Tag Archives: Business

How Do You Build a New Channel? Four Cases

Situation: A company wants to increase business by building a new channel. The new business is different from the company’s base business, but won’t change the company’s focus on its base business. What lessons have been learned by other CEOs who have accomplished this? How do you build a new channel?

Advice from the CEOs:

  • One company created a new channel without changing the base business.
    • They responded slowly to the opportunity before deciding to change.
    • They needed to change infrastructure by adding more people.
    • They also needed to redefine the offering to meet the needs of new clients.
    • This involved adding additional data which had been accessible previously but hadn’t been presented.
    • At first the hand off wasn’t smooth. Hiccups that could have been foreseen with more planning were extra data fields and rough hand-offs. Future new releases will focus on improved process review and more challenging of assumptions, and more patience in the scoping stage.
  • The second company created a new branch with different products and operations, but maintained one financial and inventory management system.
    • The initial produce was sold and installed, utilizing union labor. The new product is sold wholesale business to businesses and is non-union.
    • After struggling with attempts to house both operations under one roof the new operation was moved to a separate location.
    • This enabled company to set up separate operations and to fully understand the financials of both operations. It also makes it easier to assess the viability of each business and to implement changes in one without disrupting the other.
  • The third company created a new offering to sell to the same customer base, with no change in the back-end systems.
    • The new business created an insurance model for the company’s services as an alternative to the original break-fix model.
    • The two systems use a common sales team, network engineers, and back-end system. Customers choose either insurance or break-fix.
    • The challenge was that the two models need completely different monitoring and incentive systems for the engineers. This took time for development and training.
  • The fourth company created two production operations: turnkey and component.
    • This called for different sales and contracting processes and separate production areas on the plant floor, with clear delineation but using the same back end, financial, and engineering support systems.
    • The component process is short-run, high value, high margin; the turnkey is high volume runs, lower value, low margin.
    • The challenge has been in setting up a new set of contract agreements and monitoring systems to monitor the financial success of the turnkey operation.
  • What is the common thread?
    • Put sufficient time into planning and evaluating options and challenges so that there is a solid understanding of the new channel before starting.

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How Do You Address the Compensation Side of an Employee Development Plan? Four Points

Situation: A CEO has an employee who consistently performs above expectations. The employee has asked whether they could be rewarded for over-performance on customer retention and for gaining new business from existing customers. How can this be structured? How do you address the compensation side of an employee development plan?

Advice from the CEOs:

  • This is the type of employee that every CEO wants to see. Responding positively to the employee’s request is essential, and an opportunity to assure the employee’s loyalty and retention by the company.
  • One structure is bonus multipliers based on under or over performance. An example of the structure could be to assign and have the employee agree to a target for customer retention or new business acquisition from existing customers. Bonus is then impacted by their performance against this objective as follows:
    • Hit <85% of the target – no bonus;
    • Hit 85-100% of target – receive your standard bonus;
    • Hit 110% of target – get bonus times 10%
    • Hit 120% of target – get bonus times 20%
    • And so on.
  • This is just an example for the purpose of illustration. Variations on the original bonus plan can be negotiated with the employee, and adjusted over time to further encourage continued outstanding performance.
  • The multipliers do not necessarily have to be large, but are there to show that a certain level of performance is expected to receive this portion of the bonus. In addition, the employee can increase the bonus by overachieving their objectives.

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How Do You Manage a Remote Team? Three Suggestions

Situation: A company just acquired a remote office, including a team that has worked together for years. The manager has 20 years of experience. During the early weeks working with this office, some challenges have developed, specifically resistance to the new reporting relationship. Meeting schedules have been adjusted to accommodate the manager. The principal concern is buy-in from manager’s reports. How do you manage a remote team?

