Wednesday, October 31, 2012

Using Humor In Business Is An Art

This CEO Blogger believes that humor and quick wit is a sign of intelligence.   As a result, I find humor in almost every situation, even cases that others might see as dire.  Humor can be used in business to build relationships.   In fact,  everyone knows that people buy from salesmen that they like.   This often involves using appropriate humor.   Story telling in particular is a real art to be admired.  This does not mean using off color humor, or humor that makes fun of others; but it can mean making fun of oneself. 

This Blogger has seen really good Account Managers use humor to defuse very difficult situations; but it must be done very carefully and it can be a little scary.   In one case, years ago, one of my colleagues was meeting with Rockwell International, maker of the Space Shuttle.  It was at a time when mortgage interest rates were at 18% and the real estate market was in a free fall collapse.   During the meeting, the Rockwell Senior VP was just brutal concerning our company's ability to sell the Rockwell employee's houses, we had in inventory.  

After listening to all the insults, my colleague, who was a masterful story teller, said "you know in business, there are some things we just can't control, like 18% mortgage interest rates that have seriously impacted our ability to sell houses, without huge losses."

At the time, Rockwell was having problems with tiles falling off the Space Shuttle.  This was long before the tragic accident that resulted in an explosion, the loss of a Space Shuttle and the death of all on board.   In any case, that accident had not yet happened, so the loss of these tiles had become a joke of sorts in the media.  My colleague went on to talk about things we can't control in business, kind of like the tiles falling off the Space Shuttle; again this was long before the tragic loss of life caused by the explosion of a Shuttle.  

There was a pregnant pause, a scary moment, after which time the Senior VP said "touche", a recognition that in fact, not everything in business is controllable.   From that point, the meeting turned into good business discussion.   Of course, this particular use of humor was very risky.   If my colleague had made this comment after the tragic Shuttle accident, it would have been totally inappropriate; but since it happened long before, he was able to use humor to make a point and get the meeting back on track.

Using Humor In Business is an art that can be very effective; but it must be done carefully when dealing with difficult situations.   In normal discourse, humor is a great way to build relationships.   Beside, making work fun, for all concerned, is a good thing. 

Tuesday, October 30, 2012

Using Collaboration As A Management Style

Well managed teams win.   Managers who are collaborators are far more successful than sole contributors.   Creating win-win scenarios is always the best way to impact change and or implement tough management decisions.   This Blogger CEO often sees the inherent conflict that exist within organizations; both at our company and client companies.  Let me illustrate how it works.

There is often conflict between Company Procurement, out to get the lowest price possible and the end user looking for the best possible service, or product.  The rubber usually hits the road when the first transaction takes place, in accordance with the scope of work in the contract, that may not be the service that is really needed.  Sales often over sells to get the business.  Account Managers then have to work with a new client to help them understand what they really bought, even though the contract is usually very clear.   Account Managers are sometimes referred to as the shovel brigade.  And then, Finance and Accounting professionals are in place to protect the company's financial well being, not necessarily to keep the client happy.   This leads to inherent conflict between Sales, Account Management and Accounting that often gets pretty heated. 

The best thing that can happen is for all to realize that they are on the same team, presumably working in the best interest of the company.   Sometimes, it takes Senior Management, with the big picture in mind, to drive home the point by stressing the need for collaboration, not confrontation.   Successful Managers work together to solve problems, not create even more.   In many ways, this is all about style.  Having worked in Consulting for years, this Blogger often had to work with Managers to implement various projects, that were not collaborative and even disliked each other.  

My job as a Managing Consultant was to drive consensus and make everyone happy, while achieving a positive end result for all concerned.  This was possible by implementing a process, or methodology designed to forge consensus.   I knew where we would end up before we started, but it was the process that always got us there. 

