Category Archives: Leadership

How Do You Smoothly Transition Employee Roles? Four Suggestions

Situation: Two employees within a small company are shifting roles. One is shifting from Operations Manager, a higher level position, to an engineering role in charge of production, with no reports. The second has been promoted from Customer Service Supervisor to greater responsibilities for purchasing and production scheduling. How should the CEO adjust the titles and compensation of these individuals?

Advice from the CEOs:

  • The Operations Manger is really shifting to a staff engineer position. Consider the title Senior Engineer or Senior Staff Engineer if the individual is comfortable with this. It conveys respect for prior experience while delineating this individual’s preferred responsibility. You may want to make adjustments to compensation over time by holding back on salary raises rather than by cutting salary right now.
  • The Customer Service Supervisor is moving into new responsibilities, and this may take time. In a sense this is a lateral move with potential for growth. Consider retaining the title of supervisor until this individual has demonstrated ability to perform these new duties. Salary adjustments and raises can be added as the individual grows in responsibility.
  • There is no problem having multiple titles and business cards. Many small companies do this. You can give the second person two titles: Customer Service Supervisor and Production Supervisor. This enables you to elevate this individual to manager of one or both areas as ability is demonstrated to take on additional responsibility and accountability.
  • Because both employees will be working in production, albeit in different capacities, monitor the situation closely to assure that conflicts don’t develop.

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How Do You Grow Without Losing Control? Five Factors

Interview with Kelly Masood, President, Intilop, Inc.

Situation: An emerging company is gaining traction as it moves from early adopters to mainstream. They need to continue to develop new technologies, while bringing down the cost of existing products. This is a delicate balancing act for a small company. How do you grow without losing control?

Advice from Kelly Masood:

  • It’s important to maintain momentum and continuous improvement. From a practical standpoint, we do this by applying common sense to our technical discipline. Common sense, here, is a relative term. It isn’t really taught in school at any level, but is gained through experience. This is the true expertise of the CEO.
  • The delicate part of the balancing act is the mix between developing new technologies and building an effective business model. An effective business model is built on innovative and cost effective products and sustainable profitability. Since new technologies go through development stages, it is important to create break points where you transition from development to productization to marketing and sales. Continuous improvement in existing products based upon customer feedback and new product ideas for future developments are crucial aspects of a successful business model.
  • If you want to minimize outside funding and investment you have to watch cash flow and development expenses. Revenue from existing products is the key. When you don’t have resources, you become resourceful. If the team is dedicated to producing innovative and good products that make business sense, they figure out how to accomplish it without cutting corners.
  • To mature your team over time you must keep them motivated, occupied and adequately compensated today while inspiring them to make it big in the future.
    • You maintain interest through the pursuit of new technology and the learning associated with it. Engineers like to see their designs work and turned into a product that creates value, is used and is appreciated.
    • Keeping the team occupied and challenged starts with choosing the right talent in the first place and then getting them to focus on building great products.
    • Compensating them with a fair salary means locally competitive rates, sweetened with stock options to provide great upside potential.
    • For us, retaining great employees is about enabling them to innovate products that will find broad market acceptance.

Key Words: Early Adopter, Mainstream, Develop, Cost, Continuous, Improvement, Common Sense, Business Model, Cash Flow, Expense, Price, Retain, Employees, Off-shoring

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How Do Identify and Bring In A COO? Five Suggestions

Situation: A company’s Board is pressing the CEO to hire a COO to oversee operations. The Board’s concerns include succession planning for the CEO and a desire for the CEO to put more focus on the vision and strategy of the company. There are no current candidates within the company. How do you identify and bring in a COO?

Advice from the CEOs:

  • Think beyond roles and responsibilities and consider how you would describe the ideal candidate. This includes attitudes and behaviors, talents, experience, and essential skills. Map these attributes and use them to guide your recruitment and selection process.
  • Increasingly, companies are using a values-based process to evaluate personnel both for promotion and outside selection. Tony Hsieh of Zappos talks about this in his book “Delivering Happiness.” This doesn’t substitute for skills and experience, but helps to identify candidates who will help to strengthen your company’s culture.
  • Assure that you have a full process in place that will help you to recruit and select a good candidate. If it has been a while since you last recruited a high level executive, consider securing outside resources to assist. One of the CEOs even hires a 2nd expert to vet the recommendations of the primary expert.
  • Where can you look for good candidates?
    • Talk to your key vendors about who is really good in the industry. Look for a high potential individual in another company who doesn’t have room to grow in their current situation.
    • Also look at related industries where there will be cross-over knowledge and skills.
    • Don’t overlook the military. Talented officers are regularly rotating out of the services – people who have exceptional experience leading and motivating people.
  • On-boarding a new senior executive is different from a lower level employee. If you choose the right individual and they fit your culture, this will ease the process. Be aware that some of your current senior employees will likely be upset that they were passed over and may be difficult. If you haven’t done this in some time, it is worthwhile to secure counsel on the best ways to bring a new COO on-board.

