Tag Archives: Challenge

How Do You Encourage Others to Take the Initiative? Five Points

Situation: A CEO has a challenge getting employees to take initiative in areas that she wants to delegate. Part of the challenge is that she needs to “let go” and tends to do too much checking in. She is concerned that this results in employees’ hesitation to demonstrate the initiative that she desires. How do you encourage others to take the initiative?

Advice from the CEOs:

  • Continual checking-in alters the “urgency.” It feels more like a lack of confidence in the individual’s ability to complete the task to specifications and on schedule.
  • Work to establish more trust. Do this incrementally – start with less urgent / important responsibilities or tasks and move toward more urgent / important ones.
  • Determine boundaries and clearly establish deliverables.
    • Write the objective down ahead of time – as well as how much information to give them.
    • Ask yourself: Is this providing “just enough” information to guide them without micromanaging or over specifying the solution?
  • Is an objective being set, or are you trying to teach a methodology to reach the objective?
    • Unless the methodology is critical, focus on the objective and let them determine the methodology.
    • Once the objective is completed review and learn from them how it worked. Ask how they prefer to complete the objective so that you can provide the appropriate level of guidance in the future.
  • Delegating takes more time than doing it yourself.
    • Employees will complete a task differently than you will. As long as an acceptable result is achieved, be tolerant that the method or tone is different. They may be coming up with a better way!

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How Do You Improve Communication with a Key Employee? Three Points

Situation: A CEO has a challenge. While a key employee does excellent work and has fresh, new ideas, he can be overly protective of these and how they are implemented. The result is that conversations often become combative. How can the CEO better lay out alternatives and improve these conversations? How do you improve communication with a key employee?

Advice from the CEOs:

  • Have a conversation with the employee about communication and competitiveness.
    • Be honest. Acknowledge your own combativeness during previous conversations. Discuss and develop alternatives to avert this in the future.
    • If future communications take the same turn toward combativeness, be conscious. Admit what’s happening and shift the tone. Keep the conversation civil.
  • When this employee offers an idea, listen and repeat the idea first to confirm that that was said was understood.
    • Ask questions to clarify specifics of the idea prior to offering a different perspective.
    • When offering an alternative, ask for the employee’s thoughts on that perspective and whether this would complement or conflict with his idea.
    • The objective of the conversation is to develop alternatives which will benefit the company and its operation. Keep the focus on this.
  • Take some time and sketch out your own thought process before responding to his proposal. Ask for some time to consider this, if necessary.
    • Repeat his words and objective as you heard it and ask whether you heard correctly.
    • Identify any challenge that may arise implementing his suggestion, and ask whether he sees the same challenge. Could his suggestion be tweaked to avoid this challenge.
    • Present another alternative only after the previous steps, and ask what the employee thinks about this alternative. Work together to design and decide on the appropriate solution. Assure that he receives credit for his idea.

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How Many Direct Reports is Too Many? Five Thoughts

Situation: A young company has been growing rapidly but hasn’t been growing its infrastructure to support its growth. The CEO now has fifteen direct reports. Things are getting hectic and the CEO wonders whether it’s time to make a change. How many direct reports is too many?

Advice from the CEOs:

  • It is generally accepted that the largest number of direct reports that an individual can successfully manage is ten. Beyond this and even at this number, if the reports require significant supervision it is difficult to meet the needs of the individuals and to effectively direct their multiple activities.
  • The maximum number of individuals that you can manage depends upon what you are managing.
    • If the individuals are very independent, then perhaps ten can be managed.
    • If the individuals require any significant levels of supervision and/or training, the number goes down rapidly.
  • This is both a challenge and an opportunity. The challenge is determining the right number of reports for the CEO to manage. The benefit is the opportunity to start building a management team.
  • The benefit will be that by adding managers reporting to the CEO, there is the opportunity to train individuals who can take on additional managerial responsibilities in the future. As the company continues to expand this will become critical to future growth.
  • Another benefit is the ability to divide responsibilities among the teams.
    • For example, one team becomes the sales team, a second the Client Services team, and a third becomes the back-office operations team.
    • As the company expands, there is the opportunity to add additional subgroups to the sales and client service teams. simultaneously serviced by the existing back-office operations team.

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How Do You Balance Career and Personal Goals? Three Guides

Situation: After two challenging two years, a CEO has observed that to keep the company afloat he has had do set aside his personal goals. As the economy has recovered business conditions have improved and he wants to devote more time to personal goals and objectives. Where should he focus, and how have others faced this challenge? How do you balance career and personal goals?

