„The carrier of money is always the salesman!“
Pavel Klein is, as he calls himself, a broadband mentor, otherwise also a business coach, crisis manager and the author of the video podcast In the Chair of Business. He is also a fisherman and hunter. He handles all these positions with his left back. He has been gaining experience in business for over 30 years and it doesn't look like he's going to stop. He has experience as an employee and as an entrepreneur.
He has worked his way through various positions and now works mainly on helping business owners with their management. He puts together management for companies to relieve them, help them grow, or put the brakes on their downfall. He pulls capable people out of companies and puts them in middle and upper management. He teaches them how to improve internal processes in times of prosperity and how to prepare for and manage periods of crisis or stagnation.
Paul says the business owner should remain a visionary and aggregator. He should build up the executives under him. Many business owners want to keep an eye on everything, but as the company grows, we just can't keep track of everything. In the Ignition, we'll discuss...
🔸 How to start building your management? And which positions to fill first?
🔸 Do people deserve a second chance?
🔸 How not to stand in the way of your own management?
🔸 What if it turns out that family members are not up to management?
🔸 How to explain that it is necessary to prepare for a crisis in times of prosperity?
PŘEPIS ROZHOVORU
Martin Hurych
Hello. I'm Martin Hurych and this is Zažeh. Today's Ignition will be with Pavel Klein. Hello, Paul.
Pavel Klein
Hello, Martin.
Introducing
Martin Hurych
Pavel is, and I liked this very much, a broadband mentor, lecturer, coach, founder of the "In the Chair of Business" project, an avid hunter, fisherman and lover of powerful cars. What have I forgotten?
Pavel Klein
That's all, actually. I fish in the morning, drive during the day, and hunt in the evening. Then I look in vain for a place to work.
Martin Hurych
Anyway, you're a very active person. Let's have a brief introduction. Your CV is very comprehensive in terms of what we will discuss later. Today's topic will be working with people, working with management, building management, and potentially replacing people in management. So that the listener and the viewer always have a sense of what angle you're commenting from, come tell us what you've done professionally in your life.
Pavel Klein
Professionally, I have experienced a lot in all positions. I've climbed up the ranks to what I consider the highest positions. Not to the position of CEO of the globe, I didn't really audition there, there are others for that, of which there are plenty. I've been gaining experience for 30 years, whether as an employee or an entrepreneur. Most of the time I was simultaneously employed and running a business. It was kind of a back door. When I was employed somewhere and a business took off, I tried to stay that way as long as possible before I went into private business. I was always making a reserve. I like reserves. At my age, it may seem like they've been used up, but I still think I have some reserves. So I have experienced all kinds of positions and now I have been coaching and mentoring for many years. I'm a doctor in that company. An amateur doctor, a lay person, sometimes even a pathologist if the company is simply no longer salvageable and the owner doesn't want to admit it. I work with management to get the owner relieved and either get the company going, or save it, or sustain it, and coax rapid growth. I have several clients now who are in a growth phase but don't have management built up. And as they grow rapidly, they suddenly stop and start to fall precipitously because they don't have anyone to grab their back and keep going.
How to start building your management? How to start letting go of the reins?
Martin Hurych
This is a great donkey's bridge to what I would like to discuss with you today, and if possible, the more practical the better. I have a preview of a particular company, which I won't name here, of course. It is doing very well despite COVID and everything that is currently happening. The company is growing in the tens of percentages a year. So far it is run by the immediate family and as the company grows there is no chance to oversee everything. What now? How do you start to build management and actually start to slowly let go of the reins? Because up until now, I knew everything about the company and the general assumption is that if I start letting go of the reins of management, I will lose track of my own company. What do you think?
Pavel Klein
The presumption is only general. First of all, the most important thing is the decision and a little overcoming of one's own ego. Suddenly I won't be in complete control of everything, but if I don't, the company loses its growth potential. The owner is supposed to be the aggregator and the visionary that drives the company forward, but the executive should build the executive under himself. That's a pretty common breaking point because the owner has a hard time accepting that he's supposed to take charge and make decisions for someone. It's such a stuck state. Let me give you an example. I was invited by a company that was doing well but felt it had some reserves. They gave me six months to get my bearings. Half a year to get my bearings, zero responsibility, paid, excellent. In 14 days I found out the company was run on a one man show system. The owner wanted to know everything, which was impossible because the company had 100 people and he could no longer know every detail. My only advice was to go on vacation, I would build them a management team and they would have 3 months to decide if it was functional or not. It succeeded, but it was cruel. Apart from firing people I was allowed to all- well, so I changed everything from marketing to management selection. They went for it because they saw that they were stagnant, but there was some potential. In 14 days, I uncovered that potential.