Managers that practice Collaboration are great communicators.   They use words, often understated and humor to build relationships.  Finally, great managers use process to get the job done.   Story telling is also a great management art.   It is always best never to use the word NO, when interacting with other employees, which immediately puts up a wall blocking communications.  It was always good to say there are no right or wrong answers; though there are sometimes better approaches than others.  The key is open dialogue centered on a positive end result.   Using Collaboration As A Management Style will achieve superior results every time.  

Monday, October 29, 2012

Off - Shoring To India - Competive Pressures

About seven years ago, it became obvious to this CEO Blogger that competitive pressures made it necessary for us to Off - Shore various back office accounting functions to India.   We just could not afford to do this type of work in the United States, or Europe any longer.   When I announced our Off - Shoring initiative to our Management Group, though they did not say it to me directly, I am quite certain that they thought I was just plain crazy.   I know that look by now. 

The CEO's job, above all else, is to insure the survival of the company, doing whatever is necessary within legal and ethical bounds to make it happen.   Though I was hardly a trail blazer, I knew it was the right thing to do.   As such, we put a task force together to journey to India to interview the top Off - Shoring companies in India.  At the same time, since none of us had ever been to India, we traveled to Mumbai, Bangalore and New Delhi, all before new airports were built in these cities, which made the trip quite an experience.   Of course, we also did the obligatory 5 hour drive, the longest day of my life, to Agra, the site of the Taj Mahal.   Today, there are new airports in these cities, as well as, a toll road to get to the Taj that cuts the trip to two hours.    

The only way to describe India is to say that traveling there is an assault on all human senses; sight, smell and taste.   And, though most educated Indians speak English, it is not their first language, so it takes a while to become accustomed to Indian accents, which can vary greatly since Indians actually speak many languages, in addition to Hindi, their national language. 

In any case, after doing our due diligence, we chose an Indian Partner for our Off - Shoring engagement that is still in place today.   Since I had read about the cases and reasons for Off - Shoring failure, I made it very clear to impacted managers in our company that if we failed, I would hold them responsible, not our Indians partners.   We were crossing the Rubicon and there would be no turning back.   As such, many of our managers have since traveled to India as part of their jobs. 

We made the decision to Off - Shore these back office accounting functions to India before the Great Recession, which began in 2008 and though technically we are out of Recession, slow or no growth in the last four years has really validated our course of action.  In fact, if we had not moved these functions to India, our profitability would have been severely impacted during these difficult economic times.  

And, those critical of Off - Shoring simply do not understand the workings of Capitalism.   The savings generated from Off - Shoring these back office functions not only allowed us to remain profitable during bad times, we were able to invest more money in front office jobs and technology, around the world, that have been critical to the growth and development of our company.   We are actually bigger and better today because of our Off - Shoring engagement in India. 

Global companies are just that, Global.   We have employees in various countries including India, through our Off - Shore arrangement.  The BRIC countries, Brazil, Russia, India and China represent huge business opportunities and they are not going away any time soon.   Successful companies think globally.   It this inter connected world, what other option is there. 

Sunday, October 28, 2012

Human Resources - Wearing Many Hats

The Human Resources Department of every company is usually charged with recruitment, selection of new employees and terminations, in addition to administration of compensation and benefits, payroll and the company's performance evaluation system.   But equally important, Human Resources is the conscious of the company guiding senior management into making the right talent management decisions.  Effective Human Resources management is also involved with Succession Planning to assist both management and employees with career development. 

Employees should always turn to Human Resources, failing action by other management, to deal with any grievances.  Certainly any employee that is feeling harassed, in any way, should go to Human Resources for assistance.   Every company seeks to provide a safe and secure work environment free of intimidation, or any other kind of harassment.   Protecting the rights of all employees is a vital Human Resources function.  

More and more, Human Resources is in the business of lawsuit mitigation related to employment practice issues that unless properly managed can result in frivolous, or serious lawsuits.  However even with the best Human Resources practices in place to avoid serious lawsuits, every year companies face employee lawsuits that often have no basis in fact; yet must be dealt with at considerable time and expense.   These cases often occur when an employee is terminated for cause.   It is at that point that some employees find a contingency attorney, willing to take almost any case, in the hope of a quick settlement.   Some of these cases are really funny because they are so goofy. 

