Tag Archives: Disrupt

What are Appropriate Social Interactions at Work? Three Thoughts

Situation: A first-time CEO is curious about the experience of others regarding social or personal interactions with employees at work. At previous companies, outside of company picnics or similar events there was little interaction between top staff and employees. Do others observe similar practices? What are appropriate guidelines for social interactions at work?

Advice from the CEOs:

  • Consider the following cases:
    • Case 1 – even though individuals may be friends outside of work, they often do not engage as “friends” at work. There is a different role structure at work.
    • Case 2 – if, based on history, a CEO and employee have had a close relationship outside of work, the CEO should not show favoritism toward this individual at work. It is important to preserve a veil of trust with the other employees; apparent favoritism will disrupt this.
    • Case 3 – a CEO may have lunch with employees, to build relationships and keep tabs on the company atmosphere, but other social activity outside of work should be handled cautiously.
  • There is a natural distance between any employee and those individuals who evaluate or review them or decide on promotions. The individuals have a power over the employee that prevents them from approaching each other as true peers.
    • Because of this natural barrier, it is inappropriate to force social or personal interactions. The best option is to make sure that the employees know that the boss cares about them, has their interests in mind, and shows an interest in them and their families.
    • It is important to take advantage of opportunities to demonstrate to employees that the CEO is interested in them.
  • The situation is different between managers and their teams. Teams function on the basis of relationships and trust. If the CEO is invited, it is appropriate to attend team or department functions. Observe and learn from these interactions with the others. Most of all, listen actively, and patiently allow the interactions to mature. Don’t force things.

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How Do You Communicate a Company Sale? Six Guidelines

Situation: A closely-held, non-public company is in negotiation for a possible sale. The CEO seeks guidance on when and how to communicate this to employees. What event would demand communication? The CEO is concerned that if the sale falls through this may significantly damage employee morale. How do you communicate a company sale?

Advice from the CEOs:

  • The trigger point for any employee communication will be due diligence. At this point, you may have a serious buyer.
    • Going into due diligence, limit updates to those who will be involved in the process.
    • Most acquisitions do not go through, so a broader communication risks disrupting the company – unless you are very confident that the sale will proceed.
    • Prior to due diligence, there is no benefit to communicating any possible sale to employees.
  • What message do you deliver to those who will be involved in due diligence?
    • We are entering a due diligence. This is an exercise that we’re doing for our own education so that we understand the value of the company. This is just a drill.
  • Keep your eye on the business and don’t be distracted by the offer.
  • Have a good idea of an acceptable sale price.
    • For a company with intellectual property or significant assets, three to five times EBITDA is a good starting point – unless the sale is a strategic buy to the buyer.
  • A possible deal is often spoiled by terms and conditions that the buyer attaches to the deal.
  • One buyer (at any one time) is the same as no buyer. When owners get serious about selling the company they will need a broker to develop multiple buyers, to advise them through the sale process and to defend their interests.

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What Three Qualities Characterize the Company of the Future?

Interview with Philippe Courtot, CEO, Qualys

Situation: Few economists predict a robust recovery. We know from past recessions that in a slow recovery some companies will fail while others rise to the top. What are the three qualities of the companies that will thrive and become the companies of the future?

Advice from Philippe Courtot:

  • Companies of the future will have three qualities. The first is a keen sense of who your customers are – what characterizes them and their buying and use decisions. You need to see yourself through their eyes. This will give you the ability to shift more easily as their needs shift. Making this shift is easier for a service company than for a manufacturing company because the infrastructure of a service company is more flexible.
  • Second is an intense focus on operational excellence. Everything is measured with the objective of obtaining the highest levels of productivity as well as the opportunity for ongoing learning and improvement. The companies of the future will have superior systems for gathering and tracking performance data, as well as cultures which allow them to learn from what they track.
  • Third is a culture of continuous innovation. The company of the future will be the company disrupting itself. Germany provides a wonderful example because of its culture of excellence in small, family owned companies. You may be surprised to learn that it is these small companies who are the true drivers of German innovation, not the big companies like Daimler or BMW. The small companies follow the three rules outlined here. Their success has been aided by the emphasis in German education on math and engineering which means that there is an ongoing supply of domestic talent to feed these jobs.

You can contact Philippe Courtot at [email protected]

Key Words: Company, Future, Quality, Customer, Shift, Adapt, Service, Manufacturing, Operations, Excellence, Learning, Improvement, Data, Culture, Innovation, Continuous, Disrupt, Family, Business, Education

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