Tag Archives: Focus

How Do You Prepare for an Acquisition? Six Suggestions

Situation: A company is purchasing another company to expand its product offering. The CEO is concerned that the employees need to stay focused through the closing date. He is also concerned about retaining key employees both of his company and the company that he is buying. How do you prepare for an acquisition?

Advice from the CEOs:

  • Until the deal closes, don’t change anything about your current direction.
  • As you negotiate and move to close, be mindful of competitive bids.
    • This will help to keep the deal in place.
    • It may also open the option to put together the deal and then seek competitive bids to fund the deal through private equity groups.
  • Get three second opinions – learn what could go wrong with this deal so that you can plan and anticipate.
  • To assure that you retain key staff take the following steps:
    • Hire consultants: HR, financial, see what they recommend.
    • Offer key employers favorably priced options for a combined minority position in the company. This offers them an upside and will be an effective retention package.
  • What else can be done to retain key employees.
    • Let them know how this acquisition will position the company as the Dream Team company in your space.
    • Explain how this acquisition gets the company closer to a true exit strategy which will be financially beneficial to them.
  • If you can assure key employees that they will not experience any change in their job, title, responsibilities or compensation, retention may not be an issue.

How Do You Maintain Your Culture as You Grow? Five Thoughts

Situation: A professional services company wants to grow while maintaining the small company atmosphere that has been the key to its success. There is a limit to how many clients a manager can manage, and with this the reality that if the firm is to grow they will have to bring on more client managers and support personnel. How do you maintain your culture as you grow?

Advice from the CEOs:

  • To maintain your boutique atmosphere, consider hiring to fit your needs rather than to maintain a culture. Use team meetings to direct team members while communicating and instilling the culture that you wish to maintain.
  • Don’t risk diluting the strength of your client relationships. A $250K client who is fully committed to your service may have more demands than a $1M client for whom you only represent 10% of their business.
  • Service companies with the highest profit ratios rotate customer contact among several qualified people. What matters is the level of service provided, not the individual providing the service.
  • Grow by adding locations. Instead of growing vertically in the same office, grow modularly by spawning additional offices.
    • Create an optimally sized model for the level of service that you wish to deliver.
    • Design the organizational structure for this model and identify the order in which slots will be filled as business grows through each office.
    • Develop a service and organizational template with standard operating procedures, metrics, technology, and reporting.
    • Once the model is created, spawn it.
  • Focus your business. Define a niche that you can serve better than your competitors. Focus on this niche and develop a sustainable advantage over your competition.
    • Assure that your service delivery is seamless to the client and make sure that it remains seamless.
    • Offer a menu of service options and price options by the level of service delivered. Some will want to buy a Mercedes, and some will be happy with a reliable lower priced sedan.

How Do You Build in a Declining Market? Five Solutions

Situation: Revenue for a product and craft business has been slipping. At the same time, their competition has been disappearing. It is clear to the CEO that demand is and will continue to be present because of the market that the company serves. The question is how to maintain the profitability to survive long-term. How do you build in a declining market?

Advice from the CEOs:

  • The keys to recovery in a business like this will be in two areas: improving sales and increasing margins.
  • To increase sales the choices are more aggressive marketing and selling to existing customers or creating new markets like previous generations did when they started the business. Consider services that you could bundle with your products to augment the ways that customers use them. It will be the responsibility of your sales and marketing teams to demonstrate these product/service bundles to increase sales both to new and existing customers. This will help to solve the revenue slippage.
  • The other side is ongoing efforts to reduce cost which will, in turn, improve your margins. Costs can be reduced in creative ways that are not obvious. These include improvements in purchasing, reduction of waste, recycling of component materials, and inventory controls. It will be the responsibility of your production, purchasing and inventory management teams to develop these solutions. Assure that these teams are recognized and rewarded for their solutions.
  • Look at the segments of your product offering. Are they declining at the same rate or are there differences? This will help you to focus your efforts, as a company, to grow market share even if the overall market is declining.
  • Other suggestions for increasing sales:
    • Take advantage of the craft trends. Do this with NEW talent – not tired talent.
    • Consider partnerships and collaborations.
    • Set up contests and craft classes.
    • Look at how other industries promote to the craft industry and follow their lead.
    • Consider kitted craft products.

How Do You Revamp Your Sales Team? Seven Solutions

Situation: A company is faced with the imminent departure or retirement of several key sales personnel. This presents the opportunity to rethink and rebuild the sales team. What is the best way to take advantage of this opportunity? How do you revamp your sales team?