Human Resources management is critical to all sized companies.  This function becomes much more complicated for global companies that often must make payroll in multiple currencies and deal with cultural differences in employment practices.   Human Resources managers often wear many hats that change throughout the day.   When we think we have heard it all, we hear something new related to our employees.  Since employees typically make up 65% - 70% of a company's spend, in essence Human Resources in involved in managing our most important investment; our people. 

Saturday, October 27, 2012

The Role Of Marketing

The Marketing Department, in any firm, is the keeper of the company story.  Marketing is in place to support Sales and Account Management; but also to manage Public Relations, Advertising, Websites, Social Networking, Convention, or Conference Participation and the Prospect List.   More and more, Marketing has a role to play in preparation of Informational Webinars.   Marketing owns the image of the company and must protect it at all costs, which can often mean dealing with trademark, or service mark infringements. 

Years ago, when I was a young manager in Sales and Consulting at Merrill Lynch, I took it upon myself to create my own proposal paper that positioned the Merrill Lynch Bull in the bottom right hand corner of the page outside a double black line that created the frame on the page.   I got away with using this paper for about a year until one day, I got a call from the Merrill Lynch Bull Police in Marketing at Corporate Headquarters in New York City.   The woman who called me informed me that they were aware that I was using the Bull in an unauthorized way.   She went on to say that the Bull could only be used when next to the Merrill Lynch name and then only in approved Templates.  I was told to cease and desist, or I would be fired.  Suffice to say, I learned a valuable Marketing lesson and that is never, never mess with the company logo. 

A good deal of time in Marketing is often spent in dealing with major Requests For Proposal (RFP's).   While Marketing typically does not control Pricing, it is often Marketing that works with Sales and Finance to secure Pricing for a pending proposal.   RFP's often come in as a result of the work of the Sales force.   When an RFP comes in out of the blue, without any Sales involvement, which frequently happens, this Blogger CEO attributes that RFP to Marketing Spend, rather than the efforts of our Sales People.  Ideally, I would prefer that not more than 30% of RFP's happen as a result of Marketing Spend because it is always best that a Sales person have a relationship with the prospect to have a better chance of winning the business. 

The Director, or VP of Global Marketing should have a place at the table in Strategic Planning and most company discussions to be fully aware of the latest and greatest in Operations and all departments, or divisions of the company so that such information can be properly represented in marketing materials, Websites, advertising etc.   In companies that practice continuous improvement, this means constant updating of Marketing information. 

Marketing plays a vital and never ending role in every size company.  It is virtually impossible for a company to grow without a sophisticated Marketing Department, especially today with all the Internet connectivity that is necessary to control a company's message.   In our particular case,  as the Founder, Primary Owner and CEO of our company, our Director, Global Marketing reports directly to me because the image of our company is very important to me.   That may not be common in much larger companies;  but since Marketing is so integral to company success, this CEO would always recommend a strong dotted line relationship, at a minimum, to the President, or CEO of the company.  

Friday, October 26, 2012

Being An Employer Of Choice

During the last ten years, there has been significant downsizing in many industries, wages have been flat, benefits have been cut, lavish holiday parties and other employee perks have disappeared and in general Middle Class families in the US are earning about $4,300 less than they earned four years ago.   Yet, most companies would still like to be regarded as a Employer Of Choice, an organization that employees prefer working at when compared to other companies.  

But how is it possible to be an Employer of Choice in bad times, in particular, when it is impossible to significantly raise compensation and benefits.   First the easiest thing to do is to provide a nice work environment, including work stations, offices, break rooms and clean rest rooms.   Second would be providing technology and IT support that makes doing the job easier.  Third is a recognition that employees want flexibility and reasonable time off when they need it to deal with family issues. 

