Tag Archives: SWOT

How Do You Plan for a Leadership Transition? Four Points

Situation: A CEO is planning a transition to the next phase of his life. This will include resigning as CEO and preparing  the company for this transition. What are the important steps for the transition, and what can he do to best prepare the company for the change? How do you plan for a leadership transition? 

Advice from the CEOs:

  • Prepare a transition plan for the board and set up a meeting to discuss the plan.
    • If the CEO is not the Board Chair, then a preliminary step is a conversation with the Chair about the CEOs plans, timing, and an update on short and long-term issues which must be addressed.
    • Given that the CEO will be leaving, the Board Chair’s responsibilities will include overseeing the transition. Prepare the transition plan with this in mind.
  • By solving the problem of transition for the Board, their task is eased, and opportunities for future relationships and alternatives are created.
    • Update the business plan for the company, including a SWOT analysis.
    • Line up search firms in advance who can assist in finding a replacement if internal candidates are not available.
    • The proper attitude is “my job is to make your job easier.”
  • As to the timing of the transition, 3 months is short notice. If personal needs dictate a transition in this timeframe, develop options to facilitate the transition and offer these as an alternative.
  • If the CEO’s career options for the future include consulting, the company can become an early client.

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How Do You Evaluate Business Opportunities? Five Guidelines

Situation: A company is planning for growth and is considering several business opportunities. None are fully baked, but broadly speaking the CEO is interested in a list of pros and cons that will help her team to evaluate the opportunities before them. What questions should the management team be asking? How do you evaluate business opportunities?

Advice from the CEOs:

  • Which of the opportunities do you find exciting? Which opportunities ignite your passion? Which opportunities would be exciting to pursue on a daily basis? Use this to create your first cut.
    • When you meet with your team, prompt discussion by asking: why do you come to work each day? What drives you now?
    • Now look at each of the opportunities that you are considering. Which opportunities best reflect your answers?
  • Rank the opportunities in terms of probability of success. For each, do a SWOT analysis – how does each address your current strengths, weaknesses, opportunities and threats? How could each make the company stronger or address potential threats that you foresee?
  • Which opportunity provides the best segue to your long-term strategic opportunities over the next 2-3 or 3-5 years?
  • On a personal basis, how important is power and authority to you? What about the personal and work time that is available to you? What is your role, as CEO, in each opportunity? For each opportunity, does this role reflect your personal priorities? Finally, what is your ideal opportunity, in personal terms?
  • Once you have evaluated all of your opportunities – including your personal ideal opportunity – perform a weighted scoring of the opportunities to test your assumptions. Among the opportunities available, which is closest in score to your ideal opportunity?

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How Do You Create Clarity About the Future? A Simple Method

Situation: A company finds that new opportunities are coming in more slowly than they had planned. They have work now, but no confidence that this will continue long term. This is frustrating because they are in the middle of a transition in their business model. How do you create clarity about the future?

Advice from the CEOs:

  • There is a lot of uncertainty in the business world. Low oil prices are depressing investment in the energy sector. Global political and economic uncertainty are not conducive to bold expansion plans. This uncertainty may last for some time. Companies have to adapt.
  • A mapping solution is a used by some companies use to create clarity between alternatives:
    • Start with box representing where you are now.
    • Draw boxes representing each of the alternatives that you are considering.
    • Map the paths that will get from where you are now to each alternative. Draw them out, including what you have to accomplish and what resources you have or must acquire to get to each.
    • Do a SWOT analysis (strengths, weaknesses, opportunities, threats) for each alternative.
    • This will help you to think through each of the options and identify the benefits and pitfalls of each.
    • This is a great exercise to do with your management team, as others will add their own perspective and insights.
  • Tools: use Post-it notes – either easel pads or larger (5” x 8”) Post-it notes. Put these on the wall, and start sketching out your ideas with boxes and paths. Revisit the charts for at least a few minutes a day for the next 3-5 days. You will be amazed at both the number of new options you generate and how the obvious options rise to the top.
  • This is much easier and more productive than it may sound. Don’t fear the process.