Key Words: COO, Operations, Succession, Candidate, Role, Responsibilities, Attitude, Behavior, Experience, Values, Process, On-Boarding

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How Do You Increase the Strategic Focus of a Board? Four Guidelines

Situation: A company has a board which is uncomfortable with strategic issues. Faced with a strategic decision, they gravitate quickly to tactical issues. What can you do to increase the Board’s strategic focus?

Advice from the CEOs:

  • Change the focus of your Board meetings.
    • Change the agenda of Board meetings. Start with a review of the Strategic Plan and progress toward meeting the objectives of the Plan. Over time, input to the Plan grows as Board members become more comfortable with the strategic issues addressed in the Plan.
  • Develop a Board Charter and annual objectives for the Board as a whole.
    • If you have an individual on the Board who models or nearly models the behavior that you wish to see in the full Board, ask this individual chair a Board subcommittee to work on the Charter. Devote time at Board meeting to discussion of the subcommittee’s recommendations.
    • Develop annual objectives for the Board, including both global objectives and specifically how you want individual members to contribute. Outline your most important expectations of the Board, what you need from them, and ask them to develop objectives to meet these needs and expectations.
  • Start to proactively educate your Board on how they can be most helpful to the company.
    • Gather benchmarking data from similar companies. Educate the Board on best Board practices.
    • Look at the best performing companies in your industry – preferably organizations that do not compete directly with you – and ask to attend their Board meetings as a guest. You may want to take one of your own Board members along. Look for practices that will augment your meetings.
  • Augment the Board with individuals who will help to steer it toward the strategic focus.
    • As you begin to bring the right talent to the Board, recommend the creation of Board subcommittees to work on key strategic areas. At meetings, after the Strategic Plan update, the Subcommittees can formally present their updates to the Board for discussion and consideration. Choice of subcommittee chairs is important to success.

Key Words: Board, Strategy, Tactics, Agenda, Charter, Objectives, Accountability, Best Practices

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How Do You Transition from Product to Business Development? Three Thoughts

Interview with Trevor Shanski, Founder, eWORDofMOUTH, Inc.

Situation: A company with a new lead generation solution is ahead of the curve for their market segment, and ready to transition from a product development focus to a full-scale business development focus. This means developing new capabilities on a limited budget. How have you made the transition from product development to business development?

Advice from Trevor Shanski:

  • The reality of early stage companies is that they live on scarce resources. Founders and early executives have to be able to work for lean base salaries during the learning curve. They will be individuals who have selective characteristics.
    • They will be able to accept conservative salaries near-term, as well as during financial bumps in the road. Their focus will be growing the company’s value and their incentive will be having a material stake in the company.
    • They will have limited outside demands on their time and attention so that they can work long hours.
    • They will appreciate the challenge of heavily performance-based compensation, with the potential to win big if they can deliver.
    • They will have a network of connections and relationships upon whom they can call to gain early business traction.
  • Characteristics for successful early stage executives include the ability to work intimately with the founding team. Early stage companies are idea and capability incubators where things change quickly. Players must be able to get the job done with little support.
  • It is critical to have a clearly defined set of expectations for the first few months as you bring on new executives. Early foci will include:
    • Immersion in understanding the product capability and possibilities.
    • Sitting down with a white board and openly looking at fresh thoughts for how the market should be approached. Founders frequently suffer from tunnel vision after a long period of development and need a fresh outside perspective on the market and messaging. What partnerships could accelerate market development? What knowledgeable experts should be leveraged to build awareness? What potential is out there that the founders are not seeing?
    • After these factors are defined, the next step is to develop an action plan and milestones to guide plan execution, plus a budget and alternatives under different resource scenarios.
    • Once the plan is in place, the focus will be to gain early feedback on the company’s product and capabilities, and then iterate quickly to find the right message to target significant segments of the market.
  • The focus of early stage companies has to be on quickly developing plans, and then executing.

