Tag Archives: Decisions

How Do You Bring Different Teams Together? Seven Points

Situation: There are many opportunities to team with other companies, whether through partnerships, joint ventures or M&A. This is accompanied by the challenge of bringing together different teams to succeed in new roles and tasks. How do you bring different teams together?

Advice of the CEOs:

  • People are an investment. Just like the stock market is not up every day, neither will be the performance of your people. Bringing people into new relationships, roles and responsibilities takes patience, work and nurturing to build skills and to get the best out of people.
  • To optimize this, build an organizational chart of the new or revised organization that you will build. Fill in the spaces with the individual who currently holds responsibility for each role. This means that some people will have several different roles. This is OK. As you add additional people, they will fill many of these roles.
  • Build a set of company or project values to guide individuals through the decisions that will drive future growth. Involve the full team in this exercise so that ownership of the resulting chart is broad.
  • Develop and consistently express the roles and boundaries of the company or project.
  • Focus on systems and processes, not just on tasks. The core of any organization is people and relationships. These are best expressed through systems and processes, not tasks. Tasks express discrete roles. As sophisticated as these may be, they won’t encompass the richness or complexity of the systems, processes or the people involved.
  • When dealing with people always ask “What is my role?” and “What is their role?” In each situation, work to understand the other’s perspective and what opportunity or concern they are bringing to the table. Trying to transform an individual into someone that they are not doesn’t work.
  • Particularly in a company or venture that focuses on high levels of customer service, act urgently, but avoid emergencies. You want your response to customer needs to be swift, but you don’t want to destroy operational rhythm.

Thanks to Jennifer Choate for her contribution to this discussion.

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Are Your Employees Living the Company’s Values? Four Recommendations

Advice from the CEOs:

Situation: An important tenet of a company’s CEO is that all decisions are made consistent with company values. However, some of the managers are asking for guidance on how to do this. How have other CEOs encouraged managers to make decisions consistent with company values? Are your employees living the company’s values?

  • Create cross-functional teams to address initiatives, solve problems and develop new processes consistent with company values. This builds understanding other departments’ perspectives and awareness of the impact of decisions on the company as a whole. It builds awareness of company values and fights unhealthy competition between functions.
  • One company created an employee task force to encourage living company values. Their solution includes: reviewing the company’s values and revising how they are stated for easy learning; involving employees in discussions of company values and how they are applied in their departments; creating a cross-functional employee task force to address inter-departmental conflicts and to suggest solutions in line with company values; and expecting everyone to know the company’s values, and occasionally testing them on these.
  • Build a vision of what the company looks like as an expression of its values. Make living this vision part of the CEO’s role. Include living and demonstrating company values as a formal responsibility of managers. Reward initiatives that transform company values into company efforts. Regularly review and discuss with your mangers their execution of company values.
  • Create “SMART” objectives around implementation of company values. Hold individuals accountable for achieving their objectives.

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How Do You On-board a New CFO – Four Imperatives

Situation: A company is hiring their first CFO. Previously, as a small company the founder and an accountant handled this responsibility. How do they integrate this key person into the company? How do you on-board a new CFO?

Advice from the CEOs:

  • The company and its key players should reflect the values, needs and desires of the CEO. The talents of the CEO and CFO should complement each other. Have a clear discussion and agreement with the CFO candidate on values, role, and organizational structure before hiring or announcing anything to the company.
  • Recommended announcements and timeline: When the new CFO is announced, simultaneously present the new organization chart with broad responsibilities, but not with detailed position descriptions. Set a timeline for realignment of roles. It is not necessary to specify exact roles at the time of the announcement. Let everyone know that this is a work in progress and give a time frame within which all will be resolved.
  • Once the CFO is in place, the CEO and CFO should meet at least weekly to assure that the CFO has the support and resources needed to accomplish his/her responsibilities. All decisions within the CFO’s group, personnel responsibilities and any shifts in roles should come from the CFO, with the support of the CEO. This will help the new CFO to assimilate into the company more rapidly and will give him/her the authority needed to manage his/her organization.
  • The CEO may put the CFO in charge of areas that they want to delegate – accounting, administration, finance and contracts. The CEO should remain involved in banking relationships.