Everyone wants promotions and upward mobility, both of which are more possible during strong economic times and less probable during bad economic times.   However, it is possible to provide for a career ladder within each job to reward those with more experience with higher base pay.   And, even if lateral moves, encouraging employees to take jobs in other departments to build experience and resume is also very good.  Further, providing tuition reimbursement assistance to either get a college degree, or a graduate degree is important to career development, particularly since some, or all of these monies can be provided without income tax implications, in many countries, including the United States.   In addition, award programs should be in place to recognize employees for a variety of positive contributions, not only to the organization; but the community at large. 

Finally, this CEO Blogger believes that the direct report management relationship is absolutely critical to Being An Employer Of Choice.  Employees don't just quit because they are unhappy with the company, more often than not they quit because they dislike working for their Manager.   No one is going to work for a Manager for long who is abusive, dismissive, disorganized, or uncaring.   Any time we see a high turnover trend in a particular department, or division, it is very likely that there are issues with the direct report manager.   When that happens, it is time for Senior Management to step in to address the problem.

It never ceases to amaze me when I do what we call President's Round Table, just sitting and talking with our employees, I learn of company practices that are not company policy, at least not anything I have ever sanctioned, or ordered.   I suspect this happens at many companies as Managers impose what they believe to be practices in the best interest of the company that can actually be very short sighted and or counter productive.   When I encounter one of these practices, it gets changed very quickly; but I am quite certain there are things happening at all companies that are contrary to Being An Employer Of Choice. 

Work is not necessarily fun; though it should be enjoyable and rewarding.  The work environment can be fun as a result of various company sponsored activities designed to build camaraderie and relationships.   For some employees with problems at home, work can actually be a refuge.  Smart companies should work to be an Employer of Choice.  This will not only lead to lower turnover, it will also result in higher productivity.  In some ways this is simple process.   Just ask employees what is important to them and to the degree possible, DO IT. 

In Business Time Is Money

This Blogger CEO is a  man in a hurry.  After 33 years in business, I can see the light at the end of the tunnel.  I often tell our employees that we need to get moving because we are all going to die and some of us sooner than later.   As such, I have a sense of urgency, not to be confused with panic, related to getting things done.   Corporations, big and small, suffer from inertia.   Think of every day in life like an airplane seat that goes up empty.  It is inventory that can never be used again.   The same is true about life.   A day wasted is a day that can never be lived again so we have to make every single day count during this speck of time God has given each of us. 

Employees often focus on little things instead of the big picture.  Yes, little things must be done to be successful; but as we prioritize our days, weeks, months and years,  we must keep our eye on the bigger prize, which in business is always growing the company.   Petty office politics often gets in the way.  I don't have much patience for employees that worry about reporting relationships, or their place in the pecking order.  In that sense, it would almost be better if there were no job titles.   Once in a while, when I see that kind of silliness happening, I have to remind an employee that ultimately everyone works for me, the CEO and owner of the company so the current reporting relationship, which often changes, is irrelevant.   

Successful employees demonstrate a sense of urgency related to getting big things done.  They plan their work and they work their plan.   Quantifiable Performance Objectives help bring focus to those big things that can make a difference in the growth and development of any company, which is the reason they are so important.  In the end though, it is driven people that make big things happen, not Performance Objectives.  

In business, time is money, or more importantly lost opportunities if people don't make thing happen quickly.   That means doing today, what could be done tomorrow, next week or next year.  It also means the ability to multi-task and work on many things at once.  Since we are all going to die, we can't wait to make big things happen.  We have to act right now, this minute to achieve success.   Doing otherwise is a road to mediocrity; certainly not my game plan.

Tuesday, October 23, 2012

Bad Things Can Happen To Good Companies

During my 33 years in business, this Blogger CEO has managed through three Recessions, often accompanied by real estate downturns,  9/11, the Financial Collapse that began in 2008, both the highest and the lowest interest rates in my life time, inflation, stagflation and deflation.  When all of these things occur, often beyond any one's control, Bad Things Can Happen To Good Companies. 

