Category Archives: Strategy

Have You Hired People with Disabilities? Six Suggestions

Situation: A company is expanding. Some jobs that need to be filled are either utilitarian or don’t require full mobility. Labor through agencies runs $20/hour including agency fees. The CEO considering hiring the disabled including wounded warriors for this work. Have you hired people with disabilities?

Advice from the CEOs:

  • In San Mateo County California there is a group called Community Gatepath. They assess the work and work requirements and the company pays for disabled services a fair price piece basis. This worked well for sample product with simple packaging.
  • National groups include SourceAmerica.org and the Small Business Association which can assist with any regulatory questions pertaining to hiring the disabled.
  • Working with Easter Seals one company hired high functioning disabled individuals. For everyone involved, it was a very positive experience.
  • If you are interested in hiring disabled veterans, organizations like Hire Heroes USA provides both resumes and assistance. Tax credits are available for hiring disabled veterans.
  • There may be issues around how disabled workers process information or how they handle emotional situations that are different from non-disabled workers. Sensitivity among those supervising is important.
  • Interview and investigate the sponsoring organization and arrangements. Make sure that they are set up well for your needs as well as those of the disabled workers.

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How Do You Get New Employees Up to Speed? Seven Thoughts

Situation: A company has a new set of employees coming up to speed, but this is happening slowly. The work environment is semi-skilled, with learning curves for new office employees and apprentices. How do you get new employees up to speed?

Advice from the CEOs:

  • Provide a competitive level of compensation to journeymen and higher level office employees. Make these levels of skill to which office employees and apprentices aspire.
  • Develop a mentor program. Provide chits (company currency) to both the mentor and the mentee for learning each new processes. Make awarding these chits a big deal. For example, the mentor and mentee collect their chits from the CEO who then takes them down to the treasurer to collect on the chits.
  • As appropriate, create a team learning environment. Game theory has demonstrated that both basic and more advanced skills can be successfully taught in a team game environment where there is both competition and rewards for attainment.
  • Set up a system where successful training is demonstrated bench performance.
  • Establish Operator 1, 2 and 3 levels to qualify for graduated levels of jobs or responsibilities. This creates a career track and an incentive to go for the next level. Celebrate employees as they move from level to level.
  • Company celebrations are important. Celebrate birthdays, tenure anniversaries, skill level attainment, career track attainment, and so on at monthly meetings or events.
  • Hire slow/fire fast. Give new employees a fair shake, but if their mentor doesn’t see promise in them, let them go.

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When Does It Make Sense to Buy a Company? Three Guidelines

Situation: A Company has a key customer that wants to upgrade the Company’s status as an approved supplier. This comes with a catch – the customer demands that the Company reduce the amount of its total revenue represented by its business with the customer. The customer doesn’t want the Company to be overly dependent upon them or their business. One option that the Company may explore is purchasing another business. When does it make sense to buy a company?

Advice from the CEOs:

  • The Company may be working under a false premise.
    • If the Company is truly a critical supplier, the customer is not likely to go away just because they don’t like a single ratio on how the Company runs its business.
    • The risk that the Company takes on buying another business is that this distracts the Company and ends up jeopardizing current business both from thus customer and others.
    • It makes more sense to explore acquiring another company if the Company’s broader goal is to become more diversified, or if new business commitments are forthcoming from this or other current customers.
  • What about this strategy makes sense?
    • Provided that the purchase of another company makes strategic sense, it may be feasible to finance the purchase of that company through a leveraged buy-out.
    • Be sure to build an earn-out with incentives contingent upon the seller staying on and helping to maximize long-term value of business.
  • As an alternative to buying another business, it may be possible to build a new lower cost/price version of the Company’s current product or service and build a new customer base for the lower cost version. This is how automobile companies use the same or similar frames, engines and many of the same components to create different cars for different markets.

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How Do You Best Leverage Networking? Six Suggestions

Situation: A company is actively marketing to prospective clients and also engages in networking. They want to assure that they are up to speed with current trends in marketing. What are best practices for following up on marketing or networking contacts? How do you best leverage networking?

