Tag Archives: Creativity

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 is the Role and Value of an M&A Consultant? Four Points

Situation: The owners wish to sell a company. One option is an M&A consultant to assist with the sale. The CEO wants to know about others’ experience. What is the role and value of an M&A consultant?

Advice from the CEOs:

  • The first step is to assess the strengths and weaknesses of a consultant to determine their value.
    • The cost of an M&A consultant is inexpensive relative to the value of the business.
    • Accounting rules and M&A practices of public companies do not always apply to private companies. Valuation is affected by variations in profits year-by-year, so consultants typically use 3 to 5 year historical results for comparison against industry standards.
    • Technology companies may have a different value than service-oriented businesses, particularly if significant IP is involved. Look at the creativity of potential consultants’ solutions.
  • Consultant alternatives:
    • Business brokers, accountants, and valuation specialists can all offer valuations.
    • Investment Bankers who charge an upfront fee may be more strategically oriented. Typically, the more strategic the valuation exercise, the more dollars involved.
  • Be cautious in choosing a consultant.
    • Many business owners spend a lot of time and money with accountants and lawyers when they could save by working with a business broker paid on a commission basis.
    • Business brokers are skilled at getting business sold – however the deal is not necessarily in the best interest of the owner. Brokers are paid by commission and so may not have the best interests of the owner at heart.
  • What should you look for in a consultant?
    • Maximization of sale value with a minimal tax exposure.
    • A consultant who will help the owner figure out what they want from their business and exit – who will help to establish owners’ exit objective, a key to a successful exit.
    • A consultant who will help choose the right team of advisors.

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How Do You Improve Delegation? Three Solutions

Situation: A company is growing rapidly. As it grows it is important to build the management team needed to support this growth. A few talented potential managers have a tough time letting go of previous responsibilities. How does the CEO help them to let go of previous responsibilities. How do you improve delegation?

Advice from the CEOs:

  • Don’t teach method. The individuals to whom responsibilities are to be delegated may feel like trained monkeys, not the bright creative people that they are.
    • Set goals. Give them the information that they need to get there. Let them know that there is a procedure, and they are welcomed to use or adapt this as they wish. If they can find a better way that is more efficient – Wonderful!
    • Empower them. This is an investment. Like many investments, it may take time to generate a return, but be patient and wait for this return.
  • Look at the required roles and prioritize them as most to least critical to the company.
    • Start delegating the less critical roles, as well as the roles that are less time sensitive.
    • This will make it easier to maintain patience.
    • Also, delegate roles that play to the strengths of those to whom new responsibilities are being delegated. Those taking these roles will be happier and will do a better job.
  • Create an organizational chart for each department and responsibilities.
    • Make sure that all of the roles for which a department is responsible are included, but group these into similar roles so that there are, for example, 3-5 role delegations.
    • Prioritize each role for importance and urgency.
    • Take the least urgent and significant role and delegate it. Either assign it to an existing individual, or hire someone to take it on.
    • Once this has been done this and those to whom roles are delegated are used to them, do the same with the next least important or urgent role.
    • Do this over time until all the needed roles have been delegated, and managers are comfortable managing the individuals now responsible for them.
    • A valuable resource is the EMyth Revisited by Michael Gerber. It is a quick read and provides guidelines for how to delegate and let go of responsibilities the organization grows.

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How Do You Manage Company and Board Dynamics? Four Points

Situation: A company started as a collaboration of friends. Upon incorporation the leader became the CEO, and some of the original team became members of the Board. The CEO struggles with the responsibilities of being CEO while wishing to maintain the friendships that drive the company. How do you manage company and board dynamics?

Advice from the CEOs:

  • While the company was formed as a collaboration of friends, once it incorporated the nature of the relationships necessarily changed. While away from work the CEO may remain friends and close to the others; however, within the company there must be one CEO who is responsible to the shareholders for operating the company according to that individual’s vision. If the CEO and company are successful, all will be rewarded.
    • Shareholders are not partners – a partnership entity is inherently different from a corporate entity based on share ownership.
  • Within a corporate structure, majority control is critical.
    • While one should never trample on the rights of other shareholders, having 51% is better than having 47% ownership. Majority ownership makes it unnecessary to assemble a majority to drive the company in the direction that the CEO seeks.
    • That said, it is important to encourage the ideas and creativity of minority shareholders who are also employees. There is an art to recognizing and incorporating the ideas of others while the CEO, in the end, maintains final say.
  • The CEO’s job – and preferably within a small company as both Chairman and CEO – is to develop the CEO’s vision of the company and drive this through the organization.
  • Having a key employee report to the Board rather than to the CEO is likely a mistake. Employees do not do well long-term reporting to a committee.

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