Tag Archives: Change

How Do You Position a Professional Services Company for Growth? Part 1 Three Suggestions

Situation: The CEO of a professional services company wants to position her company for growth. What suggestions do others have to assist her? How do you position a professional services company for growth?

Advice from the CEOs:

  • Focus on Dynamic Processes – The world and business environments are changing rapidly in response to economic, business and political stimuli. This places a premium on developing dynamic and highly adaptable business models. Companies that develop these models will have a much more sustainable competitive advantage than those who do not.
  • Leverage Information – Along with rapid change comes a great deal of new information. Companies with a sustainable competitive advantage will leverage information from both traditional and new sources to develop new opportunities and new applications for older but still valuable technologies and processes.
  • Be Sensitive to Cultural Issues – The expanding global economy means that customers, suppliers and employees will come from all over the world, bringing with them different cultural backgrounds. By adapting business models to address and respond to varying cultural needs – by celebrating differences instead of being inhibited by them – a company enhances its competitive advantage.

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How Do You Navigate Communication Style Differences? Four Points

Situation: A CEO seeks advice on how other CEOs work with employees who have significantly different styles of communication. He suspects that this is a source of conflict between employees and wants to reduce that conflict. How do you encourage employees to be more open and receptive to other employees? How do you navigate communication style differences?

Advice from the CEOs:

  • Conduct regular personnel reviews. In reviews work with the individual to develop personal growth plans in addition to professional development objectives.
    • It may be necessary to create enough stress in an interview situation to prompt the real personality to show.
    • Recognize that sometimes an employee who meets professional goals can still be a poor fit for the team. This can impact other, productive team members. Don’t be afraid to fire a bad hire.
  • How much can you expect to mold another person’s communication style?
    • There must be personal motivation to change – the impetus must come from within.
    • To prompt the conversation acknowledge that something isn’t working – or isn’t as effective as expected.
    • Communicate to the individual that the consequences of not changing are potentially worse than the effort to change.
  • Breed adaptive communication skills throughout the organization.
    • Use an assessment tool to start the conversation and align tasks.
    • In dealing with an individual who is confrontational, probe to determine what is motivating the individual’s question or position on an issue. Does the individual genuinely need additional information or are they using a wall of questions as a roadblock to moving on?
    • Work with the individual to organize their answers or input into a plan.
  • Communicate values and goals as they pertain to individual contribution and appreciate the impact of different departments’ actions on each other.
    • Be flexible – some people need more definition and reinforcement than others.
    • Understand that changes and transitions in the company’s focus can shift roles.
    • Review each individual’s role periodically to insure that it fits the company vision. This can increase the individual’s understanding of how they are contributing to moving the company forward.

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How Do You Manage Seasonal Gaps in Project Flow? Five Options

Situation: A company experiences seasonal gaps in project flow. This makes it difficult to project both cash flow and staffing needs into the future. In addition, monthly cash flow tends to be uneven. What can they do to improve control of internal and external resources in this environment? How do you manage seasonal gaps in project flow?

Advice from the CEOs:

  • The company currently focuses 60% on consulting and 40% on internal projects, some of which produce future projects. Relative proportions shift over time, and projects can be cancelled.
  • Try to write the company’s contracts to push revenue to early stages of a project, so that there is more cash cushion to help ride out short cash periods.
  • Look for options to change the business model to increase financial flexibility.
    • If there are significant margin differentials between different types of projects this has overhead implications when resources are shifted.
    • Look for ways to allocate less expensive resources or virtual resources with a lower cost to lower margin projects. Look for opportunities to utilize remote resources if these resources cost less.
  • Adjust staff assignments to maximize payoff, as well as staff retention options. Look for project work opportunities.
  • Analyze and evaluate the ability to switch personnel between paying projects and internal development projects.

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Should You View a Competitor’s Illegally Published Code on the Internet? Four Points

Situation: A CEO recently learned that the proprietary code for both his company’s and his principal competitor’s products have been published on an international web site. He is conflicted about whether he should look at his competitor’s code, knowing that this would potentially be illegal in the US. Lawyers have offered conflicting and vague advice. Should you view a competitor’s illegally published code on the Internet?

