Tag Archives: Strategic

How Do You Focus Your Team? Six Points

Situation: Several CEOs asked how others have had success improving company performance and is interested in how they focused their teams. How do you focus your team?

Advice from the CEOs:

  • Important tasks for any company are to validate the value proposition, technology, target customer, and the rate of market expansion, and minimize risk and liability. This should be a regular company exercise – not a one-time event.
  • Assuming that a company has goals and people who can align with and achieve them, a company needs a vision – the broader strategic picture of where they are going. Often some of the best ideas come from line staff who are enabled by their company’s culture.
  • It is critical that companies are able to quickly identify problems and have systems in place to drive problem resolution. The minigame technique is very useful in these cases.
  • Companies should have a plan for transitioning employees into new roles as the company grows. The key is clear identification of the individual’s role within the company, and how that role compliments achievement of company objectives.
  • If a company wants to grow sales from, say, $20 to $60 million, it will need a professional sales leader. In addition, growth may require a change in company culture from engineering and development centric to sales centric.
  • A significant challenge is determining how to define corporate success. Much depends upon the questions asked. The Great Game of Business by Jack Stack provides guidelines and tools for assessing options. Anyone starting or growing a business should look at this book.

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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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What is the Role and Value of an M&A Consultant? Four Points

Situation: The owners wish to sell a company. One option is an M&A consultant to assist with the sale. The CEO wants to know about others’ experience. What is the role and value of an M&A consultant?

Advice from the CEOs:

  • The first step is to assess the strengths and weaknesses of a consultant to determine their value.
    • The cost of an M&A consultant is inexpensive relative to the value of the business.
    • Accounting rules and M&A practices of public companies do not always apply to private companies. Valuation is affected by variations in profits year-by-year, so consultants typically use 3 to 5 year historical results for comparison against industry standards.
    • Technology companies may have a different value than service-oriented businesses, particularly if significant IP is involved. Look at the creativity of potential consultants’ solutions.
  • Consultant alternatives:
    • Business brokers, accountants, and valuation specialists can all offer valuations.
    • Investment Bankers who charge an upfront fee may be more strategically oriented. Typically, the more strategic the valuation exercise, the more dollars involved.
  • Be cautious in choosing a consultant.
    • Many business owners spend a lot of time and money with accountants and lawyers when they could save by working with a business broker paid on a commission basis.
    • Business brokers are skilled at getting business sold – however the deal is not necessarily in the best interest of the owner. Brokers are paid by commission and so may not have the best interests of the owner at heart.
  • What should you look for in a consultant?
    • Maximization of sale value with a minimal tax exposure.
    • A consultant who will help the owner figure out what they want from their business and exit – who will help to establish owners’ exit objective, a key to a successful exit.
    • A consultant who will help choose the right team of advisors.

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Should You Combine Sales and Marketing? Five Points

Situation: A company is considering combining its marketing and sales teams. The company’s overall objective is to expand their marketing presence and to bring on new customers. Some team members believe that these two functions are distinct, while others believe that they should work in tandem or even be combined. What do others think about these options? Should you combine sales and marketing?

Advice from the CEOs:

  • The skill sets required to create and operate an effective marketing effort are different from those required to create and operate an effective sales organization.
  • Sales and Marketing are two different sides of the same coin – they complement each other but are distinct.
  • Direction begins with the CEO; however it is imperative to make certain that everyone in the organization buys into both this direction and the organization to achieve it.
  • Some feel that it is not a good idea to have one person covering the role of Sales and Marketing. Sales is tactical while Marketing is strategic. It is Sales’ job to implement the Marketing Strategy and report back what is working and what is not. Marketing’s job is to take the feedback from Sales into account and revise the strategy accordingly.
  • Challenges which can create a constant battle between marketing and sales are due to:
    • Lack of common direction, and
    • Poor or inconsistent communication between Sales and customer on one side and Sales and Marketing on the other.
    • These challenges need to be resolved to have an effective Sales + Marketing organization.

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How Do You Target CIOs of Large Companies? Six Suggestions

Situation: A company’s target customers are Fortune 1000 companies, some of whom are simultaneously clients and competitors. The key target is the VP/CIO. A prime concern of that individual is assuring that their IT systems never go down. What could the company do better to approach these target customers and reach the right decision-maker? How do you target CIOs of large companies?

Advice from the CEOs:

  • The approach must be tailored to reach corporate level decision-makers:
    • Conduct a direct marketing campaign strategically as opposed to using a high-volume mailing with a low cost-per-piece.
    • Mail relatively expensive dimensional mailers to a small number of highly qualified prospects. Look for high impact to the best targets.
  • Research and identify the key targets within prospect companies.
    • The best success will come from prospects who have tried other options from the large competitors but are unsatisfied with the results.
  • Consider and research prospects within the large consulting firms. They may have tried IBM or similar options, but weren’t happy with what was provided, either because of cost, time or quality.
  • Also look at next-tier players. Success with these customers can become valuable references to the larger firms.
  • Position the offering as the “safe choice.”
  • Closely monitor customers and their experience with the offering – both pre-installation, during installation and post-installation. The key variables will be quality and ease of installation and adoption of the company’s offering.

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Is It Better to Develop Internal Resources or Hire? Four Views

Situation: A key employee will be leaving for at least 5-6 months on maternity leave. This individual is a top performer, and will be welcomed back following maternity leave should she wish to return. However, her absence will leave the company short of resources. Is it better to develop internal resources during her absence or hire a new resource?

