Category Archives: Team

How Do You Bring in a General Manager? Four Recommendations

Situation: A CEO has hired an individual who is currently working on projects for the company. The CEO likes this person and anticipates that he could eventually become General Manager. There have been a few rough spots but, overall, objectives are being met. How do you bring in a new General Manager?

Advice from the CEOs:

  • Transition the individual from their current responsibilities to GM in small steps. This will allow him to develop relationships and credibility with the rest of the team. These relationships and credibility are what he will need in the more senior position.
  • Coach the individual about any behaviors that you may observe, or which may be reported to you by others within the company, which are contrary to your culture. Understand, from the new individual’s perspective, what motivates these behaviors. Encourage the individual to develop alternative behaviors that are more consistent with your culture. Be open to the possibility that some of the behavior may be addressing flaws in the current culture.
  • Maintain open communication with your key managers who will be impacted as the new individual gains responsibility. As the individual gains authority within the organization, be clear that you support your new manager.
  • Your current culture is always in flux, and will continue to change as you bring in the new GM. This will create natural resistance as people adapt to the new situation. Be patient and stick with the plan. When others complain be honest and up-front that you support the new manager, and that everyone will have to adapt.

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How Do You Keep Customers and Employees Updated? Five Points

Situation: A company wants to keep both customers and employees up to date on what is happening within the company. This includes announcements of new products, services and initiatives, changes in personnel policy and benefits, and other information important to both customers and employees. The CEO is considering a company newsletter. How do you keep customers and employees updated and what benefits do you accrue from the effort?

Advice from the CEOs:

  • Customers and employees are two different audiences and require different communications. Externally focused company newsletters are a value-add from a marketing perspective and enhance the image of the company in the eyes of clients and prospects. Internal company newsletters are valuable to reinforce vision, understanding of company policy, and inter-departmental alignment.
  • Both efforts are justified from a time and expense standpoint, and perhaps deserve even more focus.
  • Within the companies represented around the table, frequency of both internal and external newsletters varies from semi-annual to monthly publications.
  • Both print and online newsletters have value. Employees respond positively to both. Print media make it easier for them to share important updates in benefits and excitement about company developments with their families. Online media can be updated more frequently and inexpensively, and the HR department can track the number of views to measure impact.
  • Emailed external newsletters are valuable because they enable you to measure ROI from the effort by building in tracking mechanisms and correlating web page hits to business development and revenue.

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What Changes in Benefits Do You See for 2015? Five Points

Situation: A CEO is doing benefit planning for next year. The company is small, with just under 100 full-time employees. They are growing, and anticipate reaching over 100 FTEs in the next 12 months, unless they consider either contract or less-than-full-time employees. The CEO is curious about what other companies are planning for employee benefits. What changes in benefits do you see for 2015?

Advice from the CEOs:

  • Including employer-paid social security and Medicare matches, CEOs in the group are seeing a range of from 12.5% to 30% in benefits. This does not include 401K matches or bonuses.
  • Over the last five years, there has been a big shift in benefits, in particular a move from traditional health coverage to high deductible HSA plans.
  • ACA requirements for businesses kick in during 2015/2016. In 2015 employers with more than 100 FTEs will need to provide coverage to at least 70% of full-time employees. Starting in 2016 employers with 50 or more FTEs will need to provide coverage to 95% of their full-time workforce.
  • Much depends upon your annual cost per employee is for health coverage as well as your philosophy on employee benefits.
    • Starting in 2015, if a business is supposed to insure its full-time workers but does not, they will have to make a $2,000 per uninsured employee payment on their year-end federal income taxes.
    • The fee is $3,000 if the employee gets health insurance subsidies through the Health Insurance Marketplace.
    • Some companies who currently pay more than this in annual premiums per-employee are considering boosting employee pay and having their employees self-insure through the Marketplace, or by purchasing the same policies available in the Marketplace directly from health insurers. The policy cost is no different, assuming that the employees will not qualify for subsidies, but policies purchased directly from insurers may provide a better network of physician providers.
  • Before you make any decisions, it is best to consult an outside HR professional who is knowledgeable in both health care alternatives and the ACA.

