Situation: The CEO is moving a key employee from head of engineering to a more customer development focus. To support this, she will have to bring in or promote another employee to fill the position of leader/supervisor/manager of the engineering group. The CEO seeks advice on the best way to approach finding a replacement for this key job. How do you replace a key position?
Advice from the CEOs:
• First, it is necessary to develop a timeline for finding and transitioning the replacement. Realistically, count on 6 months to find a replacement and transition the responsibilities to a new person.
• Keep in mind that anybody you find or promote will be different from the individual who currently occupies the position, and will not handle their new responsibilities the same way as the current individual. Their motivation and their approach to their new responsibilities will be different, at least at the outset, and they will not handle their responsibilities the same way that the current individual does.
• Seek an individual, either currently within the company or an outside hire with strengths that, over time, will add significant value to the organization. Prepare for this by brainstorming and developing a profile of the ideal candidate.
• If you have qualified candidates, the ideal person will come from within the organization. This has the added advantage of demonstrating to other employees that they, also, may become candidates for future positions to grow both their skills and income.
Tag Archives: Hire
How Do You Find and Keep Good People? Seven Suggestions
Situation: A company needs to both find and retain good people to continue its profitable growth. What experience can the group share to assist the CEO in his efforts to address these needs? How do you find and keep good people?
Advice from the CEOs:
• Before starting the recruitment process create specific position profiles including desired skill sets, qualifications, and functional responsibilities.
• Set up a recruiting team to develop current and future employees and candidates. Offer scholarships to new and existing associates to continue their education.
• Once a new person is hired, create a first 90 day skill set plan. Include challenges that they have to pass, as well as scheduled training and support.
• The first 90 days is critical. If someone slips up during the first 90 days it is taken very seriously as a sign or more to come.
• Profile and hire attitudes as well as focusing on skill sets. Lots of people have skills. It is those employees who possess both the right attitude and right skills who make great hires and who will stay with the company.
• Share the company’s culture and goals. Let candidates and new hires know how they fit into both.
• To boost retention, focus on charities that employees care about. Encourage employees to participate in worthy causes and give them time to support these charities.
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How Do You Maximize Company Value & Strategic Positioning? Five Points
Situation: A CEO has a young company in a very favorable strategic position. The Founders have bootstrapped the company and it is currently on the “blade” of the growth hockey stick. How can the Founders maximize the value of the company as they grow it? How do you maximize company value and strategic positioning?
Advice from the CEOs:
- What are company’s principal challenges and goals?
- Over time, as the market begins to mature, there will be more competition and margins will drop.
- Before this happens organize the company for maximum value, and build additional products and/or services that will maximize company value.
- Hire managers to manage on-going business while devoting top management time to strategic market expansion and building new products and/or accompanying services.
- Perform a strategic analysis focused on the long-term plan and building equity value. Plan a future that will optimize the company’s strategic position while increasing cash flow and equity value.
- Anticipate, plan and organize for the he most likely coming changes to the market.
- Consider starting a second company to compliment the value and products of the current company. For example, if he company is best at a key technology, start a second company to provide accompanying services that will enhance the value of the technology. Having done this, future options open up to either combine the two companies or to let them grow on complimentary paths.
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How Do You Take on Additional Business When You Are Capacity Limited? Seven Suggestions
Situation: A Company has been growing rapidly over the past year. This has strained resources in some departments, including manufacturing. New customer demand just keeps coming in. What can the CEO do to meet customer demand without busting at the seams? How do you take on additional business when you are capacity limited?
Advice from the CEOs:
- There are three questions to be asked before taking other steps:
- Is it possible to expand manufacturing by outsourcing?
- Can the company just hire more people?
- Is the business that the company is getting good profitable business?
- First, what a great problem to have – not to belittle the challenge that the company faces.
- If there is concern about the company’s vulnerability to future downturns and the company is holding off adding staff because of this, look for a filler product that can help the company to smooth business cycles.
- Farm out constrained work to other departments of the company – for example engineering. Are there independent entities that the company could partner with to add temporary capacity?
- If there are financial constraints, then look at adjusting the pricing for new business.
- If there are conflicts between capacity in manufacturing and engineering, consider becoming more of an engineering-focused firm and invest in this area. Look at outsourcing manufacturing capacity.
- Look for sources of temporary capital to fund the company through the adjustment. Use an existing bank line of credit or a loan to finance short-term capital needs.