Advice from the CEOs:

  • The timing is good. Take advantage of this opportunity!
    • You’ve identified the next generation of sales leadership. Now determine their role building the future.
    • This is an opportunity to reset your vision for the next 3-5 years.
  • The task of the new sales leaders is to learn the products, customers, and processes. One of the best ways to do this is in the role of sales engineer.
    • Be the listener first – become the solutions person.
    • Use existing company personnel as resources to develop closer relationships with key people within the company.
    • Have existing staff can introduce them to current customers and point them toward new opportunities. Focus on impeccable customer service.
  • What are the immediate priorities for the new sales leaders?
    • Do what must be done.
    • Observe experts on the job.
    • Listen and learn.
    • Ask lots of questions.
    • It’s scary, but don’t worry – just do it!
    • Let others assist.
    • They will make mistakes – it’s called learning.
  • Be sure to build an approach and team that can support both your existing core business and build new opportunities.
  • You need to replace the capabilities of those who will be retiring, and at the same time bring in new opportunities for future growth. This includes sales hunters who are good at finding new customers and helping them define their unique needs.
  • What fears or concerns do you see in the new leaders?
    • Fear and concerns regarding short and long-term roles.
    • Focus on the near term. The President is focused on the long term. Focus now on visiting customers, being introduced to them, and learning about them.
  • Are you fully focused on marketing of your services?
    • What is your Sandbox? What is your Value Proposition? What is your Brand Promise?
    • Define these and let the definitions guide your development of the sales leadership as well as the search for additional personnel.

How Do You Manage Residual Commissions? Three Thoughts

Situation: A CEO is renegotiating the company’s agreement with a sales person. The sales person wants a declining residual commission on sales from past customers, regardless of who is servicing the account. A consultant who knows the industry advises the CEO to focus on new sales. What are the implications of each choice? How do you manage residual commissions?

Advice from the CEOs:

  • There are two types of salespeople: Hunters and Farmers.
    • Hunters focus on new business and generally get paid first year, then in later years only on sales that come specifically through their efforts.
    • Farmers focus on ongoing relationships with existing customers and are the service people for those customers. If they are paid commissions, they get paid on the ongoing sales that result directly from their efforts.
  • It is rare to find a salesperson who can manage both of these roles well, so companies often divide responsibilities, and any commissions paid, according to responsibility.
  • Decide what behavior you want from your sales person and pay for this – make the distinction between hunting and farming. Then ask the sales person which they want to be. If they say “both,” challenge this and let them know that they need to make a choice.

How Do You Find Your Sweet Spot? Seven Suggestions

Situation: A company’s sales are bumpy. The CEO thinks that this may be due to a mismatch between products that they offer and their customers’ needs. They currently use online surveys to capture customer needs and input. How do you determine customer needs? How do you find your sweet spot?

Advice from the CEOs:

  • The most important first step for a smaller and growing company is to clearly identify the customer niche that they serve. This must be a niche where the company can out-serve their competition.
  • There are two types of niches to consider:
    • A product/service niche focused on a specific set of products and services – one where you can offer a differential advantage over your competition and become known for this, or
    • A customer niche – a specific set of customers that you dedicate yourself to serve in a way that provides a differential advantage.
  • An example of the product model is an individual who started an e-commerce site for lacrosse equipment – products not commonly stocked in sports stores. They offered a wide range of lacrosse products, built an online community, shared articles, etc. and became THE place for lacrosse players to get their equipment.
  • An example of the customer niche model is to focus on a population and build a concierge or member-only service. The niche here is the buying group. This can be employees of specific companies or government workers as examples. Costco grew using this model.
  • For an early-stage company, survival is about single pointed focus on that niche where you can provide better products/services or better serve your customers than anyone else. As you grow you can diversify based on the reputation and loyalty that you gained early on.
  • Look at competitors – how are they gathering customer preference information?
  • Look at your passion – is it products or people? Choose a niche that fits your passion.

How Do You Optimize Your Business Model? Six Points

Situation:  A company is in the process of shifting their business model to better address customer needs. They have three different models under consideration. Management is split between these models, but must arrive at a consensus. How do you optimize your business model?

Advice from the CEOs:

  • Right now, you are considering three different potential models:
    • Tools – your old model
    • Data – produced by your old model
    • Service – your new model
    • These are different models with different prospects.
  • The money makers in marketing focus on data, not tools. Data is information, and this is what is valuable to clients. If you want to focus on the data component of your offering.
  • Currently, you are scraping data from social media and matching this to your client’s database on a real-time basis. There’s a model and value here because you are enhancing your client’s current database by making it more useful and actionable to them.
  • You have tools to enable and add value to existing client databases by allowing them to better segment their database. Again, there is value here.
  • Your core IP is the ability to correlate diverse data sources. Have you protected this IP? If not, this needs to be a top priority.
  • How much information that you scrape from social media sources can you share without violating privacy? This is something to think about because people are becoming increasingly sensitive about companies collecting their private information.