Advice from the CEOs:

  • The company’s HR strategy should complement its strategic plan as well as the CEO’s feel for market conditions.
    • If the strategy for the next year is to grow, then plan accordingly and commit to either bringing on someone new or to aggressively growing the talent already within the firm.
    • If the strategy is to hedge bets due to lack of clarity as to where the market is headed, then plan accordingly and act more conservatively.
  • Assess the availability of resources within the company.
    • Are there internal candidates who can fill the gap created by this employee’s leave? If so, then start training and developing these resources. They will be valuable as the company grows.
    • What is the company’s current workload vs. the capacity of current staff? If there is any excess capacity that can fill the gap, short-term, then use this as an opportunity to develop this excess capacity.
  • If the company has excess capacity, and is unsure about market movement six months out, develop internal capacity first.
    • This provides both additional flexibility and time to assess signs of market movement before making an investment in additional talent.
    • Plan to revisit the situation in 3 months and make another decision.
  • Keep a close eye on the market for developments, and have rapid action back-up strategies in place to respond to market conditions.

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How Do You Boost Intensity and Accountability? Five Solutions

Situation: A CEO is concerned about the intensity and accountability of her team. An employee stock ownership program is in place, and employees are rewarded with bonuses for meeting or exceeding objectives. HR reports that there is a lack of decision-making; employees just sit and talk instead of moving forward. How do you boost intensity and accountability?

Advice from the CEOs:

  • Does the current bonus structure include revenue growth? If revenue growth is not part of the incentive program, then this won’t be the focus.
  • What happens when the CEO is away?
    • Assure that the #2 who’s in charge has the same sense of urgency as the CEO and has the confidence to make decisions.
  • The company is at the point where it needs seasoned professionals to run key operations and functions.
    • Ideally this would be an internal promotion, but if there is no internal candidate look to hire from the outside. Hire two new managers – for different teams. Watch how they do with each of their teams to determine whether one can run the whole outfit.
    • This can ignite other employees – those who will catch on to what the new manager is doing and will now get the message.
  • Another CEO empowered people and explained how it worked.
    • They have had to swallow some poor decisions but have learned that they can’t come down on those who make mistakes – it discourages them from taking the risks needed to make decisions.
    • They’ve organized strategic teams to develop the empowerment program with minimal input from top staff. Teams are required have to report on their results 2x week – no exceptions.
    • The CEO hired two key hires who are hard hitting with deep resumes and experience – individuals who have shaken things up.
    • The new managers started in a sheltered situation where they could learn the organization and the people. This was done before they were put in their eventual positions.
  • What are the potential downsides to making this kind of change?:
    • Some sparks will fly.
    • Some will get upset.
    • Be patient with this process – let it happen.

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How Do You Take Advantage of a New Technology? Two Foci

Situation: A company has had early success with a promising new technology that compliments the company’s strategic direction. Their objective is to become one of the top suppliers and servicers of this technology in their service area. How do you take advantage of a new technology?

Advice from the CEOs:

  • Leverage the company’s strengths to create an early advantage in this technology.
    • Create a low-cost delivery system to take advantage of opportunities available through this technology initially at a lower margin, then offer enhancements to build margin to company norms.
    • Investigate other markets and applications where this low-cost delivery system can generate you new opportunities.
  • It is early to assess whether the new technology will become dominant, or just the latest fad. It has been on the market for less than two years and is just taking off.
    • Take the next few months to dig into what is happening within vendors of the technology, and how they are perceived by their client companies.
    • Talk to CIOs about their perceptions of the technology based on the last few quarters of experience – quality of implementation, quality of service. Other providers add a layer to the cost – is the service worth the cost or do client companies save over time through overhead reduction?
    • Talk to other vendors from other market areas – learn from their experience selling and working with the technology.
    • How do the other vendors make money? Are costs to their corporate clients offset by savings implementing the technology? What margins are the others enjoying and does this come from the initial technology, from add-on services, or complimentary sales. What is the perception of the sustainability of this technology both within the providers and to the CIOs? What about the technology really irks corporate clients? Where is the soft underbelly of this technology? Research may assist in making future decisions on how to approach the technology and clients.

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How Do You Quickly Shift Your Marketing Position? Five Points

Situation: A company wants to shift their marketing position quickly and effectively toward a new focus. The new focus is the result of breakthroughs that they have developed that have opened new product and service opportunities. How do you quickly shift your marketing position?

Advice from the CEOs:

  • Hire a strategic marketing consultant to help analyze the market, identify unmet needs and unaddressed segments of the market where the company can establish a strategic advantage.
  • Pick an area where the company is known or can be known as the best. Create differentiation by specializing in this segment.
  • Add both sales and marketing positions to guide the refocus.
    • Marketing is more than just collateral. It is strategic positioning, understanding changing customer needs, and thinking creatively about how to leverage those needs and the company’s capabilities to maximum advantage to support the sales efforts.
    • A good marketing platform provides salespeople the structure within which to operate.
    • How do you find good candidates? Talk to editors and publishers of trade journals. They know marketing contacts and who is good.
  • As the company shifts the model, look for ways to reduce utilization and down-time for engineers and other staff.
    • Maximize the value of this down time.
    • Develop case studies or materials to support the sales effort.
    • Create new concepts or capabilities to add to the offering.
  • Several other CEOs noted that with the quality of the projects that the company has completed for current clients, the company already has both the capabilities and proof of delivery that many sales and marketing people would love to have. Use these as assets and leverage them.

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