\\/98f61365e7c39d6be942174b8c4de468\"},\"headline\":\"How to be a CEO, in 10 minutes\",\"datePublished\":\"2013-02-08T12:00:10+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm\"},\"wordCount\":644,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/#\\\/schema\\\/person\\\/98f61365e7c39d6be942174b8c4de468\"},\"image\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#primaryimage\"},\"thumbnailUrl\":\"http:\\\/\\\/farm3.staticflickr.com\\\/2680\\\/4052671706_914d50505b_m.jpg\",\"articleSection\":[\"Waffle and randomness\"],\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm\",\"url\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm\",\"name\":\"How to be a CEO, in 10 minutes - markwilson.it\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#primaryimage\"},\"thumbnailUrl\":\"http:\\\/\\\/farm3.staticflickr.com\\\/2680\\\/4052671706_914d50505b_m.jpg\",\"datePublished\":\"2013-02-08T12:00:10+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#primaryimage\",\"url\":\"http:\\\/\\\/farm3.staticflickr.com\\\/2680\\\/4052671706_914d50505b_m.jpg\",\"contentUrl\":\"http:\\\/\\\/farm3.staticflickr.com\\\/2680\\\/4052671706_914d50505b_m.jpg\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/2013\\\/02\\\/how-to-be-a-ceo-in-10-minutes.htm#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How to be a CEO, in 10 minutes\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/#website\",\"url\":\"https:\\\/\\\/www.markwilson.co.uk\\\/blog\\\/\",\"name\":\"markwilson.it\",\"description\":\"get-info -class technology | write-output &gt; 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It was a fascinating talk and I hope Rob\u2026","rel":"","context":"In &quot;Technology&quot;","block_context":{"text":"Technology","link":"https:\/\/www.markwilson.co.uk\/blog\/topic\/technology"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3612,"url":"https:\/\/www.markwilson.co.uk\/blog\/2012\/02\/using-linkedin-as-a-b2b-social-media-platform-smwmecsocial-smwldn.htm","url_meta":{"origin":4751,"position":1},"title":"Using LinkedIn as a B2B social media platform (#smwmecsocial #smwldn)","author":"Mark Wilson","date":"Thursday 16 February 2012","format":false,"excerpt":"Yesterday, I wrote about an event I'd attended as part of Social Media Week London, hosted by MEC Global, looking at thought leadership and B2B social media. 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Until recently just a niche player in the personal computer marketplace, the company founded in 1976 by Steve Jobs and Steve Wozniak (Woz) is doing better now than ever - and that's nothing to do with\u2026","rel":"","context":"In \"Apple\"","block_context":{"text":"Apple","link":"https:\/\/www.markwilson.co.uk\/blog\/tag\/apple"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2395,"url":"https:\/\/www.markwilson.co.uk\/blog\/2011\/03\/why-the-consumerisation-of-it-is-nothing-to-do-with-ipads.htm","url_meta":{"origin":4751,"position":4},"title":"Why the consumerisation of IT is nothing to do with iPads","author":"Mark Wilson","date":"Tuesday 22 March 2011","format":false,"excerpt":"Last week, I wrote a post on the Fujitsu UK and Ireland CTO Blog about the need to adapt and evolve, or face extinction\u00a0(in an IT context).\u00a0 IT consumerisation was a key theme of that post and, the next evening, at my first London Cloud Camp, I found myself watching\u2026","rel":"","context":"In &quot;Technology&quot;","block_context":{"text":"Technology","link":"https:\/\/www.markwilson.co.uk\/blog\/topic\/technology"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4401,"url":"https:\/\/www.markwilson.co.uk\/blog\/2012\/10\/re-imagination-business-antony-mayfield-smwb2b.htm","url_meta":{"origin":4751,"position":5},"title":"Re-imagination and business: Antony Mayfield at #SMWB2B","author":"Mark Wilson","date":"Wednesday 3 October 2012","format":false,"excerpt":"Last week, I wrote about the first keynote speech at the fifth B2B Huddle, from Microsoft's Dave Coplin. 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