Situation: A mid-sized Company is more than three decades old. The challenges are modernizing operations and updating company culture to keep pace with customer expectations. They also need to diversify into new growth markets. Can they change the culture of the company without losing key people?
Let people know that you value them. Consistently express your appreciation for what they do for the company, and don’t blame them for not being perfect. For them to be willing to grow as company culture changes, they need to feel safe – to understand that a change in culture does not mean the loss of their job.
Give employees consistent face time. Ask questions and seek their solutions instead of proposing your own. Involve them through collaboration. Tolerate the fact that their solutions won’t be exactly like yours.
Pick your battles. Select what you want to change and conserve your emotional capital. Think about what’s important and what’s not before you intervene. Let minor issues slide as long as they don’t impair schedules or performance.
Maintain an open door to all levels of the company. However, when an employee comes in with an issue or complaint, defer judgment to their manager. Never undercut your managers.
Your most important strengths will be patience and understanding. Stay mindful that change can be threatening, particularly if employees find it hard to see the big picture. Keep your themes and messages simple and repeat them as often as necessary to keep everyone focused.
Situation: The CEO has regular lunches with staff to foster communication and sharing of information. In recent months few employees are attending these lunches. Also, a negative tone is beginning to pervade the office, though the situation seems to improve when the CEO is present. How would you address this situation?
Advice from the CEOs:
The immediate priority is to correctly diagnose the problem. Is this a question of the CEO’s energy or the team’s awareness of plans for the company? Is there something else going on of which the CEO is unaware?
Meet with employees. Have an open and frank discussion with them about the future of the company.
Meet with the most valuable employees first. Share hopes and vision for the business. Express appreciation for their contributions and discuss plans for their continued growth. Next, ask open-ended questions about the company and seek their input on how to improve it. Listen to what they have to say.
Next are borderline employees. Again, share the vision and appreciate their past and current contributions, but be honest about expectations for performance. Then ask the same open-ended questions that you asked the first group and listen.
For underperforming employees, again appreciate past and current contributions, but be clear that unless they substantially improve performance, future employment isn’t guaranteed. Ask the same open-ended questions asked of the other groups and listen.
Be patient. Don’t try to develop all the answers immediately. Listen and learn what drives employees – particularly keepers. Involve them in developing programs to drive the future.
Interview with Sanjay Sathe, President & CEO, RiseSmart.com
Situation: RiseSmart is in the process of building an inside sales program to complement their outside sales capabilities. What are the most important strategic components of an effective sales model?
In a marketing and sales system, marketing is the precursor to everything. If you can’t effectively deliver your message to your audience, you have no lead generation machine and sales must resort to cold calls.
In an online world, one of the key components of a marketing system is the email campaign, combined with tools for rapid and responsive follow-up.
In RiseSmart’s system, the inside sales team is primarily responsible for following up on leads. The team’s role is:
To qualify the prospect responding to our marketing efforts. Is this person the right buyer for their company? If not, who is?
Does the company have a budget for our services? If not, when will they?
Is this the right time? Do they have a current contract in place? Are they actively looking?
The most critical aspect of the inside sales rep’s role is to be an effective filter in collecting and passing data to the field sales force.
Many inside sales reps fail because their performance is measured on the number of calls made, not the quality of the calls or information gathered.
Our incentives for inside sales are based on the quality of data gathered and on the success of field sales in closing the leads they receive.
The effectiveness of outside sales really comes down to choosing the right people.
The 80/20 rule applies here. One out of five field sales reps hired is truly successful, one is marginal, and three don’t make it.
We hire based on experience selling to our target customer groups, subjective elements, and careful reference checks.
As CEO, I consider hiring good people the most important thing I do.
Interview with Sanjay Sathe, President & CEO, RiseSmart.com
Situation: RiseSmart’s top opportunities are to increase visibility and gain market share. What are the most important strategic components of an effective marketing program?
The best marketing plans don’t start with your company, product or service, They start with a focus on your customers, and the benefits you can deliver to them.
That means your first step should be to identify who your customers are.
