Tag Archives: Objectives

Are Your Employees Living the Company’s Values? Four Recommendations

Advice from the CEOs:

Situation: An important tenet of a company’s CEO is that all decisions are made consistent with company values. However, some of the managers are asking for guidance on how to do this. How have other CEOs encouraged managers to make decisions consistent with company values? Are your employees living the company’s values?

  • Create cross-functional teams to address initiatives, solve problems and develop new processes consistent with company values. This builds understanding other departments’ perspectives and awareness of the impact of decisions on the company as a whole. It builds awareness of company values and fights unhealthy competition between functions.
  • One company created an employee task force to encourage living company values. Their solution includes: reviewing the company’s values and revising how they are stated for easy learning; involving employees in discussions of company values and how they are applied in their departments; creating a cross-functional employee task force to address inter-departmental conflicts and to suggest solutions in line with company values; and expecting everyone to know the company’s values, and occasionally testing them on these.
  • Build a vision of what the company looks like as an expression of its values. Make living this vision part of the CEO’s role. Include living and demonstrating company values as a formal responsibility of managers. Reward initiatives that transform company values into company efforts. Regularly review and discuss with your mangers their execution of company values.
  • Create “SMART” objectives around implementation of company values. Hold individuals accountable for achieving their objectives.

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How Do You Create a Client-Centered Company? Four Guidelines

Situation: A CEO wants to make her company more client-centered. How have others achieved this objective and what are the most important considerations? How do you create a client-centered company?

Advice from the CEOs:

  • One CEO transformed his company into a client-centered organization based on conversations with customers. The new structure is based on client-market groups. The core of each group is cross-trained professionals who focus on client needs. These groups are supplemented with a cross-trained support staff who can shift between projects depending on market conditions.
  • Organizational structure must start from and support a strategic vision. The vision must be informed by the realities of your market and the products/services that you offer. Once you have determined strategy and analyzed customer markets, develop a structure that allows the company to adapt to market changes. Structure follows strategy and market.
  • Closely monitor the following: Flexibility within the structure. You want most of your staff to be flexible, so that you can move them among projects as market conditions change. Cross-training is critical. You need strong leaders who can develop market segments. Create objectives and accountability that will tell you how the market segments are operating and whether staff are meeting cross-training objectives.
  • As you implement a new structure be aware that any change is met with insecurity. Coach your managers to communicate with their teams. It is essential to assure employees that they are valued, that any change will be gradual, and that you will provide them with the appropriate training and incentives that they need to succeed.

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How Do You Pay Sales Reps? Two Options

Situation: A CEO is considering two options to pay sales people – base/draw plus commission, or no base/draw and larger commission. What do other CEOs find most successful? How to you pay sales reps?

Advice from the CEOs:

  • Align the sales incentive plans to company objectives. Two examples were offered, one of an aligned system and one of a dysfunctional system:
  • The aligned system. Sales reps are 100% commission (plus expenses) with no caps on income. They are measured by two sets of metrics. To keep their jobs, they have to achieve a minimum of 85% of their revenue goal. Fall below this and the rep is out the door. However, commissions are calculated on the gross profit achieved on sales, and reps are provided with software to calculate GP and commission. This company is the most successful in its market.
  • The dysfunctional system. Sales reps are paid a base plus quarterly commissions calculated on achievement of revenue goals. The net result was that reps had no incentive to preserve gross margins. The result was constant conflict between sales and finance. The situation only started to improve as reps’ commissions were converted to a combination of revenue and margin.
  • The Key Issue: What is the role of the rep within the sale? Is the rep a door opener or a closer? What percentage of the close is attributable to the rep? In a complex or staged sale, allocate commissions based on contribution to the close. Reps who can’t close are not as valuable as those who can.

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How Do You Sell an Annual Plan? Five Points

Situation: A CEO has developed an annual plan. She wants ideas on the best way to communicate the plan to staff, secure buy-in and create accountability for execution. How do you sell an annual plan?

