Tag Archives: Challenge

What are Best Methods to Develop Your Staff? Three Thoughts

Situation:  A CEO wants to build her team, identify leaders within the company, and develop managers. How have others done this? What are best methods to develop your staff?

Advice of the CEOs:

  • A valuable resource is “First Break All the Rules” by Marcus Buckingham. Among Buckingham’s findings are that great leaders are different from great managers. Good leaders are outgoing and goal-oriented whereas good managers are people-oriented. Expecting good leaders to be good managers and vice versa is not effective. Only the exceptional individual exhibits both sets of talents. The traditional business structure assumes that talented people will want to “move up” the organizational chart. The reality is that some people are very good at a particular level of responsibility, and are happiest with this responsibility.
  • How do to enhance your team’s leadership and management capabilities? Evaluate your team for candidates who possess the qualities of leadership or management. Tailor your training to enhance the natural strengths of your candidates. Draft agreed upon written responsibilities and performance objectives with each of your candidates. Regularly follow up and provide feedback. Establish trial projects for new candidates that will allow them to experience additional responsibility, and allow you to see how well they perform. Make small steps at first. If the individual demonstrates talent, make successive steps more challenging.
  • Look at your organizational chart. Does it provide room for both leaders and managers? Does it provide room for the skilled role player who thrives in a particular role? If not, how will you fix it?

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Is it Better to Sell or Downsize? Four Perspectives

Situation: A 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? Is it better to sell or downsize?

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. The experience of others with partners has been disappointing – it’s 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.
  • The 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.
  • Downsizing: Others have found the downsizing experience wrenching, but with more positive results than they 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.
  • 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 this as a layoff to restructure expenses – this keeps you on the right side of employment law. Obtain assistance from a personnel consultant who can help to handle the process effectively.
  • 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 this as a layoff to restructure expenses – this keeps you on the right side of employment law. Obtain assistance from a personnel consultant who can help to handle the process effectively.

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What are Effective Metrics for a Service Company? Seven Suggestions

Situation: The CEO of a service company finds it challenging to measure project profitability and client satisfaction. What measures and metrics have other service companies found to be most useful? What are effective metrics for a service company?
Advice from the CEOs:
• For billable services one CEO measures utilization percent defined as (hours available for service delivery)÷(billable hours). Include in the denominator both billable hours and customer good-will or preventative maintenance hours. The latter, while not producing current income, are an investment in future income. Set up audits for service needs, especially future needs, when working with customers. This will help you to stay abreast of changes in the service environment and to plan accordingly.
• For fixed budget projects – another CEO measures budgeted vs. actual expenditures by project.
• For fixed-fee services a third CEO calculates a fraction expressed as: (income per customer company) ÷ (cost in hours for that customer).
• In a discussion on customer audits and surveys, options offered included: (1) An exit “pizza party” with the client. The challenge is that this may produce tainted results. While this builds customer good-will and may provide qualitative feedback, it should be supplemented by more objective measures. (2) A mailed survey – from a 3rd party with a prize for responding. (3) Email follow-up from a 3rd party that directs the customer to the 3rd party site to complete the survey.
• A final suggestion was ambassadorial CEO visits to the top contact person in key accounts. This provides an opportunity to learn about the customer’s present and future needs, staffing plans, business and strategic direction. Helps to anticipate changes in the competitive landscape. The more a business relies on recurring revenue, the more important these visits are.

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How Do You Scale Up a Product That Is Taking off! Four Points

Situation: Demand for a product produced by a company has increased dramatically. The CEO realizes that they need to scale up production quickly to meet this unexpected demand. The company is small and the CEO wants advice as to how his company can accomplish this without killing the product. How do you scale up a product that is taking off?
Advice from the CEOs:
• This represents a major change of both mentality and culture. Essentially, the company needs to move from a “handmade” process to a commodity volume process. This may also mean moving from low volume/high margin production to high volume/lower margin production. This shift will significantly change the company.
• If there is high confidence that the company will land a contract for long-term production consider establishing high volume production at a new site. Rent or lease another facility. Alongside this hire a set of experienced people who understand the challenges of scaling up rapidly. Consider giving this facility a new name to suit the new team. This will help to establish a new culture suitable to the new opportunity.
• While negotiating a lease, ask for an option for additional space to be included in the lease. If things don’t pan out, look at this new space as the eventual location for your existing team.
• Two other options to consider: (1) Outsourcing to a 3rd party manufacturer. This is an option unless the company is an OEM outsourced producer itself. However, be careful – you could be telling your customer that they could go directly to your OEM source at a lower price. (2) Establishing an overseas production capability – one where you own the facility and manage quality control. This will be a challenge if the customer wants to specify “Made in US”, or where quality concerns are essential.