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How Do You Manage Growth? Six Points
Situation: Many companies face challenges managing growth. Growth is a complex process involving strategy, staff and company culture. What guidance can the group give to help guide planning for growth? How do you manage growth?
Advice from the CEOs:
- Think of growth in term of five major components of organization and growth: structural, cultural, facilities, documentation systems, and people.
- Structural
- Consider different ownership and profit sharing options. Look for options that fit the objectives of the company.
- If you are looking at multi-location solutions, develop a structure that can be easily copied in new locations that are added but which is complementary to the home office structure.
- Cultural
- If the business is family-run and looking at moving to a non-family structure, look for options that will preserve the best aspects of the culture as it has developed.
- Keep company values intact.
- Focus on maintaining engagement and commitment.
- Facilities
- The transition from single-site to multiple-site is particularly traumatic. The jump from 2-sites to 3-sites is much easier because an effective model is already in place.
- Documentation Systems
- Growth can compel the company to adopt entirely new systems, especially when passing certain thresholds for government regulations (i.e. 50+ employees).
- People
- Hire and retain for the right mindset – consistent with company culture and structure.
- Specialists can be a real asset for their particular talents, but they seldom have the view of the “big picture” that is required for a turbulent environment.
- Compensation – align compensation with company culture and priorities.
- “Ownership” may have to change from sole ownership to shared ownership in order to keep key talent engaged.
- Add new skill sets to address needs but assure that these complement existing skill sets.
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What are Best Practices for Interviewing and Hiring? Three Points
Situation: A company typically interviews candidates for open positions in a two-day process. The candidate talks to four or more people. The total time with a candidate is about 6 hours, and the hiring process, once a good candidate is identified, takes about 1 week. Is this typical of other companies? What are best practices for interviewing and hiring?
Advice from the CEOs:
- Extend the process – add some pressure to it.
- All companies deal with pressure and stress from time to time. The team is frequently under pressure. Artificially create a pressure situation for a candidate – preferably later in the day when they are tired. This will help to identify whether they are cool under pressure, irritable or sloppy.
- For example, put an engineering candidate in front of a computer and give them 30 minutes to do a job that you know would normally take 60 minutes. Don’t mention the mismatch to the candidate. The point is NOT whether they can complete the task, but to watch how they respond under high pressure.
- This is not unfair to the candidate. It puts them precisely in a situation that they will find while working at the company. Give them the opportunity to demonstrate through their behavior that they either respond positively or really don’t want to be put into these situations.
- Conduct thorough reference checks – including past employers or clients.
- DISC profiles (Dominance, Influence, Steadiness, Compliance) are used to improve teamwork and understand different communication styles
- Identify an experienced local resource who can help to assess the DISC profile of the company.
- This individual can advise human resources and hiring managers on the use and interpretation of DISC profiles of candidates to help assure good company fit.
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How Do You Define Roles and Responsibilities? Three Options
Situation: A small company is understaffed and finds it difficult to hire in the current environment. Employees struggle to meet both past and new responsibilities. There simply aren’t enough hours in the day to meet objectives. How do you clarify objectives so that the team can meet them? How do you define roles and responsibilities?
Advice from the CEOs:
- Start by working with employees to create a list of current responsibilities for each employee, along with the estimated time required to fulfill each responsibility.
- Within this list, classify each responsibility as “Must Do,” “Second Priority,” or “When we have time.”
- Look at the hours in the day or week. Assess what is possible to do in the hours available, and what is not.
- Discuss this with the team and ask whether they agree with both the assessment and priority list.
- Discuss trade-offs and the availability of any resources with the company that may be currently underutilized.
- Reassess the expectations of clients to determine whether everything that is being done must be done in the timeframe currently promised. This helps to define what is truly urgent and what is not.
- Another way of stating the process is to:
- Prioritize and delegate what can be done, or reallocate what can’t be done with current resources.
- Look for ways to work smarter to get more done in the time and with available resources.
- If lower priority items still can’t get completed in the available time either drop them or discuss options for accessing additional resources to complete them.
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How Do You Build an Effective Compensation Plan? Six Suggestions
Situation: A company hires and trains engineers from outside of their field. Their pay scale is typically below market for engineers in this field. Once the company trains them, these engineers are candidates for recruitment by other firms in the field that are considered premium employers. The CEO wants to address this situation. How do you build an effective compensation plan?
Advice from the CEOs:
- In addition to compensation, a high-quality workplace and work experience are equally important.