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How Do You Coach a New Manager Who Isn’t Cutting It? Six Points

Situation: A CEO recently hired a new high level manager. To integrate the individual into the company the original set of assignments was limited in scope – to help the manager get to know others within the company. The new manager seems to overanalyze things. Long hours are spent carefully drafting plans but there is little action. How can the CEO manage this individual without micromanaging? How do you coach a new manager who isn’t cutting it?

Advice from the CEOs:

  • It looks like this person is working long but not necessarily productive hours. This is costing you time and money – both yours and your employees. The question is whether the root cause is the individual’s behavior or your own expectations and behavior. Ask yourself the following questions:
  • Have you clearly outlined your expectations in terms of what is to be delivered, the time in which it is to be delivered, and any constraints around the projects for which this person is responsible?
  • Have you provided the necessary resources and empowered the individual to make the decisions required to bring projects to completion?
  • Have you scheduled regular update meetings with this individual and openly discussed project progress and obstacles to completion?
  • Have you set appropriate expectations with your other staff as to the authority of the new individual? Are you honoring those expectations in your own behavior?
  • If you have done these things, and the individual is not performing, then it is time to ask whether you hired the right person.

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How Do You Boost Financial Understanding Within the Team? Five Points

Situation: A CEO is concerned that her team doesn’t appreciate the financial implication of their decisions on the company. This applies to both day-to-day decisions and strategic decisions that team leaders make. What can be done to better connect them and their decisions to the bottom line? How do you boost financial understanding within the team?
Advice from the CEOs:
• Go down the management levels from top to bottom and take the time to explain, in understandable terms, the company’s financial objectives, why they are important, how these are measured, how managers’ day to day decisions impact company performance, and the financial consequences of those decisions.
• Give employees a stake in company performance! For some this may be an ownership stake, for others it could be linking financial performance to their compensation and promotion track.
• The objective is for everyone to view the company as “ours”. This is a critical culture shift from the usual view in terms of “me vs. them”
• Work with the team to establish understandable and trackable formulas for profitable performance.
• Establish meaningful rewards for meeting the company’s plan and financial targets. When employees see a direct link between company financial performance and their paychecks they will pay attention.

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How Do You Unlock Your True Profitability with Sound Cash-Flow Trade-offs? Six Points

Situation: A CEO has her company on a positive growth track. The company has a solid customer base. Their products and accompanying services are increasingly well-accepted. She is ready to take the company to the next level of growth and profitability. How do you unlock your true profitability with sound cash-flow tradeoffs?

Advice from the CEOs:

  • Profit is different from cash flow. Make this distinction clear and act to boost cash flow.
  • Tracking Cash & Forecasting:
    • Watch the company’s bank balance. Frequently track cash inflows and outflows by period.
    • Carefully assess and project the pattern of customer buying habits and payment performance to develop sound revenue assumptions.
    • Compare the company’s margin dollars and billings with norms for peer group businesses.
  • Issues to consider in forecasting:
    • Hiring means commitment of future cash outlays. Consider contingent work force options.
    • Project and plan for future large payments (equipment, technology, marketing, loans, etc.)
    • Differentiate between investing in ongoing business capacity as opposed to incremental add-ons.
    • Look at cyclical trends and issues. Understand your customers’ purchase habits and patterns.
    • Develop likely “what if” scenarios (good and bad) and develop plans to reduce the impact of surprises.
    • Analyze the company’s business model and determine exactly how cash flows through the company’s operations.
  • Analyze important upcoming decisions: hiring equals investment; outsourcing equals expense. Evaluate needed support for each.
    • Differentiate investment versus outsourcing decisions. Smooth cash flow through selective outsourcing – especially when dealing with sudden or cyclical peaks. Avoid the risk of committing long-term resources by staffing up to address short-term peaks.
  • Focus on the opportunity cost of money. Add this focus to both planning and assessment.
    • Operate with a mix of other peoples’ money and ownership funds. The latter are more expensive than bank interest because the trade-off is what you could earn through alternate investments.
  • Fine-tune the company’s planning tools. Analyze budget and cash implications of alternate plans through detailed budget projections and follow-up by tracking cash expenditures.
    • Use Cash Flow Statements to analyze and project trends in investments, operations and financing and how each of these affects cash balances.