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How Do You Change the Company’s Culture? Six Suggestions

Situation: The CEO wants to change the company’s culture. How can the CEO facilitate “buy-in” to support this cultural change? How do you change the company’s culture?
Advice from the CEOs:
• Encourage staff to think BIG – project 50 years ahead to a $2 billion company with business in 10 countries.
• Ask questions: Can we achieve it? Can you imagine that far? Is it real? What would make it real?
• Encourage participation in this exercise across all functions.
• When one company wanted to make a major change, they brought in an expert to help craft the communication of the changes and to explain it to staff.
• Move fast – don’t go slow. Let people know that it is OK to make mistakes. This is the Try-Fix-Do model that helps to encourage creativity and rapid development of new ideas. It makes going fast less of a risk to the individual.
• Let people know that it’s OK and necessary to challenge each other. Their involvement and input are what’s important. Keep it real and civil.

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What are Attributes of a Highly Effective Sales Force? Three Points

Situation: A CEO wants to improve the effectiveness of her sales team. As CEO of a young company she faces a choice between using contract versus direct sales reps. She seeks the advice of other CEOs as to what has worked most effectively with their sales approaches and teams. What are the attributes of a highly effective sales force?

Advice from the CEOs:

  • Spend time vetting either contract or your own sales reps:
    • The choice of contract vs. direct sales reps is driven by market conditions and end desires.
    • Utilizing a contract rep is an effective way to gain entrée into the customer. Even though they are 1099s, they must be managed as though they were company employees.
    • It is important to spend considerable time vetting candidates for direct sales. Attitude, desire and commitment are much more important than experience and technical prowess. Spend as much time as necessary to make sure that you are hiring the best people. Test them, check references from employers and customers alike. Leave no stone unturned.
  • Measure:
    • What gets measured get done. Determine what behaviors are necessary for success and develop metrics for these behaviors. This enables you to manage success.
    • For one CEO, the biggest challenge is selling above the gap – selling high and wide within the customer organization. Most reps concentrate their efforts on a few people in the client organization – generally low and mid-level people – and fail to establish relationships with senior management.
    • It is important, and rare, to have those senior relationships. Getting them requires deep understanding of the customer’s business combined with confidence, determination and persistence.
  • Respect and manage reps:
    • Many companies treat sales as a “necessary evil,” setting up an antagonistic and ineffective relationship between sales and other departments. This causes the salespeople to hide much of their information or spend time “scamming the system” rather than working as part of the team.
    • The best companies treat sales as a revenue engine and encourage, value and respect input from the salespeople. This encourages sales to be part of the larger team.
    • There can be challenges transitioning people from a pure product sale to a long term service business relationship – a transition from Hunter and Farmer. Most believe that these are two very different personalities. It may be better having hunters who bring in the business and then transition the customer relationship to account managers to maintain long-term relationships.
    • It may be necessary to design two compensation plans to incentivize the desired behavior of each group.

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How Do You Quantify Niche Market Potential? Five Suggestions

Situation: A CEO’s company focuses on a specialized niche market. One of his challenges is that there is little public or chamber of commerce information available on the size and characteristics of their market. How do you quantify niche market potential?

Advice from the CEOs:

  • Define the product / service very specifically. To narrow and refine estimates of market size look for the low hanging fruit.
    • What are the high growth segments of the target market?
    • What are the high growth industries of the target market?
  • To determine whether the market opportunity is $100M or $500M:
    • Define the company’s market more clearly – particularly the initial beachhead market where there is the potential to gain the most traction.
    • Recognize that there may be two markets: a high end market – relatively low gross sales dollars but high margins, and a low end mass market – relatively high gross sales but low margins.
  • Contact the originators of available market data to get their assumptions, comparative data and any other findings that may not be published but are beneficial.
  • Work closely with customers to build category / industry revenue estimates.
    • Segment the most active customers and increase the company’s share of their purchases.
    • Develop web site transaction capabilities to offer the company’s line as an adjunct to customers’ web sales.
    • Establish a Customer Council or Round Table to better understand the market dynamics and to differentiate the company within the market.
  • Sell the product and services’ features and benefits to the C-level, not just to engineers.
    • Sell to the CEO / CFO focusing on increasing shareholder wealth.
    • Determine a return rate for conversion to the company’s technology.
    • Reach out to professional segments that will naturally see value in the company’s process.
    • Seek an exclusive relationship with an industry leader to quickly launch new products.

