Category Archives: Leadership

How Do You Build Strong Teams? Seven Suggestions

Situation: A company has lost the team spirit that they had when the company formed. The CEO has struggled to revitalize this spirit but encounters resistance from some employees. What techniques have you found effective in building or rebuilding a strong team culture and improving team performance?

Advice from the CEOs:

  • If an individual is resistant to team meetings, work with them one-on-one. Listen to their concerns about meetings and ask questions to focus them on a higher level of concern – individual and team performance and the need to build effective teams to enhance this performance.
  • If an organization has divided into functional silos, form multidisciplinary teams around initiatives to build inter-team synergy.
  • Choice of leader is critical in team formation. The best teams have the most effective leaders.
  • Crisp, clean communication is important. Document verbal commitments in writing.
  • Select team membership with an eye to team compatibility. Avoid putting individuals with a history of conflict on the same team, particularly if this is a management team.
    • Engineering product teams – where individuals work independently on distinct aspects of a larger project – may be more tolerant of past conflict as long as team activities do not require collaboration among individuals with a history of conflict.
  • Look for common value systems and common focus when assembling teams. This helps to build the team as a strong unit.
  • Recommended Reading: The Five Dysfunctions of a Team – Patrick Lencioni.

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How Do You Gain Commitment to Plan Revisions? Three Thoughts

Situation: A company goes through an annual strategic planning process followed by an annual business planning process. At mid-year they do a review and correction. The challenge is that if the company is behind plan, the management team does not take ownership of plan revisions – it becomes “the CEO’s Plan.” How do you gain commitment to revisions in the annual plan?

Advice from the CEOs:

  • Throw out your current process and start over.
    • The challenge is to gain more buy-in and accountability. This only comes if the targets come from those responsible for delivering them – both for the original plan and if any revisions need to be made.
    • Look at who you involve within the organization – can you drive involvement deeper to generate additional buy-in across the organization?
    • Hire an outside facilitator to guide you through the process instead of chairing the meeting yourself. This prevents the resulting plan from becoming “your” plan. It also changes the culture of the meeting as well as the buy-in.
  • If you use a bottom-up / top-down process, moderate the plan results with an eye to two realities:
    • Bottom-up input from the sales team is rarely more pessimistic than the CEO’s input. If it is ask what is happening.
    • Make sure that your top-down numbers are empirical and based on the best market research that you can obtain.
  • If your plans have consistently fallen short over recent years:
    • You may be baking the targets too high.
    • Consider building the revenue plan optimistically, but build the expense plan conservatively. This helps control expenses and attain profitability targets.
    • So that the two plans are not misaligned, review them more frequently – perhaps quarterly on a formal basis with monthly reviews – so that if your revenue plan is meeting targets you can adjust spending to support production and delivery.
    • It is common to have one set of numbers for sales and a different, more conservative, number for expenses. As long as you conduct frequent review and adjustment of the expense number to sales performance, this works. Many companies also use different targets for operations than what they present to the Board – with the more conservative numbers for the Board.

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How Do You Recruit Outside Board Members? Five Recommendations

Situation: A company wants to add outside members to its Board. They seek individuals with industry knowledge, experience and contacts, among other things – members who can provide high level introductions to potential clients or key players within these organizations. The team is struggling to develop a list of candidates. How do you recruit an outside Board member?

Advice from the CEOs:

  • Your best bet is to hire a firm with a good track record of Board placements.
    • Given your other priorities, it is unlikely that you can devote the time required to develop a list of candidates on your own. Ask yourself whether this is how you should be spending your time, and what the value of that time spent would be.
    • What level of business do your expect from the contacts that the new Board member will provide for you? Calculate a fee that you would be willing to pay a recruiter as a percentage of future business. A fee of $25,000 or more for a good member is not out of line.
  • Network with significant players in your industry, and also look at who is serving on their Boards.
  • Investigate LinkedIn Groups – Groups that focus on Board members. These can be helpful in learning who might be available and connecting with them through mutual acquaintances. In addition, firms that specialize in Board placement frequent these sites. Also look at LinkSV.com which is more focused on Silicon Valley.
  • Determine what you will offer as both liability protection and compensation for new Board members. At a minimum you want to have a good directors and officers insurance policy, as well as stock and cash compensation that is competitive for your industry and company size.
  • Current Top Executives may be too busy to meet your needs. Consider individuals with deep experience who are nearing retirement or recently retired.

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How Do You Facilitate a CEO Transition? Five Factors

Situation: An early stage company is preparing for an IPO. The founder and Board have selected a new CEO with experience taking companies public. How do you facilitate a CEO transition, and how can the founder best position himself to support the new CEO?

