Situation: A CEO is
concerned about long term trends versus short term volatility. While the
business has done well over time, short term volatility has made it difficult
to project both personnel needs and cost. As the company expands geographically
these issues are becoming more critical. Which is more important – long or
from the CEOs:
the company find that capabilities are not fully understood until they get into
development? In this case, is the problem with variables of schedule, budget or
capability more important?
forward, evaluate each of these variables to determine which is having the greatest
effect, positive and negative, on project performance and profitability.
the problem is time constraints in the project planning phase, assure that
sufficient time for project iterations is allowed in both the schedule and
budget. It may be that the clients are not sure of what they want until they
see a model, and that several iterations are required to assure that clients’
needs are satisfied. Plan and bid for this.
fixed costs impact margins during dips between active projects, assure that enough
fixed cost coverage is built into project bids to cover dips.
geographically remote offices is the company’s issue a question of volume or
resource cost or is it a pricing issue?
it’s a pricing issue to stay market competitive focus initial activity where
this issue is minimized. As market presence expands, add additional capabilities
in phases according to the ability to cover costs profitably.
it’s a resource cost issue use the same solution, adding resources according
ability to cover costs profitably.
the company’s sales and marketing structure in phases while expanding into new
markets. If sales compensation is base plus commission, vary commissions paid
according to resource rates negotiated. This will tie sales incentives to
negotiated resource rates and will help to assure that costs are covered.
with short term issues effectively will improve long term planning and profitability.
A CEO is concerned that all her key personnel are over 50. This includes software
engineers who are experts in languages which remain at the foundation of many
customers’ databases, but which are no longer formally taught. How do you
replace aging talent?
from the CEOs:
at which areas potentially limit the company’s growth. Is it technology and software
expertise, or marketing and sales? Based on this assessment, rank the critical
positions to be filled and start hiring staff who can grow into the most
a cue from the Japanese. For years their aging workforce was predicted to limit
the country’s growth. Instead, they chose to retain employees through their 70s
and this has helped them to maintain both productivity and employment.
Baby Boomers are finding that they don’t have the savings to retire and are
working well past the historic retirement age.
Baby Boomers retired but found themselves bored after a productive career and have
returned to the labor pool.
factors may delay the company’s need to replace aging talent.
bigger question is what to do if a key player is lost. Focus on hiring back-ups
to key personnel and allow several years for them to come up to full speed. Current
employment trends suggest that numbers of experienced people are returning to
the labor pool. Look for a few good people to add to the team.
are the plans of the company’s key clients? Do they plan to stay with the
company’s products and expertise, or to sunset these and replace them with new
technology? Adjust operational objectives, as well as the exit strategy, to achieve
desired growth given customers’ timeframes.
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.
Situation: The key to a career development company’s growth, historically, is leveraging relationships with insiders in potential client companies who know the needs of their own companies. The key benefits to these people are access to good people, no recruiting fees and feeling good about the experience. What is the marketing message to this group? How do you market to company insiders?
Advice from the CEOs:
Ask them. You already have a number of company insiders who work with you. Develop a detailed survey to query what they see as the key benefits of working with your company, and which of these benefits are most important to them.
Consider a broad quantitative survey that you can administer via the web.
Complement this with a smaller in-depth interview survey to understand qualitatively how they benefit from their relationship with your company and the service that you provide.
Your equity is the experience that these people enjoy when they work with you – this is your leverage.
Your pitch is emotionally oriented. Stick with this. Saving recruiting fees will not be as important given your focus and the company insiders that you are likely to attract.
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.
Situation: A small company has always used guerilla marketing as its marketing modus operandi – trade shows, etc. Their VP Sales recently left. They feel a need for a marketing plan and hired a company to assist them in understanding how they are perceived by their customers. Should they continue to outsource, or is it preferable to bring marketing expertise in-house? Is it time to hire a marketing manager?
Advice from the CEOs:
How well do you understand your customer profiles? It is important to characterize, segment and understand your customers before you can understand your marketing.
What is the company size of your typical customer? Small companies don’t spend a lot on big trade shows, other than perhaps sending a couple of people as attendees. Event marketing may be a more effective way to reach small customers.
The company that you hired should be answering these questions for you.
Marketing is about creating an environment in which people are aware of you and find you versus your having to go out and find them. Social media have fundamentally changed the marketing challenge, emphasizing pull versus push marketing – commercials, ads, billboards, etc.
An important role of marketing is perception management so that when a lead or need arises, your company is a natural answer.
Whether or not you hire a person, you need a marketing plan. Once you have a plan, you need a marketing budget.
The company is now at 35+ employees. Fischer’s growth curve research indicates that at this size you need a professional in the marketing position – someone with experience who knows the ropes. This person could be inside or outside.
Situation: A CEO wants to add a key person in sales. For a long time most sales have been handled by a long-term employee with a strong sales background in the company’s market, often working closely with the CEO. This sales person is nearing retirement. What process do you use to add a new sales person?
