Situation: The CEO of a company has a problem. Quality control is an essential part of the company’s success, but ownership of quality control issues is proving difficult. When more than one department is involved, each blames the other for issues or deficiencies. Who owns quality control?
Advice from the CEOs:
At the end of the day the project owner must own this responsibility. This individual can delegate work but not accountability.
QC must be embedded within the company’s systems. In addition, someone has to walk in daily to ask what is wrong with this project? What can be done better? A skeptic.
Put a skeptic in the QC role – the job is to find what’s wrong, not what’s right – a tactical skeptic.
Skeptics are ideal for design reviews.
It isn’t necessary to hire someone for this role if there’s already a productive skeptic on staff.
This person needs to be vocal and will irritate some of the other staff. Coach staff to tolerate this, because the individual is performing an essential role.
It’s impossible to check everything. However, as issues are identified, everything can be documented.
As systems are reviewed, look for patterns of problems.
Develop solutions as problems are identified.
Log issues and solutions on a shared server to facilitate access by project managers.
Institute cross-functional design reviews – representatives from different functions offer different perspectives. Formalize design reviews in the early and start-up stages of projects.
Work on company culture – build anticipation of challenges into the culture.
Build a heuristic of the output of each program. Use this to make sure that inputs, filters and system checks will produce the desired output and the desired level of quality.
Ask: where is QC currently working within the company? Why is it working?
Operations and testers catch the errors.
The issue is distributing the knowledge gained. In complex systems nobody understands the full picture or the impact on the customer.
This becomes the responsibility of the project owner.
Situation: The head of a small service company wants to become more strategic – more like a CEO. Ideally, he wants to create a small samurai team to help him expand. He prefers working with a range of clients to develop creative, out of the box solutions. How do you transition from boss to CEO?
Advice from the CEOs:
The eMyth Revisited by Michael Gerber is a valuable primer on how to bring in more clients and revenue. The critical question that this book helps to answer is “what do I want to build?”
The book walks you through the critical questions that will help to answer whether your true ambition is to be a Picasso with helpers or a company. The answer may be either, but how you build each is different.
The more that skills can tied to a tangible outcome the easier it is for clients to hire a company. Quantify past successes. Make it easy to justify hiring your team.
To add to your pipeline:
Help friends help you. Make it easy for them to refer you. This can be simple: YouTube videos or improving the company website to highlight past successes.
The company web site can’t be just OK – it must be the all-important credibility builder that the company needs. Recreate the site to wow the visitor and tell the company’s story. Make it fun and compelling.
Participate in groups or forums that your targets attend. Create presentations, webinars, etc. Establish the company as an expert with the answer and as a trusted resource.
Also present to professional organizations to establish expertise and credibility.
Testimonials are powerful – particularly if backed by metrics.
Collaborate with people with similar depth of experience who can help develop the pipeline. Offer them a cut of total job revenue.
A young company that focuses on personalized solutions needs to generate near-term
revenue to meet expenses. There are also options for debt or equity financing,
but the terms for each will equally depend on near-term revenue potential. How
do you generate near-term revenue?
from the CEOs:
in terms of the referenceability of early customers. As a new company, the first five customers
define the company to future customers.
core values of the company will help clarify how to make early choices.
just go for the easiest closes.
a chart of potential customer prospects:
potential prospects into groups.
is the deal model and key value proposition for each group?
a video and communications package to demonstrate the company’s benefit to each
are trade-offs between the different deals that the company will pursue:
fast deals are most likely to meet immediate cash flow needs.
biggest deals may involve the creation of LLCs. These will involve both more
time and additional legal fees.
sure that early deals align with the company’s core brand.
outsourcing to speed the provision of services to early clients. Build this
cost into your billings. Assure that the funds from early deals flow to or
through the company. This will improve the financial story to additional
serving special interest groups. Their potential value is that they work for
their passion more than for money. If the company chooses to work with one or
more of these groups, assure that customer selection aligns with company values.
current focus for near-term monetization is on merchandizing. As an alternative,
consider charging a separate fee for the use of company IP. This may give clients
additional incentive to utilize company technology to monetize their
Situation: A software company is developing a new solution for their B2B market. The CEO has been in discussion with a potential partner to assist developing this solution. The question is whether this partner is the right partner. Is it smarter to complete development as a partnership, or on their own with the aid of subcontractors? How do you evaluate a potential partnership?
