Situation: A company recently hired two employees. In their first weeks of work, they were observed using company computers, on company time, to do personal work – in one case to monitor a personal web-based business. What is the best way to communicate company policy to these individuals?
Advice from the CEOs:
Everything starts with the orientation on the first day of employment and the atmosphere established in the first weeks of work.
Particularly in a small company, new employees should meet with the CEO whose job it is to describe the culture of the company, the vision for the future and broad expectations of the role and contributions expected from employees.
Matters concerning personal work on company time and with company equipment should be clearly addressed in the employee handbook. Key points should be reviewed by a representative of upper level management, along with a conversation to assure that these key points are clearly understood.
Particularly during the initial weeks of work, new employees should have frequent meetings with their immediate supervisors to assure that they have the resources they need, that any questions they have about their work are addressed, and that they are performing to company and role expectations.
Given what has been observed, you, as CEO, should definitely speak to them about the behavior observed, and give them the opportunity to explain what is happening.
Clarify expectations of all employees, and ask whether these individuals understand these expectations.
Document the meeting. If the behavior continues, take action.
What is being done by other employees, and is there a broader issue to be addressed? Are other employees behaving similarly? If so, the new employees may just be responding to what they perceive as allowable behavior within the company.
Start with a company meeting or a letter to all employees. Highlight relevant passages from the employee handbook, and speak in terms not only of company culture but of the destructive impact that this behavior has on company performance and viability. The future of everyone in the company is tied to company performance and success.
Key Words: Leadership, Team, Expectations, Personal Work, Company Time, Policy, Orientation, Culture, Expectations, Employee, Handbook, Evaluation Period, Supervision, Documentation
Situation: A company is transitioning from a time and materials to a fixed price bid model. Estimators and project leads find this transition difficult. We need them to think like business managers. How do you help managers to see and think in terms of the big picture?
Advice from the CEOs:
First, set up a framework that repositions projects in a business framework.
All projects are business go/no decisions with expenses, minimum profitability targets, and incentives provided for beating initial projections.
This will help generate more consistency in bids and final gross margins per project.
Next, teach managers and employees industry and company standards within your new model.
Do post-mortems on all projects. Did we make or lose money versus initial estimate? How much? How did we perform against estimated time and expense? Were client expectations met? Were they exceeded? What was good or bad about the project? Were there errors in the original estimates? Where could we have saved cost?
Use this information to improve your estimating process over time.
You have a long history of T&M projects. Categorize these by project type. Look at the hours required to complete the projects – both engineering and management time – as well as other costs. Establish range and averages within each category.
Look for key variables among the project categories: scope of project, learning curves, efficiency of team members.
Work through known costs and outcomes on past projects as examples to teach the process.
For new projects, calculate best, medium and worst case hours and costs. Bid based on your worst case as you develop your learning curve.
Make sure to include a project management fee on top of your T&M estimates. Eventually you want to develop an overhead percentage to cover project management.
Team your estimator with the project lead both for project input, and performance against the bid.
Evaluate and compensate both based on project outcome.
The critical measure will be gross margin generated versus gross margin estimated on the project.
Key Words: Leadership, Project, Time and Materials, Fixed Price, Bid, Framework, Consistency, Standards, Variables, Estimator, Lead, Incentive
Situation: An organization that provides an online network for senior financial executives has an immense amount of content on its web portal. To improve the user experience of their target audience, they want to simplify access to this knowledge. How do you simplify access to knowledge?
Advice from John Kogan:
We have a rich portal with an immense amount of content potentially valuable to senior corporate finance[K1] executives. We have many ways to access this content – perhaps too many. Our objective is to get the highest quality answers in front of the user with the least effort on their part. Google has done a very good job of pulling the best content to the top given a million possibilities to each query. If we can do this, we become the Google of finance and accounting!
Most people know what they want when they come to a site. We have started by creating a clean user experience to allow them that good “line of sight” to what they want.