After 9/11 and then again after the Financial Collapse in 2008, we saw our business drop by 35% in 2002 and then 50% in 2009.   Even during the worst of times, we had never seen a decline in business that great.   Of course, this resulted in tough decisions and painful lay-offs.  Certainly, dealing with growth spurts, which we have also done; though sometimes challenging and difficult is a hell of a lot more fun.  Yet, the most important job of the CEO is to do whatever is necessary, within legal and ethical bounds, to insure the survival of the company to live and fight another day.  It is when Bad Things Happen that this all comes into play. 

We lived through what happened in the movie "To Big To Fail", when the Money Markets froze up in September, 2008.   We had never experienced anything like that before.  Fortunately, President Bush and Secretary of the Treasury Paulson put the full faith and credit of the United States behind the Money Market funds; otherwise, there would have been a complete global financial collapse that would have impacted everything and everyone.

Most people just do not know how close the world came to this precipice.  I had the opportunity to be at Conference where George W Bush was a speaker.  You can bet I thanked him for acting decisively and quickly to deal with this crisis because I fully understood the implications if Bush and Paulson had not acted.  Recession would have turned into another Great Depression.  This could have been another occasion when Bad Things Can Happen To Good Companies and in this case lots of people.  

Years ago, we lost a major client that we had for 11 years even though we had provided outstanding service.  Procurement got involved in a bidder process demanding that they adopt a different business model than the one that had been very successful for years.  Our client contact, who we had helped succeed and get promoted was just not strong enough to fight this off.  Ironically, this proved to be a very bad decision.  

The supplier that was selected was acquired a few years later by another company that ultimately filed for bankruptcy.  In fact, we were almost called in to be the White Knight because this bankruptcy caused major problems for the client.  In any case,  it was the first time in my business experience that I had ever seen a contract terminated when service was great.   It demonstrated to me that some times Bad Things Can Happen To Good Companies.

When Bad Things Happen, management should allow for a short grieving period, for me about 15 minutes, though I must admit I allowed myself 4 hours, on the drive through California back to our home in Reno, Nevada to deal with this particular client loss because I was personally very involved and vested in this client.  But once grieving is over, it is time for Plan B.   Though it would never be my preference that a valuable employee leave our company, when it happens, rather than the doom and gloom I sometimes hear from our Managers, I see it as an opportunity to reevaluate our talent strategy.  Good Managers always turn lemons into lemonade.  

Bad Things Happen To Good Companies all the time.  So what.  Great Managers are always glass half full personalities.  Bad Things That Can Happen To Good Companies are what make great managers even better during Good Times.

Monday, October 22, 2012

Sales & Account Management 101 - Words Matter

Year ago when I was working in Consulting, I assisted a major client with a Supplier Selection Project.   We had narrowed the selection down to four suppliers, including the existing service provider.   These four companies were then invited in to make Best and Final Presentations.   In what must be the worst closing statement I have every heard in a presentation, the Senior Vice President in charge of Operations from the existing supplier said, "I know our services have not been very good and that we have had some service problems, but if you stick with us, at least you know what you are getting".  As a Consulting/Sales guy, myself, I could only cringe at that closing statement.   Suffice to say, the existing supplier lost the business. 

Over the years, I have heard Sales people and Account Managers, men and women, say some of the dumbest things imaginable.  First, anything negative should be turned into an opportunity for improvement.  As such, just apologizing for poor service is not the best approach, particularly if the issue was something outside the service provider's control.  That does not mean rationalizing poor service by any means.   But, it does mean using the right words to explain the situation without casting blame on anything or anyone.  The worst possible approach is to throw the person, or sub supplier providing the service, under a bus.   The best approach is to accept personal responsibility for service issues and provide solutions to prevent the problem from happening again.  

