Category Archives: Strategy

What Can be Learned from Employee Departures? Five Observations

Situation: A company has recently seen the departure of several younger employees. Reasons given were better offers at other companies. These employees have been replaced by what appears to be better talent. The CEO took these departures personally and is concerned about the impact on the departments of those who departed. What can be learned from employee departures?

Advice from the CEOs:

  • In working with Millennial employees, it may be necessary to lower your expectations in terms of employee loyalty, work ethic and longevity. Millennials have a different perspective. Recognize this and build expectations around it.
  • Be frank with new employees up front. Plan their career progression out 36 to 48 months and let them know that this time will give them great training. If they are interested in the company and career progression beyond this, then the company be open to discussing options with them.
  • Use outside resources to do a 2–3-month post-op on those who left, as well as to help monitor employee attitudes on an ongoing basis.
    • The outside resource can conduct interviews by telephone, on a confidential basis. The objective will be to assess the reasons why the employees left once the emotions of the action have died down. Summary results of the interviews will not identify the past employee. This will prompt them to be frank with their feedback.
    • Similarly, use an outside resource to conduct confidential telephone interviews with random current employees on a periodic basis. Let the employees know that they will be contacted by an outside agency on a random basis, and that their responses will be confidential. The purpose is to gain information on how the company can better address employee needs in the work environment. Only aggregated and summary results will be presented to the company.
    • These actions will help to assess whether the departures were an extraordinary event or an early warning of more systemic challenges within the workforce.
  • The increased salary needs of those who left may be symptomatic of the current economic conditions.
    • Currently, the need of companies to attract talent has increased pressure to raise wages. Along with this and there is increased turnover among employees who believe that they can make more elsewhere. There is little that can be done to run a sensible business while trying to keep up with current salary demands.
    • Most companies who survive successive boom and bust cycles do not respond to wage pressure, knowing that each boom will be followed by a bust.
    • Once the next bust sets in, wage demands will go down until the next boom cycle starts.
  • Should anything to mitigate the impact of employee departure on their departments?
    • Keep ears open for any sign of an ongoing impact.
    • As above, consider an outside resource to check the temperature of the employees.
    • The best mitigation may be a strong integration of the new, energetic R&D employees into the team.

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How Do You Position Yourself as the New Leader? Five Points

Situation: A medium-sized company has just been acquired. A long-term employee has been named CEO of the entity. During his tenure with the company, he has established solid relationships within the company and is well-respected. He understands that he is no longer a co-worker but is now CEO. How does he best position himself to both employees and to the acquirer? How do you position yourself as the new leader?

Advice from the CEOs:

  • Proactively engage the team in a dialogue about the direction and potential of the company. Focus comments on the positive and the potential of the firm and the combined entity. The acquirer is bringing a new sense of excitement and energy to the firm. They will be looking for key leaders who share their excitement.
  • Market yourself to the new owners.
    • Develop a list of hopes, desires, and needs.
    • Dialogue with the acquirers and learn their hopes and dreams for the combined entity.
    • Look for synergies between your and their hopes and desires. Create your own marketing campaign around these synergies.
    • Position yourself an essential member of their transition team.
  • Select a mentor from the acquirer. Actively seek out their advice and guidance. Use them as a sounding board as you develop your campaign as new CEO.
    • The new organization is now just a plan and may be very flexible.
    • Ask acquirers about the model that they see. What are their key objectives for the first year? What niche do they wish to fill buy acquiring the company? As the key liaison between the company and acquirer bring value to the transaction.
    • When speaking to them, listen for their questions of how they see you fitting into the organization. This will present an opportunity to define your role by addressing their key needs during and after the transition.
  • The same suggestions apply to an individual receiving a promotion within the same company.

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What’s the Optimum Business Strategy: Going Broader or Deeper? Five Points

Situation: A CEO wants to expand her company’s business base, either by diversifying its client base, or by going deeper into current clients. What are some of the key questions that should be considered as they evaluate these two alternatives? What’s the optimum business strategy – going broader or deeper?

