How do You Develop and Retain Talent in a Competitive Market? Six Points

Situation: A company must acquire new engineering talent to sustain its growth. However, there are few local engineers who are experienced in company’s key technologies, and the cost of living in the company’s location makes it difficult to bring in new talent. The CEO is considering developing a remote office where there are experienced engineers that they could attract to the company. How do you develop and retain talent in a competitive market?

Advice from the CEOs:

  • There are a number of issues to consider: location, management of the culture, leadership and potential unintended consequences that must be mitigated.
  • The COVID pandemic has forced companies to adapt to remote employees. Has this been considered as an option?
    • High definition, large screen systems can be set up for $2-3,000 per site.
    • Web cams, projectors, etc. can be set up for several hundreds of dollars per site.
    • Add to this design and analysis tools, with technology for prototyping.
  • Consider where within the organization the remote people will fit?
    • How will the organizational structure impact the integration of design engineering and manufacturing engineering?
    • What policies and procedures are needed to assure that there is no clash?
  • How will leadership be implemented for the remote group?
    • One CEO feels that there must be a sponsor from the home office to assure smooth and consistent transfer of company culture to the remote operation. This may take 1-2 years to achieve.
    • Another CEO hired a qualified individual locally for their remote operation. The important point was that this company has a very tight process and found that they could package this process sufficiently so that the new individual could pick it up quickly.
  • Look at developing a remote office as essentially the same challenge as a mini-acquisition. Like an acquisition, the key resource being gained is new talent. Think through the integration process and trade-offs as though it were a new acquisition.
  • Developing a remote location can be a good solution for advancing the company’s ability to outsource. It will teach the company:
    • How to design using a combination of internal and remote resources,
    • What infrastructure is needed in terms of policies and protocols around designs, and
    • What works from a communications standpoint to assure knowledge transfer between sites.

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How Do You Grow Business in China? Four Perspectives

Situation: A company has established a foothold in China. Their objective is to grow that business. The CEO is curious about the lessons that others have learned while doing business in China. How do you grow business in China?

Advice from the CEOs:

  • There continues to be ambivalence about the legal challenges of doing business in China. Primary concerns include both protection of IP and corporate / securities law. Become the firm that lifts the fog and charge a premium for this talent. Play off of corporate fear factors about doing business in China.
  • Networks in China look much different from networks in the US.
    • In China there is the government, and then there is the Communist Party which really runs things.
    • Particularly on a regional basis, the Chinese Communist Party has both formal, informal, and “nonaffiliated” branches and activities. All of these may be controlled by local or regional officials with little or no oversight by Beijing. Much depends upon shifts in the political climate.
    • Contacts within Chinese companies and law firms will be critical to understanding how to negotiate these networks on behalf of the company’s Chinese and American clients.
  • China has been big in the press for several years but may not be center of focus of all large firms yet. They may be waiting for additional clarity before making a significant investment China. Be a pioneer who points the way for corporations that feel that they have to be part of the China game.
    • As you develop expertise in China, this may generate opportunities to become the service bridge for other firms who find it more efficient to rely on others’ specialized expertise rather than build their own expertise in China.
  • Use the Blue Ocean Strategy techniques that are used by large corporations to create differential advantages for the company’s China presence.

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How Do You Manage Growth in a Difficult Economy? Seven Suggestions

Situation: A CEO’s company has struggled due to difficult business conditions during the last year. Top among the challenges has been poor execution in hiring quality people, not because they weren’t available, but due to uncertainty. He is also concerned about infrastructure issues, particularly in IT. How do you manage growth in a difficult economy?

Advice from the CEOs:

  • Focusing on IT, a key element for success in IT is having a clear definition of company needs. How does IT serve the company? What are the goals and objectives of the IT system? What kind of load must it be able to handle? What aspects of the system are most critical to company success?
  • Finding quality talent with the necessary experience is a challenge; particularly if solid goals and objectives haven’t been developed.
  • One CEO shared success managing IT. The company hired two IT professionals and had them report to an internal committee. This committee then communicated effectively with management.
  • Another CEO observed that some IT people look at their job as a process rather than a function; they just show up and fix things. Management of IT was improved by establishing clear objectives and holding the IT staff accountable for their performance against these objectives.
  • Another CEO told the story of terminating their IT person due to lack of consistency. IT must operate under management oversight, with clearly defined goals and objectives, and accountability.
  • Outsourcing some IT functions can help if used with care. On-site staff can focus on system maintenance and fight the inevitable fires.
  • IT costs should be thoroughly reviewed. They can be expensive. Look at IT costs as a percent of sales and compare expenditures with others in the industry sector.
  • Take a similar approach with other functions needing attention.