Advice of the CEOs:

  • Communicate your vision for the company and the future as a broad outline so that employees know how they can contribute. Create a picture so that they can see and support your vision. Ask for input on how to implement the plan. Since they will be doing the work, the best way to generate buy-in and accountability is for them to own the implementation plan.
  • You don’t have to share all details of the plan with everyone. If you communicate the plan in parts to those who will implement them, tailor the message to the person, and create individual objectives that will support the overall plan. Connect achievement of objectives to job evaluations.
  • Limit the number of objectives for each person – three key objectives plus one personal development objective. Have each employee develop activities to support achievement of their objectives.
  • Once objectives are in place, conduct regular meetings to review progress against plan and objectives, identify performance obstacles and solutions, and to reinforce the overall vision. The vision must be simple and direct. Consistently repeat and reinforce the message. Publicly recognize individual contributions that support the vision.
  • Establish metrics to track progress toward the vision. Stay on message with each person – focus on their goals and contributions. Be consistent in your words and actions and use them to reinforce the vision.

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How Do You Coach a New Manager Who Isn’t Cutting It? Six Points

Situation: A CEO recently hired a new high level manager. To integrate the individual into the company the original set of assignments was limited in scope – to help the manager get to know others within the company. The new manager seems to overanalyze things. Long hours are spent carefully drafting plans but there is little action. How can the CEO manage this individual without micromanaging? How do you coach a new manager who isn’t cutting it?

Advice from the CEOs:

  • It looks like this person is working long but not necessarily productive hours. This is costing you time and money – both yours and your employees. The question is whether the root cause is the individual’s behavior or your own expectations and behavior. Ask yourself the following questions:
  • Have you clearly outlined your expectations in terms of what is to be delivered, the time in which it is to be delivered, and any constraints around the projects for which this person is responsible?
  • Have you provided the necessary resources and empowered the individual to make the decisions required to bring projects to completion?
  • Have you scheduled regular update meetings with this individual and openly discussed project progress and obstacles to completion?
  • Have you set appropriate expectations with your other staff as to the authority of the new individual? Are you honoring those expectations in your own behavior?
  • If you have done these things, and the individual is not performing, then it is time to ask whether you hired the right person.

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How Do You Improve Performance Reviews? Three Approaches

Situation: A CEO’s company sets objectives for employees; however these objectives frequently aren’t met. There are lots of excuses for not meeting objectives. Most frustrating, employees are eager to share good news, but hide bad news and performance issues. What have other CEOs done to prevent these problems? How do you improve performance reviews?
Advice from the CEOs:
• A service company instituted frequent measurement of performance against objectives. Top staff monitors key metrics in weekly meetings that last at most one hour. They use a problem solving approach to address obstacles and to correct performance. The CEO oversees the direction with staff making and instituting changes to correct low performance. The key is in the metrics. Metrics must measure meaningful performance and must be tied directly to company objectives.
• A light manufacturing company had a history of holding on to non-performing individuals for too long. The CEO addressed this by instituting objectives and eliminating non-performers. The result was reduced complacency and improved morale. Performing employees had been tired of taking up the slack for non-performers. Document non-performance and establish a solid case for eliminating the non-performing employee. Documentation is critical to avoiding wrongful termination suits.
• A general observation: if a company has objectives, but lacks either meaningful metrics to measure performance against objectives or a regular review process to assess performance against objectives, then the objectives are meaningless. The CEOs’ experience is that establishing meaningful SMART (Specific, Measurable, Appropriate, Realistic, Time-Bound) objectives and regularly assessing performance in a collaborative team atmosphere are the most important ingredients to an effective performance management system.

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How Do You Boost Financial Understanding Within the Team? Five Points

Situation: A CEO is concerned that her team doesn’t appreciate the financial implication of their decisions on the company. This applies to both day-to-day decisions and strategic decisions that team leaders make. What can be done to better connect them and their decisions to the bottom line? How do you boost financial understanding within the team?
Advice from the CEOs:
• Go down the management levels from top to bottom and take the time to explain, in understandable terms, the company’s financial objectives, why they are important, how these are measured, how managers’ day to day decisions impact company performance, and the financial consequences of those decisions.
• Give employees a stake in company performance! For some this may be an ownership stake, for others it could be linking financial performance to their compensation and promotion track.
• The objective is for everyone to view the company as “ours”. This is a critical culture shift from the usual view in terms of “me vs. them”
• Work with the team to establish understandable and trackable formulas for profitable performance.
• Establish meaningful rewards for meeting the company’s plan and financial targets. When employees see a direct link between company financial performance and their paychecks they will pay attention.

