Category Archives: Team

On-boarding a New CFO – Four Imperatives or Considerations

Situation: The Company is hiring their first CFO. How do they integrate this key person into the company?

Advice from the CEOs:

  • The company should reflect the values, needs and desires of the CEO.
    • Have a clear discussion and agreement with the CFO candidate on values, role, and organizational structure before hiring or announcing anything to the company.
    • The talents of the CEO and CFO should complement each other.
  • The CEO may put the CFO in charge of areas that they want to delegate – accounting, administration, finance and contracts.
    • The CEO should remain involved in banking relationships.
  • Recommended announcements and timeline:
    • When the new CFO is announced, simultaneously present the new organization chart (broad responsibilities, not detailed position descriptions).
    • Set a timeline for realignment of roles. It is not necessary to specify exact roles at the time of the announcement – let everyone know that this is a work in progress and give a time frame within which all will be resolved.
  • Once the CFO is in place, the CEO and CFO should meet at least weekly, to assure that the CFO has the support and resources needed to accomplish their responsibilities.
    • All decisions within the CFO’s group, personnel responsibilities and any shifts in roles should come from the CFO, with the support of the CEO.
    • This will help the new CFO to more rapidly assimilate into the company and will give them the authority needed to manage their organization.

Key Words: CFO, On-Boarding, Values, Roles, Responsibilities, Authority, Personnel, Delegation  [like]

Developing Leaders within the Ranks: Four Approaches

Situation: As they have grown, the Company has used Bay Area talent to seed new locations around the country. Leadership is now short at headquarters. What have others done to fill leadership gaps?

Advice from the CEOs:

  • Develop a formal Leadership Development Program.
    • Identify the top leadership candidates with the company – the top 10%.
    • Identify their individual goals and determine whether these are consistent with company values.
    • Clearly communicate the roles and expectations that you have for future company leaders – both the upsides and the sacrifices that you anticipate that they will have to make.
    • Team the leadership candidates 1/1 with mentors to guide them.
    • Consider an “internal” Board of Directors for developing leaders. Members are considered advisors to the true Board of Directors, understand company strategy, are coached on company values, and are involved in an advisory capacity in key company decisions.
    • Consider a leadership “boot camp” program to groom potential leaders and weed out those who like the idea of leadership more than the reality.
    • From the standpoint of a very hierarchical company, the following items are involved:
      • Time
      • Talent
      • Defining the traits for key positions
      • Identifying candidates who appear to possess these traits
      • Assigning leadership roles to these individuals in executing the annual strategic plan – with senior managers mentoring leaders-in-training
      • Include training and development in professional development plans
      • Investigate employee assessment tools, for example the Myers-Briggs tools.

Key Words: Leadership, Development, Goals, Values, Roles, Expectations, Mentor  [like]

How do you Create Performance Incentives? Four Approaches

Situation: The Company is considering options for both team and individual recognition. What have other companies found to be effective?

Advice from the CEOs:

  • One company has foremen compete on project quality, cost containment, and other measures. Bonuses are based on a mix of team performance, project difficulty and individual initiative.
  • One company uses year-end bonuses, but places more emphasis on frequent small recognitions: pedicure, manicure, going out for a meal on the company – things that let the employees know that they are appreciated on a regular basis. Any incentives paid are based on a mix of individual and team performance.
  • One company has completely eliminated bonuses. Salaries were raised to make up the difference, and individual incentives are created and paid during the year. Incentives reward specific accomplishments which are highlighted when the incentive is paid. Incentives are a mix of team and individual performance.
  • One company is very generous with bonuses – $5K to $10K at a time at the discretion of the CEO. These are paid face to face by the CEO and the individual is congratulated on their performance. However, the bonus recipient also signs a paper pledging not to talk about the bonus. If they tell others about their bonus, they are eliminated from the bonus pool. The company also uses publicly announced annual awards, performance-based monthly awards, shirts, etc. that are presented at company meetings. Interestingly, the smaller rewards and public recognition appear to have the most impact.

Key Words: Recognition, Bonus, Reward, Public Recognition, Effectiveness. Competition, Incentive  [like]

We Only Want A-Players – But Do They Want Us? – Five Strategies

Situation: An early stage company will staff-up over the next year. In the past the CEO has recruited individuals with big company experience and solid resumes, only to find that they had difficulty transitioning to the hands-on responsibility of a small company. How do you find candidates who are highly experienced but who can also excel in a small company environment?

Advice from the CEOs:

  • The best candidates are not in the job-search pool. They are currently working but open to a change. Some will wish to return to a more hands-on situation.
  • Let people know that you are looking for “the best” and have a great opportunity. Create some buzz.
    • Go to your network ask “who do you know?” Don’t be shy!
  • Look for achievers – with proven performance in companies of the size that you plan to be in 12-18 months. Check their references carefully.
  • What can we do now, while we seek the right people?
    • Use contractors and consultants. These people are more entrepreneurial, self-starting, and self-accountable. Monitor their work. If they are good, add them to your team as permanent employees.
    • Develop a milestone-based personnel plan as part of your business plan:
      • When we hit Milestone A, we will need an operations manager.
      • When we hit Milestone B, we will need channel or market development expertise.
    • Conduct case studies of how other companies in your or similar spaces have facilitated their scale-ups. What worked? What didn’t? Why?

Key Words: Candidates, Recruiting, Fit, Culture, Start-up, Achievers, Performance  [like]

My Worst Nightmare – Sell or Downsize? Fifteen Considerations (Part 2)

Situation: The Company is losing money and has been approached about a merger. The CEO’s ideal outcome would be to get cash on the table, integrate with the merger partner and continue business. The other alternative – downsizing – may hurt company morale. What are the best options available?