This can be challenging in B2B businesses. For example, with RiseSmart’s outplacement solution, Transition Concierge, we have several possible customers: the HR department at the company seeking outplacement services; the CFO at these companies; the HR department at companies seeking good candidates; and the individuals who are going through outplacement and seeking new positions.
Each of these audiences has different objectives, priorities and approaches. To succeed, we need to connect to each of them where they are.
After you have identified your target customers, the next step is to develop messaging and message delivery systems that capture and maintain their attention.
Your messaging must express a differentiation that is easy to grasp – something that clearly sets you apart from your competition. In technology marketing, Apple’s 1984 Super Bowl commercial, with its man-versus-machine contrast, is one of the most famous examples of this.
Your campaign must consistently touch your potential customer base. Research suggests that this requires a minimum of 4-5 touches to effectively gain customer attention and communicate your message.
Accompanying the messaging and the increased visibility that you seek, you must have an effective way to respond promptly and directly to customer interest or inquiries. Rapid and responsive follow-up are critical to success.
Interview with Greg Curhan, CEO, Clickworker, Inc.
Situation: Clickworker was founded and has gained nice traction in Europe. Focusing first on Silicon Valley, they want to expand into the US. This means identifying companies that could use their service, as well as appropriate contacts within those companies. What are best practices to open new markets for a product or service?
Start with a set of profiles of possible customers and contacts.
If you have a history of success, look for companies in similar industries, and with similar profiles as your current customers. Build a set of profiles of customer companies, and use these profiles against the lists that you develop to identify and prioritize prospects.
Develop a list of who’s in your addressable market and narrow this list to prospects.
Work with your staff and systematically review past jobs and companies that you’ve been associated with, including vendors and suppliers. Identify a list of possible target customers, and use LinkedIn, Link Silicon Valley and other social networking sites to confirm and develop your contact list.
Also work with companies that develop and update databases of local companies including contact lists, web sites, telephone numbers, revenue data and SIC codes. For example, Rich’s Business Information develops searchable lists of companies Northern and Southern California. Dunn and Bradstreet and others also sell searchable lists of companies and positions.
Subscribe to the locally published Business Journals in your target markets. These Journals generate Books of Lists of local companies and contact information.
Network with those you know and ask who they know. This is more effective once you’ve developed a set of profiles, so that you can clearly characterize what kinds of companies you seek.
This is an initial set of ideas. What has worked for you as you opened new markets?
Interview with Kenneth Vogt, CEO, Crooner Labs, Inc.
Situation: Individuals participate in social networking sites for several reasons – to network, to promote their businesses, products or services, and to gain insight through crowd sourcing. For these audiences, what are the best ways to increase the value in your discussions?
Encourage participants to move from a short-term to a medium-term focus. Short term focus is about lead generation, immediate results and “Buy, Buy, Buy Now.” Think of the man in the flashy sports coat selling cars on late night television. It may generate a “sale” but with low engagement and commitment. If focus you instead on engagement, you start to build growth which is more sustainable – which will stay alive with more momentum.
Clarify your objectives. Are you interested in sales or influence today, or this quarter? How much effort do you want to put into it and what payback do you seek?
Be patient. Take the time to develop quality content. This time is an investment which pays back both medium and long-term.
Stop treating people as though they are stupid and can be manipulated into buying from you. There is a karmic cost to this approach. Look instead at the potential benefit that you can provide that will attract people to your content. Think in terms of reciprocity – give first and let others decide how they will respond.
Some time ago I tried an experiment. I proposed a simple question: “What do you want?” I asked the question three times, each time with a different thought in mind – first annoyance, then confusion, and finally empathy. But rather than speak the questions, I sent them via instant message one after the other. The words on the page were exactly the same each time, “What do you want?” Yet without tone of voice, expression or body language, the receivers could instantly tell me what I was thinking in each case. The same works in social networking. People can read where you are coming from based on how you position your content. So if you want to increase the value of what you have to say or offer, offer it openly and invite your audience to respond.
Interview with Jennifer Choate, President, Green Country Integrated Resources, Inc.