Advice from the CEOs:

  • Consider the status of IP protection outside the United States.
    • In some countries there do not appear to be clear legal guidelines. One of these countries is likely where this situation originated. The country in question either lacks rules governing IP or the ability to enforce rules that exist.
    • The frustrating thing is that the playing field is not level between US and non-US companies. US companies are held to a high ethical standard by US law, whereas competitors in other countries that are not held to the same standard are free to review the illegal source code and learn from it as they can.
  • How complicated and expensive would it be to change the code? If this is feasible and not prohibitively expensive this may be the best option. Updated code can be provided to users through a software update.
  • Any company has to assess their own ethics as they craft a response to this situation. Make sure that the solution is consistent with the company’s ethical standards.
  • Could this have been an act of economic terrorism and/or theft?
    • If so, it is possible that the U.S. Justice Department could step in if one can make a case for national or economic security (unfair trade) based on violation of software copyright laws.
    • An action like this would, at a minimum, discourage similar future events. It could also help reduce the likelihood that competitors would try to profit from this situation at the company’s expense.

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How Do You Encourage Employees to Take Full Responsibility for their Jobs? Five Points

Situation: A CEO is discouraged because employees are neither taking initiative nor holding themselves accountable for results. They see potential problems, but don’t act to either prevent or resolve them. They continually bring situations to the CEO and expect the CEO to solve the problem or save the day.  What have others done to shift responsibility and accountability to staff? How do you encourage employees to take full responsibility for their jobs?

Advice from the CEOs:

  • There are two important questions to ask:
    • Is this a situation that includes a large number of employees or just a few? If it’s just a few then these situations can be handled individually. If more than a few then systemic changes may be necessary.
    • Are all employees clear on their responsibilities and what is expected of them? Is there written documentation on responsibilities associated with specific roles or individuals? Has this been communicated to individual employees during performance reviews?
  • It is essential that direction and individual responsibility be clearly stated and understood. Encourage dialogue once direction or instruction is given to test understanding. Important direction should be documented in writing.
  • Have clear core values been established that guide both the company and individual responsibility and decisions? Have these core values been publicized and posted in break  areas as well as work areas? Use the core values to assess employees’ work to reinforce emphasis.
  • Assure that employees are clearly empowered to make decisions. This is particularly  important if employees have been subjected to micromanagement in the past.
  • Ask for and encourage dialogue, both in one-on-one situations and in team and company meetings. Make employees part of the decision process so that they feel ownership over their responsibilities. Assure that excellent performance is recognized, rewarded and publicized.

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How Do You Generate Buy-in as You Change the Business Model? Six Points

Situation: A company is changing its business model from fee for service, driven by individual contributors, to a contracted project model with teams delivering service. The driver for the new model is to deliver full solutions to meet client needs. The CEO is struggling to obtain buy-in to the new model from all stakeholders – employees, managers and shareholders. How do you generate buy-in as you change the business model?

Advice from the CEOs:

  • The objective is to obtain agreement on vision and direction as the company adapts over a 3-5 year horizon.
    • Benefits include: product vs. service sales, a growing annuity revenue base, increased stability for the company and improved career paths for all members of the team.
    • Risks include: massive change, fear accompanying any change, too rapid growth, and the changes to company culture that will accompany this
  • Acknowledge and celebrate what the company and team have done well and the success that this has generated. In addition, share the lessons learned from experience to date, as well as the new opportunities that these lessons have created and the reasons to change to take advantage of these opportunities.
  • Create an exciting vision that expresses the new opportunities. Consider an off-site “WOW” event to announce your vision.
    • Focus on what’s in it for them as stakeholders. Address how they can participate in the change.
    • Where are the opportunities? Do they include investment and ownership?
    • Focus on the next major steps and the doable objectives associated with each step.
  • The new direction will require a different type of manager – with skills and experience managing teams. This is a growth opportunity for all involved. Provide training to assist the transition.
  • Employee and manager skill sets (including the CEO’s) will need to adapt – identify what skills will be needed and how they can be found or developed.
  • The past culture has been highly entrepreneurial with little middle management. The new model may be different from the current model, but it can still be entrepreneurial in a different way.

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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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How Do You Train Others to Do Your Old Job? Four Points

Situation: A CEO has a key employee who has just been promoted to an important managerial position within the company. The task for this individual is to train others to do what he has done in the past. However. this individual feels uncomfortable training others to do what he was able to do. He feels like he is obsolescing himself. How do you coach this individual to let go of past responsibilities? How do you train others to do your old job?