Advice from the CEOs:

  • The downsizing experience is wrenching, but results were far more positive than expected.
    • A 10% cut resulted in a 30% increase in productivity.
    • Employees once thought to be critical were not missed post-layoff.
    • The employees generally understood more about the situation than the CEO knew, and those remaining responded positively to a restructuring that allowed them to keep their jobs.
    • Some companies used a layoff as an opportunity to cross-train employees and increase company flexibility.
    • If concerned about loss of key talent, consider rehiring a laid-off employee on a consulting basis for a limited period.
  • Smoothing the layoff process:
    • Communicate with the employees. Let them know the truth, and share enough of the situation so that they understand.
    • Challenge employees to come up with ways to save money or make processes more efficient and cost-effective. This can have a remarkable impact.
    • Consider a cross the board salary reduction as a temporary alternative to layoffs.
    • Position as a layoff to restructure expenses – keeps you on the right side of employment law.
    • Obtain assistance from a personnel consultant who can help to handle the process effectively.
  • Summary: If you can save expenses, return to profitability and stay independent you will be happier than you may be post-merger.

Key Words: Merger, Negotiation, Ownership, Downsizing, Mitigation, Layoffs, Profitability  [like]

My Worst Nightmare – Sell or Downsize? Fifteen Considerations (Part 1)

Situation: The Company is losing money and has been approached about a merger. The CEO’s ideal outcome would be to get cash on the table, integrate with the merger partner and continue business. The other alternative – downsizing – may hurt company morale. What are the best options available?

Advice from the CEOs:

  • The realities of mergers:
    • 70% of mergers fail, and the merger process often leaves founders with a minority stake in the company.
    • Experience of others with partners has been disappointing – better to control your own destiny.
    • Look at all alternatives before you jump into a merger. You founded the company and have brought it this far. The company will be a different company following a merger, and not the company that you founded or have led to date.
  • Message to your potential merger partner:
    • Be a reluctant bride.
    • “We are making improvements to return to profitability and I’ve joined a board of CEOs who are consulting me through the process.”
    • If the partner sweetens the offer to keep the merger on the table, make sure that you get 51% of the merged company and retain control of your own fate.
  • Reconsider downsizing – Others have found the downsizing experience wrenching, but with far more positive results than they expected.
    • More on this in the next ceo2ceos blog.
  • Summary: look more closely at your situation before your jump into a merger. If you can save expenses, return to profitability and stay independent you will be happier.

Key Words: Merger, Negotiation, Ownership, Downsizing, Mitigation, Layoffs, Profitability  [like]

The New Manager Isn’t Cutting It. Not My Fault!? Four Important Questions

Situation: I recently hired a new high level manager. To integrate the individual into the company the original set of assignments was limited in scope – to help the manager get to know others within the company. This manager seems to over-analyze things. Long hours are spent carefully drafting plans but there is little action. Did I select the right person, and how do I manage them without micromanaging?

Advice from the CEOs:

  • It looks like this person is working long hours but not necessarily productive hours. This is costing you time and money – both yours and your employees. The question is whether the root cause is the individual’s behavior or your own expectations and behavior.
  • Ask yourself the following questions:
    • Have you clearly outlined your expectations in terms of what is to be delivered, the time in which it is to be delivered, and any constraints around the projects for which this person is responsible?
    • Have you provided necessary resources, and empowered the individual to make the decisions necessary to bring projects to completion?
    • Have you scheduled regular update meetings with this individual and openly discussed project progress and obstacles to completion?
    • Have you set appropriate expectations with your other staff as to the authority of the new individual, and are you honoring those expectations in your own behavior?
    • If you have done these things, and the individual is not performing, then it is time to ask whether you hired the right person.

Key Words: Manager Performance, Objectives, Expectations, Delegation, Planning and Review  [like]

The Dreaded Performance Review: Two Methodologies

Situation: We set objectives for employees; however these objectives frequently aren’t met, and there are lots of excuses for not meeting objectives. Most frustrating, employees are eager to share good news, but hide bad news and performance issues. What do other CEOs do to prevent these problems?

Advice from the CEOs:

  • A service company’s method:
    • Frequent measurement of performance against objectives.
    • Key metrics are monitored with top staff in weekly meetings that last tops one hour. We use a problem solving approach to address obstacles and to correct performance.
    • The CEO watches the direction, and staff makes the changes to make corrections to direction.
    • The trick is in the metrics. Metrics must measure meaningful performance and be tied directly to the company objectives.
  • A light manufacturing company’s method:
    • Historically the CEO had a problem holding on to non-performing individuals for too long.
    • He addressed this by instituting objectives and eliminating non-performers. The result: reduced complacency, and improved morale because performing employees were tired of taking up the slack for non-performers.
    • Documentation of non-performance and establishing a solid case for eliminating the employee are critical to avoiding wrongful termination suits.
  • General Observation: if a company has objectives, but lacks meaningful metrics to measure performance against objectives or a regular review process to assess performance against objectives, then the objectives are meaningless.
    • The CEOs’ experience is that establishing meaningful SMART (Specific, Measurable, Appropriate, Realistic, Time-Bound) objectives and regularly assessing performance in a collaborative atmosphere are the most important ingredients to an effective performance management system.

Key Words: Performance, Objectives, SMART Objectives, Employee Reviews, Performance Reviews  [like]
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