Category Archives: Strategy

Are Your Employees Living the Company’s Values? Four Recommendations

Situation: A tenet of the Company is that all decisions are made consistent with Company Values. However, some of my managers are asking for guidance on how to do this. How have other CEOs encouraged managers to make decisions consistent with company values?

Advice from the CEOs:

  • Create cross-functional teams to address initiatives, solve problems and develop new processes consistent with company values.
    • This builds understanding other departments’ perspectives, and awareness of the impact of decisions on the company as a whole.
    • It builds awareness of company values and fights unhealthy competition between functions.
  • One company created an employee task force to encourage living company values. Their solution includes:
    • Review the company’s values and consider revising how they are stated for easy learning.
    • Involve employees in discussions of company values and how they are applied in their departments.
    • Create a cross-functional employee task force to address inter-departmental conflicts and to suggest solutions in line with company values.
    • Expect everyone to know the company’s values, and occasionally test them.
  • Build a vision of what the company looks like as an expression of its values.
    • Make living this vision part of your role.
    • Include living company values as a formal responsibility of managers.
    • Reward initiatives that build company values into company efforts.
    • Regularly review with your mangers their execution of company values.
  • Create “SMART” objectives around implementation of company values, and hold individuals accountable for achieving their objectives.

Key Words: Company Values, Decisions, Employee Involvement, Initiative, Vision, Role, Objectives, Accountability  [like]

Opening a Branch Office – Five Preparatory Analyses

Situation: The Company plans to open their first branch office. There are considering several possible locations. What are the most important considerations as they prepare?

Advice from the CEOs:

  • Perform an ROI analysis for the planned office. How is the ROI for the branch office different from your primary office? Look for potential economies of scale in your business model. This may prompt a rethinking of how you generate your products or services.
  • Simultaneously, look at your potential costs per location and the level of business required to (1) break even and (2) to match/exceed home office return in the new location. As you consider different geographical locations, compare costs and potential contribution of each against the others.
  • Decide whether you need to build full operations in your branch offices, or whether you can use a distributed services model, working from a central hub that performs some operations that need not be replicated in the branch offices.
  • Once you have completed these three analyses, perform a make/buy analysis to determine whether you get a better return from setting up your own office or purchasing a local company, if one exists.
  • Lower risk by starting with a relatively low cost operation – essentially a satellite office with minimal staff. As the new office develops initial business, they can be supported by your home office operations. They will serve as local feet on the street to evaluate the true potential and local barriers to entry within the new market.

Key Words: Branch Office, Location, ROI, Economies of Scale, Make/Buy, Barriers to Entry       [like]

Working with an Off-Shore Business Partner – Six Recommendations

Situation:  The Company has an off-shore business partner. Primary concerns involve team performance, process documentation and anticipating sales/marketing problems before they become issues. What have you found effective to monitor these areas?

Advice from the CEOs:

  • At the executive level, keep things simple – identifying the major goals and pieces of projects that are the make-break points.
  • Simplify the high level summary and make sure that all of the supporting activity is aligned with and supports key project or company goals. Some members manage projects with weekly or bi-weekly meetings.
  • The benefit of keeping it simple in your own mind is that you can always return to this simplicity when dealing with detail level queries from the partner. It keeps you grounded and on track.
  • One company uses project timelines that clearly show each of the teams where they fit into the project and how important it is for them to complete their portion of the project on time and to spec. Keep everything simple and direct.
  • Sales tracking and management is different from development projects. Drive monitoring off forecasts, pipeline, and achievement of metrics that track with the forecasts.
  • In working with your off-shore partner, organize your presentations so that the key points of emphasis are readily visible. Have back-up slides to show detail aspects of particular projects or initiatives, and be prepared to cover the details if needed. This will help to build confidence between you and your business partner.

Key Words: International, Partner, Performance, Process Documentation, Sales, Marketing, Alignment, Project Management, Communications                 [like]

Merging or Selling the Company – How do we Retain Key Staff? Five Suggestions

Situation: The Company has a merger / sale of the company pending. While most direct staff will be retained, roughly half of the indirect staff may be at risk. The CEO’s objective is twofold: to retain key indirect talent before and during transition, and to do right by those who have made strong contributions to the company.