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How Well Do You Know Your Target Audience? Five Points

Situation: A CEO and her team manage a growing and profitable company. She is interested in what others have done to expand their market presence and penetration. In discussion, other CEOs have been curious about her company’s marketing capabilities, and how well her team knows their customer base. The essential question that they ask is “How well do you know your target audience?”

Advice from the CEOs:

  • Become a thought leader:
    • This is Inexpensive because the company is already a leader in its field.
    • Marketing through thought leadership allows the company to get its message out with fewer resources than push marketing efforts.
    • Thought leadership adds credibility and educates the customer.
  • Qualify the need and/or the perception of the need. If there is no need, there is no sale.
    • It’s perfectly acceptable to ask clients about their challenges and needs.
    • Ask them to measure the need on a 1-10 scale.
    • Ask the client to play out the scenario without an adequate solution.
    • Ask the prospect how they have worked with others offering similar services to your company’s and how did that go?
  • Ask your customers to help.
    • Develop a Customer Advisory Board to test a new product or concept – a “Blue Ribbon Panel”.
    • Write a paper together with them to highlight the findings.
  • Use common sense, but:
    • Set measurable goals and listen to enough people to get more directed feedback.
  • The company’s internal staff is also a target audience.
    • Integrate departmental cultures to assure that they don’t clash.
    • Conduct collaborative off-sites to encourage cooperation and support.
    • Create processes for all departments and staff.

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How Do You Find and Train Staff for Satellite Offices? Five Points

Situation: A company plans to grow from a single site to additional distant sites. The CEO has two concerns: how to bring in the new people, and how to preserve the culture that they have developed as they build new sites. How do you find and train staff for satellite offices?

Advice from the CEOs:

  • First, how does the company currently identify customer targets?
    • Typically the company targets specific personnel within a potential client who will be decision makers or influencers on the company’s projects. Market developers then build relationships with these individuals.
  • Points of focus in selecting employees in other geographic areas.
    • What will be the office configuration? Likely 3-4 individuals, including an engineer, office manager and project manager.
    • Promote the company as the preferred place to work in the new locations. Offer signing bonuses for employees who identify and bring in new people, as well as for the new employees.
  • Does the company anticipate that maintaining company culture will be a challenge as the company expands? Yes.
    • Train new employees in the home office for one month to help them understand the culture. Immerse them in a project so that they experience the work ethic.
    • Have current personnel serve short term stints in the new offices. This will help to build consistency of service and delivery between the offices.
  • What is the best way to recover from a service challenge?
    • Occasionally we all make mistakes. Don’t miss the opportunity that “service recovery” presents to strengthen relationships with clients.
    • A competent and timely response to a problem situation can create an indelible impression on the client.
  • What else can the company do to improve its marketing?
    • Assure that there is an existing cost calculator in each remote site. This speeds response without having to wait for decisions from the main office.
    • Install a traffic plug-in on the webpage for each remote site and feature this on the site webpage. This allows current and potential customers to schedule their visits to their convenience.

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Should You Combine Sales and Marketing? Five Points

Situation: A company is considering combining its marketing and sales teams. The company’s overall objective is to expand their marketing presence and to bring on new customers. Some team members believe that these two functions are distinct, while others believe that they should work in tandem or even be combined. What do others think about these options? Should you combine sales and marketing?

Advice from the CEOs:

  • The skill sets required to create and operate an effective marketing effort are different from those required to create and operate an effective sales organization.
  • Sales and Marketing are two different sides of the same coin – they complement each other but are distinct.
  • Direction begins with the CEO; however it is imperative to make certain that everyone in the organization buys into both this direction and the organization to achieve it.
  • Some feel that it is not a good idea to have one person covering the role of Sales and Marketing. Sales is tactical while Marketing is strategic. It is Sales’ job to implement the Marketing Strategy and report back what is working and what is not. Marketing’s job is to take the feedback from Sales into account and revise the strategy accordingly.
  • Challenges which can create a constant battle between marketing and sales are due to:
    • Lack of common direction, and
    • Poor or inconsistent communication between Sales and customer on one side and Sales and Marketing on the other.
    • These challenges need to be resolved to have an effective Sales + Marketing organization.

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