Advice from the CEOs:

  • Get clear on your own strengths and desired primary responsibilities, but prepare to be flexible in negotiating responsibilities with the new CEO. For example, if the founder’s strengths are marketing, IP and early stage fund raising, see how these compliment the strengths of the new CEO. Then select a title which will allow you to leverage your strengths without impinging on the focus of the new individual. Don’t pigeon-hole yourself with your new title; keep it as broad as possible, for example Executive Vice President.
  • If you, as the founder, have a good long-term relationship with your VCs and the Board this will be one of your strengths. Be prepared to counsel the new CEO on individual personalities and objectives of this group. The CEO will form him own relationship with the VCs and Board over time.
  • Chemistry between the founder and new CEO will be very important. The job of the new CEO is to captain the ship. Your new job is to be a superior first mate.
  • It appears that you have an excellent learning opportunity. Learn as much as possible from the new CEO as well as the experience of the IPO process.
    • To smooth the transition personally between the two of you, take the opportunity to tell the CEO that you believe that the Board made the best choice and that you look forward to the opportunity to learn from him. This might be best done outside of the office, for example taking the new CEO to dinner.
  • Maintain your relationship with the key VCs on the Board. Let them know about your future ambitions and that if the right opportunity opens up in one of their portfolio companies, you could be interested.

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Do You Lead with Your Head – or Your Heart?

While doing some last minute holiday shopping this weekend, I noticed a book, The Spell of New Mexico, by one of my favorite writers, Tony Hillerman; a collection of essays by renowned authors with reflections of their visits to the state. Perusing the Contents I saw an essay “The Pueblo Indians” by the famed Swiss psychologist C.G. Jung, whom Sigmund Freud called his “crown prince and successor.”

Jung’s essay is about a visit to Taos Pueblo in 1924-25. He recounts a conversation with a Taos chief in which the chief described his perception of the Europeans and European Americans that he had met.

“See,” said the chief “how the whites look. Their lips are thin, their noses sharp, their faces furrowed and distorted by folds. Their eyes have a staring expression; they are always seeking something. What are they seeking? The whites always want something; they are always uneasy and restless. We do not know what they want. We do not understand them. We think that they are mad.”

Jung asked the chief why he thought the whites were all mad. “They say that they think with their heads,” he replied. “We think here,” indicating his heart.

Jung then reflected on the history of European civilization. Instead of seeing the “sentimental, prettified color prints” that artists painted he saw another view of European culture. “What we from our point of view call colonization, missions to the heathen, spread of civilization, etc., has another face – the face of a bird of prey seeking with cruel intentness for distant quarry – a face worthy of a race of pirates and highwaymen.”

We who pursue the practice of business sometimes fall into this face. We think about technology, numbers like ROI, ROE, growth of sales and profits, and profit per employee. We don’t always consider the impact of our focus and actions on our employees, customers, business partners, and the community and world in which we live. We don’t see the bigger picture that we might see if we thought with our hearts instead of just our heads.

So throughout this holiday season and as you enter the coming year, consider spending more time thinking and leading from your heart instead of just your head. It may soften your face and actually improve both your business and your business model.

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How Do You Align Expectations Across the Company? Five Suggestions

Situation: A company is doing well, but the CEO is concerned about emerging hurdles that may stall momentum. The key issue from a systems development perspective is changing a “one-off” project based focus towards a modular mindset – essentially shifting a short-term to a long-term view. How do you align expectations across the company and transition to a broader focus?

Advice from the CEOs:

  • Start by clearly communicating your expectations. Work with your managers so that they communicate a consistent message to developers. Look for organizational changes to better align talents of individuals to roles taking advantage of these talents. You may want to refresh the gene pool by bringing on additional people.
    • One company with multiple teams creates healthy competition against performance objectives between teams with recognition and rewards to the top team.
    • If the change involves creating greater alignment between functions, create opportunities for individuals from different functional areas to work together. For example, have an engineer accompany a sales person on a critical call to close a deal. If the deal meets spec objectives, is closed, and the project completed on schedule and on budget, the engineer is bonused on the sale.
    • One company rents a lake cabin every year. Use of the cabin goes to teams recognized for meeting objectives, deadlines or other outstanding performance. An added benefit is that on the way to and from the cabin as well as while they are there, teams spend time talking about the next performance coup that will get them the next use of the cabin.
  • Look at your organization – both your Org Chart and the physical space. One CEO found that his engineering organization was stove-piped both in terms of reporting and incentives, and physical barriers prevented groups from easily interacting with one-another. To create better coordination between design engineering and manufacturing engineering, the teams were relocated to a new shared space, without physical barriers. Also, the Org Chart was adjusted to increase incentives for collaboration between the functions.

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How Do You Manage a Company Outside of Your Expertise? Three Foci

Situation: The CEO came into a company as a engineering consultant. Three years later the Board asked him to take on the CEO role. This created a credibility issue with staff because the CEO is a duck out of water, though a duck with better business sense than most others within the company. How do you manage a company outside of your technical expertise?