Really good Sales people and Account Managers are effective communicators able to deal with anything said to them by a customer or client.  Complaints, bring them on because they are an opportunity to build positive relationships.  But this is a case where Words and finesse really do matter.  This is particularly the case if the client goes out to bid for services.   When that happens, the existing supplier is often at a disadvantage because while competitors have no record to defend, the existing supplier may have some issues that must be addressed as part of the supplier selection process.  When this happens, it is always important to demonstrate the things going well first, while addressing in a positive way any isolated service issues.  

In the old days, when a client went out to bid for services, it was usually because there were service problems.   That all changed in the last ten years as Procurement Departments became involved in buying services.   Today, some clients go out to bid when services are great because they are on a 3 - 5 year bid cycle managed by Procurement.  This is usually done to seek lower pricing, not necessarily because services are bad.   Sadly, this Blogger has seen clients walk away from great service to save a few bucks because there is always a supplier willing to work cheaper, or even lose money to win a big account.  Suppliers that implement this strategy to win an account, knowing upfront that they will lose money; but thinking they will be able to renegotiate the contract after the first year to higher pricing are delusional.  That strategy rarely works. 

Every interaction with a client, or customer is a business discussion, even those deemed casual during after hours activities.  Words should always be used to build relationships, while advancing company goals and objectives.  Those working in Sales and Account Management must be very careful related to discussions concerning religion, politics, family, or any other controversial topics.   Strong opinions about these topics are best avoided because they can be very divisive issues.  Stay focused on the business at hand.  Words can be very valuable and powerful tools to get the job done, which is always wider and deeper selling.   

Sunday, October 21, 2012

Working With Ethel - Passive Personality Style

On the I Love Lucy show, Ethel was the passive personality style.   As people pleasers, Ethel's hate conflict and run from decisions.  Ethel's are procrastinators that often put off until tomorrow, next month, or next year, what should happen today, particularly if a tough decision is involved.   Ethel's can be men or women.   Again, this has nothing to do with intelligence; but rather speaks only to personality style.   As a Ricky, this Blogger CEO can deal with Ricky's, Fred's or Lucy's, in the right jobs; but dominant Ethel's drive me absolutely crazy because of their inability to make decisions; often any decisions. 

Ethel's rarely make it to higher level management jobs in business because of their personality style.   If they do make it into management,  because they are usually really nice people, often very experienced with industry knowledge, they make very weak managers.  By definition, being a manager is all about making decisions and dealing with conflict.  And, it is impossible to be a people pleaser in many management jobs when the only answer that can be given is NO.   Further, since Ricky, likely to be the boss in this picture, can't handle procrastinators,  Ethel's will be pushed aside in favor of more pro-active, determined managers.  It is what is. 

When managing an Ethel, they must be given very specific instructions and deadline dates to get the job done.   This Blogger CEO has had to use the "pain of death" comment with Ethel's to force decision making, or completion of specific projects.   If working for an Ethel, be prepared to be very frustrated because getting decisions out of them rarely happens quickly, if at all.  And, everything takes forever to get anything done.   Are you sensing my impatience with this personality style?  It is real. 

Ethel's are better positioned in lower level jobs with constant supervision.   Ethel's are hard workers, but not always completely effective because they are naturally resistant to change.  Ethel's will get the job done provided they don't need to make decisions, or deal with conflict.   Someone else in management must do that for them.   Ethel's are doers based on specific instruction.   They can be very sloooow because they tend to be plodders, who will not rock boats; but eventually they will achieve the desired end result with some direction and help. 

As should be obvious, this Blogger CEO is not a fan of dominant Ethel's in business.   Ethel's might better be positioned as school teachers, or in other jobs that do not require decision making, or speedy action.   There is a productive place in business for Ethel's; but clearly it must involve the right job.   Life is a series of daily conflicts.   Since Ethel runs from conflict and decision making, finding just the right job for Ethel, whether in business, or someplace else is critical to their success.  