Advice from the CEOs:

  • Take the time to think about and quantify a long-term solution. This should be in detail with specific and measurable objectives, and, ideally, timelines.
    • Talk to peers. Ask them about their experience and how they defined both professional and personal goals.
    • Seek a mentor. Evaluate several before selecting one
    • Use introspection and identify the real issues and factors – both those that must be tackled and those that are aspirational.
  • Document your dreams and pursue them.
    • Define your goals and objectives.
    • Define what makes you happiest and assure that the goals objectives align with this.
    • Create a reward structure. Assure that you are in charge of each reward.
  • Pursue fulfilling outside activities.
    • Look at organizations or courses that are inspirational and aspirational and which align with what was documented in the first two steps. These could be formal organizations like Toastmasters or evening academic or online courses that appeal to the documented aspirations.
    • Get a copy of Don Clifton’s “Now, Discover Your Strengths.” It includes a link to the Clifton StrengthsFinder assessment that helps to identify strengths and fulfilling talents.

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How Do You Control Insurance Expense? Four Options

Situation: A CEO has seen the expense of employee benefits, particularly the cost of health insurance, grow higher than the inflation rate in recent years. There are no indications that this will be reduced. Employees appreciate their benefits, and in the current environment the CEO is hesitant to reduce them. What alternatives are available? How do you control insurance expense?

Advice from the CEOs:

  • To control rises in healthcare benefit costs, consider offering high deductible health insurance combined with company contributions to HSA Accounts. This combination can be less than current health coverage and may reduce the cost inflation of these benefits.
  • Another alternative is to raise the deductible on medical insurance provided but cover the deductible differential for employees.
  • Consider a benefits administrator to assist in putting together a benefits package to reduce costs. There are many alternatives available.
  • Another big expense is Workers’ Comp (WC). The group shared strategies to control WC expense. Investigate those that apply to the company’s business model.
    • Make sure that the company is coded in the proper category – if not the company may be paying a higher rate than required;
    • Develop a proactive company safety policy, with documentation – this can gain discounts from some insurers;
    • Industry or trade associations have developed ADR components for association members to help control costs;
    • Investigate eliminating the medical coverage component on auto insurance for company cars that employees use to drive home. This may already be covered by WC;
    • Shop insurance providers for WC coverage – some will quote more competitive rates to get the company’s business;
    • Challenge the amount of WC reserves that are required for outstanding WC cases – the insurers may be assuming an excessive reserve to cover contingencies and charging the company for this excess;
    • If the company’s insurer is maintaining an employee on the WC list pending resolution of the claim for an excessive period, push them to resolve the case quickly;
    • Eliminate optional employees (e.g., officers) from WC coverage.

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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 Add More Discipline to Quotes and Pricing? Four Points

Situation: A CEO faces challenges with clients. The first is vague customer specs because they don’t understand the product. Second is misunderstandings as to timelines. Third is insistence on strict timelines while simultaneously demanding revisions to previous work. How do you add more discipline to quotes and pricing?

Advice from the CEOs:

  • Is the company’s technology strategy aligned with its capabilities? Currently the company is trying to build advanced solutions in multiple international markets with a small staff. There does not seem to be the technology or development discipline to convert current capabilities into a sustainable market advantage.
  • For near term focus, because of commitments and milestone payments due from the key customers, focus resources on finishing the last piece of these projects. Once this is done, step back. Look at options and determine the company’s technology strategy moving forward.
    • The key challenge is to define ONE beachhead on which the company will focus and which they can dominate. The objective is to leverage existing engineering creativity to create a sustainable competitive advantage.
    • As this exercise is designed, start with a clean slate. Don’t burden the process with a lot of restrictive assumptions. Consider using an outside facilitator to help facilitate this process.
    • Until this exercise is completed does it really make sense to seek additional work or to commit the company to the next phases with current customers?
  • Once the company has selected and committed to a technology strategy, the decision process becomes different.
    • The objective is to develop laser-like focus on the technology. Minimize distracting the team with other opportunities.
    • It may be OK to lose money on development projects if this work will significantly impact or accelerate the development of the company’s core technology.
  • How does the company justify asking for payment for development for future projects?
    • First, determine and clearly state the company’s technology strategy. Evaluate all future development projects and decisions in terms of their alignment with this strategy.
    • Second, if a particular project is completely aligned with the technology strategy, the company may waive the requirement of payment for development. This, ideally, will be the only exception.
    • Ask for a limited time/scope project to jump start and define new projects. This provides proof of company capabilities and establishes its credibility.
    • If is it necessary to negotiate or bid, start high and bargain down to but not below the best estimate of the cost of development.
    • Remember that deciding what NOT to do or quote is often harder, but just as critical, as deciding what to quote.