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How Do You Optimize a Promotion? Four Recommendations

Situation: A company has a long-term employee who has been growing in responsibility as Customer Service Supervisor. The CEO is considering giving this employee the new title of Production Manager at the same time that the employee receives an annual wage increase. How do you optimize a promotion?

Advice from the CEOs:

  • Any promotion or increase in responsibility must be consistent with the strategic direction of the company. What are the company’s current and future needs and, based on past performance, can this individual satisfy those needs? If so, this may be a good match.
  • In addition, it is important to consider the needs and career path of the individual. Does the new position involve an increased time commitment, additional skills and training, or other important factors, and is the individual prepared for this increased commitment? Will a higher level of commitment be rewarded financially? The only way to answer these questions is to have a conversation with the individual.
  • If as the first two questions are considered there is any doubt, a longer-term transition may be appropriate. Meet with the Customer Service Supervisor and set a series of goals and objectives that will demonstrate their ability to assume the new role over a 6 month time frame. The concept here is that you must work at the level of the new job before you get it.
  • Before embarking on the above recommendations, draft a job description and list of responsibilities for the new Production Manager position, consistent with the company’s needs as it grows. This will involve input from employees who currently handle these responsibilities. Also look at the reporting structure as it currently exists and as it may change.

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How Do You Inform a Client about a Problem? Five Solutions

Situation: A company provides staff for a client. Overall the client has been pleased with the staff provided, and only a couple of individuals have had to be replaced. The client was recently presented with an individual that they seem to like; however, the company has since developed reservations about this candidate. How do you inform a client about a potential problem?

Advice from the CEOs:

  • Meet with this individual face to face or via video conference. During the interview, tactfully ask questions that will either disqualify the candidate or satisfy your concerns. Only continue to present this candidate to the client if you are thoroughly satisfied that they can meet the client’s needs and will represent you well.
  • Ask the client for their impression of the individual. If they do not express any concerns, then your own concerns may be overblown.
  • The client will require the candidate to be trained by them prior to fully bringing them on-board. This will provide another opportunity for the client to say yea or nay. If the individual completes training to the client’s satisfaction, then once again your concerns may not be justified.
  • In any communications with the client, take care to voice only concerns that you can substantiate. Otherwise, you might expose yourself to suit by the candidate.
  • Independent of this situation, adjust your selection process to require face to face or video conference interviews. This will prevent the recurrence of future situations like this one.

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How Do You Manage a Reorganization? Five Ideas

Situation: A company is preparing for a reorganization. The CEO plans to hire a new manager to in time become General Manager of the company. He also wants to terminate two current employees. How do you manage a reorganization?

Advice from the CEOs:

  • Develop a 90-day integration plan for the new manager, including his/her top 3 to 5 objectives, and have the individual develop and execute the plan to achieve these objectives.
  • Use an early project to schedule working sessions with each department in the company during the new manager’s first week. This will help the new manager and current employees learn to work together and develop trust in each other.
  • In addition to providing broad objectives for the new manager’s first 90 days, clearly establish behaviors and outcomes that are unacceptable.
  • One of the employees to be terminated is a long-term employee who reports to the CEO but has not performed to expectations. The CEO should take the lead in terminating this person, and offer them a suitable severance package.
  • A junior employee who is not performing to expectations reports to a supervisor. However, the junior employee has repeatedly tried to work around his supervisor by approaching others in the company with his suggestions and complaints.

o    First, make it clear to everyone that the employee’s behavior is not acceptable and that he has to work through and with his supervisor.

o    Then let the supervisor determine whether or not to eliminate the employee, and support the supervisor’s decision. This includes offering a suitable severance package should the supervisor decide on termination.

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How Do You Replace a Sales Manager? Four Suggestions

Situation: A company’s Sales Manager is likely to retire in the next two years, but has no strict timeline. This individual is the chief rain-maker and has been for many years. The subject of replacing this individual has been sensitive when mentioned in the past. How do you replace a Sales Manager and how do you manage the transition?

Advice from the CEOs:

  • Have a frank conversation with the current Sales Manager. For the company to thrive it is necessary to start selecting and training an individual to take his place when he retires. Have him help develop the recruitment and transition plan. Also involve your Customer Service Manager.

o    Hire a person like the current Sales Manager and allow for up to two years for the new individual to get up to speed.

o    Find someone who is currently associated with one of your key customers and who has contacts.

o    Adjust your compensation scheme to focus on growth and customer diversification with enhanced commissions for bringing in these accounts.

