Tag Archives: Final

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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How Do You Get the Right People on the Bus? Six Points

Situation: A small company is growing nicely and needs more people. However, the CEO is struggling to find the time to properly interview and hire additional people. In addition, he is not comfortable in this role. Hiring the right people will be critical to the future success of the company. How do you get the right people on the bus?

Advice from the CEOs:

  • Particularly if the CEO does not feel that hiring is a strength, hire an outside HR firm or consultant to screen and select candidates for interviews.
  • It is critical to decide, in advance of any search, exactly what the company needs in the individuals that are hired. A good HR consultant can help the company work through this.
  • Structure the agreement with the HR professional so that they are paid based on successful integration of the individual into the company. It may cost more on the back end for this type of agreement, however, it will save the CEO and the company valuable time and money far in excess of what the company will pay for this assurance.
  • Plan to only see the final candidates.
  • What does the company look for in an HR consultant relationship?
    • Generation of a job description and the key traits of the individual that the company seeks. This helps the HR consultant to select the right candidates for the business and situation.
    • Candidate recruitment, screening, and selection of final candidate(s) for company review.
    • The HR consultant will also prep the candidates to succeed in the company’s environment.
    • Assistance in identifying the key objectives and metrics that will be used to assess the success of the individuals hired during the first quarters or year in the company. If the HR consultant’s compensation is structured so that they are paid well for long-term success, it may cost the company more for the successful hires, however the company will only pay for success and will save considerable cash by averting failures.
  • In addition to making sure that the right people are put on the bus, work diligently to assure that they are also in the right seats, and that they change seats as necessary to complement the company’s growth.

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