Tag Archives: Raise

How Do You Interview for New Hires and Promotions? Part 1, Three Points

Situation: A CEO seeks advice on interviewing both for new hires and promotions. What advice and guidelines do others suggest to improve interviews? How do you interview for new hires and promotions?

Advice from the CEOs:

  • Preparation before hiring or promotion is critical.
    • Preparation means having a road map – for what will be accomplished in the new position and for how the company selects and hires or awards promotions.
    • Discipline: have the patience to do it well.
    • Be aware of and watch for possible legal issues. This has become increasingly important under DEI.
  • Raise the bar. Each new addition or promotion should enhance the company’s capabilities instead of just filling a slot.
    • Hire individuals with skills that complement areas of your own or the organization’s weaknesses.
    • Be creative in developing sources or new hires.
  • Ask open-ended questions and follow-up with additional open-ended questions to clarify areas that the response opens.
    • Focus interview questions and processes to identify demonstrated values and habits.
    • Insert pregnant pauses into the interview. How does the interviewee respond?
    • Listen for what is NOT said as much as what is said.

[like]

How Do You Evaluate Financing Options? Seven Key Points

Situation: A start-up company needs to raise cash to fund the achievement of key milestones. The founders have evaluated private equity, angel, and venture capital financing options. They believe that at their stage of development an angel is the best source of funds. What guidance can the group offer for negotiating with a private financier? How do you evaluate financing options?

Advice from the CEOs:

  • The important questions to answer are: who is the angel, what is the angel’s motivation, and what does the angel bring to the table?
  • What is the angel bringing to the table?
    • Is it money and connections? Who and how many people will be involved?
    • Do these individuals bring the expertise to take business to the next level and beyond?
  • Identify the strengths and weaknesses of the angel’s organization. Ask about other companies that the angel has financed. Talk to those companies about their experience with the angel.
  • Ask how long the angel plans to stay connected to the company.
    • Is the angel committed for the long-term or looking for a quick profit or exit and sale?
    • What happens after the angel leaves?
  • Validate statements made by and the experience of the angel.
    • How may IPOs has the individual or group been involved in?
    • What existing contacts do they have with additional potential funders or buyers?
    • Vet all of the claims and statements made by the angel.
  • Evaluate equity vs. cash funding and the prospects and terms that accompany future funding rounds.
  • What is the company’s long-term strategy?
    • Do the founders want to stay the course long-term or is it sale of the company to another entity?

[like]

Does It Make Sense to Promote a Relative? Four Perspectives

Situation: The CEO of a company has a niece working in the company on a project basis. The niece is has helped to develop a strategic plan and has performed well. She now wants to move from part-time to full-time and to receive a raise. Does it make sense to promote a relative?

Advice from the CEOs:

  • If you are pleased with the individual’s work, don’t worry about the family relationship – go ahead and hire her. This is especially true if she can play a significant role developing the strategic plan and help you to improve your sales organization.
  • Give this individual a set of responsibilities, a budget, and a time line to do the jobs you want done.
    Evaluate her performance just as you would any other employee. Don’t compromise your standards for a relative.
  • This may offer the opportunity to improve your sales. Have your niece work and travel with your sales people as a systems engineer. This will allow her the opportunity to learn your products, customers, and process – and will provide you with valuable input on how your sales team is performing.
  • You are really addressing two problems:
    • What is your niece’s passion? Don’t make work for her simply because she’s related and available. The work must serve your and the company’s needs.
    • Do you have holes in your business? Put your best people on these If your niece is one of these people, then give her a chance but don’t play favorites.

[like]

How Do You Join a Not-for-Profit Board? Seven Thoughts

Situation: A CEO wants to build network of highly placed contacts. One method that she is considering is joining a not-for-profit Board. What are good organizations? Is it reasonable to expect a quid pro quo? How do you join a not-for-profit Board?

Advice from the CEOs:

  • Do your homework. Find out what the most influential Boards are in your community. For example, the Silicon Valley Chamber of Commerce is very active and includes in its membership many very well connected people.
  • Influential groups and boards will vary by community. In Silicon Valley, the Silicon Valley Association of Start-up Entrepreneurs (SVASE) is a good organization to consider. This and other Angel groups know small companies that need help. Others include the Sand Hill Angels and the Asian-American Multi-Technology Association. In other communities Chambers of Commerce or similar organizations are the movers and shakers.
  • Don’t count out Rotary, Lions, and similar organizations. All these organizations are struggling to recruit new members and some have movers and shakers.
  • Rather than thinking about the meetings, volunteer to join a committee. For example, volunteer to join the Finance Committee. Once the members get to know you, you may be invited to join the Board.
  • Raise money for an organization, this will bring invitations to join the Boards of other organizations.
  • Follow your passions in selecting an organization, you will be more enthusiastic.
  • It is reasonable to expect a quid pro quo? Yes, if you make a significant contribution and demonstrate your competence.

[like]

How Do You Optimize a Promotion? Four Recommendations

Situation: A company has a long-term employee who has been growing in responsibility as Customer Service Supervisor. The CEO is considering giving this employee the new title of Production Manager at the same time that the employee receives an annual wage increase. How do you optimize a promotion?

Advice from the CEOs:

  • Any promotion or increase in responsibility must be consistent with the strategic direction of the company. What are the company’s current and future needs and, based on past performance, can this individual satisfy those needs? If so, this may be a good match.
  • In addition, it is important to consider the needs and career path of the individual. Does the new position involve an increased time commitment, additional skills and training, or other important factors, and is the individual prepared for this increased commitment? Will a higher level of commitment be rewarded financially? The only way to answer these questions is to have a conversation with the individual.
  • If as the first two questions are considered there is any doubt, a longer-term transition may be appropriate. Meet with the Customer Service Supervisor and set a series of goals and objectives that will demonstrate their ability to assume the new role over a 6 month time frame. The concept here is that you must work at the level of the new job before you get it.
  • Before embarking on the above recommendations, draft a job description and list of responsibilities for the new Production Manager position, consistent with the company’s needs as it grows. This will involve input from employees who currently handle these responsibilities. Also look at the reporting structure as it currently exists and as it may change.

[like]

How Can You Best Use Excess Profits? Five Suggestions

Situation: A company, an S Corporation, produced substantial profits during the first 6 months of their fiscal year. This becomes taxable personal income to the owners if it remains profits. How would you advise the CEO and owners to make best use of these excess profits?

Advice from the CEOs:

  • Use some of the funds to invest in new opportunities for the future growth of the company.
  • Prepay significant costs like software licenses multiple years in advance. Make sure that you attend to your accounting so that you properly reflect the ongoing profitability of the business. Otherwise, what you may believe is profitable in future years will not reflect true profitability because you will not be accounting for all of your true expenses.
  • Is anyone in the company deserving of a one-time special bonus for performance or a salary increase?
  • It may make sense to take dollars out of the company and to diversify owners’ investments by investing in real estate, stocks, etc.
    • Check out the current rules around 401K programs that may allow you to invest increased amounts per year per person. Talk to your financial advisor about the details and regulations surrounding these programs.
  • List your alternatives and compare the anticipated ROI, on an after-tax basis, of the various options. This will help you to evaluation options including:
    • Reinvesting in the business – various options.
    • Investing outside of the business – various options.
    • Talk to your financial planner about the choices.

[like]