Advice from the CEOs:

  • The staff credibility issue may just be one of self-confidence. You have already demonstrated competence in revising company processes and improving profitability. In fact, your non-industry perspective may have contributed to your success to date.
  • Near term, in what areas should you focus?
    • Focus on building bridges which will give you more leverage to address key barriers, particularly within the more entrenched groups in the company.
    • Look at how the company communicates and exchanges information with clients. One thing that customers want is more self-service options and access to data. You have the opportunity to develop Web 2.0 capabilities which will to set the company apart in what is historically a very conservative and paper-oriented client culture.
    • These actions will help you to increase your credibility as an effective leader and CEO.
  • Longer term, what should be the plan?
    • Keep the ship running smoothly. This by itself will help to build appreciation for your talents.
    • Use any free time to create business plans of your vision for the future. Share these interactively with key staff members and incorporate their input into the plan. Involve them in disseminating the plan within the company.
    • As you develop your vision and plan, look for opportunities to attribute success to others. This will be a breath of fresh air to staff and will strengthen the bridges that you have worked to build. They will start to see you as a key ally who shares credit instead of hoarding it.

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How Do You Manage Communications Post-Riff? Three Thoughts

Situation: A company missed production milestones and had to reduce top and line staff by 20% to keep salaries in line with expected revenue.  An executive who was very angry about being let go has asked the CEO to meet him for lunch. How do you manage communications with employees post-riff?

Advice from the CEOs:

  • If you haven’t already, call a company meeting to explain the situation, as well as the rationale for the riff. The company has to manage itself financially in line with current and expected future revenue to assure that it can take care of employees. Explain the connection between production milestones, revenue, and the company’s ability to afford staff. Employees generally understand these connections and will accept this well.
  • When you have lunch with the executive, first listen to what he has to say.
    • Anger expressed in an exit interview is part of a natural emotional response to difficult news or change. Listen for signs of ongoing anger or progress toward acceptance of the situation.
    • If the individual threatens the company or tries to bargain the severance package, don’t negotiate.
    • However, if the individual is reasonable and asks for assistance in finding a next position – references, introductions, etc. – then offer to assist as you can.
  • Should the CEO make an attempt to follow-up with others who were riffed?
    • No. If they contact you, then respond in a similar fashion as you are to the VP, but otherwise don’t try to contact them.
    • In the Silicon Valley economy, people are familiar that employment situations change and know that as this happens they can be affected.

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What Should You Ask When Evaluating New Opportunities? Five Foci

Situation: A CEO recently sold his company and is evaluating new opportunities. What are the most important questions you should ask when evaluating new opportunities?

Advice from the CEOs:

  • Perhaps the most important thing to evaluate is your passion for the choice that you select. As you evaluate options look closely at the business involved and your enthusiasm for that business. In addition, how does the company feel to you? Does the staff and culture reflect your values? Are you comfortable with the sense of teamwork and collaboration that you see?
  • Doing a cost/benefit analysis on each opportunities, with a focus on:
    • Financial stream – financial prospects for the company as well as the financial package and incentives that you are being offered. In the case of an early stage company, what are their prospects for obtaining financing? If you will be an investor, what is the investment required on your part and what it will cost to support family until you can replace your recent salary?
    • Personal enthusiasm and satisfaction associated with each option.
    • Consult several trusted advisors throughout your selection process
  • Any new CEO assignment requires considerable work and focus, especially in the early phases. Anticipate long hours. The more that you feel compatible with the company and culture, the easier this will be.
  • Look for an appropriate balance between your personal and career priorities, and the financial opportunity offered by each option. If there is an imbalance, you will have to determine which – financial or personal priorities – you want to give the greatest weight.
  • In addition to personal, career and financial priorities, determine the most important factors that you want in your lifestyle. As you evaluate options, assess the match that each option offers to your results.

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How Do You Shift From Regional to National Operations? Three Foci

Situation: A company has a network of regional offices, operating under loose oversight from the home office. Increasingly, large customers are asking for national service agreements, but the company struggles to coordinate uniform national service delivery. How do you shift from independent regional to coordinated national operations?

Advice from the CEOs:

  • If you want to act like a national company, then organize like a national company. Create a national account office which will take the lead in negotiating national contracts. That office will then coordinate with the regional offices to assure that service delivery occurs according to contract.
    • As the national office is built, it will be important for them to understand how service delivery may vary between states because of differences in state regulations. This will require a manager who is experienced and knowledgeable in your field. This may be a promising current regional manager or an outside individual from your industry.
    • You will also want to define customer categories which will enable you to classify current and prospective customers as regional or national accounts. You may want to consider three customer categories, for example Regional, Emerging National and National Accounts.
  • The key to success will lie in your incentive and professional development structures.
    • If region managers receive their incentives and promotions primarily for developing regional business, then this is where they will focus.
    • If you want the region managers to shift their activity and priorities to creating and servicing national contracts, then bias both your incentives and professional development programs accordingly.
    • For region managers, continuity of business will be a top priority, as this enables them to maintain region performance. To come on-board with the new program, they must perceive a value for both themselves and their customers.
  • Once you have determined your structure, look for high profile wins that drive the structure. Reward and promote those who produce these wins.
    • These producers will become your champions for change.
    • The message will spread quickly across the organization.

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