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Is It Time To Change Horses? Four Suggestions

Situation: A company has a business relationship with another firm. The relationship involves co-development of technology as well as marketing and other support. Portions of the relationship have worked, however, the other firm has not kept its part of the bargain in terms of marketing and support promised. What is the best way to approach the other firm to resolve this situation? Is it time to change horses?

Advice from the CEOs:

  • Have you have clearly communicated to the firm both what you are pleased with about the relationship as well as your level of dissatisfaction regarding lack of marketing and other support promise? To whom has this been communicated? Are you sure that your message has gone all of the way to the top?
  • Do a SWOT (strengths, weaknesses, opportunities, threats) analysis on the current arrangement and alternatives available to you to support your trade-off analysis before taking action.
  • Present a marketing option that will address the situation and ask whether the firm will support it as previously agreed.
    • If they say yes, have a contract ready for them to sign.
    • Negotiate other key items at same time.
    • Be sure to involve all parties on your side in the preparation, including the individual(s) who made the introductions that led to the relationship. Additional heads can bring more insight into the options that the firm and relationship offers. Bring the key parties involved to the negotiation, and be sure to prep them in advance.
  • Business relationships should be based on clearly stated deliverables and timelines. If deliverables are missed then it is time to make a business decision – either repair the situation or part ways.

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How Do You Manage in Crisis Situations? Four Foci

Situation: From time to time companies face crisis situations. A company, planning ahead, wants to establish a culture that can deal with crises effectively. What are the most important elements that should be part of this culture?

Advice from the CEOs:

  • Everything starts with a brutally honest SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) of your company and operations. Identify where you are Strong, where you are Viable, where Urgent Care is Necessary, and where you have No Reason to Be. Based on this assessment, cut your losses – for example, eliminate exposure to the No Reason to Be activities and efforts – and focus resources on your strengths and what is necessary to assure your future.
  • Support all efforts or activities that you will keep or pursue with a Bottoms-Up Financial Analysis. This will include a P&L, Balance Sheet, Cash Flow Analysis, assumptions, variables, and best, most likely and worst case scenarios. This Financial Analysis is an essential part of facing up to the Brutal Facts of your business and environment. From this exercise you will gain clarity on where to focus first.
  • The greater the potential crisis, the more frequent this exercise must be.
  • When dealing with creditors, remember their priorities: honesty, eventual payment, fair treatment and long-term customers. Present them with a credible plan, don’t make commitments you can’t keep, keep all commitments that you make, keep in touch monthly, and pay what you can. The development of trust makes it possible to negotiate incredible terms.

Special thanks to Tom Spanier of Spanier & Associates for his contribution to this discussion.

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Better to Focus on Cash or IP Protection? Three Suggestions

Situation: A company is resource constrained and faced with a serious trade-off: do they focus on short term cash needs – immediate product improvements that will speed new product iterations to boost sales; or longer term strategic concerns – assuring that they have good IP protection on their technology before they launch new versions? When you are resource constrained, does it make more sense to focus on initiatives that will quickly produce cash or strategic concerns that will protect your future?

Advice from the CEOs:

  • Build two timelines – one for shoring up the patent portfolio so that you can safely build and launch new IP-protected versions of your technology and one for quickly completing product improvements to speed development of new product iterations which will generate cash. Assess both the energy requirements and the dollar risks and implications of each timeline. If you do not have the resources to do both in parallel, this analysis will help you to determine your best course of action. The risk analysis of each timeline should take into account what would happen if another company were to duplicate your technology and get to market with improvements before you do.
  • As a compliment to the above exercise, ask what happens if I don’t do either A or B? Do a SWOT and investment analysis on both. Which is the greater risk – launching with insufficiently protected IP or risking not being first to market?
  • These analyses will help you assess whether it may be feasible to accomplish part or all of either task with dollars in lieu of your own resources.

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