Advice from the CEOs:
Is the potential partner also a competitor? If so, is the partnership arrangement on or off the core focus of the company’s business. Is there potential for future development in the partnership, or is this just a one-shot opportunity?
What would a new partnership look like? Ask the following questions:
What is the long-term vision for the company?
Does the partnership fit this vision, and under what terms?
Is the potential partnership “sticky”? Will it bring in business that can be nurtured and developed under the company’s shingle?
Until answers to these questions become clear, soft pedal the partnership opportunity and plan for the company’s future.
Take advantage of situations that the partner presents as they benefit you, but do not let these become a distraction to the company’s focus unless the partner is open to working with you as a partner rather than as a source of bodies and skills.
Put a deadline and milestones on the partnership relationship. If they don’t pan out, walk.
Don’t burn bridges, if the partner takes off, then jump back in more strongly, but on terms that benefit the company’s strategy.
For the immediate future and until the situation becomes clear don’t let people become idle. Unless something develops quickly be ready to redeploy them.
An alternative is to stick with the company’s current customers and expertise. This involves investing resources and focusing R&D on solutions for these customers. If the market remains substantial and current customers are the largest players, this has the greatest potential for growing the company’s business.
Situation: A B2B company has historically negotiated pricing with customers individually. While there are similarities between customers, each receives a product customized to their needs. The CEO is considering creating a “full disclosure” pricing model including their costs and seeks feedback from others. Do you share company costs with customers?
Advice from the CEOs:
With only two exceptions, the CEOs did not agree with the concept of fully disclosing their cost structure to the customer.
The industry exceptions were public construction and government work. Some cities and the federal government require cost breakdowns and mark-ups by regulation.
The difficulty with the profit or license line, however it’s labeled, is that it becomes obvious that this is the company’s profit ‘nut.” This may be shared with a CEO that you respect; however, if the CEO shares this information with others in the organization your cost breakdown may become the basis for future line-by -line negotiations for cost reduction. Those with whom your company negotiates will be acting in their company’s interests, not yours.
The key is to optimizing pricing is to identify and sell a solution to the customer’s pain. If you do your homework well, and the customer is the right prospect, the price that you charge will pale in comparison to the costs that the customer seeks to avoid.
In your first negotiation, make sure that you have identified the customer’s pain and are presenting a value that addresses this pain. Only after you set expectations and have assured balance of effort do you go into more detail about your cost structure. Even here, only share detailed cost information if you deem this critical to the sale.
Look at it this way – price is not the key issue. The key issue is whether you can solve the customer’s problem and do so while providing an appropriate return on investment for the customer.
Situation: A web-based software solution company wants to expand their customer base. They have several large clients, and want to expand their presence both geographically and to additional sectors. How do you position the offering to appeal to a larger audience? How do you expand your customer base?
Advice from the CEOs:
In customer presentations, talk about out-tasking versus out-sourcing. This is less threatening to the customer’s existing IT and analyst infrastructure. It allows you to focus on your strength and to build a pitch that augments the customer’s current capabilities.
Is there a trade-off between customer depth and breadth of adoption?
Test doing both on a limited scale. Go deeper in four accounts, and simultaneously focus on one application that you can rapidly sell to 20 accounts.
This exercise will help you to find the right balance.
Look at customers with whom you have had early success. Those customers are proof cases. Look for similar prospects who will respect the experience of the early adopters.