Advice from the CEOs:

  • One member dealt with this a few years ago. They set up a retention fund for important but potentially impacted employees in advance of the anticipated transaction. The longer the employee stayed with the company through the transition, the larger the payout for which they were eligible. In the case of no transaction, the funds were to be returned to the company.
    • An alternate version of this option is to use insurance to fund a retention package for a group of key employees. This package may or may not be required depending upon the transition.
  • For potentially impacted employees, consider a retention package that rewards them for staying long enough to train the purchaser in their areas of expertise.
  • Look at outplacement services as part of the package for employees. Let employees know that this is part of the package if they are not retained post transaction.
  • Seek outside consultant expertise to assist in the design and administration of a retention package. Also look at your own network, and seek the advice of others who are well-versed with the technical aspects of employee transition.

Key Words: Merger, Sale, Employee Retention, Insurance, Outplacement  [like]

Do You have a Disaster Recovery Plan? Ten Recommendations

Situation: The Company wants to be prepared in case of emergencies including water, fire, earthquake, and the possibility that owners or employees may have difficulty communicating or traveling to their offices for an extended period. What have others done to create an emergency response plan?

Advice of the CEOs:

  • One company developed a disaster recovery plan, including:
    • A communication plan.
    • Employees taking notebook computers home in the evening.
    • Data back-up and server restoration capabilities.

The plan was relatively easy to build and is summarized in a 4-page document in the possession of each employee.

  • What have others done to address emergency preparedness?
    • Daily systems back-ups.
    • If you use a web-based CRM, check whether they have a disaster recovery program.
    • Assuring that there are sufficient cash reserves to manage through 30 days with no invoicing or collections.
  • Drafting a full emergency plan is essential. Start simply:
    • Look at the obvious risks in your location.
    • For each that you identify, develop a back up or contingency strategy and put it in place.
    • Let the list of contingencies grow over time as you recognize more risks.
    • Start this exercise NOW.
  • Once you have a plan, drill the plan. Make sure that employees know what to do in a variety of emergencies so that they are prepared.
    • This can build the confidence that your employees will be able to handle emergencies.

Key Words: Emergency, Communications, Preparedness, Systems, Disaster Recovery, Cash Reserves, Risk Management, Contingency, Drills     [like]

We Want to be Different – Not a Commodity! Five Important Steps

Situation:  The Company has had success with a few large clients but wants to expand their customer base for long-term growth. How do they differentiate their products in what is perceived as a commodity market?

Advice of the CEOs:

  • One company created differentiation by getting to know everyone in the business – building long term relationships, based on reputation and trust.
    • They spent time up front understanding the needs of customers that they wanted to develop.
    • As opportunities arose, they built relationships and asked questions to clearly define client needs.
    • While it takes time and patience, the objective is to be able to say “We know your business” – with credibility.
  • The steps:
    • Study the business, sector, and customers that you wish to serve.
    • Leverage the success that you have had with large customers. Talk about how you helped subunits within your large customers. This makes a big customer seem more like a collection of small customers similar to your prospects and makes your experience relevant.
    • Let prospective customers know, when appropriate to the situation, that you are hungry and will go the extra mile for their business. Simply out-serve your competition.
    • Learn who currently serves your prospective clientele. Study these competitors, their strengths and weaknesses. Talk to their customers – learn what they love about competitors’ service, and what they would like to see changed. Find the holes in what they provide and fill these holes with a better offer.
    • Look for and encourage repeat business and references to new business.

Key Words: Commodity, Differentiation, Sales, Marketing, Business Development, Customer Needs, Competition [like]

Creating a Client-Centered Organization – Six Guidelines

Situation: We want to make our company more client-centered. What are the most important considerations?

Advice from the CEOs:

  • One CEO transformed their company into a client-centered organization based on conversations with customers.
    • The new structure is based on client-market groups.
    • The core of each group is cross-trained professionals who focus on client needs.
    • These groups are supplemented with a cross-trained support staff who can shift between projects depending on market conditions.
  • Organizational structure must start from, and support, a strategic vision. The vision must be informed by the realities of your market and the products/services that you offer.
    • Once you have determined strategy and analyzed customer markets, develop an structure that allows you to adapt to market changes. Structure follows strategy and market.
    • Things to watch:
      • Flexibility within the structure. You want most of your staff to be flexible, so that you can move them among projects as market conditions change.
      • Cross-training is critical.
      • You need strong leaders who can develop market segments.
      • Create objectives and accountability that will tell you how the market segments are operating, and whether staff are meeting cross-training objectives.
  • As you implement a new structure, be aware that:
    • Any change is met with insecurity. Coach your managers to communicate with their teams.
    • The core message is assure employees that they are valued, that any change will be gradual, and that you will provide them with the appropriate training and incentives that they need to succeed.