How to select management candidates correctly?
Martin Hurych
So, in the better option, they decide to build their management and continue to scale, grow, expand and grow the company. Given the shortage of people on the market, how do you choose good candidates for management? Should we go inside the firm, should we go outside the firm, what method to use to select people?
Pavel Klein
The last case was that I was selecting top management in such a way that I was using one agency to pull capable people out of companies that were healthy. They were creative people and they wanted to keep going. I picked 20 candidates, and the ones I felt weren't fulfilled, I pulled out. Because finding top management on the open market is almost impossible. Every good manager today has a job. So I pulled them from a company that I knew was very strong.
Which positions should be filled first?
Martin Hurych
For my target audience, when you say middle management or management, they often start to get pimples because their first idea is that it's a bunch of people and it's going to be very expensive. Come tell me from your experience, in which sequence you would start to fill positions and in which sequence you would let the owner leave.
Pavel Klein
Take a smaller or medium-sized company, because that's where the need to hire management usually starts. Who feeds the company? It's the salesperson. So the first person I pick is the salesperson. It's not a problem to produce almost anything, it's a problem to sell it. The salesman brings money into the company. So at the first interview, I break him down into atoms. I look for his stress level and his ability level by putting myself in the position of his partner. I'm a nice, kind, stupid uncle with a hat who doesn't understand anything, now offer me a product. Then I'm an egocentric who knows everything, knows everything, is the best in the world, and I'm waiting for reactions to work with me. He doesn't have to have the right answers to everything to pass this test. I'm looking for the logic of his thinking, how he's trying to get to me, how he's trying to sell me. When I have my trader, I give him the first, let's say, easier actions that I have already made myself and I watch his growth. It's dynamic, it has to be fast, because 2 years is a very long time to build management. Management has to be very fast in action. As soon as I know that it's functional, I give it bigger and bigger actions, but I still keep an eye on it. Then I can slowly move him out and suddenly I have a sales director. Second is the CFO, who knows how to work with the money. He or she can be the chief econnom at first and gradually get to the position of CFO. Suddenly I have a team of two key people. A salesman who carries the money and a CFO who knows how to work with it.
Should the best salesman become a sales director?
Martin Hurych
I can think of one thing to say. You said I'd take a salesman, let him take the biggest contracts, then make him sales director. I don't have the best experience with that route, because-it often turns out that being a good salesman doesn't mean being a good sales director. And by turning the best salesman into a sales director, I often lose a third, 40% of the company's turnover. How do you watch out for that?
Pavel Klein
I agree with you completely. There is no one-size-fits-all guide. It's not math, it's working with these people. If I have a salesperson who is an element in the business, but he's not a systematist, he's not an analyst, he can't be a sales director, that's clear. I'll give an example from practice. The person was suffocated by administration, unable to do much, overwhelmed by spreadsheets and reports. I pulled him out of it, gave him a car and clients to try to go out into the field. Suddenly, the man lit up, he was happy- and he reports to me every day what he has managed to get for the contracts. He's gone from being a burdenby the administration. I know he's not the sales director, but he's the first-line salesman.
Do people deserve a second chance?
Martin Hurych
Based on this, would you recommend working more with people and giving them chances in other positions in the company? Because I usually see that once there is a bad salesperson, the company gets rid of him. I see very little in smaller, medium-sized companies, even family-owned companies, working with people's potential and willingness to work in positions they enjoy. Does this mean that you allow yourself to play chess with people in your consulting activities and look for a better place for them within the structure?
