Tag Archives: Distraction

How Do You Add More Discipline to Quotes and Pricing? Four Points

Situation: A CEO faces challenges with clients. The first is vague customer specs because they don’t understand the product. Second is misunderstandings as to timelines. Third is insistence on strict timelines while simultaneously demanding revisions to previous work. How do you add more discipline to quotes and pricing?

Advice from the CEOs:

  • Is the company’s technology strategy aligned with its capabilities? Currently the company is trying to build advanced solutions in multiple international markets with a small staff. There does not seem to be the technology or development discipline to convert current capabilities into a sustainable market advantage.
  • For near term focus, because of commitments and milestone payments due from the key customers, focus resources on finishing the last piece of these projects. Once this is done, step back. Look at options and determine the company’s technology strategy moving forward.
    • The key challenge is to define ONE beachhead on which the company will focus and which they can dominate. The objective is to leverage existing engineering creativity to create a sustainable competitive advantage.
    • As this exercise is designed, start with a clean slate. Don’t burden the process with a lot of restrictive assumptions. Consider using an outside facilitator to help facilitate this process.
    • Until this exercise is completed does it really make sense to seek additional work or to commit the company to the next phases with current customers?
  • Once the company has selected and committed to a technology strategy, the decision process becomes different.
    • The objective is to develop laser-like focus on the technology. Minimize distracting the team with other opportunities.
    • It may be OK to lose money on development projects if this work will significantly impact or accelerate the development of the company’s core technology.
  • How does the company justify asking for payment for development for future projects?
    • First, determine and clearly state the company’s technology strategy. Evaluate all future development projects and decisions in terms of their alignment with this strategy.
    • Second, if a particular project is completely aligned with the technology strategy, the company may waive the requirement of payment for development. This, ideally, will be the only exception.
    • Ask for a limited time/scope project to jump start and define new projects. This provides proof of company capabilities and establishes its credibility.
    • If is it necessary to negotiate or bid, start high and bargain down to but not below the best estimate of the cost of development.
    • Remember that deciding what NOT to do or quote is often harder, but just as critical, as deciding what to quote.

How Do You Have a Fierce Conversation? Six Factors

Situation: A valuable tool for CEOs is Susan Scott’s book Fierce Conversations. This includes challenging conversations with staff. Scott characterizes Fierce Conversations as being robust, intense, strong, powerful and passionate. These are the traits that a leader must bring to challenging conversations instead of avoiding them. How do you have a fierce conversation?

Advice from the CEOs:

  • The first step is to master the courage to interrogate reality. This means confronting the difference between “ground truth” or reality and official truth or what we or others wish to believe. There is often a difference between the truth that we want others to see and reality. Jim Collins calls this confronting the brutal facts of our situation without losing faith in our ability to deal with it.
  • Be here, prepared to be nowhere else. The conversation must be your only point of focus when you are having it. Choose a location where you won’t be interrupted or distracted. Don’t allow yourself to be distracted by texts, phone calls or anything else.
  • Tackle your toughest challenge today – you gain little by putting it off for another day. Prioritize your challenges, and tackle the most difficult ones first. Handling these will make the most difference.
  • Obey your instincts – but remember that instincts are subjective and must be verified through reality checks. Trust your gut, but verify it objectively with evidence.
  • Take responsibility for your emotional wake – what he or she will remember after the conversation. Keep the focus on factors that the other party can control, and offer to assist. But be sensitive to how you deliver the message and how the other party responds. Don’t leave more of a mess than you had before the conversation.
  • Harness the power of silence – silence slows a conversation and increases your chances of making it meaningful.

What Are Best Practices For Managing a Due Diligence Process? Six Suggestions

Situation: A family-owned business received an unsolicited letter of intent to purchase the company. The Board is split on sale of the company, but has agreed to allow due diligence. Only a few key employees are aware of the LOI. What are best practices for managing a due diligence process?

Advice from the CEOs:

  • A due diligence process can be a major distraction. Put as short a fuse as you can on the due diligence process; insist that the information requested be limited in scope to essential materials to minimize distraction; and that the process not interfere with scheduled company commitments.
  • It is exceedingly difficult to hide reality from the troops. Good due diligence is incompatible with secrecy. Absent communication about the situation, if rumors develop at least a segment of employees will assume the worst leading to possible employee loss and erosion of leadership credibility.
  • It is better to explain the situation and put it in the best light. Here’s an example:
    • The company is not for sale but has received an unsolicited inquiry.
    • This is happening because the company is successful, is producing consistent value, and others appreciate our success.
    • Whatever happens, the company will continue as a going concern and if the company is sold, all efforts will be made to assure the retention and security of the employees.
  • Ideally, communicate this through a company-wide announcement, with video link to remote sites, and with the opportunity for employees to ask questions.
    • Brief all key managers in advance, with Q&A scripts to deliver a consistent message and address individual questions.
  • Strictly control the due diligence process.
    • Restrict direct contact with employees and, to the extent possible, with key customers.
    • Maintain your focus on the business – there is no guarantee of a sale.
    • Put retention packages in place for all key employees.
  • If the deal does not go through, assume that it will negatively impact company results for at least one quarter. Adjust your forecasts and incentive programs accordingly.

Key Words: Due Diligence, Purchase, Time Line, Distraction, Communication, Message, Coordinate, Q&A, Limit, Incentive, Retention Package