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How Do You Maintain Company Culture in a Merger? Four Suggestions

Situation: A US-based company is in the process of merging with a foreign company. The US company has multiple locations across the US, and there are cultural differences between these locations. The CEO has worked diligently to mitigate these differences. The foreign merger presents new challenges. How do you maintain company culture in a merger?

Advice from the CEOs:

  • Between some of the US locations, there has been a “we make money, but you spend money” perception. How did the company get past this?
    • The company adjusted metrics to demonstrate the contribution of each division to short and long-term profitability.
    • This information was communicated selectively to key opinion leaders within the company.
    • Use the lessons from this experience to plan post-merger communications and protocols that will contribute to team integration post-merger and improve the chances of merger success.
  • Focus on the common vision and interdependency of the teams. This accommodates differences in culture and encourages teams to appreciate each other’s contribution. Use the same technique during the merger.
  • Have lunch with CEOs of other companies that have been bought by foreign firms. Learn how they adapted to the new reality. Ask what worked or didn’t work. Seek specific details of solutions that were developed that could be applicable to the planned merger.
  • Become better educated on business culture in the country of the company with which you will merge. Seek experts who can give seminars to company employees on what to expect and how to work most effectively with workers and executives of the foreign company.

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How Do You Keep a Company Afloat Short-term? Three Points

Situation: The CEO of a service company continually finds the company short of cash. They have just hired a new accountant, but it will take time for this individual to understand the financial situation and to generate recommendations to improve cash flow. How do you keep a company afloat short-term?

Advice from the CEOs:

  • Point #1: This isn’t just a question of controlling costs; the company needs to build the infrastructure to succeed.
    • If there isn’t someone on the team in a position of authority, who the CEO can trust completely, hire this person. The CEO can’t control all risks.
    • While the company has shrunk over the last two years, it is still a substantial company and needs professional management. To grow effectively, professionals are required in key leadership positions. If necessary, hire experienced outside talent
    • Look for teachable moments as challenges arrive. The CEO, instead of solving a problem, should work with employees and mentor them through discovering and implementing solutions.
    • How to communicate this to current staff?
      • Put the story together. Be able to make a clear statement to them, including the current situation and future possibilities for which the company must prepare.
      • Generate charts and metrics to support key points.
      • Use senior staff as the mouthpieces to present the story to the rest of the organization. Once they are onboard, have them help craft the message. Don’t underestimate the CEO’s authority. This is business, not a popularity contest.
      • Let others make mistakes – it is part of the learning process – no matter how critical the situation.
  • Point #2 – Return to the company’s roots.
    • The faster everyone accepts that a focused approach is the only way to survive, the faster the company will turn around. Reestablishing company presence in key markets with a new model that speaks to their desires makes a lot of sense.
    • Be very clear as to what flat-rate service pricing covers. Include this in the signed customer agreement. Don’t allow costs to creep up or it will kill the profitability of flat rate jobs.
  • Create an infrastructure nimble enough to adapt as market conditions change. Identify what really works and focus on this.

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How Do You Plan for Succession? Four Points

Situation: The CEO of a family business seeks to create a succession plan. One family member has expressed an interest in taking the reins of the company but has failed to take the initiative to demonstrate that he is prepared to take on this role. Another family member is now demonstrating both interest and initiative. How do you plan for succession?

Advice from the CEOs:

  • How should this situation be approached?
    • Do not view this situation competitively, but rather from the standpoint of what is best for the whole family because many family members stand to benefit from the ongoing success of the business.
    • Whatever decision is made, the successor will need support and assistance understanding both the financial and business sides of the company. This individual must also be aware of conflicts and challenges that face the business.
  • What else should be done to prepare for succession?
    • Given that there are two individuals interested in becoming CEO sit down with each individual and negotiate a clear boundary statement on what you, as CEO, can and can’t do, as well as what can and cannot be expected of you, as CEO, as the succession decision is made. This understanding should be documented in writing and signed, signifying understanding by both the CEO and the candidate. Each candidate should have their own signed agreement with the CEO.
    • In a family business, the CEO, as guarantor of the company, may be faced with a different level of financial risk than other family members. Both candidates for the CEO position must understand that if they accept this position, they also accept this risk.

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