Category Archives: Team

How Do You Align Expectations Across the Company? Five Suggestions

Situation: A company is doing well, but the CEO is concerned about emerging hurdles that may stall momentum. The key issue from a systems development perspective is changing a “one-off” project based focus towards a modular mindset – essentially shifting a short-term to a long-term view. How do you align expectations across the company and transition to a broader focus?

Advice from the CEOs:

  • Start by clearly communicating your expectations. Work with your managers so that they communicate a consistent message to developers. Look for organizational changes to better align talents of individuals to roles taking advantage of these talents. You may want to refresh the gene pool by bringing on additional people.
    • One company with multiple teams creates healthy competition against performance objectives between teams with recognition and rewards to the top team.
    • If the change involves creating greater alignment between functions, create opportunities for individuals from different functional areas to work together. For example, have an engineer accompany a sales person on a critical call to close a deal. If the deal meets spec objectives, is closed, and the project completed on schedule and on budget, the engineer is bonused on the sale.
    • One company rents a lake cabin every year. Use of the cabin goes to teams recognized for meeting objectives, deadlines or other outstanding performance. An added benefit is that on the way to and from the cabin as well as while they are there, teams spend time talking about the next performance coup that will get them the next use of the cabin.
  • Look at your organization – both your Org Chart and the physical space. One CEO found that his engineering organization was stove-piped both in terms of reporting and incentives, and physical barriers prevented groups from easily interacting with one-another. To create better coordination between design engineering and manufacturing engineering, the teams were relocated to a new shared space, without physical barriers. Also, the Org Chart was adjusted to increase incentives for collaboration between the functions.

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How Do You Manage Communications Post-Riff? Three Thoughts

Situation: A company missed production milestones and had to reduce top and line staff by 20% to keep salaries in line with expected revenue.  An executive who was very angry about being let go has asked the CEO to meet him for lunch. How do you manage communications with employees post-riff?

Advice from the CEOs:

  • If you haven’t already, call a company meeting to explain the situation, as well as the rationale for the riff. The company has to manage itself financially in line with current and expected future revenue to assure that it can take care of employees. Explain the connection between production milestones, revenue, and the company’s ability to afford staff. Employees generally understand these connections and will accept this well.
  • When you have lunch with the executive, first listen to what he has to say.
    • Anger expressed in an exit interview is part of a natural emotional response to difficult news or change. Listen for signs of ongoing anger or progress toward acceptance of the situation.
    • If the individual threatens the company or tries to bargain the severance package, don’t negotiate.
    • However, if the individual is reasonable and asks for assistance in finding a next position – references, introductions, etc. – then offer to assist as you can.
  • Should the CEO make an attempt to follow-up with others who were riffed?
    • No. If they contact you, then respond in a similar fashion as you are to the VP, but otherwise don’t try to contact them.
    • In the Silicon Valley economy, people are familiar that employment situations change and know that as this happens they can be affected.

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How Do You Shift Culturally from R&D to Production? Seven Steps

Situation: An early stage company needs to move from an engineering/R&D focus to a production focus. Cash availability and business plans dictate that this must happen very rapidly – within 4 months. How do you coordinate a rapid cultural shift from R&D to production?

Advice from the CEOs:

  • You will need an experienced VP of Operations.
  • Operations and production engineers are a different personality type than R&D engineers. The latter are creative and seek new and more effective ways to solve problems, while production engineers thrive on perfecting a process and getting it right every time. You will likely have to adjust the team to assure that you have both types.
  • Reorganize the current engineering team into R&D and Production engineering teams.
    • A core R&D team reports to the CTO.
    • Another team reports to VP Ops and will cover product manufacturing, process improvement and logistics and QA.
  • What are the most important steps to take first?
    • Have a heart-to-heart conversation with the individuals who you have assigned to production responsibilities.
    • Get back together in small groups or one-on-one with your production group and explain that to meet the company’s objectives – and everyone’s long-term financial objectives – there must be a change. Explain the cost in stark dollars of what the failure to make this change means to the company and to the team. Challenge them to assist you in developing solutions that will allow you to meet your corporate objectives.
    • Allow some learning opportunities to arise. Let team members make the occasional mistake and use these as coaching opportunities for the group to show what happened, why it happened, and why it can’t be repeated.
    • Separate standard and special order production into two groups. Each group will have to meet their own performance objectives and metrics – but all objectives and metrics must support the company’s objectives.
    • Early on you may want to require CEO sign-off on production sheet changes, but within a system that allows you to easily determine material from non-material changes.

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How Do You Shift from Craft to Lean? Four Steps

Situation: A company has an engineering structure which emphasizes function over cost. As a result, there is little collaboration between design and manufacturing, and little design for manufacturability or cost control. This contributes to a last-minute mindset and expensive solutions. How do you shift design engineering and manufacturing from a craft to a lean mindset?