Advice from the CEOs:
Involve non-sales personnel in the interview process. These individuals are important to your company culture, and will necessarily be working with the sales person. They may bring insights to the interview process that you do not see. In addition, involving them in the selection process will smooth the on-boarding process of your eventual hire.
Work with current staff to create a 90-day on-boarding plan for the new person. This helps in two ways: it identifies important characteristics that you will want to see in a good candidate, and it provides an on-boarding road map that will help the new hire to succeed.
Consider going one step further and have current personnel identify and pre-qualify candidates for you.
Use creative as well as traditional methods to identify potential candidates. In the process, make sure that you are not misrepresenting your situation or creating legal or ethical problems.
Have your options in place when you are ready to move on a particular candidate.
Situation: A CEO manages more than one company and is overcome by the complexity of the task. The biggest challenge is the oldest of the companies which is increasingly resistant to change. How do you overcome resistance to change?
Advice from the CEOs:
Regardless of the age or experience of any company, meeting on-going performance objectives is critical. The fact that strategic imperatives have led to the formation of spin-off entities does not change this. Managers and key personnel are expected to perform to reasonable expectations, whether in a family or non-family business.
Resistance to change may be a symptom of more fundamental issues. Is the older business receiving adequate attention from upper management? Are they receiving sufficient funding and resources to complete their objectives? Do they have the latitude to make decisions necessary to achieve their objectives? If the answer to any of these questions is no, then address this first.
Presuming that the answers to the questions mentioned above are positive let the key personnel in this company know that they remain a critical business entity. Telling them this 1-on-1 is not enough. They need to hear this in public forums within the company. They need to be clear on the opportunity that the company enjoys, and what this means both for the company and for them as employees.
You cannot over-communicate the vision, mission and opportunity. They already know that you are juggling multiple balls and need ongoing assurance that they remain important.
Make sure that you have a right person handling day to day matters in the core company and in each of the other entities so that as they grow that they can support themselves.
Situation: An early stage company needs to move from an engineering/R&D focus to a production focus. Cash availability and business plans dictate that this must happen very rapidly – within 4 months. How do you coordinate a rapid cultural shift from R&D to production?
Advice from the CEOs:
You will need an experienced VP of Operations.
Operations and production engineers are a different personality type than R&D engineers. The latter are creative and seek new and more effective ways to solve problems, while production engineers thrive on perfecting a process and getting it right every time. You will likely have to adjust the team to assure that you have both types.
Reorganize the current engineering team into R&D and Production engineering teams.
A core R&D team reports to the CTO.
Another team reports to VP Ops and will cover product manufacturing, process improvement and logistics and QA.
What are the most important steps to take first?
Have a heart-to-heart conversation with the individuals who you have assigned to production responsibilities.
Get back together in small groups or one-on-one with your production group and explain that to meet the company’s objectives – and everyone’s long-term financial objectives – there must be a change. Explain the cost in stark dollars of what the failure to make this change means to the company and to the team. Challenge them to assist you in developing solutions that will allow you to meet your corporate objectives.
Allow some learning opportunities to arise. Let team members make the occasional mistake and use these as coaching opportunities for the group to show what happened, why it happened, and why it can’t be repeated.
Separate standard and special order production into two groups. Each group will have to meet their own performance objectives and metrics – but all objectives and metrics must support the company’s objectives.
Early on you may want to require CEO sign-off on production sheet changes, but within a system that allows you to easily determine material from non-material changes.
Situation: A company wants to expand its business development staff. What is your experience, and what has worked best for you in selecting among business development candidates?
Advice from the CEOs:
Your first priority is your compensation plan for the new person. There are three basic compensation schemes:
High Base/Low Commission
Medium Base/Medium Commission
Low to No Base/High Commission
Choice between these options depends on your own philosophy, as well as common practice within your industry. Compensation is central to candidate selection. The CEOs recommend asking candidates about their own preferences for compensation.
If they prefer Option 1, don’t hire them – they either lack experience or confidence.
They ideally prefer Option 3 – they can make more money, but cost you little unless they perform.
If they prefer Option 2, probe. They may be good but face personal obligations that make it difficult to choose the high risk/high reward option. Ask about past compensation and performance. Verify any claims made during the interview.
You want to structure sales compensation so that non-performers leave of their own accord – without costing you dearly in time or money.
What are the most important traits to seek in a good B.D. candidate?
Understanding of customer’s requirements as well as purchase behavior.
Understanding of your product or service.
How do you find candidates?
Use a Head Hunter who knows your industry and competitors.
Use written tests to evaluate the individual’s traits.
Let the recruiter find and screen prospects and present the top 2-3 to you.
Key Words: Business Development, Candidate, Compensation, Experience, Traits, Evaluation, Base, Draw, Commission, Industry Practice, Verification, Performer, Non-Performer, Selection, Head Hunter, Personnel, Recruiter, Test