Advice of the Forum:

  • If the company diversifies, what will be the perception of current clients?
    • Will they see this as more or less beneficial to their interests?
  • What are the most important objectives – what is leadership trying to achieve? Does the response to this question weigh in favor or one or the other alternative?
  • Analyze the available markets, as well as the company’s current share of the existing market. Is the company the dominant player in its market or is there still ample growth opportunity by investing in deeper penetration of the existing market?
  • Are there important vulnerabilities regarding the current client base? Is the company too dependent on a small number of customers? What will happen if key customers decide to choose another vendor or to develop internal resources to meet their needs?
  • For the option to go deeper into the current client base, what is the resource match between the objective and current resources?
    • Do current employees have the appropriate competencies?
    • What is the available time and dollars to pursue the market?
    • What is the ROI target and what are the risks?
    • Does the company have the right infrastructure to pursue the market, or will it require developing additional infrastructure? What is the cost of development in time, money and resources?
    • It is an area in which the company can excel, and does it align with the passion and drive of the current business focus?

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How Do You Strike a Healthy Work/Life Balance? Three Points

Situation: A CEO fills nearly every minute of the day with activities. All these meaningful to him and the company, and he enjoys the contribution that he is making. However, he fears that he is beginning to burn out. Is burning the candle at both ends doing harm or creating the legend? How do you strike a healthy work/life balance?

Advice from the CEOs:

  • We are best at what makes us happy. We are the only individuals who can really monitor our activities, so we must set both our own priorities and the metrics.
  • The priority is a positive, healthy lifestyle. What may be getting in the way?
    • Getting enough sleep. Medical studies indicate that while some people can get along on 6 hours of sleep per night, most need 7-8. Those who get less than 6 hours on a regular basis are taxing their bodies as well as their psyches. Are you are not getting enough sleep to sustain your current level of activity? Is the recovery time from strenuous activity increasing? If so, your body is telling you something!
    • Quality time with significant others. Are you spending enough quality time with your spouse and children? On a regular basis, not on a once-per-week evening out. Is your family receiving the time and attention that they need, or are they sending signals that they need more? Given the importance of these relationships, not just now but looking out 10-20 years, perhaps it is necessary to reallocate proprieties.
  • Create monitors to assure that you are not over committing and that you are giving sufficient time to rest and your family. After all, this is a marathon. You don’t want to burn out in the first mile!

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How Do You Address Employee Departures? Four Points

Situation: A CEO is concerned that three members of the R&D Team recently left the company. All were in their late 20s and were close. All three cited receiving better offers from another company. They have been replaced by what the company considers better talent. The CEO is concerned about the impact of this turnover on company morale and performance. How do you address employee departures?

Advice from the CEOs:

  • In working with Gen Y through Millennial employees, it may be necessary to adjust expectations in terms of employee loyalty, work ethic and longevity. Younger generations have a different perspective. Learn from this and adjust expectations accordingly.
  • Be frank with new employees up front. Plan their career progression out 36 to 48 months, and during this time give them great training. If they are interested in the company and career progression beyond this, discuss options with them.
  • Use outside resources to do a 2–3-month post-op on the three who left, as well as to help monitor employee attitudes on an ongoing basis.
    • The outside resource can conduct interviews by telephone, on a confidential basis, to assess the reasons why the employees left once emotions have died down. This resource should only provide summaries of the interviews without identifying which past employee said what. This will prompt them to be frank about their feedback. This can yield valuable lessons.
    • Similarly, use an outside resource to conduct confidential telephone interviews with random current employees on a periodic basis. Let employees know that they will be contacted by an outside agency on a random basis, and that their responses will be confidential. The purpose is to better respond to employee needs in the work environment. This will help to assess whether the departures were an extraordinary event or whether they are an early warning of more systemic challenges within the workforce.
  • The increased salary requests of those who left may be symptomatic of a “boom and bust” economy.
    • When things are heating up, and through an employment peak, there is increased pressure to raise wages, accompanies by increased turnover among employees who believe that they can make more elsewhere.
    • Most companies who are able to survive successive boom and bust cycles do not respond to the wage pressure, knowing that each boom is followed by a bust. Those who inflate their wages to keep up often end up dying during the bust.