Pavel Klein
There aren't people in bad jobs, they're just poorly placed. At the client, we switched about 5 people between them after I interviewed them for a few hours to uncover their main potential. The first question was what they didn't like about the company. They were taken aback because they thought I was going to go immediately to the owner to squeal. But the conversation was confidential because I like to work with only one person, because then we understand and trust each other. Then I made an exit for the owner. Who would I put in what position, who would I cut back on administration, give more freedom, and who would I give more responsibility. And considering that I worked with the owner of the company like this for 2, 3 months and I haven't heard from him since then, I consider it a success that everything worked out. He got back to me with a thank you, but he never hired me again.
What positions to pursue?
Martin Hurych
That's what we have, a sales director and a finance director.
Pavel Klein
Then we come to production. Speaking of directors, it should always be the leader at the beginning. Director is a bit misleading. It makes everyone feel like a director. If we take a smaller and medium-sized company, I would call the manager the head of the operations department, for example. Because that's the one who runs the operation. That's the one who generates the product, the product, and who is responsible for it. So that's the third position that I usually recommend to clients when they're starting to build management. I use the more cautious "manager" because if we take a locksmith shop that we want to build middle management, the owner will deny it and say it's going to be a lot of money and they're not going to be skilled enough, etc. So gradually we'll get to that operations manager. Then there's HR. I try to use external HR people. There's no telling how many employees are needed. The HR person is supposed to have a general overview. Once he's firmly embedded in the company, he gets blinders on. He's focused only on his field, he's great at doing questionnaires for people, but I don't think an HR person is necessary in a medium-sized company. The guy who handles payroll is a completely different person. I would outsource the HR person myself, but I wouldn't put him in middle management at all if we're talking about a company of around 100 people. In my opinion, it's unnecessary and there are blinders on because the company will absorb him and he doesn't have a broad scope. Then if the owner decides to go another route and the HR person works in a locksmith company, he will be hard pressed to find a top solar technician.
Martin Hurych
There was a time when there were arguments about whether the number 2 behind the owner was the head of human resources or the head of finance. Clearly you don't profess this.
Pavel Klein
Definitely not. Again, I'll go back to who feeds the company, the businessman and the financier runs the finances. Those are the two key people for me. The head of human resources is a hard position for me to grasp. I'm not saying it shouldn't be, it certainly is in larger companies, but I still see the limitation of their skills there to the segment they operate in. If I want to diversify my income, asking my HR person to find me completely different people than they've been looking for, they get a little lost.
Martin Hurych
What to say to the more active ones, especially the younger ones, who have a typical software studio and say they are tired of it, that they need to go to the Bahamas? They hire a CEO who will do it all for them and even come up with a strategy. What do you say to these people?
Pavel Klein
The IT industry is very specific in this respect. There it's all in the head and if the owner wants to go to the Bahamas, he has to be aware that he has to be connected online all the time. In the IT industry in particular, everything is extremely fast-paced and he has to react extremely quickly. So I can pick a CEO who will deal with the day-to-day operations, the day-to-day work, but I wouldn't dare go to the Bahamas and leave everything up to him. I can't afford to do that just because I make a lot of money, and I can't expect the company to grow on its own. I'd be very careful. Anyone who doesn't move ahead in IT, which is extremely fast, and stay put is actually failing. Everyone else in IT is growing alongside him. As soon as I stand still, everyone immediately overtakes me. So putting a CEO behind me is possible if I want to take a risk and can afford to lose a lot of money, but in an IT company it's not the best thing to do.
Will the CEO solve the company strategy for me? Should he?
Martin Hurych
One thing that always strikes me about this. I don't want to say that hiring a CEO is a bad thing, I think it's a lot of phasing. But I often see owners give up on their company in the sense of letting the CEO figure out the strategy, since they don't know what to do with it themselves. I think that's very dangerous because once the CEO takes your company somewhere you don't want it to go, then it's too late. Are you experiencing something similar?
Pavel Klein
I'm meeting. At this point, the owner loses credit and respect with his CEO, who tells himself that the owner doesn't know any better, that he's smarter, and can take the business from him. I don't mean in that company, I mean in some other company. That's how I raise my competitor. So as the owner, I must not look stupid, that I don't know how to go on, and that the CEO is my savior. Because then two things happen. The CEO wants more money, he wants more power. and there's a risk that they'll build their own business because the owner doesn't know which way to go. Owners are supposed to still have influence, still have oversight, and pretend to the CEO that they know when they don't.