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How Do You Execute the Product and Market Timing Plan? Five Points

Situation: A company’s CEO is operating in a complex marketplace. Product pricing and consumer acceptance are issues. Consumer education about the product is an important part of the market plan. It may take a couple of years for the market to develop. How do you execute the product and market timing plan?

Advice from the CEOs:

  • Important issues are survival while the market develops and maintaining a unique technology advantage.
  • As a small player in a busy and rapidly evolving market, a critical element of the strategy will be to rapidly gain the attention of the people that Seth Godin has named the “sneezers” – those who have significant influence on their consumer and business peers and who can quickly help to create the momentum that will drive the company’s market position.
    • Examples: give the product to the key influencers at target companies.
    • Make it easy or free for the key influencers within your partner organizations to experience, love and spread the word about the product. Allow them to give a few free copies to friends.
  • To avoid becoming roadkill, fly under the radar.
    • Look for opportunities as they occur in this evolving market. They may come from many players.
    • Have a solid strategy in place to execute once an opportunity arises: What do you want to achieve? What is the timeline? How will you measure achievement?
    • Have multiple back-ups to the key partners that the company is currently courting.
  • Instead of looking for VC funding to fund the next round, why not secure the additional funding from the company’s original backer?
    • To earn this the company will have to demonstrate: interesting partnerships, traction in the marketplace, and assurance that an existing major player won’t squash the company.
  • A perceived barrier is that the product is not quite ready to deliver the experience that customers will expect.
    • What is “not quite ready”? Most successful products are not 100% ready on introduction. Look at Microsoft’s strategy. From their earliest products to the present, new versions are launched when they are 80-90% complete. They then respond quickly with updates based on customer feedback. Many other companies have done the same.
    • Historically, first to market has beaten later, more complete entrants.

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How Do You Change the Culture of a Company? Five Points

Situation: A newly hired CEO finds that the company is struggling. Employees are not responsive to customer queries. Calls aren’t being returned on a timely basis. Employees are reactive instead of proactive. There is a “just getting by” mentality. How do you change the culture of a company?

Advice from the CEOs:

  • The CEO is the culture of the company.
    • Bring the company together – show them the numbers. Let them know what’s going on. Ask for their help after sharing information.
    • Bring a vision for the company – what it can be – and put it on the table.
    • Daily, walk around with a cup of coffee. Talk to people. Ask questions and encourage their input.
  • The CEO must set the vision / mission for the company and be the evangelist supporting this vision.
    • Until this is done, employees have no reason to change.
    • It is critical to build a strong culture that people want to be a part of.
    • Culture change may require replacement of some of the staff – over time.
  • The cultural problems that are being described are symptomatic of a deeper problem.
    • The current situation grew from the values of the founder. The founder hired people who supported his vision. Fortunately, he hired people who created much of the unique value that is in the company today. Something was being done right. The challenge is to shift the culture without losing that value.
  • Consider “divisionalizing” the company.
    • Create an R&D division under the Founder / CTO. This will give him his own sandbox and may enable the company to save what was being done right.
    • At the same time, protect the rest of the company from day-to-day interference.
    • Dividing the company into divisions under strong leaders can help to shield the rest of the company from the source of the issues.
  • Another CEO was in the same place that is being described. He had a vision that he thought was shared by the company. In reality there was none. Establishing a vision and enlisting the company in the vision takes work. The CEO as evangelist must continually repeat the message of the vision.
  • Change in a manufacturing environment starts from the floor. Get the operators and technicians involved in the process of changing the culture. Look for “secret champions” who are responsive to these efforts. Create teams (with the secret champions as leaders or key players) and let them champion improvements.

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How Do You Implement Your Vision for the Future? Seven Points

Situation: A CEO has a clear vision for the future of her company and what she wants to build. Her ambition is to revolutionize her industry. What are the most important things that she should to make her vision a reality? How do you implement your vision for the future?