Advice from the CEOs:

  • This individual was promoted because he excelled in his former job. His mastery of these skills, plus his past management background, prompted the CEO to offer him a managerial position. It is critical to understand that his job and responsibilities are no longer what they used to be.
  • As a manager, an individual is no longer expected to be a “doer”. The primary responsibility is now to select, manage, train, and promote others whose primary responsibility is “doing.”
  • As this individual is coached, encourage him to step back and look at the big picture of his new role.
    • The CEO does not expect perfection from the start. He understands from his own experience that learning management takes time.
    • However, he also knows that to become a new manager requires giving up many of the hands-on activities that one used to perform. The job is no longer to do these yourself, but to coach others to be able to perform these tasks to the standards of the firm.
    • Initially, this takes more time than “doing it yourself.” However, this individual now has talented people reporting to him and they will learn quickly. In a short while, it will take less time to delegate than to do it himself.
    • From a big picture standpoint, a manager justifies the higher salary and greater prospects that come with a new position by training his or her team to do what used to be “their job” at a lower salary than the manager’s current salary.
  • In short, in the role of manager, the better one is at developing others who can take on the skills that they used to demonstrate, the more successful that individual will be as a manager, and the more value they will bring to the Company.

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What Do You Manage as You Adapt to Market Conditions? Four Points

Situation: A company is in the process of adjusting its customer and business focus in response to changing market conditions. Gross margin on projects that have been the company mainstay in the past have fallen significantly. The CEO is evaluating different adjustments to address this. What do you manage as you adapt to market conditions?

Advice from the CEOs:

  • The company’s business model is shifting from a staffing agency to a product development model. This means that the business must be driven by a different set of parameters and metrics:
    • A different time/utilization mix.
    • Different personnel – the company needs managers.
    • Changes to the organizational chart and incentives.
  • How does the company currently charge clients for Project Management?
    • Currently it is time and materials.
    • Consider charging on a percent of project cost basis. For example, 15% of total project cost. The pitch will be that the client will be able to reduce the overall cost of the project – ideally in both dollars and time – and that the company will have increased accountability for delivering these results.
  • How will this impact the company’s cash position? How will the company retain adequate cash flow during the transition?
    • The current cash position is 4 months of projected monthly cash plus receivables.
    • If there is drop to 3 months, flag a yellow caution light.
    • Two months becomes a red light.
    • What is the backstop if the company runs shy – if, for example, some engineers are not very active? In this case, will deferral of unpaid vacation time and other options allow the company to survive without further draining cash? Have a meeting with key managers to evaluate the impact of this option.
  • Consider looking at competitors for possible collaborations. This can be delicate because they may want to steal the company’s personnel and there are other risks, but sometimes promising deals can be arranged.

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How Do You Build Teamwork Across Account Teams? Four Observations

Situation: A CEO is concerned that there is a lack of teamwork across the company’s account teams. Often, they compete with each other rather than sharing knowledge and information. While some competition is good, too much can stifle growth. How do you build teamwork across account teams?

Advice from the CEOs:

  • It looks like the company needs to change its account management culture. There is a need to review the entire operation and rethink how the account teams interact with each other.
    • Schedule meetings with the full account staff – attendance required – describe the concern and encourage teams to share ideas and resources.
    • The commission structure drives performance. Tie financial incentives to collaboration. Reward the teams on collaborative efforts disproportionately to individual team effort – Y% commission for individual team effort vs. 1.5 x Y% commission for collaborative effort.
    • Increase monitoring of revenue and client acquisition – for the full group as opposed to individual account teams.
  • To keep a manageable level of competition among teams, group them into “leagues.” The leagues compete against each other for production and financial rewards. Encourage them to develop social interaction to build the league spirit.
    • A twist on this is temporary “leagues.” Shift team and league groupings from time to time to share best practices and resources. Measure the results. Track and reward the best league performance over time.
    • Be sensitive to the possibility that individuals may respond differently to league vs. individual team incentives. Those who respond more positively to the league concept can become the collectors and disseminators of best practices among the teams. This creates a status incentive to complement the financial incentives.
  • Consider the peer-programming model from the software industry. In this model, two people are occasionally teamed with one as lead and one as back-up. Let them learn from each other for a period and then return to normal operation. The same can be done with teams.
  • Does the company really have a problem? If the corporate competition leaves at 5:00PM but the company’s staff are working weekends to produce, maybe things are OK!

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