Tag Archives: Direction

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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Where Should You Focus the Business? Four Recommendations

Situation: A company has experienced limited growth and profitability for the past five years. It is also short of resources. They have invested a lot of time and effort in a new technology which has yet to bear fruit. The CEO seeks advice on the company’s future direction. Where should you focus the business?

Advice from the CEOs:

  • Continue to support BOTH business – the core product line and the new technology – but rearrange priorities to boost revenue and profitability growth. Simultaneously, focus new R&D investment in the company’s core product. This has three principal benefits:
    • The company’s primary expertise is in its core product line. This product is its principal source of revenue and has the greatest potential for profitability and growth.
    • R&D and start-up production of new iterations of the principal product is less resource intensive than the new technology.
    • Further, sales of the core product are far less cyclical than the market for the new technology, and therefore more promising to a small, niche company.
  • Looking at this recommendation sequentially, the group recommends that the company:
    • Continue to sell the current product line a well as existing complimentary products to maintain revenue and profits.
    • If additional work or resources are needed to mature the new technology, have someone else take the lead role in R&D and private label the technology for the company.
    • Focus all new R&D investment on improvements to the core product.
    • Refocus market research on current and potential customers for the principal product line to determine their greatest needs to guide product line innovation.
  • The company needs access to advanced equipment to support development of the core product line. Consider creative ways to gain access to this equipment at little expense.
    • Look for advanced equipment that is available at distress or liquidation-sale prices by companies who made poor investment decisions.
  • Find a partner that wants to focus on the new technology, but who also wants and needs the company’s expertise in its core product line.
    • The company focuses on the core line; let the partner develop the technology.

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How Do You Maintain Your Culture as You Grow? Five Points

Situation: A company has been growing well and has developed a solid culture. Currently a key individual has decided to leave the company and has said that he is uncomfortable with the company’s culture and values and feels that he could make more money elsewhere. This has caused the CEO to question how he maintains the company’s culture. How do you maintain your culture as you grow?

Advice from the CEOs:

  • The individual who is leaving was the wrong person for the company. The company is lucky that he is leaving.
    • As this individual departs the company, conduct an exit interview and listen closely to what he has to say.
  • Develop a simple statement of the company’s culture. This is not the current vision and mission but is a statement that represents the core values to be maintained by the company and staff.
    • This will help to identify and evaluate new people as they are brought onboard.
    • It will also help to guide the company as it faces both new opportunities and the numerous business choices that will be encountered in managing both current business and future growth.
    • As an example, J&J’s “Credo” starts: “We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality.”
    • This statement of values guides everything that J&J does and saved them as they formulated their response to the Tylenol scare.
  • The team leads are the key to cultural fit. They determine whether the culture of their teams is consistent with the culture of the company.
  • Look at the culture of subgroups within the company. These have a huge impact and represent areas where the company truly excels.
    • Microsoft excels at managing software development but does not have the skill set to manage networks – nor do they care to develop this. Focus on what the company’s leadership are staff are best at doing.
  • From what has been said, it appears that the company was founded:
    • To create a professional work environment – to the founder’s standards; and
    • To be of uncommon value to the company’s clients.
    • If leadership conforms to these two standards, they will guide decisions about new opportunities and directions. Either a particular choice fits these standards, or it does not.

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Do You Diversify or Stay the Course? Five Thoughts

Situation: A CEO seeks advice on the direction of her company. Her objective is to build a lasting company which is a wonderful place to work. She has a creative group of employees who have suggested options to expand the scope of the company. Should she maintain the current direction or entertain exploration of these options? Do you diversify or stay the course?

