Tag Archives: Experience

How Do You Expand into a New Market? Four Points

Situation: A company is interested in expanding into new market. The CEO notes that they have little experience in this market, but it is lucrative, and they believe that their technology has effective applications in this market. How do you expand into a new market?

Advice from the CEOs:

  • If the new market is technical it is important to identify the standards that govern production in that market. Examples include ISO 9000 processes and 13485 ISO Medical Standards. Start work on these now to assure that the products and services under development meet market standards.
    • While it will take effort to become ISO compliant, this investment will bring significant benefits in terms of regularizing all the company’s processes and procedures.
    • There may be some early resistance, but the long-term benefit is worth the pain.
    • Being ISO certified helps the company to sell its services. Many clients will not consider the company as a serious vendor unless it is ISO certified.
  • Pull in an outside consultant to do a quick gap analysis between where the company’s current procedures are and where they need to meet the standards.
  • Will ISO certification provide a competitive advantage?
    • It will never disadvantage the company and may provide a competitive advantage with customers.
    • Use Blue Ocean Strategy to create a new advantage for the company around ISO certification.
    • Industry will eventually require vendors to increasingly become ISO certified. If the company is already there it will be ahead of the curve and may be able to gain a premium price for its products and services by being there ahead of others.
    • European and International companies increasingly insist on ISO certification – they are ahead of the US.
    • Create a Market Road Map. Identify the markets that the company could serve. Look at the requirements for doing business in these markets. It may be possible to find additional leverage in ISO certification that will allow the company to enter additional markets with minor incremental additional cost.
  • Will ISO certification add an additional cost structure to the company’s services?
    • Under ISO, a company can have both ISO and non-ISO projects. Company standards will simply identify which projects are which and when non-ISO standards apply. Standards can be changed under ISO as new non-ISO opportunities arise. It is just a matter of updating procedures.

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How Do You Develop an Employee to the Next Level? Four Points

Situation: A CEO has a key employee who wants a higher level of responsibility. Currently this employee is primarily focused on business development. He’s good at this but wants a higher level of experience. The CEO agrees. How do you develop an employee to the next level?

Advice from the CEOs:

  • If you ask this individual what needs to be done, what happens?
    • Revenue is number one. This is where he is focused, but he wants more than this from his role.
    • If this is also the CEO’s primary objective then the CEO needs to back off and direct him to split his time between closing high level opportunities and training his direct reports to be able to close lower-level opportunities on their own.
  • To the CEO – thinking about your own experience, how did you mature to a higher level when you had primary responsibility for business development?
    • Answer: I built and trained staff to do this and delegated these responsibilities to them.
    • Allow this individual and other key managers within the company to do the same thing, and coach them along the way.
    • Empower this individual to build his staff and enable them to take on more of the functions that he no longer wants to handle himself. Allow him to prioritize his time to focus on: hiring and training of his key staff and coaching and supervision as they grow into their new roles.
  • Consider this solution as a larger project manager role. Take a key product and empower this individual to design, build and manage the organization to deliver this product.
  • To frame this solution short-term, start with a 1-on-1. Ask about his vision – what he wants as his role and how he sees building this.
    • Follow by laying this out in terms of the company’s objectives – be specific as to what this looks like.
    • Look for a win / win reconciliation between the CEO’s and the employee’s visions that meet both of their objectives. Get on the same page with this individual, so that this fulfills both of your needs.

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What are the Options for Your Next Phase? Six Suggestions

Situation: It’s a new year, and a CEO is thinking through options for the coming year and beyond. She has decided to leave her company and establish a new role and career for herself. Immediate concerns are funding the transition and entry into a new career. What are the options for your next phase?

Advice from the CEOs:

  • The area that can be built most quickly to provide income is a consulting practice based on the experience developed as a CEO and as a specialist leveraging past experience. Building a new practice is a big commitment. Make this the initial focus and get a few gigs to get the ball rolling. The company is an early option, as well as some of their key customers. These relationships are already in place.
  • On the academic side, investigate Executive Education programs in Business Schools. Here the clientele is different from normal undergraduate and postgraduate education – actively working managers and executives. For this audience the combination of experience as a CEO and academic credentials is advantageous. For this audience, a lack of credentialed teaching experience is largely counterbalanced by the weight of professional experience.
  • The Professor / Consultant track looks best if established as a 5-year plan.
  • While getting established in a new role there will be an initial challenge managing the time demands of teaching, research and developing a consulting practice. Think of this as managing the multiple functions of a company. It will be important to establish early priorities to accomplish the desired plan.
  • A professorship does not necessarily tie financially to current goals but can be an important strategic adjunct to consulting efforts. In a certain sense, teaching will have to be its own reward.
  • To the extent possible and depending upon how the board responds to the decision to leave the company negotiate the best possible severance package. This can tie into some of the suggestions, above.

