We have all heard the term, “The Sacred Cow”. Here is how I apply it to the business world… I am in my 28th year of working as a professional after graduating from college. I have been privileged to work in large private companies, small private companies, and large publicly traded companies. In addition, I have made the transition from accounting/finance to operations. I have also consulted for companies in a variety of industries, size, and complexity in the last 6 years. And I run into this one thing constantly – the lack of succession planning.
The Sacred Cow
After all these years and great experiences, I still see companies that have “Sacred Cows”. That is that employee who has been in the company 20 years and knows everything and everyone. He has outlived reductions in force, down turns in the economy, is still there after 2 new ownership changes. It’s that guy no one can touch because he is a “Sacred Cow”.
Unfortunately, these Sacred Cows are oftentimes not always that good. They come with some baggage. I have seen many of these Sacred Cows. Oftentimes, they are bullies. They are the ones that are often insubordinate. Although they are the ones that get stuff done, it is done at the cost of moral – always threatening the company that on their next temper tantrum they are “quitting”. Usually, they are overpaid.
Perpetual Life of the Business
A business is created within the confines of a legal entity mostly for continuity of perpetual life. That is one of the main characteristics of a Corporation. Therefore, the business continues no matter who is CEO, CFO, or COO or if there any changes in shareholders. But the business will continue because it “has a life of its own”. As a matter of fact, that is also how you add value to the business. If that is the case, then how do companies allow Sacred Cows to exist? I see it over and over again. Owners of companies say something like…
“If we terminate him, then how are is going to run the operation?”
“But he is our key sales person and he knows all the clients personally.”
“No one else knows what he knows.”
If your business faces any of these situations, then it is your own fault. No business should be built around a single or two key people. It’s a lack of succession planning! Some exceptions to this rule are small startups or pre-revenue entrepreneurial companies.
Examples of a Sacred Cow
I have an example that I lived through in my career. (More stories available upon request).
Petrochemical Company – The Lead Supervisor
There is a petrochemical company that had been around over 20 years and was very successful at different levels. The operators worked on three different shifts with each shift having their own supervisor. But the “Lead Supervisor” – the one that all operators and supervisors reported to – was a gentlemen that had been in that position many years. He had a personal relationship with the President and his wife. He was also the one that made hiring decisions out in the plant and control room. Most subordinates feared him. And management played his game because he “knew where every valve was”.
This guy was the Sacred Cow, but he was nothing more than a prima donna bully. There were many other HR issues, but you get the picture.
Since I am one that believes that no company should depend heavily on one person and the company should never be held hostage, I terminated this Sacred Cow the day I was promoted to President of the organization. I terminated him for being insubordinate and for holding the company hostage with demands of more pay or he would quit. I also terminated him for being a cancer in the organization.
Shock waves throughout the organization, rumors of failure spread, and we are going down in everyone’s mind. In reality, we did not skip a beat. It has been 10 years, and I hear the company is doing great.
Client – Fear of Sacred Cow
I recently saw a large client with a similar issue. Now, we are dealing with a management team that fears the Sacred Cow. It is the fault of prior management for allowing this to happen. As the acting financial leader of the company, I am putting up mechanisms to prevent the development of future Sacred Cows.
Lack of Succession Planning
Avoid the Sacred Cow (Lack of Succession Planning)
So how do you avoid these pitfalls? There are three things to focus on as well as steps to avoid the sacred cow.
Sales Person That Has All the Key Customers
One example of a Sacred Cow in your business is the sales person that has all the key customers. First, insist that you attend some key customer meetings. You have every right to ask for detailed documentation of the key customers, relationships, meetings, and the pipeline of business. Finally, develop a relationship with those key customers. Do not let one person hold all the cards.
Key Person in Field Runs the Operation
Another example of a Sacred Cow is the key person in the field that runs the operation. Make sure you have a number 2 person that is just as good; they just don’t have the title… Yet. In addition, every key person in management should drive a succession plan. In order to have that happen, the company should have a succession plan in place for its leaders from the CEO on down. Someone can have direct reports under the Sacred Cow in operations. Furthermore, this does not mean that the Sacred Cow controls everything. Have the subordinates that run key areas document their day-to-day functions. Finally, develop a relationship with those key subordinates. Talk to them about training and potentially moving into bigger roles in the future.
The Sacred CFO Cow
The last example is the Sacred CFO Cow. Have a strong Controller that reports to the CFO. Have the CFO document key functions. In addition, the CEO should know those key contacts – legal, banker, insurance, etc. Develop a strong team underneath the CFO to prevent the CFO from becoming the Sacred CFO Cow. It never hurts to continue networking and meet professionals that you may want to hire one day.
Do Not Allow Sacred Cows to Form
The objective is to not allow Sacred Cows to be born in the first place. We know that they take control and abuse it. But if you do have Sacred Cows in your organization, then you need to deal with it. Build out the number 2 and number 3 person. Every company should also build a succession plan for key employees. And most importantly, do not allow your company to be held hostage by anyone due lack of succession planning! Be the trusted advisor your CEO needs and access the How to be a Wingman guide.
Access your Projections Execution Plan in SCFO Lab. The step-by-step plan to get ahead of your cash flow.
Click here to access your Execution Plan. Not a Lab Member?