Advice from the CEOs:

  • From the discussion, the remote manager has been getting disparate and sometimes conflicting direction from several different people at the home office.
    • Meet with home office team. Develop a consistent set of expectations and priorities so that the Manager is not struggling with different directions from different people.
    • Consider that in the coming months there will be two business phases:
      • Phase A: Business and client transition to the new ownership.
      • Phase B: Client maintenance and business expansion.
    • Different strategies and objectives will be needed to address each stage.
    • Ask for input from the home team on how best to achieve these strategies and objectives.
  • Have a discussion with the remote office manager.
    • Explain Phases A and B and the focus of each phase.
    • Expectations will be flexible during Phase A as business is transitioned.
    • In Phase B the focus will be on Team procedures and development.
    • Listen to the remote office manager for her thoughts and suggestions on the strategy for each stage and how her team will best meet expectations.
  • Similar advice applies to working with remote managers and employees, a situation that has become more common following the COVID Pandemic. Listen to their input and ask for suggestions as how to best achieve their objectives.

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How Do You Improve Your Time Management Skills? Four Recommendations

Situation: A CEO is finding that reduction in staff over the last two years combined with expansion of business have left her in a quandary trying to manage too much. While the prospects of bring in new staff are improving, she wants to improve her time management skills to support company growth. How do you improve your time management skills?

Advice from the CEOs:

  • Delegation and communication around delegation is about “monkey” management – getting the monkeys off you back and onto the backs of others. In addition, it’s about not letting others put inappropriate monkeys on your back.
  • Think about the difference between:
    • Empowerment versus involving yourself in all aspects of the business.
    • Empowerment is more effective and frees up time to focus on new opportunities and growth.
    • Involving yourself everywhere quickly leads to a time crunch and is less effective.
  • Set quarterly goals for yourself, just as you set quarterly goals for the company. This drives achievement and growth. It helps you to:
    • Clarify your role – where you should be focusing your time, and to
    • Let go.
  • Think of your staff as your customers. Like customers, the more you give and recognize them, the more they love you. Effectively, this is serving your staff just as you serve customers. This is called Servant Leadership and builds both empowered employees and great employee loyalty.

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How Do You Shift a Key Employee to Manager? – Pt 2 Three Points

Situation: A CEO wants to promote a key employee from rainmaker to manager. This will not involve a change in expectations or metrics for either the new manager or the employees who will report to her. However, there needs to be more forcefulness and clarity on what needs to be accomplished, both for the new manager and her team. How do you shift a key employee from rainmaker to manager?

Advice from the CEOs:

  • Don’t just measure calls. Measure the outcome from calls. Develop an objective and a metric or set of metrics that they can run to. Link their activity to business results. They will respond because they will be able to impact the firm as well as their careers.
    • Tie individuals’ metrics to the business culture that the management team is creating and create win-win links.
  • What is involved in changing the business focus to new markets?
    • Build a replicable system for servicing a particular channel. Use the lessons from this exercise to build systems for new channels. As the team moves into new channels, tweak the replicable system so that it responds to the specific demands of that channel.
    • For new channels, identify the most important needs of the new customer – from their perspective – and develop a client service model to meet this need. For example, if the goal is to develop an investment service for foundations and endowments, the key variables may be acceptable return with a high degree of safety. Tailor an investment portfolio, as well as a client service strategy to meet the most important needs of this sector.
  • What is involved in creating a smooth hand-off within client relationships?
    • Start bringing in others to whom will be handed off the relationship as early in the client relationship development process as possible. Allow rapport and trust to develop, and prep the client for the expectation that a smooth hand-off is part of the ongoing client relationship.

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Where Do You Focus to Build a Strong Company? Four Considerations

Situation: A company has just hired a new CEO. Historically the company has focused on high quality and good customer service but has lacked good financial management and has experienced financial difficulties. As a result, they could not support their staffing needs. Where do you focus to build a strong company?