Advice from the CEOs:

  • Timing is everything. A prospective client may or may not have an immediate need for your product or service, but may develop a need in the future. Assure that you have a program that provides ongoing follow up via:
    • Social Media
    • Phone calls
    • Emails
    • Regular personal follow up
  • Initial follow up should be rapid. Ask for permission to follow-up and set the time frame when you meet a new prospective client. Ask how the prospect prefers for you to stay in touch. Do they prefer newsletters follow-up via social media, or personal follow-up?
  • Draft letter, email and social media communication templates ahead of time so that rapid follow-up is easy.
  • Use an electronic or print newsletter to stay in touch with prospects. Social media have become an increasingly important way to stay in touch with networking contacts.
    • Basic newsletters are usually 2-3 pages, or a one pager with links to see full articles.
  • Look at contact management software: for example Salesforce.com or ACT.
    • Basic sales and marketing subscriptions from Salesforce.com start at $25/user/mo. for up to 5 users, or $65/user/mo. for a complete customer relations management (CRM) system.
  • Quality of collateral is important. It is a face of your company. High quality collateral should have a consistent look and feel, and should remind the prospect why they were interested in you and your company in the first place.

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How Do You Structure a Transition Proposal? Three Insights

Situation: A CEO is transitioning her role in a company that she founded to new ventures, while maintaining a part-time commitment to the company. The company seeks a proposal as to how she will split her time and what compensation she wants during the transition. The CEO seeks guidance on the focus and content of the proposal. How do you structure a transition proposal?

Advice from the CEOs:

  • This sounds like a set of half-decisions.
    • The CEO envisions a transition from the current position to a transition position to a new position. The more likely scenario is that the CEO will go straight to the new position. As soon as one new venture starts to solidify, this will demand 100% of the CEO’s time.
    • Given that this is most likely the CEO’s priority, the important question is what the company wants and needs from the CEO. Deliverables, time commitment and compensation should follow these needs.
  • Another approach is to look at an exit package, including a long-term consulting retainer. For example, full salary for 6 months with a retainer for another 6 months. This will allow the CEO more freedom and flexibility to pursue the new ventures.
  • The current negotiation is just a starting point. Here are the things to consider in the proposal to the company:
    • Does the CEO need income from the current company during your transition? Will a new venture benefit from financial or professional assistance from the company?
    • If the CEO is not fully engaged with the company, leadership will likely want the CEO out sooner than later.
    • The company mostly will want a non-compete and the ability to use the CEO as a resource as needed.

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How Do You Manage Internet Use by Employees? Six Suggestions

Situation: A CEO notes that the company’s employees surf the Internet during work – some excessively so. The CEO has visited other companies and noted very different behavior around surfing. Does your company monitor or manage employee Internet use? How do you manage Internet use by employees?

Advice from the CEOs:

  • The first question to ask is whether your company culture allows or does not allow surfing during work.
    • Do you want it to or not?
    • Based on your desires for the company’s culture, set a policy that works for you.
    • If you want to more tightly control surfing, look at Surf Control software which allows you to create surfing rules, and allocate time allowed to surf.
  • Create and communicate your policy. It’s OK to let employees know that you’re not comfortable with what you’ve observed and that it’s time to set boundaries.
  • Act quickly, keep the message positive – for now – but make clear the consequences of inappropriate behavior in the future.
  • Don’t create double standards. Furthermore, a free-for-all atmosphere is corrosive.
  • Once you set your policy, if it is necessary to deal with a chronic and unresponsive offender, let everyone know what action you’ve taken and why.
  • Different companies around the table have created varying policies consistent with their cultures.
    • Company 1: Surfing during breaks and lunch is OK, as long as sites are appropriate.
    • Company 2: Surfing is OK – on your time and with our equipment – as long as you ask.
    • Company 3: As long as you are productive, we don’t monitor your surfing. Caveat: it is important to define and measure what is meant by “productive.”

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How Do You Raise Capital for an Expansion? Five Guidelines

Situation: A company needs to expand to meet growing demand and has opportunities to expand in several locales. They can finance this expansion through bank loans, or by selling either a minority or majority interest in the company. How do you raise capital for an expansion?

Advice from the CEOs:

  • Minority shareholders have appeal. Just be aware that they have rights. If they own interest above a certain percentage, they gain legal rights such as the ability to force liquidation. Research this percentage, and figure out a percentage of minority ownership that will work for you. Based on this, look for a minority partner who will give you the capital to expand for ownership below this threshold.
  • Consider a hybrid solution combining a smaller loan with sale of a limited percent of the company.
  • This is a risk equation.
    • The loan option is risk / reward for long term profit. You may have to secure the loan with personal assets.
    • On the other hand, selling a minority interest could set you up for life.
    • Look at both options, plus your personal goals and decide which combination of risk, reward and personal security fits you best.
  • One sale option is a phased buy out.
    • Example: sell 30% now, with options under conditions that you accept, to buy a larger share of your company later.
    • Continue to involve the key stakeholders in these discussions.
  • Assure that you secure your own future, and then secure the future of other family members.