Take a current client who has had success with your applications. Go to similar state and regional companies who will respect the first company’s experience. This will help you to create a national presence in a sector or industry.
Build strategic alliance partnerships.
For example, take a potential customer that wants to be an application service provider.
Look for other companies serving that customer who could benefit from an alliance with your company. Build an alliance to offer bundled services to the potential customer.
If you do not have someone in this important business development role, you need it.
The Association of Strategic Alliance Professionals is a great place to start strategic alliances.
Work more deeply with your current clients. Offer additional applications, subscriptions and offer combinations of services.
Situation: A company has a crowd sourcing solution which is co-creational. You ask a question and get multiple answers. The company then uses technology to select the best answers. The challenge is developing a business model. What parameters are predictable and dependable? How do you develop a revenue model?
Advice from the CEOs:
Revenue is always, in the end, a matter of value received – both potential and actual.
High dollar per click comes from delivering better responses, particularly if you can demonstrate higher sales conversion rates.
High value responses are valuable. If you can deliver these consistently, consider charging a subscription instead of pay-per-click. Pay per click is fine for attracting first-time users, but move to subscription for ongoing access.
Limit your initial audience to crowd source participants who have knowledge and experience – like CXOs on LinkedIn. Create relevant communities.
In addition to best practice answers, provide an opportunity for participants to share failures – experiences from which they learned. Simply Hired created an early, and lasting audience by creating a companion site called Simply Fired when they started. Based on the responses to this site, they created a Top Five Reasons for getting fired, with inappropriate behavior and sexual harassment at the top. This exercise helped them to create a lasting presence.
Make your site clean and show clear steps to a revenue model for users. This will take time and you won’t see results immediately. Over time it will pay off for you.
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.
Situation: Much of a company’s work is non-standard. Each customer’s solution is individualized. Finding the best solution in each case frequently requires a stretch. The CEO’s approach is to simplify the problem to its essential components and from this develop a unique solution. However, several of the staff responsible for developing solutions shy from this approach when confronted with a new challenge. How do you create a bias for action?
Advice from the CEOs:
Company culture is defined by the CEO. In this case you wish to establish a culture of innovation. This might be defined by the phrase “we don’t do simple things.” This means that you need innovators or creative people in the problem solving positions.
Consider breaking the roles apart. You need experienced and balanced but creative people to develop the unique solutions. People like yourself. On the other hand, you need methodical, reliable people to put the solutions into effect. These two roles usually require teams of different personalities. They don’t conflict, but are different.
Look at Landmark Worldwide as a resource for your staff. Landmark specializes in teaching people to expand their horizons. This doesn’t mean changing who they are, but facilitating their ability to team with others with different but complimentary talents to achieve original and effective results.
To help the team understand what you want to accomplish, bring in an organizational development consultant to help communicate your vision and assist with culture transformation.
It is important to recognize that these individuals are likely as uncomfortable with this situation as you are. This realization helps to craft a win-win solution that will strengthen the company.
Situation: A company has clients who are interested in projects for which the company’s partners already have partial designs. There is an opportunity to leverage these partial designs into development of full solutions for their clients. How should the company approach this in a way that satisfies their customers and is fair to their partners? How do you set up co-development partnerships?
Advice from the CEOs:
Given this opportunity it is no longer important who performed what part of the development. As long as your partners have quoted you what they believe to be a fair price for their development pieces, you are free to accept their price, complete development to your clients’ specifications, and sell the full solution to the client at market prices.
What you bring to the table is the opportunity to rapidly monetize the technology. This is something that your partners can’t do, so by filling this role you are acting in the interest of all parties.
What you charge for your work and the full solution depends on the potential value to the client. Time is money, and delivery now is worth a premium price to a client who needs your solution and wants to release their product as soon as possible.
This strategy is particularly applicable to early stage companies who need to release their initial products and start generating revenue.
Take a note from Bill Gates – sell the product for a good price and then buy or acquire the supply.