You can contact Trevor Shanski at tshanski@ewordofmouth.com

Key Words: Product, Business, Development, Limited, Budget, Transition, Resource, Scarce, Incentive, Focus, Compensation, Performance, Network, Expectations, Action Plan, Execution

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How Do You Control Expenses As You Grow? Four Foci

Interview with Andy Wallace, CEO, Maxx Metals

Situation: A company, noting that business conditions have improved, is planning for growth. This means keeping current customers and taking on the next tier of customers. They are also focused on improving customer service and the customer service experience. All of this costs money. How do you control expenses as you grow?

Advice from Andy Wallace:

  • As a small business, you can’t spend more than you have. You need to focus on all expenses from supplies to workers compensation. Major expenses are inventory and payroll. You need to focus on the line items, control the little things and control the big things.
    • There are three areas that we monitor frequently: inventory control systems, overtime, and assuring that safety is first to reduce accidents and control workers compensation costs.
  • Employees respect employers who respect them and their families. Recently we had an employee who was called by school because their child was sick. We told the employee to take the rest of the day off to take care of the child. The employee was back in an hour, having made other arrangements for the child’s care.
  • As you grow your payroll, hire the right folks with the right skills. Take time and don’t rush – you need to fill the position with the right person. As a small company having the right skills is important and reduces the costs for training and on-boarding new employees.
    • Important skills for us vary by position but include solid computer and technology skills; attention to detail, as well as writing, communication and math skills; the ability to multitask and respond positively to interruptions.
  • The culture of our company is extremely important. It’s the foundation of the company and we want to perpetuate it. Culture starts at the top with the leadership as examples for the employees to follow. It can’t be “do as I say, not what I do.” Employees know who arrives early and stays late, who is attentive to details. If we don’t set the right tone as leaders of the company, we can’t expect them to follow.

You can contact Andy Wallace at andy@maxxmetals.com

Key Words: Plan, Growth, Expenses, Inventory, Payroll, Overtime, Workers Comp, Respect, Skills, Writing, Communication, Culture

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How Do You Unify Culture in a Geographically Diverse Company? Six Ideas

Situation: As a company has grown to multiple sites around the world they have lost some of the culture that originally bound the company together. Many new hires are hired locally by regional managers and don’t have a strong bond to headquarters or the broader company culture. How do you build a unified culture in a company with many geographically diverse sites?

Advice from the CEOs:

  • Company culture starts with a common set of values. These values should drive everything, from hiring, through on-boarding and training, to performance measurement and evaluations.  In a strong company, these values should be reinforced regularly and expressed in the day-to-day behavior and decisions of the company.
  • Look at how you hire new personnel. Is alignment with company values part of the selection process?
  • Next, look at your on-boarding and training process. Company values and culture should be thoroughly expressed and reinforced in the training process.
  • There is no substitute to face-to-face meetings to build shared company values and culture. At least once or twice a year you should host national meetings that bring the regions together. At these meetings company values should be reinforced, there should be business content, and there should also be recreational bonding component to help employees get to know one-another.
  • Consider an annual reward or recognition trip or special event, and include spouses at company expense. This creates a completely different level of bonding, and spouse involvement communicates a company commitment to the families of the employees.
  • If you have a large number of locations, you should also have a human resources department. Among the important responsibilities of the HR department will be developing uniform selection criteria, uniform training which includes emphasis on company culture and values, and assistance in planning national or multi-regional meetings.

Key Words: Culture, Regions, Multi-site, Diverse, Values, Hiring, On-boarding, Training, Company, Meetings, Bonding, Award, Trip, Spouses, HR, Human Resource

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What Can SMBs Do To Empower Women? Six Options

Interview with Linda Gold, CEO, M3iworks

Situation: While women comprise the majority of US society and business customers, they continue to be underrepresented in business and government. For girls growing up, it’s hard to be what you can’t see, so girls and young women don’t see the opportunities that business offers them. What can SMBs do to empower women?

Advice from Linda Gold:

  • Women contribute greatly to the business community, particularly in small and medium-sized businesses which are the principal job creators in the US. For example, in tough times, smart companies and CEOs face outward rather than retreat inward. Women are naturally more collaborative and can be better at networking and building communities of interest that can open up new opportunities. Smart CEOs will leverage this talent.
  • Dr. John Gray (“Men Are from Mars, Women Are from Venus”) points out that business is like a football game—it’s about getting the ball and running with it. While women know we should be given more credit for our contributions, we need to learn how to take more credit. We need to accept the credit and accolades we receive and deserve. And if a male team member takes “our ball” and runs with it, defense needs to “kick in” and recover the ball. You can only score if the ball is in your possession.
  • Dee Dee Myers, President Clinton’s former Press Secretary gives an example of how to gracefully take credit. When a colleague told her she had done a great job, instead of deflecting the credit, Myers simply and elegantly replied “Thank-you.”
  • Small and medium-sized businesses employ a significant population of women. This gives them the opportunity to raise the profile of their women employees both in the local press, at local social business events, and through social media.
    • The YWCA TWIN Awards – Tribute to Women and Industry – recognize women for excellence in their area of expertise, and for giving back to the community. In Silicon Valley, CEOs nominate their high-achieving executive women for this prestigious TWIN award each year.
  • Girls For A Change (GFC) is a national organization that empowers girls to create social change. GFC encourages young women to design, lead, fund and implement social change projects that tackle issues girls face in their own neighborhoods. The program depends on volunteer coaches – local business, professional and career women – who receive coach training and meet with girls for a 12-week period after school. By publicizing this opportunity within your company or sponsoring a GFC team, SMBs can make a significant contribution.
  • SMBs have a vested interest in encouraging public education to adopt more relevant curriculum and teaching methods. We are in the information age, not the industrial age. We can learn more about opportunities to offer services to and partner with local schools and educational foundations like the Silicon Valley Educational Foundation. We can also lobby for more H-1B visas.

You can contact Linda Gold at lgold@m3iworks.com

Key Words: Empower, Women, Representation, Role Model, Collaboration, Credit, Contribution, NAWBO, YWCA, TWIN, Girls For A Change, Education, Standards, H-1B, Visa

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What Are Best Practices For Managing a Due Diligence Process? Six Suggestions

Situation: A family-owned business received an unsolicited letter of intent to purchase the company. The Board is split on sale of the company, but has agreed to allow due diligence. Only a few key employees are aware of the LOI. What are best practices for managing a due diligence process?

Advice from the CEOs:

  • A due diligence process can be a major distraction. Put as short a fuse as you can on the due diligence process; insist that the information requested be limited in scope to essential materials to minimize distraction; and that the process not interfere with scheduled company commitments.
  • It is exceedingly difficult to hide reality from the troops. Good due diligence is incompatible with secrecy. Absent communication about the situation, if rumors develop at least a segment of employees will assume the worst leading to possible employee loss and erosion of leadership credibility.
  • It is better to explain the situation and put it in the best light. Here’s an example:
    • The company is not for sale but has received an unsolicited inquiry.
    • This is happening because the company is successful, is producing consistent value, and others appreciate our success.
    • Whatever happens, the company will continue as a going concern and if the company is sold, all efforts will be made to assure the retention and security of the employees.
  • Ideally, communicate this through a company-wide announcement, with video link to remote sites, and with the opportunity for employees to ask questions.
    • Brief all key managers in advance, with Q&A scripts to deliver a consistent message and address individual questions.
  • Strictly control the due diligence process.
    • Restrict direct contact with employees and, to the extent possible, with key customers.
    • Maintain your focus on the business – there is no guarantee of a sale.
    • Put retention packages in place for all key employees.
  • If the deal does not go through, assume that it will negatively impact company results for at least one quarter. Adjust your forecasts and incentive programs accordingly.

Key Words: Due Diligence, Purchase, Time Line, Distraction, Communication, Message, Coordinate, Q&A, Limit, Incentive, Retention Package

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How Do You Ramp Back Up Following a Slowdown? Five Thoughts

Situation: A company is ramping back up following a two-year slowdown. During the slowdown employees were on reduced weeks versus historic 50+ hour weeks. When polled about resuming historic hours, several say that they say they don’t want to work more than 45 hours per week. What are best practices for ramping back up following a prolonged slowdown?

Advice from the CEOs:

  • Communication is critical, particularly during times of change. Make sure that you clearly communicate the new situation, any change in direction that accompanies this, the need to readapt to the former schedule, and the benefits to the company and employees in terms of ongoing opportunity and employment.
  • If resumption of normal business includes any change in direction, add metrics and objectives that compliment the new direction. To ease the assumption of new roles and responsibilities, provide process check lists.
  • Provide more deadlines, and complement this with increased recognition and rewards.  Rewards do not necessarily mean money, particularly if your employees are knowledge workers who have to exercise critical judgment in their work.
  • Make sure that you are providing any training that employees need to move into new roles. Schedule training days on Fridays – but let those involved know that they are expected to get their regular week’s work done by Thursday evening.
  • During future slow periods, instead of cutting back hours for everyone, offer unpaid vacation to employee volunteers and keep everyone else working at normal capacity. This avoids forcing them to become accustomed to shorter hours at reduced pay.

Key Words: Slowdown, Resume, Work Hours, Adapt, Communication, Delegation, Change, Direction, Metrics, Objectives, Rewards, Training

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