Advice from the CEOs:

  • Changing how people think and act may also mean changing people. Are you prepared for this? If not, then it may be difficult to achieve the change that you desire.
  • Let’s use a mindset change in another area – sales compensation – as an example. In this case, the sales team had previously focused primarily on revenue, with no incentive to drive margin. This impact was continuously eroding margins, though the company realized revenue goals. The mindset was changed by introducing a new system with dual incentives: to retain their position, a sales person had to hit at least 85% of their revenue target, however commission was based completely on the gross margin from their sales, with a bump in commissions when they hit 100% of their revenue target. This system drove both revenue and margin targets and was very successful; however, the company lost a few sales reps who couldn’t make the adjustment.
  • Transferring this lesson to the engineering situation, design an incentive structure that drives both function and low cost manufacturability to achieve both targets simultaneously.
    • Task your VPs of Operations and Manufacturing – and the key managers of your design and manufacturing teams – to create a dual incentive system that meets both function and manufacturability objectives. Measurements may include:
      • Actual vs. initial estimated manufacturing costs.
      • Margin on final product.
    • Once the parameters are developed, clearly communicate these to all affected employees up front to set clear expectations for the future.
    • Incentivize your VPs and key managers jointly on collaborative efforts and their ability to develop joint solutions.
  • Another solution which will speed the process – put design and manufacturing engineering in the same work space instead of separating them. This encourages the teams to work together.

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How Do You Plan for Contingencies Post-Deal? Three Insights

Situation: A company is in the midst of due diligence for sale of the company. Chances of closing the deal are 50/50. The CEO, key staff and the Board must plan for both contingencies. How have you planned for contingencies whether a sale goes through or not?

Advice from the CEOs:

  • You have to assume that the company will be a going concern. If there’s no hope for the future, there’s no power in the present. Without hope, you can’t establish a motivating vision around which to rally the team. Whether or not the sale goes through:
    • It is essential that the owners and Board make a commitment to the key employees, if not to the long term business.
    • Absent a long term commitment to the business, customer initiatives and alliances may prove difficult, because major customers will know that an offer is on the table. They want to be sure that they can count on you for ongoing needs.
  • The Board and Leadership Team must create a strategy for moving forward.
    • Key to success will be material and financial commitments from the Board to motivate the Leadership Team to stay on-board.
    • Retention plans may include:
      • Sizeable retention bonuses to the team.
      • If an employee stock-ownership program is in the works, there must be assurance that this will be put into place.
      • Rules of engagement in the case of future due diligences that will preserve the financial interests of the team.
  • For the CEO, support of the Board is crucial. It is imperative that the CEO impress on the Board how critical their support is to both the company and their own financial and fiduciary interests. If the Board fails to make commitment to the team and company moving forward, it will be difficult to create a winning strategy.

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How Do You Recruit Hard-to-Find Talent? Five Solutions

Situation: A company needs a strong pool of engineers in their market niche to stay ahead of the competition. Their niche is specialized with little transferability from other engineering specialties. They struggle to find local talent and relocation expenses are high. How have you recruited hard-to-find talent?

Advice from the CEOs:

  • If you want a mix of fresh and experienced talent and need to add 3 to 5 new engineers per year to keep up with growth and turnover, you will be hiring a new engineer every 2-3 months so you need a standardized, repeatable process that is ongoing. If you don’t have either in-house or reliable outsourced HR capabilities, you need to secure this as soon as possible.
  • Consider establishing a satellite office in a geographic area which has an available talent pool.
    • Look for areas with a top university engineering program in your field.
    • Look at your key competitors’ locations and see whether they are in areas with both the educational and industrial-technology base to be a candidate location.
  • As you develop a new geography, forge strong relationships with the university programs that can feed you the younger talent that you need. This is a win-win relationship, because universities are focused on their placement statistics and corporate support.
    • Get to know the professors in your specialty and explore establishing a center of study or excellence within the engineering programs.
    • One company works closely with Santa Clara University and developed a program that offers financial rewards for the best technical papers produced by students in their specialty. This has created a buzz around the company, helped to establish a study program in their specialty, and enables them to attract the best and brightest graduates.
  • As you establish a reputation for attracting the best younger talent, this can help you to attract seasoned talent that wants to work with the brightest young talent in the field.
  • Another option is to find 2-3 key experienced engineers who are willing to relocate for the opportunity to build a new team.

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How Do You Develop Leaders and Managers? Five Factors

A company has focused on developing future leaders and managers. They do this both to increase their managerial and leadership bench strength and to boost employee retention. What has worked for you in developing managers and leaders?