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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 Hire the Right Person? Three Points

Situation: A CEO is in the process of hiring a new employee for a key position. The company is now writing the position description to post for candidates. What can they do to improve on past hiring experiences? How do you hire the right person?

Advice of the Forum:

  • Two of the members of the Forum have worked with a skilled consultant who taught them a system for improving employee selection. Both companies have experienced excellent results from this system.
  • Key points of this system include:
    • Screening applicants for appropriate skills and inviting for interviews those who have the right background. The interview process is a 2-day affair. Day 1 focuses principally on behavior and culture.
    • Day 1 Interviews: the focus is behavior and adaptability. This involves 2-4 hours of tightly scheduled 15-minute interviews. These are scripted with standardized questions. Several candidates are run through this process simultaneously. The objective is to create the same type of pressure that an employee normally face when the company is chasing a tight deadline. Interviewers are instructed to observe how the individuals being interviewed respond to this pressure. Those who are not right for your culture quickly screen themselves out of the process. Those who pass Day 1 are invited back for Day 2
    • Day 2 Interviews: the focus is on a skill drill down. This includes real-time tests of the key skills that are typical of the position for which the interviewees are interviewing. The objective is to assess the familiarity of the interviewees with the required skills, and to determine who reacts both competently and creatively.

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How Do You Boost Intensity and Accountability? Five Solutions

Situation: A CEO is concerned about the intensity and accountability of her team. An employee stock ownership program is in place, and employees are rewarded with bonuses for meeting or exceeding objectives. HR reports that there is a lack of decision-making; employees just sit and talk instead of moving forward. How do you boost intensity and accountability?

Advice from the CEOs:

  • Does the current bonus structure include revenue growth? If revenue growth is not part of the incentive program, then this won’t be the focus.
  • What happens when the CEO is away?
    • Assure that the #2 who’s in charge has the same sense of urgency as the CEO and has the confidence to make decisions.
  • The company is at the point where it needs seasoned professionals to run key operations and functions.
    • Ideally this would be an internal promotion, but if there is no internal candidate look to hire from the outside. Hire two new managers – for different teams. Watch how they do with each of their teams to determine whether one can run the whole outfit.
    • This can ignite other employees – those who will catch on to what the new manager is doing and will now get the message.
  • Another CEO empowered people and explained how it worked.
    • They have had to swallow some poor decisions but have learned that they can’t come down on those who make mistakes – it discourages them from taking the risks needed to make decisions.
    • They’ve organized strategic teams to develop the empowerment program with minimal input from top staff. Teams are required have to report on their results 2x week – no exceptions.
    • The CEO hired two key hires who are hard hitting with deep resumes and experience – individuals who have shaken things up.
    • The new managers started in a sheltered situation where they could learn the organization and the people. This was done before they were put in their eventual positions.
  • What are the potential downsides to making this kind of change?:
    • Some sparks will fly.
    • Some will get upset.
    • Be patient with this process – let it happen.

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How Do You Take Advantage of a New Technology? Two Foci

Situation: A company has had early success with a promising new technology that compliments the company’s strategic direction. Their objective is to become one of the top suppliers and servicers of this technology in their service area. How do you take advantage of a new technology?

Advice from the CEOs:

  • Leverage the company’s strengths to create an early advantage in this technology.
    • Create a low-cost delivery system to take advantage of opportunities available through this technology initially at a lower margin, then offer enhancements to build margin to company norms.
    • Investigate other markets and applications where this low-cost delivery system can generate you new opportunities.
  • It is early to assess whether the new technology will become dominant, or just the latest fad. It has been on the market for less than two years and is just taking off.
    • Take the next few months to dig into what is happening within vendors of the technology, and how they are perceived by their client companies.
    • Talk to CIOs about their perceptions of the technology based on the last few quarters of experience – quality of implementation, quality of service. Other providers add a layer to the cost – is the service worth the cost or do client companies save over time through overhead reduction?
    • Talk to other vendors from other market areas – learn from their experience selling and working with the technology.
    • How do the other vendors make money? Are costs to their corporate clients offset by savings implementing the technology? What margins are the others enjoying and does this come from the initial technology, from add-on services, or complimentary sales. What is the perception of the sustainability of this technology both within the providers and to the CIOs? What about the technology really irks corporate clients? Where is the soft underbelly of this technology? Research may assist in making future decisions on how to approach the technology and clients.

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