Advice from the CEOs:

  • It is critical to take charge of the vision for the company and to see that the company has or hires the right people to implement the vision.
  • As CEO, remove yourself from the day to day.
    • Hire a Director of Operations ASAP.
    • With the right experienced Director of Operations, the infrastructure to support the program will fall into place. This individual will help to assure that this happens because he/she will be incentivized and motivated to perform.
  • Concentrate the focus for the next 4-6 months to scale the present operation to the point where the model can be “franchised.” Consider expanding the model through sites with managers who have an ownership interest.
  • An important initial step is rounding out the training process.
  • The greatest value of the present site is to serve as a demonstration site to show potential customers how installation of the technology in their operation would work. With this in mind, build a working demonstration model on the present site to the dimensions and scale that customers would see on their sites.
  • To shorten the lengthy sales cycle, create and sell a feasibility study for the technology. Agreement to a feasibility study represents commitment from the prospect and conducting the study will create buy-in on the part of the customer.
  • As the new technology is launched, CEO time will be spent away from the initial site. Prove that the site can run in the CEO’s absence before leaving for extended periods of time.

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How Do You Pursue a Market Expansion Opportunity? Three Points

Situation: A CEO is considering expanding market reach to include an additional specialty niche in the market currently served. He sees the opportunity to diversify the current offering, to make significant money, and to grow the company. The principal challenge is finding a person to build this capacity. How do you pursue a market expansion opportunity?

Advice from the CEOs:

  • Without a leader to build the new capacity, an individual who already knows both the technology and the market, it will be difficult to build the new capability.
    • Bring in a heavy hitter with a proven track record in the market to develop the new capability. Someone who can build a team to offer the same quality / delivery package that has been the source of the company’s success.
  • Once this individual has been identified and is onboard, gather top management and develop clarity on the company and its values – why the company is in its current as well as the new business and what the company does for itself and its clients.
    • From this exercise develop or update the values statement and a vision / mission statement.
    • Consider hiring a consultant with proven experience in the market to help develop the value statement, mission, and some of the strategic and planning capacity that the company has not yet developed on its own.
    • Communicate these openly and reinforce them frequently with staff. This will help them understand the company culture as well as the vision for the company. It will also help them to understand the decisions made to guide the company.
  • Is there another firm – or an independent consultant – with proven expertise in in the new field to work with the company on the proposals that are being submitted for the new market?
    • This will help to evaluate the market and to get a taste of what is involved in this work before making a major investment to support the new capability.
    • It will also speed the development of expertise to address the new opportunity. If it goes well, the company can consider either a deeper joint venture, hiring the consultant, developing its own capability with internal resources, or a combination of these options.
    • In the short term, this will impact cost and margin but will substantially reduce risk.

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How Do You Keep Your Culture in the Face of Rapid Growth? Ten Points

Situation: A CEO’s company is facing rapid growth. The CEO is concerned that the cordial team culture that he has carefully nurtured will be strained as the company adapts to this growth. The present culture is characterized by lack of politics and truthful, frank communications. How do you keep your culture in the face of rapid growth?

Advice from the CEOs:

  • The company currently markets its culture, complemented by a solid history of performance. Clients receive highly personalized service at a competitive cost. This combination attracts and retains clients.
  • The company’s employees are a happy, competent group that enjoys what they are doing. This differentiates the company from other firms all by itself.
  • Identify the key attributes of the company’s culture. This will simplify internal and external communication when discussing what makes the culture special.
  • Use one several tools available to develop behavioral profiles of the current employees. This will help to understand how team members interact with each other. It will also help to build profiles for ideal additional employees as the team expands.
  • Hire an expert do a formal evaluation of the team around individual and group dynamics, as well as bottlenecks in the current structure and culture. This will help determine how scalable the company’s current culture is.
  • Grow at the rate the company’s culture allows, not at the rate that salespeople bring in new business. With gradual, careful growth size will less of an issue as it would be if the company were to simply grow as fast as possible.
  • The more the company grows organically – through additional business from existing clients – the fewer additional clients the company needs to meet growth objectives. This means adding fewer new employees to maintain target client/employee ratios.
  • If the plan is to grow larger, consider growing around core groups of 9-12 employees, perhaps in distinct locations with good communication between the groups. In the military, operating groups are 9 to 12 soldiers; the more specialized and highly trained the group the more it tends toward 9 soldiers instead of 12.
  • There is a Zen saying that a healthy tree grows as tall as it can. Use this as your guide.
  • The key role of the CEO is as CCO – Chief Culture Officer!

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How Do You Best Test a New App Online? Five Perspectives

Situation: A CEO has a new app that her company wants to test online. The principal challenge is avoiding a “catastrophic success” – success that ramps so quickly that the company is unable to deliver the quality or responsiveness expected by users. How do you best test a new app online?

