Tag Archives: Transition

How Do You Get Doer/Sellers to Sell? Four Recommendations

Situation: A company has a geographical sales and service organization. Much of the sales effort comes from the consulting reputation of the managing director of each geographical unit, but he directors’ core values usually favor consulting over meeting sales plans. How do we get these directors to meet sales goals? How do you get doer/sellers to sell?

Advice from the CEOs:

  • One company shared their experience turning around a consulting organization with no sales culture. This was a 5-year process. It started with a leader who sells successfully and teaches by example. As the company made the transition, they selected new hires for sales skills to complement their consulting skills. This facilitated their transition to a strong sales culture.
  • Another CEO pointed out that you need to commit to build a sales culture. Moving to an account manager team versus an engineering/professional team is a big shift. It took time and patience. Hire effective sales people to jump-start the process. Most of the successful seller/doers will be new hires. Revise the reward and recognition structure around the new sales objectives. Make rainmakers the best paid people. This will bring others out of the woodwork.
  • A third CEO recommended biasing sales compensation for doer/sellers toward variable compensation. Allow successful individuals to make over $200K per year. Consider a 3-year phase-in by not increasing base pay through raises. More than make up the difference in available variable pay. This will give directors more incentive to hit their sales numbers
  • This is a difficult change in both sales leadership and culture. It may require significant changes in leadership within the company.

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How Do You Retain Key Staff During a Merger or Sale? Five Suggestions

Situation: A company has either a merger with another company or sale of the company pending. While most direct staff will be retained, roughly half of the indirect staff may be at risk. The CEO’s objective is twofold: to retain key indirect talent before and during transition and to do right by those who have made strong contributions to the company. How do you retain key staff during a merger or sale?

Advice from the CEOs:

  • One member dealt with this a few years ago. The company set up a retention fund for important but potentially impacted employees in advance of the anticipated transaction. The longer the employee stayed with the company through the transition, the larger the payout for which they were eligible. In the case of no transaction, the funds were to be returned to the company.
  • An alternate version of the above option is to use insurance to fund a retention package for a group of key employees. This package may or may not be required depending upon the transition.
  • For potentially impacted employees, consider a retention package that rewards them for staying long enough to train the purchaser in their areas of expertise.
  • Look at outplacement services as part of the package for employees. Let employees know that this is part of the package if they are not retained post-transaction.
  • Seek outside consultant expertise to assist in the design and administration of a retention package. To compliment this look at your own network, and seek the advice of others who are well-versed with the technical aspects of employee transition.

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How Do You Replace a Key Position? Four Points

Situation: The CEO is moving a key employee from head of engineering to a more customer development focus. To support this, she will have to bring in or promote another employee to fill the position of leader/supervisor/manager of the engineering group. The CEO seeks advice on the best way to approach finding a replacement for this key job. How do you replace a key position?
Advice from the CEOs:
• First, it is necessary to develop a timeline for finding and transitioning the replacement. Realistically, count on 6 months to find a replacement and transition the responsibilities to a new person.
• Keep in mind that anybody you find or promote will be different from the individual who currently occupies the position, and will not handle their new responsibilities the same way as the current individual. Their motivation and their approach to their new responsibilities will be different, at least at the outset, and they will not handle their responsibilities the same way that the current individual does.
• Seek an individual, either currently within the company or an outside hire with strengths that, over time, will add significant value to the organization. Prepare for this by brainstorming and developing a profile of the ideal candidate.
• If you have qualified candidates, the ideal person will come from within the organization. This has the added advantage of demonstrating to other employees that they, also, may become candidates for future positions to grow both their skills and income.