- Give the lead engineer or team compensation tied either to engineering charges or gross profit on successful projects. This can be a small percentage – but offers them a compensation upside that they are unlikely to find at another company.
- Create a peer-recognition award like another company’s RAVE Award (Recognition, Achievement, Value, and Enthusiasm). On a regular basis – perhaps quarterly – the engineering team has the opportunity to select one of their members for this award. Components of the award may include a plaque, a free dinner or massage, or something that team members value. Ask them what they would like to see as rewards within the program.
- A similar technique is a peer recognition box. Engineers nominate peers for recognition based on performance in a team project. At regular intervals, draw a name from the peer recognition box, with the winner receiving, for example, a gift certificate. The dollars are less important to the recipient than the recognition.
- Focus on making the company “the place for talented engineers to work.” This can be as much a cultural situation as a place to make a great salary. The more that the company creates a fun and personally rewarding culture, the more it builds “stickiness” into the job. Ask the team for their input to shape the team and work environment.
- Provide performance incentives for meeting quality objectives while exceeding time objectives. This beats existing cost estimates, so share some of the savings with the team working on the project.
- Make special company celebrations a regular part of the company culture – for example, evenings out at premium restaurants and including spouses or significant others. By treating significant others well, the company creates a disincentive for the employee to leave.
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How Do You Beef Up Talent to Drive the Company? Three Questions
Situation: There is no secret that hiring is more challenging now than it was two years ago. A CEO is finding it difficult to attract and bring in the right talent to achieve her growth objectives. What are others doing to bring in new talent, especially high performers who will help to bring in new accounts and work with key customers to develop new business. How do you beef up talent to drive the company?
Advice from the CEOs:
- What has worked best for others?
- Hired low and developed home grown talent. This means building the capacity to train new talent to meet the company’s needs.
- This may not produce entrepreneurs like the company’s founders but can produce solid performers.
- Some sectors are by nature risk averse. Individuals are not dollar driven as much as by security with an acceptable salary. Good candidates who are hungry for growth are more likely to be found outside of these sectors.
- How do you hire to match the company’s objective?
- The objective is rapid growth – the mold of the original founders who were risk-taking entrepreneurs atypical of the sector.
- Look for candidates who are driven by growth. The right candidate will jump at the opportunity to take a $5M book of business and grow it to $10-15M in 3 years with appropriate corporate support and compensation.
- What has been tried or investigated in the past?
- Looked for successful smaller businesses similar to the company as possible acquisitions. The challenge was that the people running these companies liked their independence and didn’t want a boss.
- Looked at individuals from corporate backgrounds in the same sector. Some worked, some didn’t. Frequently, these people were not entrepreneurs or builders.
- Talk to private equity companies. Ask who they have bought or sold in this space. Gather names of drop-in CEOs and key staff who turned companies around and did well.
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How Do You Grow Knowledge Workers into Servant Leaders? Three Methods
Situation: A company’s staff is made up primarily of knowledge workers. These are highly skilled individuals who excel in their roles. The CEO wishes to shift their focus to servant leadership – where the focus is the growth and development of the company. How do you grow knowledge workers into servant leaders?
Advice from the CEOs:
- One option is to create a different set of incentives. Offering key managers the option to invest in and hold shares in the company will change their perspective. This, in turn, can change their behavior because servant leadership will improve company performance and the value of their shares.
- Another option, used by Accenture and many Fortune 500s, is to hire a lot of the best and brightest individuals that they can find out of college and see who rises to the top.
- The ratio in large firms is generally 15 hires to produce 1 high performer. Another CEO at the table is now shifting to this model at his company.
- Create an entry level position for recent graduates that will allow for this sifting without disrupting the company’s culture.
- Speed identification and retention of the best talent through annual evaluations of the company’s talent. This includes ratings by employees’ supervisors of both how the individual is doing and their ultimate potential within the company.
- Be aware of the downsides to this model. One is that the two groups that tend to leave of their own accord are the best and the worst employees.
- A third option is to create two career tracks within the Company.
- One track is upwardly mobile. This is the track that identifies, develops and grooms future servant leaders.
- The other track is a specialty track, which can produce servant leaders along a different dimension – breadth of experience and expertise in key skills of value to the firm.
- This second track also allows for growth, characterized by levels of title, salary and recognition that reward the acquisition and perfection of skills in key disciplines.
- Several “kinder, gentler” environments such as 3M have used parallel tracks with great success.
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