Key Words: Customer Focus, Cross-training, Communication, Strategic Vision, Structure, Objectives, Accountability  [like]

Great Deal on a New Space . . . Now We Must Move! Five Recommendations

Situation: The Company has taken advantage of favorable lease rates to secure a larger space. How can they minimize work flow disruption during the move?

Advice from the CEOs:

  • Plan the move in detail: electrical, intranet and telephone needs; office space and facilities; design or production space and facilities.
    • If you can’t move everything over a short period of time – a 3-day weekend – consider moving in steps – a series of discrete moves over time, each with its own requirements and timetable.
  • If you carry inventory, pre-build inventory to see you through critical steps of the move.
    • If you have a major customer with strict delivery deadlines, try to negotiate a delivery window during which you can conduct the move.
    • Determine if there is seasonality to order delivery that makes a particular time of year more convenient to move critical operations.
    • Custom work will require special planning.
  • If you plan to upgrade equipment, consider purchasing, installing and operating the new equipment in the new location instead of your existing location.
  • If you will be leasing the new facilities – maybe even if you are purchasing – ask the new lesser or seller to provide cash to:
    • Finance delayed shipments at a price discount,
    • Cover expenses of the move and outfitting the new location to your needs.
  • Consider converting to a wireless intranet and telephone system to avoid the expense of wiring the new facility.
    • Look at plug and go options.

Key Words: Planning, Location, Work Flow, Inventory, Technology, Customer Service, Logistics  [like]

Gee, I Like Your IP! Let’s Talk: 3 Steps to the Dance

Situation:  The Company is moving from a specialty solution to a complete solution. They have identified a partner with intellectual property (IP) that will help them fulfill this vision. How should the CEO approach this company to access their IP?

Advice from the CEOs:

  • There are two aspects of any deal: technical feasibility that will produce value; and the emotional needs of the principals.
    • The technical aspects are the most straightforward and easiest to value.
    • Frequently, a favorable deal hinges not on technical feasibility, but on the desires of the principals and their ability to trust one-another.
  • If you are convinced of the value, you must convince the other party that their best option is to work with you. Then you can negotiate the specifics.
    • Sell your vision: the technologies together are much more valuable than they are alone: 1 + 1 = 5!
    • If control of the technology is an issue, you must negotiate an arrangement where they are comfortable with your control.
      • Do you and the other party have a trusted advisor in common or is there an individual who is respected by both of you? This person can help communicate your good intentions.
  • If your best efforts do not produce an appealing arrangement, your fall-back position may be a partnership. If the partnership is backed by modest investment with options for future purchase, this may be another way to for you to eventually gain control of the technology.

Key Words: IP, Intellectual Property, Negotiation, Emotional Needs, Feasibility, Deal, Partnership  [like]

Working On vs. In the Business – Six Thoughts for your Staff

Situation:  The Company created five customer-centered divisions headed by Business Development Managers (BDMs) who oversee project management as well as business development in their markets. A year after implementation, the BDMs are more focused on managing their teams than on developing new business. How can we enhance focus on business development?

Advice from the CEOs:

  • Your BDMs are technicians; business development (BD) isn’t their strength.
    • People gravitate toward important/urgent activities in their comfort zone.
  • Supplement your staff with people who have a proven talent for business development.
    • You may not need 5 people – 2 or 3 may be sufficient to support the BDMs.
  • What if our customers demand technical expertise in business development personnel?
    • Make category expertise a requirement when hiring, in addition to experience in BD.
    • There are specific traits that characterize successful BD personnel. Specify these traits in your hiring process and verify these abilities in candidates both by testing for these traits and through reference checks. The Sandler Organization has good tests for BD talent.
  • The BDMs are responsible for coordinating bidding and pricing. Should this responsibility be handed over to the new BD personnel?
    • Not completely. You have two options.
  • Require BD personnel to coordinate with the BDMs when it comes to pricing and project delivery, and/or
  • If you determine that the BD personnel need to be able to negotiate pricing on their own, tie their commission compensation 100% to margin on projects bid.

Key Words: Sales, Business Development, Customer-Centered Organization, Hiring Requirements, Hiring Selection, Collaborative Sales, Compensation  [like]