  • To ease the transition, start to build a different customer relations structure – one where the CEO has more engagement with key customers.
  • An alternative to replacing the Sales Manager is to create a different organizational structure. For example, hire a COO who will eventually take over business development as well. Think longer term about to how you want the management structure to grow. Build your future vision of the company into this process.
  • You can’t wait – start now!

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How Do You Emerge from the Recession Stronger? Five Actions

Situation: A company is encouraged by signs of a strengthening economy. They want to encourage their staff to prepare for growth and new opportunities. The CEO is curious about what other companies are doing to prepare their staff so that they emerge from the recession stronger than they were in 2008. How do you emerge from the recession stronger than you were before it began?

Advice from the CEOs:

  • One company is organizing company meetings at each site to outline their high level plans so that all managers know the plan and vision:

o    General company direction

o    Market and opportunity

o    The plan – where they are, what they’re going to do by when

  • Another company conducts a general employee meeting every two months. At the last meeting:

o    They cancelled the 20th day off without pay – and celebrated!

o    They compared revenue growth now versus last year, focusing on the positive upside and company’s potential.

o    They explained why they are now recruiting, and reinforced their business model.

o    They had kept up marketing and sales during recession and these are now paying off.

  • Another is reinforcing the belief that they will stay lean and mean.
  • Another is Increasing update communication frequency and assuring that managers are updating their teams. This maintains the soft reasons for people to stay onboard, and to stay excited.
  • What not to do: do NOT allow cuts that were made to survive destroy the long-term workable business model.

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Do You Give Equity to Board Members? Four Considerations

Situation: An early-stage company has a key advisor who is helping them to build a 3-5 year vision and plan. The company can’t afford to pay the advisor full-time but he’s interested in working one day a week or becoming a Board member. Should they give him equity as a Board member and under what conditions?

Advice from the CEOs:

  • Adding Board members increases complexity, especially when it comes to big decisions. Once an early stage company transitions from their start-up Board to a more formal Board with non-founder members, particularly when a significant number of the new members have strong corporate experience, the Board will take on a certain level of independence in corporate and compensation decisions. Be aware of this, as a larger more independent Board may make decisions that the founders would not make.
  • It is not irregular for Board Members to receive equity or options. If you want to grant options, you must undertake an initial company valuation exercise, followed by annual valuations. It is common to grant options with 4 year vesting on a monthly basis. Vested shares can be purchased at Day 0 price, with some period to exercise options following departure from company.
  • Seek an expert in Board operation and compensation. There are a number of advisors with deep experience in this area who can advise the company on standard practices for Board operation and compensation.
  • If the company decides that they are not yet ready for an expanded Board of Directors, another alternative is a Board of Advisors.

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How Do You Attract a High Powered Individual? Three Thoughts

Situation: An early-stage company is in discussions with a high-powered individual who could invest, join their Board, or help them more directly as an executive. They want to involve him enough so that he is interested in working with them. How do you attract a high powered individual?

Advice from the CEOs:

  • You are still in fact finding mode. Get an NDA ASAP! Backdate the NDA to your first conversations.

o    This individual needs to meet face to face with your current team. See how the dynamics work; be very sensitive to conflicts and jealousies. These can wreck an early stage company.

o    You need to see how the new individual interacts with your current team to check chemistry before you go too far.

o    Be gingerly with your co-founders about adding another “founder.”

  • Create a high level straw man for this person’s roles and responsibilities.

o    Ask the individual what he sees as the potential for the company and how he foresees being able to contribute.

o    Develop a business plan for this individual – with the appropriate title. Spell out roles and expectations.

  • If you offer an equity position, be sure that shares are on a vesting schedule and that you have a shareholder’s agreement.

o    Be creative in your vesting. Rather than vesting on time, consider vesting on individual and company performance against milestones. If the company doesn’t hit the milestones what is the value of the shares? Make the milestones consistent with the individual’s objectives – bringing dollars into the company based on investment or revenue hurdles.

o    If this individual wants to come in as a “founder” insist on some investment to demonstrate commitment – you and your co-founders have funded the company to date.

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