Advice from the CEOs:

  • Trying to make a leader doesn’t work. Leadership is a trait, not a skill. Leaders can arise from anywhere within the organization. An effective CEO recognizes this and works with both the leaders and the managers, whatever their position.
  • The Gallup Organization found that exceptional managers and exceptional leaders are not often the same people. Usually, the best managers are people who excel at bringing out the best in their employees, but may not be either visionary or strategic thinkers. Leaders, on the other hand are those to whom others look to for guidance and direction. Good leaders know how to identify and delegate to good managers.
  • Identify and develop strengths within your people; don’t try to fix weaknesses.
    • Gallup found that talented people have identified and developed their strengths. Instead of fixing weaknesses they find ways to work around weaknesses so that they are not harmed by them.
  • Use informal mentoring. Assign mentors to employees, and include cross-departmental mentor assignment to extend skills development, as well as managerial and leadership development.
    • Ask mentors to report progress to the CEO on occasional basis.
  • As you develop your talent pipeline, track the number of employees added to the pipeline per year as a key company metric. As an additional metric, look at the number of individuals in your pipeline compared with the number that you believe you need to fill future needs.

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How Do You Structure Your Bookkeeping Function? Four Suggestions

Situation: A small company has a long term clerk employee. This individual is responsible for AR/AP, Payroll and also HR manuals and reports to the CEO. This individual has been a good employee, but doesn’t perform well in this role. How would you structure accounting and bookkeeping in a small company?

Advice from the CEOs:

  • This is a key role, but there are a number of options. One is for the individual to continue reporting to the CEO, but train someone else to back them up. This will enable you to either shift the individual to another, more appropriate role within the company, or to continue with minimal disruption if the individual leaves.
  • Because of history and loyalty, this is a difficult emotional issue for you as CEO. It is important to consider what you would do if you could remove your emotions from the issue. If the answer is that you would eliminate the clerk position and hire a qualified, experienced bookkeeper at the appropriate salary, then this is your answer.
  • Packard’s Law – from one of HP’s founders – is that no company can grow beyond the capabilities of their employees. Hire the right person. This individual must be process-oriented – someone who routinely checks their own work to make sure that it is right. There is an adage in accounting that good accounting is 20% knowledge and 80% double checking the work. Hire a person who loves to do this.
  • Take care of this position in the best interests of the company, and look for another, more appropriate within the company job for the clerk.

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What Are Best Practices Hiring Out of College? Four Thoughts

Situation: A Silicon Valley company finds it difficult to find good candidates locally, and also to attract qualified distant candidates to the Bay Area. They want to explore hiring talented individuals out of local colleges and developing them within the company. What are best practices hiring right out of college?

Advice from the CEOs:

  • Hiring out of college or graduate school is a good way to find long-term hires who can grow into positions. It is less useful if your need is for experienced and tenured individuals who can immediately get up to speed in a position of significant responsibility.
  • As in any hiring situation, you should review your hiring process before you start to hire. Many companies hire locally based on who applies or who’s a friend of a friend, rather than making an effort to recruit the best candidates.
    • What is your infrastructure? Do you have a system for identifying candidates who best fit your culture and needs? Do you have personnel who can mentor a new college hire, or are you willing to devote significant time to this?
    • An alternative is to hire consultants to develop a recruiting process or to mentor the new hire in specific areas of development during their first year or two on the job.
  • One CEO sponsors an annual competition at Santa Clara University for papers in his company’s field. This has won him considerable support at the school, and gives him access to promising students, several of whom he has hired. An advantage of this program is that the company gets to know the individuals and the quality of their work before making a commitment to offer them either an internship or a full-time position.
  • Be cautious using candidate assessment tools with college hires. An individual’s profile may shift significantly once they start working because there is a significant shift in priorities once an individual leaves student life.

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What are Best Practices for Employee Reviews? Five Examples

Situation: A CEO is evaluating her company’s employee review process and seeks input on alternative practices from other companies. What are best practices for employee reviews in terms of frequency, format and structure?

Advice from the CEOs:

  • Company A conducts annual reviews. They ask for written input from the employee, peers, and manager. The review is a sit-down meeting between the employee and manager.
  • Company B conducts formal annual reviews, with informal 6 month reviews. The annual review evaluates the employee’s performance on 15 key variables, and is prepared by the manager. The review is a sit-down meeting between the employee and manager
  • Company C does not conduct reviews. They have tried several formats over the life of the company, but found none satisfactory. Instead the company continually monitors key metrics on a green, yellow, red scale. As soon as yellow appears on a metric for an employee, the supervisor meets with the employee to discuss the situation and to formulate corrective action. The result is that reds do not occur.
  • Company D conducts annual reviews on the employment anniversary. They request written input from both the employee, and manager. The employee, manager and President meet over lunch, off-site. The objective is to communicate plus and minus points, taking a long-term approach in a conversational setting.
  • Company E conducts annual reviews, with quarterly self-evaluations. Both reviews and evaluations include a key question: “what can management do for me to improve my performance?” The review is a sit down meeting between employee and manager. Results of reviews are tied to quarterly profit sharing.
  • All companies agreed that, generally, in evaluating the options, the most important questions to ask are:
    • Why are we doing reviews?
    • What is the objective?

    The answers to these questions help to evaluate review options.

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