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How Do you Position Yourself as the New Leader? Six Points

Situation: A new CEO has just taken over at a well-developed medium-sized company? He will be a first-time CEO. The principal concern is how to introduce himself to the staff and customers. He believes that first impressions are critical and wants to get off on the right foot. How so you position yourself as the new leader?

Advice from the CEOs:

  • Proactively engage both staff and customers in a dialogue about the direction and potential of the company. Focus comments on positive opportunities. Demonstrate a fresh sense of excitement and energy. Both staff and customers will be looking for a leader who shares their excitement. Demonstrate good listening skills.
  • There are a number of good books on leadership. Look for a title and theme that is appealing. An important point is the need to “market” yourself to both staff and customers.
    • Develop a list of hopes, desires and needs for the company. Add to this list based on what is heard from staff and customers.
    • Look for synergies between your and their hopes and desires. Create a “launch campaign” around these synergies.
    • This will position you as both an essential member of their team, and as a leader that others will want to follow.
  • Find a mentor. One who has deep experience with the role of “new Leader”. Seek their advice and counsel. Use them as a sounding board while developing a campaign for “Operation New Leader”.
  • Remember that both the company and the new vision are just plans and may require flexibility.
  • Ask others – particularly mentor and staff:
    • What is the model that they see? What are the key objectives that the company should accomplish during the first year?
    • What niche do they see the company aspiring to fill? From this may come insights into underdeveloped opportunities that the predecessor failed to leverage. Also, an opportunity to gain key allies within the company.
    • Focus discussions on what will bring increased value to the company.
  • While speaking to others, listen for their questions about the role of the Leader. This will present an opportunity to define the Leader role by addressing their needs as you transition into the new position.

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How Do You Align Vision Among Leadership? Three Approaches

Situation: The CEO of a software company finds that she and her #2 don’t have the same vision for the company concerning objectives and what is required to reach these objectives. In addition, key employees are reaching retirement age. The company needs to bring in new employees to learn the skills of those who will retire. How can these challenges be addressed? How do you align vision among leadership?

Advice from the CEOs:

  • Consider the following approach:
    • Add 1-2 people and bring them up to speed within the company so that they can step into the roles of the employees who are nearing retirement.
    • Focus the CEO’s role on creating the development outline and priorities, assisting in closing significant sales opportunities, participating in industry seminars to publicize the company’s capabilities, and guiding administration and finance.
    • Focus the #2’s role on assuming a greater role in new software development and customer support and have this person delegate and oversee internal technology development and code maintenance.
  • In pursuing this approach take the following steps:
    • Buttress the CEO’s skills with another developer who knows the key software, and who can maintain this for the company long-term.
    • Shift development from individual efforts to a collaborative atmosphere to ease and speed integration of new code into the company’s software.
    • Reduce the CEO’s day-to-day administrative role.
    • Increase the #2’s role in software development and reduce focus on maintenance and internal technology.
    • Add an additional resource in sales/marketing to boost company growth.
  • How to Get There?
    • Allow the #2 the latitude to start developing some of his own ideas for new tools or products.
    • Bring in a “marriage counselor” to assist the CEO and the #2 to define a common understanding.
    • One focus will be to establish that they clearly respect and value each other’s talents and contributions. The other focus will be to work through objectives and requirements where there has been difficulty reaching consensus.

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How Do You Reduce Interruptions in the Office? Three Points

Situation: A CEO of a small company finds it difficult to focus of company strategy and direction because on continuous interruptions to handle customer and company issues. Frequent phone calls and employees coming in to ask for guidance or to talk about issues make it difficult to focus on plans for the future. How do you reduce interruptions in the office?