How not to stand in the way of your own management?
Martin Hurych
I have management. I've been to everything so far, I don't want to let go. I still tend to run a lot of short-term management. What do I do to keep my management from getting in the way?
Pavel Klein
When there's a management meeting and everyone's silent, it's wrong. When they argue, when they have a constructive discussion, it works. Sometimes I find myself talking to myself because nobody is listening. Sometimes I even argue with myself. To avoid getting in management's way, I worked by letting them come up with their own ideas. I told them I knew how I would do it, but I wanted to hear their solutions. That way I didn't lose face, I could pick the best ideas from everyone and then make them my own as a big boss.
What if it turns out that family members are not up to management?
Martin Hurych
I have built the management, but because we are 2, 3 co-owners, our families are in the management. They looked great, but somehow they're not up to it. What now?
Pavel Klein
Family management works to a limited extent. I don't know of many companies where it is nonconflicting. On the surface we are a family company, everything works, but in reality we have internal conflicts. It's no longer relaxed Sunday lunches with the family, there are conflicts carried over from work. For companies that get into this situation, I recommend hiring management. Stay on the decision-making bodies, the board of directors, the supervisory boards, but stop being actionoriented in the management of the company. Because a company is only as big as the owner. Now imagine there's a family where everybody wants to be in charge, they want to outgrow each other and they start fighting amongst themselves. Who's gonna take it? The company takes it. It's not just about direct descendants, but also about their dear halves. Because they say that someone in the family is making less but taking more, and it starts a kind of domestic teasing that can then result in a big mismatch. As Mr Werich says, everyone enters a marriage with their own opinion, only to have theirs take over.
What if it turns out that family members are not up to management?
Martin Hurych
We used to call this an exchange of views with your own boss in the corporation. On the other hand, if I realise, even as one of the co-owners, that a family member is not doing their job and they can't afford it, what then? Because it really eats away at the company from the inside.
Pavel Klein
Move him to another position. I was dealing with a company where the son, who wasn't cut out for it, was going to become the manager of part of the company. After discussion with the owner, he was moved to the warehouse manager position. This fulfilled a sort of will to keep him in the company, but to make him understand that he could not go any further on his own. It's best if the man realizes that himself. Suddenly everyone was happy. My son still works in the company, he doesn't have a bad salary, but he doesn't have a management position. I did many hours of personal coaching with him and had to tell the owner bluntly that he was not a guy who was capable of running the company. He had too high a social sense and couldn't assert himself, he wasn't an authority figure.
Can an owner be a subordinate of his/her own CEO / director?
Martin Hurych
I can think of one quite common situation in companies where I am present. I'm the owner and I don't want to be the CEO. I enjoy some part of the company, technology, finance, law, business maybe, but I don't want to run the whole thing. I don't feel up to it, I don't have the experience. How do I work with that dual role where I'm the owner of the company in the morning and then I'm the subordinate of my own CEO in the afternoon?
Pavel Klein
That's tough. Again, it's about the ego and the intellect of the owner. But it can be comfortable from one side, I'll leave it. You take care of the invoices, manage the people, and I'll be here in my little cubicle exploring, doing my own thing and being happy. That's the way it works. I'll give you an example from practice. One of the owners solved this problem. We made a deal. The company built him a big workshop, which he managed himself, he was there alone, then he hired one person, another person, and stopped talking in the management of the company. He realized early on that he was happy there. He had it as a hobby, and at the same time it made money for the company, and he was free from the worries of active management. That's where it worked.
Martin Hurych
I see another, perhaps far greater, mischief there. If the owners have the self-reflection to admit that they can't do it because they have pushed the company to its limits, and hire someone, it can work very well. What I see as the bigger potential threat is that if I speak to you as a business owner from the position of shop boss, the employee will always think of me as his boss anyway. I'm still the owner of the company.