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How Do You Establish Sales Accountability? Three Approaches

Situation: Several CEOs have experienced difficulty establishing accountability within their sales teams. Sone sales reps consistently come up with excuses for not generating new accounts or meeting their sales objectives. The impact of lost sales had significant effects on revenue performance. How do you establish sales accountability?
Advice from the CEOs:
• It is vital to understand who are the best customers and most profitable products and services for those customers. Establish regular sales meetings to discuss customers, products and services, to identify promising sales opportunities and to coordinate sales efforts.
• Work with both sales management and individual team members to determine desired outcomes:
 Set sales targets – work with the team to establish firm expectations on reasonable and achievable sales targets. Agree on a tracking system to measure progress toward those targets. Encourage members of the team to work together to achieve the targets.
 Customer type – who are they, what are their priorities and expectations, and how can the company best address these.
 Product(s) – work with the team to determine which products best fit each customer type and develop creative ways to position those products to increase sales.
• Establish measurable behaviors which if done will result in success. For example:
 Calls per week and results of those calls.
 Relationships with key decision makers and development of additional relationships within existing and potential customers.
 Thorough qualification before quoting, presenting, demo, and so on. The who, what and why that connects with successful sales..

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How Do You Boost the Performance of a Life Sciences Company? Six Suggestions

Situation: The CEO wants to improve the performance of her life sciences company. She has questions about the business plan and roles within the company. She is also looking for better ways to connect with current and potential customers. How do you boost the performance of a life sciences company?

Advice from the CEOs:

  • Assess both your own role and the company to ensure that there is good alignment between the business plan and the roles within the company.
  • Be strategic after assessing the company’s needs and situation. Too often companies jump to tactical considerations because they are action oriented. To be effective, tactics must align with the broader company strategy.
  • Build a foundation based on value and compliment this with effective models to communicate and leverage this value base.
  • Think outside the box. Consider options to use or increase the effectiveness of social networking. This has growing dramatically in importance as a way to reach and communicate with key current and potential constituencies.
  • Perception is important. Be aware of what others think of the company and work creatively to present the company in a light that will support objectives.
  • The visual cortex represents 75% of sensory awareness. Leverage this on web sites and in marketing campaigns.

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What Should You Look For in Selling a Company? Eleven Points

Situation: The owners of a company wish to sell the company. The CEO is 50% owner and some senior employees are partial owners. Ideally the CEO wants to maintain the company’s culture for the good of the employees. What should the CEO look for in an acquiring company or a merger? What pitfalls should be avoided?

Advice from the CEOs:

  • Key Considerations – Define the exit objectives. Understand that pursuing an exit will take time away from other activities. Know your buyer’s team.
  • Stakeholder Alignment – Make sure various stakeholders agree in advance on exit objectives.
  • “Keep an eye on the ball” – Selling a company can be a distraction. Focus on running the company, not on the novelty of selling.
  • Watch Out for Deal-Killer Individual – One member told of a CFO of a buyer company who sabotaged a sale at the last minute.
  • Qualify the Buyer’s Decision Process – It is valuable to understand the process that the buying company will follow to made the acquisition.
  • Broker or M&A Specialist? – About 50% of private party deals are not handled by a broker. These are sales within the industry. Few sales to insiders, such as employees or family, are handled by brokers. The same is true for synergistic companies that are already familiar with each other.
  • Avoid Over Reliance on a Broker – One member told of losing touch with important details of a sale transaction when using a broker. A better alternative was a transaction advisor as opposed to a broker paid by commission.
  • Consider an “Insider” Sale – Some businesses cannot be easily sold to outside buyers. In this case selling to insiders, employees or family may be a good solution. Employee Stock Ownership Plans (ESOPs), or “S” ESOPs using an S-Corp entity, have been numerous and successful.
  • Consider Private Equity – One member spoke of selling to an investment group or private equity group that specializes in buying smaller companies.
  • Buying on the Come – Buyers look for growth. Showing a history of profitable growth is highly desirable. Having a plan for future growth in place is also valuable.
  • Leverage Strategic Partners to Boost Value – One way to increase equity value is to partner with another company. Examples include a partner that provides greater distribution and sales, or which can validate the viability of a technology. That partner can become a future purchaser.

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