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How Do You Hire and Retain the Right People? Four Suggestions

Situation: A CEO is concerned about employee turnover, particularly among promising younger employees. He doesn’t know whether these employees are different from past employees, or whether it is a function of the current economy and recovery. They look like a good fit during interviews and appear to fit well with the company when they come onboard. Yet, after a few weeks or months they leave. How do you hire and retain the right people?

Advice from the CEOs:

  • Ask other companies in your area whether they are experiencing the same phenomena, and what they are doing about this. Are their experiences similar? Why do they think this is happening? Have they developed successful strategies to stem the resignations?
  • Conduct follow-up interviews 3 months after the employees leave. Use an independent party – or at least a neutral party within the company – to conduct the post-departure interview. While there may be a variety of reasons why individuals leave, are there similar themes in their motivations?
  • Are employees being treated similarly to the way that Margery Mayer and others have discussed treating customers – are they being heard?
    • Ask and listen to their true motivations – perhaps they value the opportunity to take an extended vacation for a life experience more than they value a raise. Intel and other companies offer their employees an extended sabbatical after a certain number of years of service. The employee does with this time what he or she wants.
  • Host informal beer and pizza sessions with employee groups. Keep the mood relaxed. Let them open up and complain if they so wish. It’s far better to let them air these feelings with the CEO than as buzz within the office – particularly if the see that they are being heard.
    • It is important to follow up and respond to what is heard. Employees appreciate the opportunity to be open and honest, but only if they sense that their input is producing the changes that they desire.

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How Do You Manage Growth in a Difficult Economy? Seven Suggestions

Situation: A CEO’s company has struggled due to difficult business conditions during the last year. Top among the challenges has been poor execution in hiring quality people, not because they weren’t available, but due to uncertainty. He is also concerned about infrastructure issues, particularly in IT. How do you manage growth in a difficult economy?

Advice from the CEOs:

  • Focusing on IT, a key element for success in IT is having a clear definition of company needs. How does IT serve the company? What are the goals and objectives of the IT system? What kind of load must it be able to handle? What aspects of the system are most critical to company success?
  • Finding quality talent with the necessary experience is a challenge; particularly if solid goals and objectives haven’t been developed.
  • One CEO shared success managing IT. The company hired two IT professionals and had them report to an internal committee. This committee then communicated effectively with management.
  • Another CEO observed that some IT people look at their job as a process rather than a function; they just show up and fix things. Management of IT was improved by establishing clear objectives and holding the IT staff accountable for their performance against these objectives.
  • Another CEO told the story of terminating their IT person due to lack of consistency. IT must operate under management oversight, with clearly defined goals and objectives, and accountability.
  • Outsourcing some IT functions can help if used with care. On-site staff can focus on system maintenance and fight the inevitable fires.
  • IT costs should be thoroughly reviewed. They can be expensive. Look at IT costs as a percent of sales and compare expenditures with others in the industry sector.
  • Take a similar approach with other functions needing attention.

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How Do You Transition to a New CEO? Four Strategies

Situation: A company founder was advised by her Board to help them hire a CEO with more experience to run the company. This new CEO is now in place. As the founder gains more experience, the Board has indicated its willing to consider her as CEO. How do you transition to a new CEO?

Advice from the CEOs:

  • Become the fire hose! Build a tight relationship with the new CEO and together build the future strategy that will enable you both to win.
    • Others will focus on past issues. Keep your approach and advice positive. Position yourself as a partner, not an adversary. Emphasize your supportive and collaborative capacities.
    • Become the new CEO’s go-to person: trustworthy, objective, knowledgeable, reliable. Nurture the development of chemistry with the new CEO.
    • When the new CEO asks what needs to be done, produce the plan. Leverage your knowledge and expertise to become his greatest resource.
  • Enlist the CEO’s support of one or more of the focused strategies that are already in play within the company. Build the support of the Board and focus on boosting company value to 2x sales. The Board won’t forget who produced the original initiatives.
  • You have more power than you imagine – both with the Board and the new CEO – due to your knowledge of the marketplace and the business. Use it wisely.
    • While there is a new CEO, the company has already been profitable and company operations are clean. The Board will remember this.
  • How do you boost the chances to eventually be named CEO by the Board?
    • Tie yourself very closely to the new CEO – be this person’s more important resource. Build and cement your position as his most important ally within the company. It will help you to gain his support for implementing your ideas.
    • Segue your relationship with the Board members to become the company’s next CEO.
    • At the same time, grow your successor within the company so that you will be ready to move up to CEO when the opportunity arises.

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How Do You Bring Children into the Company? Seven Observations

Situation: The CEO of a company is looking at her succession plan. The preferred option, from a family standpoint, is to groom one of her children to eventually become the CEO. A concern is how current key employees will react to this plan. How do you bring children into the company?