Our objective is to help the user identify the right content with the smallest number of queries. From the user perspective, exposing the wrong content is a waste of time. We want to show them high quality, compelling content which directly addresses their need.
To develop quality content, you must have an open mind. It’s not about what we want to say, but understanding the user’s needs and addressing these. You have to be guided by the data to tell you what’s happening on the site and what the user wants to see, and then provide them relevant information.
Achieving this means that we must find people who are smarter than us in these areas and gain their input. In the end, your company is no better than the ideas that you can either dream up or gather from others. We constantly seek fresh perspectives from investors, advisors, users and potential users.
Finally, you must take action on the data you gather. Too many companies suffer from information paralysis. The solution is Vision plus Will plus Doing it!
Situation: A company has historically given Christmas bonuses at the rate of 10-20% of salary in a good year. The CEO is concerned that employees may stay until their bonus is received, and then leave for another job. What are your plans for 2011 bonuses?
Advice from the CEOs:
First, what is your objective in granting bonuses? Which among the following are you trying to achieve?
Acknowledgement of effort.
Effort above and beyond the norm.
Once you determine your goal, design a structure that will effect this goal.
What practices are typical for your industry – your competitors, vendors and clients?
Background research on industry practices provides a basis for your own practice. You can then evaluate whether varying from industry practice can give you an advantage.
Company performance should be a factor in determining bonus payment. So should performance against individual employee goals and objectives.
How much discretion should be given to managers for setting bonuses for their direct reports?
Talk to your managers and get their input on how they would handle bonus evaluation.
A number of companies give managers a pool guideline, and have them produce a spreadsheet of recommended bonus distribution for executive review and approval.
Individuals should not decide their own bonuses. Bonuses for all employees/managers should be decided by their direct supervisors.
Should the CEO be concerned if an employee takes their bonus and then leaves?
If an employee has earned their bonus, then you are granting them an earned reward. Their departure likely has much less to do with whether or not they receive a bonus than other factors.
Human resource research consistently demonstrates that compensation is at the bottom of the ladder of reasons that workers remain or leave – particularly workers who exercise critical thinking and judgment in their jobs.
Situation: A company has recently introduced a disruptive business proposition. The immediate focus is pitching the solution as an attractive alternative and building early traction. What are best practices for building acceptance of a disruptive model?
Advice from Marc Rochman, CEO of Openbucks:
Any business, especially an innovative start-up, is bound to meet a wall of resistance; the key is finding the cracks in the wall. To do this, you must demonstrate a significant benefit to both the company and its customers. However, most important is finding a partner who has an early adopter attitude or culture.
Often the principal resistance is not with the product or solution being presented, but fear of being the first through the gate – particularly with a product and company who haven’t yet proven themselves. This stems from a perception that if the solution turns out badly the penalty may be severe, especially for the executive who made the decision.
Openbucks recently introduced a new payment solution for people who don’t have bank accounts or credit cards such as teenagers and people without strong credit and those hesitant to use credit cards online. The solution allows people to purchase a gift card from a retailer and use that gift card to buy in-store goods as well as to buy and pay for digital goods inside hundreds of online games.
Openbucks’ first partner is Subway. They are innovative, imaginative and not afraid to be first with a new concept. In addition, Subway also happens to have a subsidiary that specializes in payments and payment processing so they immediately understood the model.
Another early partner is CVS Pharmacy. To CVS the appeal was the model of convenience and a way to encourage repeat customer visits. Since people routinely visit pharmacies to get prescriptions and a host of other products, it is easy for them to buy a gift card during a routine visit.
The keys to overcoming objections to innovation are:
Be resilient and patient, especially when working with large companies. Once they begin to see a trend of success, they will more likely be ready for mass adoption.
Strike the right balance between persistence and a willingness to adapt your product when you see an opportunity. Pivot or tweak your model to take advantage of a new opportunity that you did not anticipate originally. The pivot allows you to take an easier path instead of banging against the wall too long. Sometimes you just have to go around the wall.