Saturday, October 20, 2012

Senior Management Teams That Work

There is perhaps nothing more important to the success of a company than for a Senior Management Team to work and function as a well oiled machine with common purpose.   As someone who has lived through dysfunctional Senior Management Teams that did not work, I can say with some authority that is causes a ripple effect throughout an organization that is not only destructive, it can be downright ugly.   I have worked with Senior Managers who actually hated each other and saw as their goal the destruction of other Senior Managers to get ahead.   The fact that the CEO of the company tolerated these behaviors was inexcusable; but was also an indication of the CEO's dog eat dog New York mentality.   It was despicable. 

And then, I have also experienced a Senior Management Team where all liked each other; but just could not work together.   The CEO allowed management meetings to degenerate into yelling, screaming matches, often based on the company's lack of profitability.   I recall counseling the CEO, that this situation was intolerable, requiring her intervention to stop savage attacks that were counter-productive.   The good thing is that for me anyway, now a CEO, I learned that a Senior Management Team that works well together was critical to the success of an organization and that it is my job to make it work.   This is never more important than during bad times when difficult decisions are often necessary. 

For starters, it is important that members of a Senior Management Team actually like and respect each other.   During our company history, we have had a few Senior Managers, like new fish in an aquarium, that just did not make it because they could not develop relationships with other Senior Managers.   This had nothing to do with experience, competence, or intelligence; but rather inter personal skills.   In another case, one of our Senior Managers was viewed as untrustworthy by other employees.   Usually, Senior Managers that don't fit in, self select; but in a few cases as CEO of our company, I have had to help this process along, if you know what I mean. 

Senior Management Teams that work enjoy being with each other the many hours that are spent in monthly meetings.   The time spent together; though often very serious, is also filled with humor and fun and lots of laughter.  Successful Senior Management Teams are supportive and not territorial, which in our company is a good thing, since we are constantly reorganizing to deal with changing conditions.   And, it is always interesting to watch when a new member of the Team comes on board.   As CEO, I try to facilitate integration into the Team as soon as possible; but it often depends on the new Senior Managers personality style.   Some lay low until they get the lay of the land, which is a reasonable approach.    Others jump right in, which can work too. 

The job of every CEO, in charge of a Senior Team, is to build and promote a very cohesive management structure.   That means insisting on mutual respect, flexibility and positive communications.   This doesn't mean that heated debate is excluded from management meetings, as long as such debate remains constructive and does not become personal, or accusatory.   If and when that happens,  the CEO should step in to implement a Time Out.  

Years ago, when I was still doing Consulting, I was working with the Senior Management of a major company, a name you would know.   The Senior Team savaged each other in ways even I had never seen before.   I kept waiting for the CEO, a really nice guy, to step in to stop the carnage.   When it did not happen, I used my role as Managing Consultant to end the destructive behaviors I was seeing in front of me because it was incredibly counter productive to the process.   This scenario should never be permitted by the CEO of a company. 

Senior Management Teams that work are critical to the success of every company.   It is the CEO's job to build and maintain a Senior Management Team that works well together.   That means hiring the right people, rewarding positive behaviors and never allowing behaviors to become destructive.  And, oh by the way, joking around and having some fun is good too.   

Friday, October 19, 2012

Working With Ricky - Authoritarian Leadership Style

On the I Love Lucy show, Ricky was always in charge.  Ricky is the authoritarian leadership style.   Ricky's often end up in Senior Management, or other high level management roles in various organizations.  Ricky's can be very detail oriented, depending on other personality traits in their mix; but usually only when necessary.  Ricky's are impatient and do not suffer fools very well.  Ricky's always want to know the end of the story first because for better or worse and sometimes for worse, Ricky's sort very quickly, often leaving others behind to wonder, what the heck just happened as management decisions then follow just as quickly.  This CEO Blogger is a long time Ricky, probably from the age of 7, my earliest recollection (surprise, surprise).  Ricky's are always looking to turn gray into black and white and fast. 