How Do You Purchase a Company as a Non-Owner President? Four Points

Situation: The President of a company has a long-standing relationship with the Chairman and Founder, who is also the principal owner of the company. The President joined the company at a time that the Chairman/Owner thought that he was terminally ill and needed an individual who could take over operations as well as leadership. Since then the owner has fully recovered and wants to retake control. The President would like to buy out the owner. How do you purchase a company as a non-owner President?
Advice from the CEOs:
• What role has the President played so far? The President has advised the Chairman on how to grow the company and is leading this growth through developing key customer relationships.
• What is the owner currently doing? The owner has fully stepped back into his prior role, and is micromanaging all aspects of the business, effectively shutting out the President.
• The best way to avoid a situation like this is to negotiate the full deal, including transition of authority and terms of transition of ownership, up front before the signing of an employment contract. Not having not done this, the President currently has no leverage.
• The best option at this point is to have a conversation with the owner and to see whether the owner is open to a transition of either power or ownership. If the owner is not interested, the President may want to consider other opportunities.

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How Do You Redefine the Top Executive’s Role in the Business? Four Points

Situation: The President of a family-owned business that has been in operation for over 30 years wishes to change her role by increasing delegation of responsibility and accountability within the business in preparation for her eventual retirement. Other family members in the business are happy with their current responsibilities and are resistant to taking on more responsibility. What advice does the group have for this member?
Advice from the CEOs:
• Given that you are preparing for retirement, it is important to let others know about your plans and your desire to increasingly hand off your responsibilities to others. Ideally, one or more of the others will express a desire to take on more leadership, particularly if it includes a boost in pay.
• It is important to clarify responsibilities and prioritize which ones you wish to hand off. Once this is done build and execute a hand-off plan.
• Transition current managers who are misplaced in their position to other roles. Work with them to identify alternate roles where their talents can better benefit the company. They may be aware of their current discomfort and welcome the opportunity to take on a different role more suited to their abilities.
• Focus on removing barriers to delegation that may be in place. For example, bring others into the discussion and review the projects that they are overseeing. Identify the challenges underlying those projects and ask for their suggestions on how to address these. Don’t provide the answers. Ask questions and push them to develop appropriate solutions.

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How Do You Forge an Effective Relationship with a Buyer? Five Points

Situation: A CEO’s Company was recently acquired. She is getting little, if any, guidance from the acquiring company in terms of leadership or management of her former company. What does the group recommend that she do? How do you forge an effective relationship with a buyer?
Advice from the CEOs:
• You’re Lucky: We all wish we had that problem. Many buyers interfere with the operations of the acquired company and make the transition very difficult. This leads to all sorts of problems including employee departures.
• Employee Feedback: Hold an employee meeting, gather their thoughts and concerns, forward those to senior management. This demonstrates a willingness to work with the buyer to forge the best relationship possible.
• Memo: Draft a memo with all of your thoughts, options, and recommendations, send it to the management of the acquiring company and you have satisfied your moral responsibility. No guilt.
• Consult: You may end up consulting to new management sent to you by the buyer to help them figure out how to evolve from practitioners/managers to full-time managers.
• Don’t Worry: The purchase was a good deal to you because you were able to negotiate a favorable deal for yourself and your managers. The future is more a concern for the purchaser than it is for you.

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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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What are Attributes of a Highly Effective Sales Force? Three Points

Situation: A CEO wants to improve the effectiveness of her sales team. As CEO of a young company she faces a choice between using contract versus direct sales reps. She seeks the advice of other CEOs as to what has worked most effectively with their sales approaches and teams. What are the attributes of a highly effective sales force?

Advice from the CEOs:

  • Spend time vetting either contract or your own sales reps:
    • The choice of contract vs. direct sales reps is driven by market conditions and end desires.
    • Utilizing a contract rep is an effective way to gain entrée into the customer. Even though they are 1099s, they must be managed as though they were company employees.
    • It is important to spend considerable time vetting candidates for direct sales. Attitude, desire and commitment are much more important than experience and technical prowess. Spend as much time as necessary to make sure that you are hiring the best people. Test them, check references from employers and customers alike. Leave no stone unturned.
  • Measure:
    • What gets measured get done. Determine what behaviors are necessary for success and develop metrics for these behaviors. This enables you to manage success.
    • For one CEO, the biggest challenge is selling above the gap – selling high and wide within the customer organization. Most reps concentrate their efforts on a few people in the client organization – generally low and mid-level people – and fail to establish relationships with senior management.
    • It is important, and rare, to have those senior relationships. Getting them requires deep understanding of the customer’s business combined with confidence, determination and persistence.
  • Respect and manage reps:
    • Many companies treat sales as a “necessary evil,” setting up an antagonistic and ineffective relationship between sales and other departments. This causes the salespeople to hide much of their information or spend time “scamming the system” rather than working as part of the team.
    • The best companies treat sales as a revenue engine and encourage, value and respect input from the salespeople. This encourages sales to be part of the larger team.
    • There can be challenges transitioning people from a pure product sale to a long term service business relationship – a transition from Hunter and Farmer. Most believe that these are two very different personalities. It may be better having hunters who bring in the business and then transition the customer relationship to account managers to maintain long-term relationships.
    • It may be necessary to design two compensation plans to incentivize the desired behavior of each group.

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How Do You Navigate Communication Style Differences? Four Points

Situation: A CEO seeks advice on how other CEOs work with employees who have significantly different styles of communication. He suspects that this is a source of conflict between employees and wants to reduce that conflict. How do you encourage employees to be more open and receptive to other employees? How do you navigate communication style differences?

Advice from the CEOs:

  • Conduct regular personnel reviews. In reviews work with the individual to develop personal growth plans in addition to professional development objectives.
    • It may be necessary to create enough stress in an interview situation to prompt the real personality to show.
    • Recognize that sometimes an employee who meets professional goals can still be a poor fit for the team. This can impact other, productive team members. Don’t be afraid to fire a bad hire.
  • How much can you expect to mold another person’s communication style?
    • There must be personal motivation to change – the impetus must come from within.
    • To prompt the conversation acknowledge that something isn’t working – or isn’t as effective as expected.
    • Communicate to the individual that the consequences of not changing are potentially worse than the effort to change.
  • Breed adaptive communication skills throughout the organization.
    • Use an assessment tool to start the conversation and align tasks.
    • In dealing with an individual who is confrontational, probe to determine what is motivating the individual’s question or position on an issue. Does the individual genuinely need additional information or are they using a wall of questions as a roadblock to moving on?
    • Work with the individual to organize their answers or input into a plan.
  • Communicate values and goals as they pertain to individual contribution and appreciate the impact of different departments’ actions on each other.
    • Be flexible – some people need more definition and reinforcement than others.
    • Understand that changes and transitions in the company’s focus can shift roles.
    • Review each individual’s role periodically to insure that it fits the company vision. This can increase the individual’s understanding of how they are contributing to moving the company forward.

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How Do You Manage Growth? Six Points

Situation: Many companies face challenges managing growth. Growth is a complex process involving strategy, staff and company culture. What guidance can the group give to help guide planning for growth? How do you manage growth?

Advice from the CEOs:

  • Think of growth in term of five major components of organization and growth: structural, cultural, facilities, documentation systems, and people.
  • Structural
    • Consider different ownership and profit sharing options. Look for options that fit the objectives of the company.
    • If you are looking at multi-location solutions, develop a structure that can be easily copied in new locations that are added but which is complementary to the home office structure.
  • Cultural
    • If the business is family-run and looking at moving to a non-family structure, look for options that will preserve the best aspects of the culture as it has developed.
    • Keep company values intact.
    • Focus on maintaining engagement and commitment.
  • Facilities
    • The transition from single-site to multiple-site is particularly traumatic. The jump from 2-sites to 3-sites is much easier because an effective model is already in place.
  • Documentation Systems
    • Growth can compel the company to adopt entirely new systems, especially when passing certain thresholds for government regulations (i.e. 50+ employees).
  • People
    • Hire and retain for the right mindset – consistent with company culture and structure.
    • Specialists can be a real asset for their particular talents, but they seldom have the view of the “big picture” that is required for a turbulent environment.
    • Compensation – align compensation with company culture and priorities.
    • “Ownership” may have to change from sole ownership to shared ownership in order to keep key talent engaged.
    • Add new skill sets to address needs but assure that these complement existing skill sets.

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