What’s the Next Version of Our Business Solution? Four Ideas

Situation: A company that provides personnel services wants to adjust their business model to make it more appealing to employers. They are unique in that they focus on social issues, rather than purely on business services. From the perspective of a hiring Manager, what would you want to see? What’s the next version of our business solution?

Advice from the CEOs:

  • The idea of a social issues-based brand is unique. To some employers this may have appeal.
  • Your obvious differentiator is the tie between existing communities and social networking. Emphasize this.
  • As an employer, the focus is on finding quality employees for the right price. This will always take precedence over other factors for most businesses. In fact, over-emphasis on social issue-based hiring could subject an employer to discrimination issues. It also will not appeal to everyone. How can you address quality employee for the right price through your service? Here are some things to consider:
    • The employers’ challenge is finding good candidates. How do you solve this problem?
    • Employers have specific needs to fill. Help them by identifying and screening candidates so that it makes their job easier.
    • The question for the employer is whether your helper audience can crowd source the screening function. Screening is the challenge of the employer. Solve this and I as an employer want to talk to you!
    • Within your model, instead of asking for monetary contributions from your helper audience ask them to donate time to screen candidates. Not being a recruiter is a plus.
  • Pitch your new ideas to your company insiders – see what they say.

How Do You Work with a Resistant Employee? Five Points

Situation: A CEO feels overworked, fatigued and ready to retire! The core problem is a long-term employee who is constantly resisting the CEO’s the company’s strategic direction. How can the CEO alleviate this situation? How do you work with a resistant employee?

Advice from the CEOs:

  • If this individual is valuable, try to work with him first.
    • Can you give him a different focus – another role within the company for which his talents are suited and where he will make a significant contribution?
    • For a change like this to be effective it must be offered and accepted with the condition that this becomes his focus and not your strategic leadership of the company.
  • How is it best to have this conversation?
    • First, clearly state the direction of the company.
    • Then ask a question: What do you want to be doing for the next 5 years?
    • You may be surprised by the response to the question. It may lead you to a win-win solution; or it may become clear that this individual needs to be doing something else.
  • Conduct the discussion in two stages – but without a lot of time between these two discussions.
    • “You are valuable but things have to change. I prefer that you remain as part of the team, but on the strategic front you have a choice – are you on board or not?”
    • If after consideration the answer is that he is not on-board then you must let him go.
  • Don’t blindside this person. Think of a Resurrection versus a Come to Jesus Meeting.
  • If it turns out that you must get rid of this person you will wonder: why you didn’t do this 6 months ago.

How Do You Create Management Alignment? Five Suggestions

Situation:  Top managers of a company are all very experienced.  All want to drive the company – but each in their own way. Overall objectives are not significantly different but the path forward varies considerably among the managers. Is this situation common? Should the CEO be doing things differently? How do you create management alignment?

Advice from the CEOs:

  • Strong differences among strong leaders are common. This is not necessarily a cause for concern or a problem. Rather, it means that you have a lot of options to help address opportunities or solve issues.
  • When you hire bright, talented people with good ideas, there will always be differences of opinion. This is healthy. You need this, particularly when sailing uncharted waters.
  • As CEO, sometimes you need a strong critic on your team to moderate your inclinations. Just because you are CEO doesn’t mean that you always have the answer. Rather, allowing the answer to come from the team strengthens the team as well as commitment to execution.
  • How do you leverage the strengths of this team to create the best future for your company?
    • First, assure that the broad roadmap is clear and that everyone agrees on this.
    • When addressing a choice, opportunity or challenge lay out the situation in broad terms. Allow all of the managers their say, and facilitate the discussion to identify commonalities and differences. Confirm the commonalities, and dig into the differences to understand the perspectives of each. Digging into differences can identify roadblocks as well as alternative options. Keep the discussion open instead of trying to drive toward a single, quick solution.
    • Summarize the options presented. If there are multiple alternatives, do a ranking exercise to see if one rises to the top. Be sure to credit the managers for their ideas and creative input.
    • In each situation there is a final decision maker. All must respect that after you’ve listened there will be a decision and that decision will be executed. Allow them to execute and focus on results.
  • Be consistent and always be who you are.