Advice from the CEOs:

  • The company has grown to the point that it is time to build a management structure to facilitate decision-making. It’s time to delegate.
    • Identify promising individuals within the company who have the capacity to take on management responsibility. Provide them with the training to assume managerial roles and to handle direct reports.
    • If the talent is lacking in some areas, hire managers to oversee these areas.
  • The phone is the #1 problem – interruptions to deal with customer issues.
    • Hire an assistant to manage incoming calls and to transfer these calls to the appropriate department.
    • Learn to say no. For example, if an opportunity requires the CEO to be off-site to evaluate and estimate a project, that individual could not answer the phone in the office. Similarly, it is necessary to carve out concentrated time for strategic and critical tasks when in the office.
    • Explain to the team the challenge, and the benefits of spending uninterrupted time each day working on strategic direction. These benefits include additional growth and opportunity for both the company and employees.
    • Establish an official time – during regular hours – that the CEO is not available to respond to calls or other immediate needs. During these times, have an assistant direct these requests to the appropriate department or schedule time later in the day to handle an issue.
  • Any executive in a Fortune 500 company plans time for planning and other essential work when they cannot be interrupted. Working without interruptions is essential to efficient, high-quality work.

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How Do You Maintain a Healthy Work/Life Balance? Three Perspectives

Situation: A CEO finds that even on vacations he is obsessed with what is happening at the office. This keeps him from relaxing even during time off. Moreover, his family notices this and is unhappy that he isn’t spending his vacation time with them. How does he turn this around? How do you maintain a healthy work/life balance?

Advice from the CEOs:

  • If an individual is still working most of the time when on vacation this has a number of negative effects.
    • It makes the vacation even more stressful than normal work. First, a vacation is meant to provide distance and perspective from the workplace, as well as to allow time to relax and recharge. Second, this is time set aside to enjoy being with family and focus on work robs everyone of this. Third, while on vacation, there are fewer resources at one’s disposal so solving problems from afar is more difficult that when in the office.
  • To address these issues, plan on the next vacation to be “fully unplugged.”
    • Designate a “substitute” to act as CEO during this vacation. Assure that this individual has their own “go to” person to work with if they encounter a situation that puts them in over their head. Perhaps this can be a member of the board or another senior officer.
    • Plan the next vacation for two weeks to test the substitute model.
    • An additional benefit is that this can provide assurance that even if an unexpected situation prevents the CEO from being present, there is an assurance that the company can operate without the CEO if necessary. This boosts the value of the company.
  • Remember that success as a CEO is measured partly on the ability to have a fully operational office when the CEO is absent. Build and conduct the role so that the company operates well when the CEO is not there. This is consistent with a healthy growth model and long-terms plans for building a successful company.

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Where Do You Focus to Build a Strong Company? Four Considerations

Situation: A company has just hired a new CEO. Historically the company has focused on high quality and good customer service but has lacked good financial management and has experienced financial difficulties. As a result, they could not support their staffing needs. Where do you focus to build a strong company?

Advice from the CEOs:

  • Critical areas where the CEO should focus:
    • Quality – assuring that the company continues to produce high quality products.
    • Customer service – assuring that the company continues to offer excellent customer service.
    • Quality and customer service must remain one and two, though they can be in either order.
    • Financial soundness; but not so focused on the bottom line that either quality or service suffer.
  • How do you achieve or maintain focus on these areas?
    • High quality and good customer service are already well established.
    • What has been lacking is sound financial management. Evaluate whether the right people are in place, and what financial and financial record systems are in use. If expertise is needed, bring in an expert to evaluate both personnel and systems and recommended changes that need to be made.
  • What other important factors should be the CEO’s focus?
    • Ethics – particularly when evaluating the company’s financial system, assure that both people and systems support a strong and reliable department. This may result in some hard decisions that are necessary to turn the situation around. If this is the case, be determined but fair.
    • Sustainable business practices – assure that any new practices that are instituted are sustainable. Look at case studies of similar companies that have turned themselves around.
    • Fun – an enjoyable workplace as far fewer issues than one that is difficult. It is important to build strong teams, and to give them the autonomy necessary to do their jobs well without overly taxing team members.
  • Build a company that has a good balance between the first 3 critical factors. When new hires are necessary look for people with an established track record and business background who also have strong ethics.

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