Advice from the CEOs:

  • The challenge is similar to that faced in the massively multiplayer game space.
    • Creators target a small number of known enthusiasts (sneezers) with the message that they are special. The creators ask them to preview a new game and provide feedback that will help the creators produce the best game possible.
    • Never apologize for an Alpha or Beta test. Let enthusiasts know that they are getting the first peek at what will be the greatest thing since sliced bread. Enthusiasts will tolerate Alpha conditions – as long as the company responds quickly to their suggestions for service or performance improvement.
  • For initial live tests hype the coolness and uniqueness of early availability and adoption.
    • Don’t lower expectations – manage them by responding very rapidly and fixing any glitches. This is why Web companies are 24-hour, eat and sleep in the office affairs during launch and for as long post-launch as needed to assure success.
    • Continually hype the coolness of being involved early.
    • Use the current version as the early test. When the company is ready to spread beyond the very first users, reward them for sneezing the app to other users.
      • For example, as a Beta Testers, users get 10 free 1-year plug-ins to give to their friends. For each additional user that they bring on-board, they get an additional 10 free 1-year plug-ins.
      • This technique supports the coolness of having been a Test participant because it makes the participants cooler with their close circle of contacts. The really smart ones will give free plug-ins to other sneezers and influencers. Reward this latter group for bringing on additional users.
  • Using lessons from the gaming market:
    • Shake out all issues pre-Alpha Test.
    • Conduct automated testing of the software via server farms that are set up for this.
    • Be prepared for upgrades – both in the software and in the server farms. Typically upgrades are conducted while the software and systems are live.
    • Create test localities to pre-test any upgrades to assess the impact on performance and service prior to deployment. This minimizes disruption to the broader audience.
    • Recruit, alert, and reward those who assist with these tests.
  • It is possible to conduct an unsophisticated Alpha Test, but this can’t be risked in Beta Tests.
    • Alpha testing is usually conducted as an internal exercise and lasts until all of the bugs have been identified and worked out.
    • The Beta test is then planned, with a known number of sites or users.
  • Concerning IP Protection:
    • Threats will come from two sources:
      • The iTunes types who may perceive the new offering as a threat to their markets – ones with deep pockets to keep the company busy defending its legal position.
      • International teams who rapidly clone any new technology that they find for a variety of motives. These groups tend to work from locales where IP protection is difficult to impossible.
    • IP is not secure until tested in courts. Often this involves the most innocuous aspects of the IP or software offering. In addition, big players may seek injunctions to halt service until courts resolve claimed IP conflicts.

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How Do You Establish the Company’s Brand? Four Approaches

Situation: A company has developed a leading local position in an important new technology. The CEO is concerned that the company’s suppliers may try to move into their market and replace them. What’s the best strategy to counter this threat? How do you establish the company’s brand?

Advice from the CEOs:

  • Exhibiting high growth is the company’s best shot – whether to preserve exclusivity in the company’s geographic area or to build the company’s brand. Aggressively build the company’s service presence to build a sustainable advantage.
  • The primary question is – What is the objective? The objective is to build the company’s own presence and brand.
    • What would happen if another, better technology was launched? Wouldn’t the company want to offer this?
    • Think Web 2.0+. Build the company’s website as the place to go to discuss the technology, share thoughts, designs and software, and easily source prototypes – provided by the company. Let users define the site and the market for the company.
    • The bottom line: exclusivity may not be in the company’s best interest if it inhibits access to the best technology. Strive to build the company’s brand instead and be opportunistic on the exclusivity issue.
  • What markets have gone through similar development? What can you learn from them?
    • Document other rapidly changing markets. Hire a current undergraduate or MBA student to research how these markets have developed.
    • Select a target vendor with multiple locations and do a deal with them to locate your technology and service in their locations.
    • Look at a franchise for which the company’s technology is a compliment and see whether franchise owners are open to adding the company’s technology in their locations.
  • Does the company have a partnership strategy? How can they accelerate strategic development?
    • Where is the place to focus?
    • Who is the perfect partner for this focus?
    • Identify the most promising markets and use partnerships to accelerate penetration of those markets. Write partnership agreements so that once an area is developed the company has the option to take it over. This is a classic market development strategy.
    • Give away some of the company’s margin to partners in lieu of salaries or commissions to support market development.
    • Look for partners in key locations in the company’s territory. Do a demo at a Starbucks where engineers like to hang out.
    • Hire a sales or business development person to work on partnership development.

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