Tag Archives: Result

Is it Better to Sell or Downsize? Four Perspectives

Situation: A company is losing money and has been approached about a merger. The CEO’s ideal outcome would be to get cash on the table, integrate with the merger partner and continue business. The other alternative – downsizing – may hurt company morale. What are the best options available? Is it better to sell or downsize?

Advice from the CEOs:

  • The realities of mergers: 70% of mergers fail, and the merger process often leaves founders with a minority stake in the company. The experience of others with partners has been disappointing – it’s better to control your own destiny. Look at all alternatives before you jump into a merger. You founded the company and have brought it this far. The company will be a different company following a merger, and not the company that you founded or have led to date.
  • The message to your potential merger partner: Be a reluctant bride. “We are making improvements to return to profitability and I’ve joined a board of CEOs who are consulting me through the process.” If the partner sweetens the offer to keep the merger on the table, make sure that you get 51% of the merged company and retain control of your own fate.
  • Downsizing: Others have found the downsizing experience wrenching, but with more positive results than they expected. A 10% cut resulted in a 30% increase in productivity. Employees once thought to be critical were not missed post-layoff. The employees generally understood more about the situation than the CEO knew, and those remaining responded positively to a restructuring that allowed them to keep their jobs. Some companies used a layoff as an opportunity to cross-train employees and increase company flexibility.
  • Smoothing the layoff process: Communicate with the employees. Let them know the truth and share enough of the situation so that they understand. Challenge employees to come up with ways to save money or make processes more efficient and cost-effective. This can have a remarkable impact. Consider a cross-the-board salary reduction as a temporary alternative to layoffs. Position this as a layoff to restructure expenses – this keeps you on the right side of employment law. Obtain assistance from a personnel consultant who can help to handle the process effectively.
  • Smoothing the layoff process: Communicate with the employees. Let them know the truth and share enough of the situation so that they understand. Challenge employees to come up with ways to save money or make processes more efficient and cost-effective. This can have a remarkable impact. Consider a cross-the-board salary reduction as a temporary alternative to layoffs. Position this as a layoff to restructure expenses – this keeps you on the right side of employment law. Obtain assistance from a personnel consultant who can help to handle the process effectively.

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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 Encourage Others to Take the Initiative? Five Points

Situation: A CEO has a challenge getting employees to take initiative in areas that she wants to delegate. Part of the challenge is that she needs to “let go” and tends to do too much checking in. She is concerned that this results in employees’ hesitation to demonstrate the initiative that she desires. How do you encourage others to take the initiative?

Advice from the CEOs:

  • Continual checking-in alters the “urgency.” It feels more like a lack of confidence in the individual’s ability to complete the task to specifications and on schedule.
  • Work to establish more trust. Do this incrementally – start with less urgent / important responsibilities or tasks and move toward more urgent / important ones.
  • Determine boundaries and clearly establish deliverables.
    • Write the objective down ahead of time – as well as how much information to give them.
    • Ask yourself: Is this providing “just enough” information to guide them without micromanaging or over specifying the solution?
  • Is an objective being set, or are you trying to teach a methodology to reach the objective?
    • Unless the methodology is critical, focus on the objective and let them determine the methodology.
    • Once the objective is completed review and learn from them how it worked. Ask how they prefer to complete the objective so that you can provide the appropriate level of guidance in the future.
  • Delegating takes more time than doing it yourself.
    • Employees will complete a task differently than you will. As long as an acceptable result is achieved, be tolerant that the method or tone is different. They may be coming up with a better way!

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What Are Good Metrics for a Service Company? Four Recommendations

Situation: A service company has been debating internally about which metrics they should use to evaluate company performance. This is important because it ties both to strategy, marketing, and bonus compensation. The CEO seeks advice based on the experience of others. What are good metrics for a service company?

Advice from the CEOs:

  • For a service company the key goal is delivery of a consistent quality product/service to the customer – as a company rather than as individual performers.
    • Instituting regular activities or meetings to infuse the company’s “special sauce” to projects will help assure consistent quality of service delivery.
  • To generate support and consensus within the company, ask employees what they would do to develop metrics to assure delivery of quality.
    • Have a clear view in mind of what the metrics should achieve – the result rather than the fully detailed process – before initiating this exercise and articulate this result as the desired objective.
    • Remain open to ideas from the group.
    • Use the exercise to establish a shared vision and to generate the best possible set of metrics to support the desired result.
  • Once both the metrics and a methodology for delivering the result have been selected – for example, weekly performance review meetings if this is the answer – then institutionalize these. It may be best to start with a “trial process” to refine details of the process.
    • An efficient regular process review meeting may save the company more than the 3 hours that it takes (preparation + travel + meeting) for this process.
    • If there are many “islands” of employees working at different company locations, consider organizing meetings into geographically convenient archipelagos.
    • Establish, within the service review process a “patented” company process that focuses on quality delivery. Publicize the existence of this process (not the details) when speaking with existing or potential clients. This is a key part of the company’s essential differentiation and “value add”.
  • Establish a definition of quality for the company.
    • Develop this as the company’s vision.
    • Develop the methodologies to consistently deliver this quality.
    • Long-term, drive this to professional training systems to consistently produce this quality.

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