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How Do You Delegate Yet Stay Informed? Seven Suggestions

Situation: A CEO wants to push project ownership down to lower levels of the company. This is not happening unless the CEO pushes. How do you delegate yet stay informed as you push authority down the organization chart?

Advice from the CEOs:

  • The company needs systems and guidelines to clarify on what and when the CEO wants to either have input or hear back, and what can happen without the CEO’s knowledge.
    • Set levels of approval – dollar impact or decision type – and clarify what decisions can made at what level, what decisions need higher level approval and at what level, where they must inform you, and where you must sign off.
    • Similarly, establish regular reporting and meeting schedules, along with guidelines as to what is to be reported – again by budgetary impact or decision type – and assure that this reporting takes place.
  • “The Great Game of Business” by Jack Stack describes a company which has implemented these systems with astounding results. It provides a template and describes in detail how the system is implemented and what bumps they encountered along the way.
  • Invest more time in setting roles and responsibilities for your direct reports.
  • Keep reporting systems aligned across the company.
  • Expect over time to adjust levels of authority as individuals grow in responsibility and accountability.
  • Most importantly, lead by example. If a team member comes to the CEO for guidance on a project, refer them back to the proper manager for advice.
  • 2015 Top ranked software systems to manage projects and processes from selected searches:
    • Capterra: Microsoft Project, Basecamp, Atlassian, Wrike, Podio
    • Insider.com: Smartsheet, Mavenlink, Wrike, Posoda, Metier
    • PC Magazine: Zoho Projects, Teamwork Projects, LiquidPlanner, Workfront, Wrike

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When Are You Dominant and When Do You Facilitate? Three Keys

Situation: For a CEO to lead effectively, she or he needs to be able use both dominant and facilitative modalities of leadership. James Church, in Navigating the Growth Curve, ties the use of each mode to the growth stage of the company. A CEO asks whether the use of each modality is purely a question of growth stage, or whether there are situational guidelines for the use of each modality. When are you dominant and when do you facilitate?

Advice from the CEOs:

  • The Dominant Mode is appropriate when there is an immediate situation with a clear desired outcome; whereas the Facilitative Mode is appropriate when fixing a broken system that produces issues, or to increase team communication and contribution. As examples:
    • The Dominant Mode is appropriate when there is an immediate issue to be resolved, with clear legal implications and a clear response based on established policy.
    • The Facilitative Mode is appropriate when you want to develop and institute policies and procedures to handle issues ahead of time, or to establish guidelines for action. In these cases you want both input from the team as well as buy-in to institute the resulting decisions.
  • Strategic Planning shifts from Dominant to Facilitative Mode as the organization grows and becomes more complex. Early on, strategy needs to come with a single, decisive voice. In larger companies strategy becomes a group exercise because there are many moving parts and teams.
  • Another way to think about this is that Dominant is appropriate when “the buck stops here,” and will shift from CEO to managers for specific decisions when you reach a stage where the managers are now dominant. Facilitative becomes appropriate when managers and employees – those below the level of company or division leader – need to make the decision instead of the leader.

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Where Should a Company Focus – People or Cash? Four Thoughts

Situation: A small company sells consumables as its primary source of revenue and profit, and produces equipment associated with these consumables. Their challenge is that designing and producing equipment is beyond their financial capacity. They have a small, loyal staff engaged in equipment production. This is a critical trade-off that must be resolved. Where should the company focus – people or cash?

Advice from the CEOs:

  • This product/profit combination is common. HP sells printers and ink, as well as other products, but ink cartridges have long been their primary source of corporate profit. The question is how to produce the associated equipment at the lowest cost?
  • Given the shortage of financial resources, why not asks a company with expertise in equipment to build the equipment on a contract basis?
    • Offer the outsource company the designs and expertise to support the project. That company may even hire your employees who have developed expertise in this area.
    • In return for providing design and guidance, ask the contract company for a percentage of the revenue or profit on equipment that they sell. This relieves you of the payroll and cash obligations for the equipment, and provides you with a modest income stream from equipment sales.
  • There is an obvious question of how the small company retains its intellectual property position. Is it possible to look at critical sub-assemblies and retain the expertise within the smaller company to complete and install some of these?
    • If so, this will boost annual revenue. The contract partner completes all but the most critical pieces, and the small company finishes the product with its technology.
  • The small company, through its sales and marketing efforts, should maintain control of leads and sales of both equipment and consumables.

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