Advice from the CEOs:

  • With a solid, sustainable business model and the current level of revenue, diversification is not as important as it was when the company was a fraction of its current size. Current objectives could well be reached by just doing more of what the company does now.
  • The most important question to ask is: “What do we want from this or that option?”
  • Concerning the top opportunity under consideration, the group felt that:
    • It’s not the company’s core business and doesn’t play to the company’s strengths.
    • However, there are aspects of the opportunity that fit both the company and the existing client base. These represent an opportunity that fit’s the company’s culture.
    • Explore these aspects in small steps that do not detract from the current business.
  • If culture is a key ingredient of the company’s offering, how scalable is this, particularly into new markets? Look for ways to grow that are consistent with the strong culture that already exists.
  • Improve selling the full breadth of the company’s offering. The company offers many services that may be of interest to clients, but which are not mentioning in initial sales calls.
    • In sales presentations focus on the client, rather than a detailed description of the service offering. Offer clients a small brochure that covers the range of the company’s services.
    • By focusing on clients’ needs it is easier to selectively mention options that will serve these needs.

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How Do You Prepare for an Acquisition? Six Suggestions

Situation: A company is purchasing another company to expand its product offering. The CEO is concerned that the employees need to stay focused through the closing date. He is also concerned about retaining key employees both of his company and the company that he is buying. How do you prepare for an acquisition?

Advice from the CEOs:

  • Until the deal closes, don’t change anything about your current direction.
  • As you negotiate and move to close, be mindful of competitive bids.
    • This will help to keep the deal in place.
    • It may also open the option to put together the deal and then seek competitive bids to fund the deal through private equity groups.
  • Get three second opinions – learn what could go wrong with this deal so that you can plan and anticipate.
  • To assure that you retain key staff take the following steps:
    • Hire consultants: HR, financial, see what they recommend.
    • Offer key employers favorably priced options for a combined minority position in the company. This offers them an upside and will be an effective retention package.
  • What else can be done to retain key employees.
    • Let them know how this acquisition will position the company as the Dream Team company in your space.
    • Explain how this acquisition gets the company closer to a true exit strategy which will be financially beneficial to them.
  • If you can assure key employees that they will not experience any change in their job, title, responsibilities or compensation, retention may not be an issue.

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How Do You Work with a Resistant Employee? Five Points

Situation: A CEO feels overworked, fatigued and ready to retire! The core problem is a long-term employee who is constantly resisting the CEO’s the company’s strategic direction. How can the CEO alleviate this situation? How do you work with a resistant employee?

Advice from the CEOs:

  • If this individual is valuable, try to work with him first.
    • Can you give him a different focus – another role within the company for which his talents are suited and where he will make a significant contribution?
    • For a change like this to be effective it must be offered and accepted with the condition that this becomes his focus and not your strategic leadership of the company.
  • How is it best to have this conversation?
    • First, clearly state the direction of the company.
    • Then ask a question: What do you want to be doing for the next 5 years?
    • You may be surprised by the response to the question. It may lead you to a win-win solution; or it may become clear that this individual needs to be doing something else.
  • Conduct the discussion in two stages – but without a lot of time between these two discussions.
    • “You are valuable but things have to change. I prefer that you remain as part of the team, but on the strategic front you have a choice – are you on board or not?”
    • If after consideration the answer is that he is not on-board then you must let him go.
  • Don’t blindside this person. Think of a Resurrection versus a Come to Jesus Meeting.
  • If it turns out that you must get rid of this person you will wonder: why you didn’t do this 6 months ago.

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How Do You Ramp Back Up Following a Slowdown? Five Thoughts

Situation: A company is ramping back up following a two-year slowdown. During the slowdown employees were on reduced weeks versus historic 50+ hour weeks. When polled about resuming historic hours, several say that they say they don’t want to work more than 45 hours per week. What are best practices for ramping back up following a prolonged slowdown?

Advice from the CEOs:

  • Communication is critical, particularly during times of change. Make sure that you clearly communicate the new situation, any change in direction that accompanies this, the need to readapt to the former schedule, and the benefits to the company and employees in terms of ongoing opportunity and employment.
  • If resumption of normal business includes any change in direction, add metrics and objectives that compliment the new direction. To ease the assumption of new roles and responsibilities, provide process check lists.
  • Provide more deadlines, and complement this with increased recognition and rewards.  Rewards do not necessarily mean money, particularly if your employees are knowledge workers who have to exercise critical judgment in their work.
  • Make sure that you are providing any training that employees need to move into new roles. Schedule training days on Fridays – but let those involved know that they are expected to get their regular week’s work done by Thursday evening.
  • During future slow periods, instead of cutting back hours for everyone, offer unpaid vacation to employee volunteers and keep everyone else working at normal capacity. This avoids forcing them to become accustomed to shorter hours at reduced pay.