Subway has more stores than any other retailer in the US. Adopting the Openbucks solution came naturally for Subway because they understand payment processes and how to use them to create loyalty and foot traffic.
The program is simple and a win-win-win for the consumer, retail outlet, and merchants who can collect cash-like payments from the unbanked, under-banked and those who prefer not to use a credit card online. The purchase of a $10 Subway gift card can be used to buy a Subway sandwich, and inside mini digital stores in hundreds of online games. Fifty-four percent of those who buy a Subway gift card also get a sandwich – a clear value to the retailer. Further, since they have the card, they are more likely to be repeat customers.
Situation: A company has developed and shipped equipment that puts it into a new market. They can continue to pursue this direction or make a significant shift that will open up a larger opportunity. What are the most important considerations to this decision?
Advice from the CEOs:
There are a number of points that you need to clarify before making this decision:
What is the magnitude of difference between the two opportunities?
How much of a shift in technology is required to make the jump to the larger segment?
How much of the expertise to make this shift do you have in-house, and how much must you bring in, acquire or develop through partnerships?
What is your most likely exit strategy and how will each opportunity impact it?
Are you being realistic in your ability to meet development timelines?
If you don’t have deep expertise in the area that you want to develop, the answer is most likely yes. If you do you can often beat your initial estimates.
If the shift includes both there is risk that you will underestimate the time required to develop both the prototype and to turn the prototype into production quality technology.
If your ultimate objective is to sell the company, be aware that selling any company can be tricky, and you may not be able to sell the company for the value that you need to support yourself after the sale.
Study other companies in your geography and market, and determine both the price that they received for their companies and how they positioned their companies for sale.
As an alternative to selling, consider hiring a general manager to run the company. This can free you to concentrate on your passion and also increase the value of the company if you decide to sell at a future date.
Interview with Skip Brand, CEO, Martini Media Network
Situation: Thanks to the rise of social media, the 10-20 million individuals who were the influencers with the most purchasing power have increased to 70 million. Within the influencer group, there is a sub group deemed “uberinfluencers” who have the most influence. How do marketers reach the uberinfluencers and why are they so important?
Advice from Skip Brand:
Uberinfluencers increasingly spend more time online, are twice as likely to make a purchase, and spend three times as much per acquisition when they do purchase. Also, they always share new product experiences with friends and family via different social media (Facebook, Twitter, Blog’s, etc). For the first time, consumers control a brand’s reputation and are able to set the brand’s tone and image. This is why marketers need to focus more dollars to get in front of this audience.
Uberinfluencers spend more time online than the general US population. They are brand savvy, digital savvy and socially networked.
They have diverse and specific interests and leverage the Internet extensively to connect with their passion areas. Niche sites appeal to this audience because of the specificity and existence of community. If you better understand where these people spend their time at work and play –you are better positioned to leverage their influence.
The company that wants to reach and leverage these uberinfluencers needs to be scalable, exciting and relevant.
For this audience, small is beautiful and also scalable. Let’s use the example of golf, a passion for many uberinfluencers. Your site should feature the highest quality courses and equipment if you want to reach 50% or more of this target audience. It must be easy to navigate, provide enough information to make them feel comfortable about product selection, and have a social component to help them broadcast your message.
Uberinfluencers spend time on sites that are exciting, engaging and which have a single share of voice. This means one focused ad per page instead of multiple ads.
Particularly in a recessionary market the site must work diligently to maintain relevance by continually enhancing site content to provide a fresh experience with every visit.
Marketers should put uberinfluencers at the center of their media buy and strategy.
To attract and leverage this audience you must maintain a maniacal focus. Reach out to them using social networking tools, which find uberinfluencers where they work and play on the web. Let’s illustrate this with an example.
Let’s say that your uberinfluencer is a digital media executive. You will find them on social networking sites because they are living what they are doing. Put the right message in front of them. If they buy they will spend more, but it’s even better if they tell 10 friends about you.
Once you start figuring out the keys that attract uberinfluencers, they will start telling each other about you and news of your product will spread across the web, in turn maximizing your revenue!