Pavel Klein
He will, I guess we can't get rid of that. It's quite logical, because people have self-defense mechanisms. Even if I, as a business owner, go to the turners and say I'm going to work on the lathe now, they won't treat me as their equal. There's always going to be that distance and they're going to treat me like a business owner. Even if I try my best to facilitate, I won't succeed because I'm a different social class. When-if I'm accepting, they won't go out for a beer with me anymore because they'll be afraid to say anything. It creates a stuffy atmosphere in that segment. Even if I have the same money as them, I'll get a job after work. I'll get in my S-Class and drive home happily, while they get in the Octavia and drive home. It's just a different social class. It doesn't do any good, it breaks up the collective. Therefore, the owner should find a different line of work than he has, so that he does not have to be among the people as an employee. A hobby outside the business that can bring benefits. It can be anything. If a person enjoys, podcasts, starts making podcasts, enjoys marketing, in short, starts doing something that he or she has always been interested in and enjoyed. I recommend that rather than implementing it into your employee structures.
Martin Hurych
I often see a lot of owners in my bubble dreading this move because they are afraid of having nothing to do. I, on the other hand, say that being in quotes just an owner is a great thing because I have time to strategize, to grow the business, to build directions that I was interested in that I never had time for before. It takes a while for the person in question to shift gears, but then I see that those owners are much happier because they've finally started doing again what they went into business to do. Do you have that going on?
Pavel Klein
It's hard to disagree with you when I agree with you. Again, I will give an example from practice. The owner of a company was completely beaten by the normal agenda, was used to growth and suddenly stopped. He was horrified that the company was stagnant, that it wasn't growing like it does every year. The business was good, the market position was excellent, but they weren't growing. At the consultation, my first question was what they were doing and how much enterprise software they were using. The maji- tel prepared a big list and said they use 4 software and they rewrite from one to another. He he has to check everything to make sure it's transcribed correctly. So I asked him when he had time to file if he had to check and rewrite things all the time. When he's running a business, when he has time to develop, when he has time to work with people, to use their potential. That's why the company was stagnant.
Is business a passage through a black tunnel?
Martin Hurych
Now, by the way, we've described the business as going through a long black tunnel, where I enjoy it at the beginning and at the end when I come out of it again. That's certainly not it, is it?
Pavel Klein
Definitely not. In business, there are phases of exhilaration, sobering up, dread, falling down and then back again. That's how I feel, that's how I often feel with my clients. It's just a matter of keeping the crash from going below zero, keeping it above zero all the time. When we look at the world's business people, who we would say can never make a mistake, suddenly we find that they have made a loss there and they have made a loss there, it's just logical. It's nothing that should blow us away. If it blows a person away the first time, they shouldn't continue in business, they shouldn't try.
How to explain that it is necessary to prepare for a crisis in times of well-being?
Martin Hurych
You are, among other things, a crisis manager. I deliberately wanted to avoid it today because there have been a lot of crises. But one thing caught my eye. You nailed it. How do you explain to the owner that if he's is doing best, so he must save up his piggy bank to get through the black valley, which will come in a year, in two, in ten hundred, with as little loss as possible?
Pavel Klein
I explain it with personal stories from my business. I will say absolutely unequivocally that it happened to me and next time I will take precautions to make sure it doesn't happen again. In this day and age, it is important to preserve as many assets as possible, to invest prudently, because no one knows what can happen. So I explain it with my own examples, because that's the best way to understand it. It's not something I've read in books, but I'll give a specific case. I had one customer and if I hadn't won the tender with him, I would have fallen.
Martin Hurych
Do you feel it's a winnable fight? Because to me it often seems like with my three-year-old son, who does not need to be told not to touch the hot stove, because he will only understand when he touches the stove. Isn't that how it is with management in terms of preparing for a crisis? Because I often have this experience.
Pavel Klein
That may be so. I always tell them right away that it's bound to happen. So far, everyone who has told me they have a linear business, and they've been smart, they've sold at the highest point and walked away from it. Because they knew, they suspected, they had information that something was going to happen. So they grew up fast and sold fast. These are the companies that can make a huge amount of capital in six months, a year, just IT these days. But the ma- ers don't like to hear that, that they should now be ripping their mouths off, even though their livelihood may not be affected. dard. I tell them to go find the reserves in the company now, to keep a crisis scenario in their drawer and the moment the first exclamation marks start to appear, they will start pulling readymade solutions out of the drawer. Now I'm not talking about money, I'm talking about solutions I can cross off. The first thing I don't cut is marketing, still keeping the image of a successful company and so on.
