Situation: A company has an excellent bookkeeper. However, during slow seasons cash is tight and the bookkeeper is not occupied full time. The CEO contacted a friend at another company, and that company has hired the bookkeeper for 10 hours / week. This is working well for both for both companies. Are there downsides to doing this? Does it pay to share an employee?
Advice from the CEOs:
If you share an employee, share at your cost – your fully burdened cost per hour. For the company using a piece of your employee, this may be a significant hourly cost, but is much less expensive than a consultant and lower risk than bringing on an unknown individual.
Keep a short term perspective – once the economy improves you will want the individual back full-time. Make sure that this is well understood by the other company.
Make sure that this is not a burden on your bookkeeper. Ask whether the individual can handle two bosses. It helps to fully segregate the individual’s time with time rules – for example, by day or half-day with clean break points in time worked for Company A vs. Company B.
Overall, the apparent benefits of this situation outweigh the challenges.
Situation: A company’s staff is highly paid. Historically, annual raises have been 4-5%; however some individuals are above industry salary ranges. The CEO doesn’t want to lose key individuals who would be expensive to replace. The company is planning salary increases for the end of this year. If the level is lower than historic averages they are concerned about the impact. Are planning for salary increases this year? How will you communicate your decision to employees?
Advice from the CEOs:
What’s the problem? Even in an improving economy your employees are lucky to be making what they do! On top of this, you need to consider profitability compared to last year as well as historic levels. Selectively share financial data with your employees as well as financial realities – your and their top priority are to keep the company healthy.
Gather data on salary ranges for roles in your industry. Good sources are Salary.com for national data (it may be dated) or Assets Unlimited’s Silicon Valley Survey for up-to-date salary information by industry and position. This will help you to prepare for conversations with employees who are currently paid above the range for their positions.
If you have employees above the range and do not want to give them raises, give them bonuses or spot bonuses for work well done.
Formalize your bonus system – base bonuses on performance metrics. Consider tying bonuses to net margin performance for the company or for departments that can impact new margin.
Whatever you decide, make announcements about salary levels a positive event.
Situation: A CEO wants to push project ownership down to lower levels of the company. This is not happening unless the CEO pushes. How do you delegate yet stay informed as you push authority down the organization chart?
Advice from the CEOs:
The company needs systems and guidelines to clarify on what and when the CEO wants to either have input or hear back, and what can happen without the CEO’s knowledge.
Set levels of approval – dollar impact or decision type – and clarify what decisions can made at what level, what decisions need higher level approval and at what level, where they must inform you, and where you must sign off.
Similarly, establish regular reporting and meeting schedules, along with guidelines as to what is to be reported – again by budgetary impact or decision type – and assure that this reporting takes place.
“The Great Game of Business” by Jack Stack describes a company which has implemented these systems with astounding results. It provides a template and describes in detail how the system is implemented and what bumps they encountered along the way.
Invest more time in setting roles and responsibilities for your direct reports.
Keep reporting systems aligned across the company.
Expect over time to adjust levels of authority as individuals grow in responsibility and accountability.
Most importantly, lead by example. If a team member comes to the CEO for guidance on a project, refer them back to the proper manager for advice.
2015 Top ranked software systems to manage projects and processes from selected searches:
Capterra: Microsoft Project, Basecamp, Atlassian, Wrike, Podio