Advice from the CEOs:

  • Critical areas where the CEO should focus:
    • Quality – assuring that the company continues to produce high quality products.
    • Customer service – assuring that the company continues to offer excellent customer service.
    • Quality and customer service must remain one and two, though they can be in either order.
    • Financial soundness; but not so focused on the bottom line that either quality or service suffer.
  • How do you achieve or maintain focus on these areas?
    • High quality and good customer service are already well established.
    • What has been lacking is sound financial management. Evaluate whether the right people are in place, and what financial and financial record systems are in use. If expertise is needed, bring in an expert to evaluate both personnel and systems and recommended changes that need to be made.
  • What other important factors should be the CEO’s focus?
    • Ethics – particularly when evaluating the company’s financial system, assure that both people and systems support a strong and reliable department. This may result in some hard decisions that are necessary to turn the situation around. If this is the case, be determined but fair.
    • Sustainable business practices – assure that any new practices that are instituted are sustainable. Look at case studies of similar companies that have turned themselves around.
    • Fun – an enjoyable workplace as far fewer issues than one that is difficult. It is important to build strong teams, and to give them the autonomy necessary to do their jobs well without overly taxing team members.
  • Build a company that has a good balance between the first 3 critical factors. When new hires are necessary look for people with an established track record and business background who also have strong ethics.

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How Do You Handle a Difficult Employee? Five Observations

Situation: A CEO is pondering how to handle a difficult employee. This individual has brought in good business but is never satisfied with his level of pay – though he is highly paid. While he is good at bringing in new accounts, he doesn’t make the effort to grow them over time. How do you handle a difficult employee?

Advice from the CEOs:

  • It is necessary to establish a mutual understanding with the employee that no matter the level of pay, the employee will think that it is too little. This reframes the discussion because it establishes that there is no win by paying the individual more. The unspoken part is “why bother?”
    • Given this reality, the maximum level of pay for the employee is $X.
    • Note that there is no negotiating power until once this is said it is acceptable to let the employee walk away.
  • The CEO feels indebted to this individual because he has brought the company many new accounts. He is a good hunter. But the task now is not to hunt but to cultivate and grow the opportunities that that the company has in hand.
    • The issue is that this individual doesn’t build relationships that will grow business in his accounts.
    • He has done well for the company. The company has rewarded him handsomely. However, now a different talent is needed.
  • What’s the best alternative for action, and how is this communicated to the staff?
    • Do not lay this individual off – terminate him for cause.
    • This individual has repeatedly been asked to act as a team member, but he has steadfastly refused to do this.
    • His attitude, while good for his own efforts, is bad for the company and is clearly counter to the desired culture.
    • He is better off in a situation that aligns with his talents and style.
  • Terminating this individual for cause sends a critical message to the rest of the company – culture is important. You are determined to establish a healthy culture even it if means eliminating your best performer.
    • To those who ask, answer that this individual was treated fairly. Clear expectations were established, and ample opportunity was given to be a part of the culture that you are establishing.
    • Ultimately, the culture that you seek to establish – one that is good for the whole team, not just for star performers – was not right for this individual.
  • Use this situation to relaunch a campaign to build a company culture of collaboration and best practice development between teams. With the elimination of this individual there may be new enthusiasm around this initiative.

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How Do You Develop an Employee to the Next Level? Four Points

Situation: A CEO has a key employee who wants a higher level of responsibility. Currently this employee is primarily focused on business development. He’s good at this but wants a higher level of experience. The CEO agrees. How do you develop an employee to the next level?