Key Words: Slowdown, Resume, Work Hours, Adapt, Communication, Delegation, Change, Direction, Metrics, Objectives, Rewards, Training

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How Do You Chase A Moving Ball? Three Fundamentals

Interview with Michelle Bonat, CEO and Founder, RumbaFish Technologies

Situation: Early stage companies focusing on social commerce and analytics face an unpredictable market. Nobody can accurately forecast market direction or even who the players will be in 2 to 3 years. What are best practices for chasing a moving ball?

Advice from Michelle Bonat:

  • In a rapidly evolving market it is critical to have laser-like focus on the needs of your customers. You must create value for them by understanding their needs, businesses and challenges. While technologies and markets change and evolve, human behavior is remarkably consistent over time. By focusing on rewards, sharing and customer motivations we better understand their needs. We see three fundamentals in working with customers.
  • First, focus on understanding needs versus wants. If Henry Ford had asked what customers wanted for better transportation they would have said “a faster horse.” They needed a faster way to get from Point A to Point B without getting rained on. We invent solutions that are incrementally better at addressing fundamental customer needs by leveraging technology and social commerce.
  • Second, work collaboratively with your customer. As we develop an understanding of needs versus wants, we develop an arm in arm relationship with customers and partner to evaluate solutions that work for them. We use short versus long release cycles with frequent checkpoints to assure that both sides are on the same page and that we understand the features that are most important to the customer. As a result, our customers become evangelists not only for the resulting product or service, but for us!
  • Third, go into any project with the customer’s success foremost in your mind. We focus not only on getting the solution right, but on assuring that the solution optimizes the customer’s primary objectives. That way we all share in the win.
  • The bottom line is that customers want to be treated as individuals and want their individual needs met. We honor this and make it central to our customer interactions. This way, no matter where the market goes, we will be a player.

You can contact Michelle Bonat at [email protected]

Key Words: Strategy, Leadership, Social, Media, Commerce, Analytics, Predictability, Unpredictability, Market, Direction, Player, Customer, Value, Needs, Wants, Behavior, Engage, Share, Understand, Technology, Social Commerce, Collaborative, Relationship, Success, Solution, Individual

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What are Best Practices for Effective Delegation? Three Thoughts

Situation: The CEO of a small company finds that whether he gives broad direction to employees or very specific instruction he gets the same result: they don’t seem to understand what he wants. He feels that they don’t have a sense of buy-in or urgency. What are best practices for effective delegation to improve results?

Advice from the CEOs:

  • You recently fired an employee for inconsistent performance but didn’t tell your staff. When you return to the office this afternoon, get the employees together and tell why the individual was fired. Let them know that this is part of a broader pattern that you see within the company and that if you see other cases of individuals not following through on their assigned responsibilities you will have to take additional action. Unless your employees understand that nonperformance has consequences, there will be no change.
  • In your operations, set subassembly goals and intermediate milestones coupled. Create and post a set of charts in the operations room so that employees have a regular visual reminder of how they are doing. Bring these charts to employee meetings and discuss how the company is doing. If deadlines aren’t being met, ask for input on how to improve performance. Celebrate successes with recognition for individuals or groups who demonstrate the ability to meet objectives.
  • Hire an operations manager with experience working with teams the size of yours. You want an individual who excels at motivating and getting results from people, and who has supervisory versus managerial experience. Think platoon leader – a person who excels at effectively running small teams.

Key Words: Delegation, Direction, Buy-in, Urgency, Performance, Consistent, Consequences, Vision, Priorities, Goals, Milestones, Chart, Review, Employee Input, Improvement, Celebration, Manager, Motivation, Results

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