Situation: There are many opportunities to team with other companies, whether through partnerships, joint ventures or M&A. This is accompanied by the challenge bringing together different teams to succeed in new roles and tasks. What are best practices for bringing teams together?
People are an investment. Just like the stock market is not up every day, neither will be the performance of your people. Bringing people into new relationships, roles and responsibilities takes patience, work and nurturing to build skills and to get the best out of people.
Build the organizational chart of the new organization that you will build. Fill in all spaces with the individual who currently holds responsibility for each role. This means that some people will have several different roles. This is OK. As you add additional people, they will fill many of these roles.
Build a set of company or project values to guide individuals through the trade-off decisions that will drive future growth. Involve the full team in this exercise so that ownership of the resultant values is broad.
Develop and express in a consistent way the boundaries of the company or project. If Enron had had as one of its boundaries “we don’t embezzle” a crisis would have been averted.
Focus on systems and processes, not just on tasks. The core of any organization is people and relationships. These are best expressed through systems and processes, not tasks. Tasks express discrete roles, even if these may be sophisticated, but don’t encompass the richness or complexity of systems, processes or the people involved.
When dealing with people always ask “What is my role?” and “What is their role?” In each situation, work to understand the other’s perspective and what opportunity or concern they are bringing to the table. Trying to make someone into someone that they are not doesn’t work.
Particularly in a company or venture that focuses on high levels of customer service, act urgently, but avoid emergencies. You want your response to customer needs to be swift, but do not want to destroy operational rhythm.
Interview with Clark Avery, President & CEO, Aesyntix Health
Situation: We’ve established a strong core business and it is time to diversity. Our principal growth opportunity is complimentary to but a different business model from our core. What are best practices for maintaining focus on core business while developing a new opportunity?
First and foremost, be emotionally and strategically ready to make the bet and commit to action. In doing so you must “know thyself.” Specifically, taking a long look to determine whether you tend to overanalyze or are too quick to pull the trigger. Understanding your tendencies will help in the steps below.
Establish the prerequisites for pulling the trigger. For us we had to determine the:
Level of operating stability for the core business that will allow you to split focus.
Level of financial stability and predictability that will support both core and expansion efforts.
Level of organizational and process stability that will allow you to take on the new opportunity.
Understand and define the differences between the old game and the new game.
What are the financials of the growth opportunity? How do they differ from your core business? Are there conflicts that must be resolved?
Can you launch an innovative solution to differentiate the new offering?
Gather enough understanding of market need that you will satisfy with the new opportunity so as to be able to address it effectively.
Establish a sound execution strategy and timeframe for launching the new business.
Some/many of your decisions will be wrong. You need the resources to tolerate a learning curve while running fast towards your goal.
Draft a leadership development plan of both the core and new business before you start. This plan must define the skill sets and growth needs of each business.
Situation: As business improves the Company needs to manage cash flow to support growth. How are you managing your cash flow in the recovery?
Advice from the CEOs:
This is a common challenge following a down period. You’ve reduced personnel and used up cash reserves to survive. As demand resumes, you may need to add resources as you increase production. It’s important not to let accounts payable get ahead of your receivables.
Ask customers for deposits on orders – giving you up-front cash. Give priority to those who do.
Redesign the work flow:
Add independent contractors on a project basis.
This requires good cost estimates and well-defined deliverables.
Work with your bank and Line of Credit:
An LOC should cover 1-3 months of operation.
Ask for a lot, and shop different banks for favorable lines and rates.
An LOC is a short-term obligation whereas debt may be long term. Watch your debt covenants for restrictions on obligations to assure that you stay in compliance.
LOCs are frequently Prime plus 1-2%
If you have a broker, see what rates they will offer on a business credit line to keep your brokerage business.
The best alternative is to plan ahead and develop a strong relationship with your banker – including a reliable credit history – so that when need arises, the banker will help you based on your past performance and the confidence that they have developed in you and your operation.
Key Words: Cash Flow, Recovery, Growth, Deposits, Contractors, Project, Estimates, Deliverables, Line of Credit, Bank, Covenants, Credit History