Advice from the CEOs:

  • If you ask this individual what needs to be done, what happens?
    • Revenue is number one. This is where he is focused, but he wants more than this from his role.
    • If this is also the CEO’s primary objective then the CEO needs to back off and direct him to split his time between closing high level opportunities and training his direct reports to be able to close lower-level opportunities on their own.
  • To the CEO – thinking about your own experience, how did you mature to a higher level when you had primary responsibility for business development?
    • Answer: I built and trained staff to do this and delegated these responsibilities to them.
    • Allow this individual and other key managers within the company to do the same thing, and coach them along the way.
    • Empower this individual to build his staff and enable them to take on more of the functions that he no longer wants to handle himself. Allow him to prioritize his time to focus on: hiring and training of his key staff and coaching and supervision as they grow into their new roles.
  • Consider this solution as a larger project manager role. Take a key product and empower this individual to design, build and manage the organization to deliver this product.
  • To frame this solution short-term, start with a 1-on-1. Ask about his vision – what he wants as his role and how he sees building this.
    • Follow by laying this out in terms of the company’s objectives – be specific as to what this looks like.
    • Look for a win / win reconciliation between the CEO’s and the employee’s visions that meet both of their objectives. Get on the same page with this individual, so that this fulfills both of your needs.

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What are the Options for Your Next Phase? Six Suggestions

Situation: It’s a new year, and a CEO is thinking through options for the coming year and beyond. She has decided to leave her company and establish a new role and career for herself. Immediate concerns are funding the transition and entry into a new career. What are the options for your next phase?

Advice from the CEOs:

  • The area that can be built most quickly to provide income is a consulting practice based on the experience developed as a CEO and as a specialist leveraging past experience. Building a new practice is a big commitment. Make this the initial focus and get a few gigs to get the ball rolling. The company is an early option, as well as some of their key customers. These relationships are already in place.
  • On the academic side, investigate Executive Education programs in Business Schools. Here the clientele is different from normal undergraduate and postgraduate education – actively working managers and executives. For this audience the combination of experience as a CEO and academic credentials is advantageous. For this audience, a lack of credentialed teaching experience is largely counterbalanced by the weight of professional experience.
  • The Professor / Consultant track looks best if established as a 5-year plan.
  • While getting established in a new role there will be an initial challenge managing the time demands of teaching, research and developing a consulting practice. Think of this as managing the multiple functions of a company. It will be important to establish early priorities to accomplish the desired plan.
  • A professorship does not necessarily tie financially to current goals but can be an important strategic adjunct to consulting efforts. In a certain sense, teaching will have to be its own reward.
  • To the extent possible and depending upon how the board responds to the decision to leave the company negotiate the best possible severance package. This can tie into some of the suggestions, above.

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How Do You Evaluate Management Team Performance? Four Points

Situation: As the end of the year approaches, a CEO is evaluating management performance over the year. An area of focus during the year have been evaluating new business opportunities and the impact of these on the company. The CEO has been uncomfortable with disagreements between departments which have slowed opportunity evaluations. How do you evaluate management team performance?

Advice from the CEOs:

  • Breaking down issues of concern, there are two areas of focus.
    • Problems that should have been resolved by two people have required a referee (the CEO) to mediate the solution because the two parties could not work things out themselves.
    • Individuals who are otherwise highly skilled have become overly sensitive about minor issues that have prevented them from developing their own solutions
  • The most important step is to have the management team agree on a protocol for dealing with new business opportunities and the impact of new sales opportunities on development and support. A protocol will help to avoid the two issues of concern that have been identified.
    • Direct the team to come up with a protocol that they all agree to, subject to CEO review.
    • Once it is finalized, announce it with great fanfare as the new process that will guide the company. Make it mandatory.
    • Support this process with daily (short – 10-15 minute) or weekly (longer but 1 hour or less) team meetings to anticipate and remove blocks to execution.
  • Tension between sales, service and engineering are natural and healthy. This is because each is driven by different priorities, all of which are necessary to serve the customer.
    • Resolution of this tension requires a turnkey handoff protocol, involving checklists and flow charts.
    • The best protocols are not imposed on people but are developed by the people involved. This gives them ownership, and a stake in implementing and maintaining the protocol.
  • If, despite everyone’s best efforts there is ongoing dysfunction, it may be necessary to replace difficult people. As challenging as this seems, those who report to difficult top managers likely experience similar difficulties with them. Organizations often respond with relief after leadership eliminates a difficult manager.

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