Advice from the CEOs:

  • As preparation for a key role at the company, have your child gain experience at a company that has been where the business is today but has grown to a higher level. Learn from them what they went through and what they would change were they to do it again.
  • How did Peter the Great become the greatest leader of Russia? As young man, and son of a czar, he apprenticed in England and Holland – in ship building and other important arts that were scarce in Russia. He was able to leverage what he learned to help build the country when he became czar.
  • Have them develop the leadership qualities and maturity that they need to run this company in another company – where there is the freedom to make mistakes and learn from them. Bring this wisdom and experience back to the company. It will help gain the respect and loyalty of company employees.
  • Have them take on tasks which are not comfortable – for example, sales. Don’t underestimate the value of being able to visit a new customer. This is the key role of the principal of any company.
  • A parent/child relationship can be difficult in business. It can get tense when business, money, survival of the company and making payroll are on the line.
  • The son or daughter must be aware that in a new role one doesn’t start out in control. This may be achieved in the end, but it is not the starting point.
  • An option, once experience has been gained in another company, is to have the individual start a new branch of the company in a different location. This will provide a valuable learning experience and will demonstrate both capacity and success to company staff.

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How Do You Choose Between Strategic Options? Four Points

Situation: The founding CEO of a technology company is considering options for the future. The company is doing well, with two options for future development either within or outside the company. How do you choose between strategic options?

Advice from the CEOs:

  • Domain expertise is less important than business experience, P&L experience, and fund-raising success. A diversified background and successful experience as a CEO are as important as specialty industry experience.
    • Continue to pursue all options for the time being. See how the new opportunities mature before making final choices, and either split time between the options or assign good managers to oversee each.
    • Ownership agreements should be based on cash investment of the parties – not time and effort.
  • Option #1 – Focus on the primary company.
    • A challenge is that most of the Board members just see the numbers, not the dynamics of day-to-day operations. They don’t know the CEO’s contribution.
    • Assure that the Board understands the CEO’s contribution and is rewarding the CEO appropriately.
  • Option #2 – Focus on New Opportunity #1.
    • Is this option more like a product or a company?
    • Consider this option as a product incubator rather than a single product company – producing and spinning off a series of ideas for development.
    • This can be done either within the primary company or as an outside effort.
  • Option #3 – Focus on New Opportunity #2.
    • Software development can be self-funding. Compared with manufacturing, software is inexpensive to develop and requires little investment to scale and sell once the code is written.
    • The trick is to rigorously focus on market opportunity while minimizing cost.
    • Watch staffing commitments. Use scarce resources to lock up irreplaceable capabilities. Hire or offer equity only for significant contributions such as IP development. For labor, use consultants, independent contract arrangements, or look for what can be outsourced.
    • Like Option #2 this can be done either within the primary company or as an outside effort.

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How Do You Introduce a Product into a New Market? Five Ideas

Situation: A technology-based company has a very successful product in a niche market. The team has been brainstorming about additional markets into which the product could be introduced. The only experience that the CEO and team members have is with the existing market. While other markets are appealing, they lack the experience and contacts to penetrate new market opportunities. How do you introduce a product into a new market?

Advice from the CEOs:

  • Hire someone, either an employee or a consultant, who intimately knows and can introduce you to the new market. If you have more than one good candidate consider hiring them both.
  • Start with clients that you already serve in your current market but who also serve the new market. This can provide quick wins and proof of concept. Overlap is important because you will have a shorter sales cycle with these clients.
  • Another company moved from on-site consulting to turn-key services. They found the purchase process to be completely different. Originally, they were unprepared for this, so the transition took longer than it might have.
    • Talk to existing customers and learn about their companies’ purchasing processes to organize your fact gathering and strategy.
  • Read case studies of other companies’ experience moving a single platform between markets.
  • Another company moved from niche photography – holiday photos – to photos for Fortune 500 companies. This was the same expertise, but the market and decision processes were different.
    • Key to the successful move was understanding the people in Fortune 500s who were making the buy decision and the structure of their decision process. The CEO of this company registered for conventions attended by client prospects. This provided a quick way to meet and learn about key people and their decision processes.

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How Do You Market to Company Insiders? Three Suggestions

Situation: The key to a career development company’s growth, historically, is leveraging relationships with insiders in potential client companies who know the needs of their own companies. The key benefits to these people are access to good people, no recruiting fees and feeling good about the experience. What is the marketing message to this group? How do you market to company insiders?

Advice from the CEOs:

  • Ask them. You already have a number of company insiders who work with you. Develop a detailed survey to query what they see as the key benefits of working with your company, and which of these benefits are most important to them.
    • Consider a broad quantitative survey that you can administer via the web.
    • Complement this with a smaller in-depth interview survey to understand qualitatively how they benefit from their relationship with your company and the service that you provide.
  • Your equity is the experience that these people enjoy when they work with you – this is your leverage.
  • Your pitch is emotionally oriented. Stick with this. Saving recruiting fees will not be as important given your focus and the company insiders that you are likely to attract.

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