BONHAM AND HINCHEY: To think like a CEO, focus on bottom line

Saturday, November 3, 2007

"Most discussions of decision- making assume that only senior executives make decisions or that only senior executives' decisions matter. This is a dangerous mistake."

We recently received a copy of Think Like a CEO (Flow Publishing) by Mark Kuta Jr., a Denver-based business consultant. Intrigued by the title, we wondered how such thinking could apply to the business of sports, and we spoke with Kuta about it this week.

The book's thesis is this: To think like a CEO, you have to realize the importance of the financial approach that dominates the mind-set of most businesses. These mind-sets may vary in their strategies and tactics, but their overall objective is the same: generating profits for their organizations.

To help businesspeople get inside the head of their C-level prospects, Kuta recommends they become fluent in the language of business, including learning how to read and understand a balance sheet; that they position their sales appeals toward their prospects' profit strategies; and that they develop a compelling case as to how their products or services will impact those strategies. "When you're selling to senior-level executives," Kuta says, "you've got to align yourself with their profit strategies."

The book has a strong bias toward sales, especially those that entail a long sale cycle (construction jobs, software sales, consulting, etc.) In fact, Kuta calls his approach The Wall Street Selling Methodology, but he insists his approach is applicable to selling to the CEO of Boeing or the owner of a corner store.

"It comes down to understanding the financial impacts on the companies. Whether you're manufacturing bowling balls or marketing to a team, you have to understand the fundamentals."

And what about those who don't present to CEOs? Kuta says "whether you're involved in developing or managing projects or requesting resources, you need to present your case in a manner that they're going to care about. I like to remind people that no matter what their position within their company, they are always on commission!"

"Think in terms of return on investment - always. If you're doing a mailing, for example, think in terms of the return it will generate in fans, or dollars for your organization."

Kuta's book has a few sports business examples, notably the American Football League's successful encroachment on the National Football League's territory in the 1960s and a look at the Boston Celtics' balance sheet. He also has an illustrative table on the dramatic rise in team and marquee player salaries and how it has affected the economics of sports.

When we asked how his approach would help those seeking to do business with sports entities, he replied, "Pull some of the 10k's of publicly traded sports teams. You'll see how they spend and make their money and how the industry is changing, especially with labor costs, overhead, etc."

Kuta praised Kroenke Sports Enterprises as an entity that has embodied the think-like-a-CEO mentality.

"They took an asset, the Pepsi Center, and developed ways to maximize the revenue-generating potential through event attendance, parking and concessions.

The Bonham Line: Thinking like a CEO requires that we look at things from the perspective of our customers, prospects and clients - and align with their needs. It's an attitude that employees at every level can adopt. We may not all be CEOs but all of us can think like one. For further information go to thinklike aceo.com.

Peter Drucker Dean Bonham is CEO and Don Hinchey is VP of communications for The Bonham Group, a Denver-based sports and entertainment marketing firm. Send your comments to dhinchey@bonham.com.