Martin Hurych
That's very hard on the psyche. Once I go through the crisis, he finally wants to start going fishing and have peace of mind, and at that exact moment I have to deal with what's coming and sweat it out. Anyway, is there anything in terms of building management that we've covered in your experience?
Pavel Klein
That's what business is all about. Business is not a walk in the park. It's not for everyone. It takes strength, character, courage and common sense. Not everyone can do it. We didn't forget anything about the narrowest team. After that, it's about how that manager delegates down. That's the spider web that's formed and that's where I, as the owner, maintain control. I take the example of the sales director. He is responsible for everything, he chooses his own people. I don't say anything to him until he picks a new salesperson, who I then interview. I'm still the one with veto power. I'll accept, I won't. If I don't like the person, but he's chosen by the general manager and the center's performance starts to fall, he's responsible. Because I work as a personal coach and I can talk to these people about multiple things, I'll let them know up front how I feel about that person. The CEO may not perceive it, as he may be dazzled by the salesperson's presentation. He was selling for hundreds of millions, and in the end it was discovered that it was hundreds of millions in turnover, but the profit was in miles. Nowadays I see salesmen being paid on turnover and the owners don't care that maybe they don't have paid invoices. I have black numbers on my profit and loss account, my closing statement, but I don't have the money because they simply haven't paid me. It's a small mistake that's gonna kill me.
Martin Hurych
As far as management working with lower management or delegating, let me use a great donkey's bridge for our networking that we agreed on. Paul will be coming to the networking, the date of which I can't remember right now, but it will be in the description of this video or in the descriptions of the podcast ap- lika- tions. There we'll loosely follow up on what we've discussed here today. And you'll be able to ask both of us, but especially Paul, because Paul is going to be the star of the networking, questions about things that maybe weren't entirely clear to you, or things that you're interested in and need clarification on. Right?
Pavel Klein
It's not, because I definitely don't consider myself a star. I just make a living with my mouth because I can't do anything with my hands. But of course I look forward to seeing everyone who comes. I'm looking forward to the questions and I'm looking forward to meeting you.
Contact
Martin Hurych
That makes two of us. In the meantime, where can we find you?
Pavel Klein
You can find me in the project "In the chair of business", where I make videocasts, record one man shows, i.e. my experiences from real business, from real life. That's my biggest platform right now. You won't find me on the air yet because I've gone a little overboard with the work. I'm responsible to clients because I don't want to lose their trust. And if a client has a problem or needs quick advice, I have to be available. So you won't find me fishing. You might find me in the woods at night, in the rocks, but mostly in the "In the Chair of Business" project. I've done a bunch of episodes with people who are interesting. It's not a product video, we're not talking about me selling a pencil that can do incredible things, but I'm talking to people who are interesting and at the same time I'm passing on my experiences. Personally, you can find me somewhere between Brno, Ostrava, Prague, Budejovice, Česká Lípa. I rotate my clients somewhere in there. Or I've newly opened a consulting section in the "In the Chair of Business". I called it, of course, self-servingly, "Consultations with Pavel Klein". It's not just me creating this project anymore, there's a whole team of people involved. I've started online consultation hours there, which, according to the calendar, usually start at 7 pm and end at 11 pm. You can find me live there and I'd be happy to welcome anyone who's interested. Otherwise, I travel all over the country, with most of my clients in Prague now.
Martin Hurych
All this can be found on the vkreslebyznysu.cz website. Thank you for your visit Pavle and I look forward to seeing you on the net-working again.
Pavel Klein
I will be looking forward to you, I will be looking forward especially to the audience and listeners, and I would like to invite you to Martin Hurych. I'll be the only one there to talk.
Martin Hurych
Thank you. Thank you. So that was Ignition with Pavel Klein. Paul's already said everything, so all I have to do is lightly recap. The invitation to the networking is on my website www.martinhurych.com under "Networking". If we have sparked you to attend, we would love to see you both there. If you're not planning on coming, but still want to keep in touch with Zazen and other episodes, be sure to subscribe on YouTube or your favorite podcast app. All I can do is say thank you, wish you success and keep my fingers crossed, thanks