Ricky/Fred's can be a pretty lethal combination.  This person would be a steam roller, into numbers and details and not much compassion for other people, or their short comings.  Ricky/Fred's are not a whole lot of fun to work with; that's for sure. Ricky/Lucy's are more fun and better positioned for management, or sales jobs.   Still a driven personality style; but tempered by relationship orientation and better intuitive skills.   Ricky's are always right because they are often right based on their knowledge and experience.  This is because Ricky's retain information and can usually pull it up whenever they need it, which is a real strength that can make Ricky's appear as a "Know It All".    What can I say, we are what we are.   

When dealing with a Ricky as a direct report, it is best to provide specific objectives and then get out of the way.  Check in once a quarter to see how things are going; but recognize that Ricky will get the job done.   Ricky's cannot be micro managed because they will rebel.  Easy to anger, Ricky's are passionate and can be emotional.  Ricky has a strong ego so beware in your day to day dealings about their feelings.  Ricky's are much more interested in being respected than loved, or feared in their dealings with other people.   

If dealing with a Ricky boss, you better have your facts straight and be quick about it.  If presenting to a Ricky business leader, you have about 5 minutes to make an impression because Ricky will shut you down, if you don't make good use of his or her time.  Ricky's have long memories and will remember everything you have said to them in the past, along with the information you provided.  Be advised, promises made to a Ricky boss, better be promises kept, or there could be hell to pay. 

Effective Ricky's use their knowledge and experience to real advantage when managing organizations, or people.   While Ricky's are by nature control freaks, once Ricky's fully recognize that they can only succeed through the work of other people, which sometimes takes some maturation, they can give up a large degree of control; but usually not all.  When that happens, Ricky becomes a very powerful manager.  Working with Ricky's is unavoidable because Ricky's probably are in charge of nearly all organizations.  So employees reporting to a Ricky need to learn to manage up and actually help temper some of Ricky's more unattractive behaviors for the sake of all concerned.  Ricky's with direct reports need to learn to manage down recognizing that no one is perfect and that everyone is capable of doing great things with the right management in place. 

Thursday, October 18, 2012

Corporate Communications - Vital To Success

When this CEO Blogger began in business 33 years ago, every manager had a secretary who used an IBM Selectric Typewriter to produce Memos, Letters, Proposals etc.   It was a big deal when secretaries got the upgraded Selectric with the white out ball to make corrections.   That all changed in 1984, when the first IBM Display Writer Word Processors were delivered to each office.   In those days, there was usually a Word Processor Room where the secretaries could go to use these machines for bigger projects.  The plight of the secretary changed forever, at least for me, the day, I had a major project to get out and a deadline to meet. 

Wednesday, October 17, 2012

Working With Lucy - Creative, Relationship Personality Style

Though not in real life, on the I Love Lucy Show, Lucy (Lucille Ball) was the creative, relationship oriented, often zany personality style.   Everyone loved Lucy because she was fun and funny.  In the business world, Lucy's can be men or women, who are often the most difficult personality style to manage.  Lucy's are not sequential thinkers; that is Lucy thinks in terms of A, G, J, B, Z etc.   As a CEO Ricky personality style, a subject for another blog posting, always facing time pressures, it is difficult for me to deal with Lucy's because it is necessary to sort through their thinking to figure out what they are trying to tell me.   That said, Lucy's can be very successful, with significant management, if their talents and skill set can be channeled to positive effect. 

Lucy's tend to work in fields like Sales, Account Management, Marketing and Human Resources.  And, unless their personality style is tempered by other more disciplined styles, i.e Fred previously described, or Ricky, the authoritarian leadership style, which is not uncommon, Lucy's have a hard time getting anything done because they are easily distracted and tend to go from one thing to another without completion.   Lucy's do not succeed in Sales without some Ricky and or Fred aspects to their personality style because their need to be loved prevents them from asking for the business, fearing rejection.   Lucy's in Human Resources are often the person that enjoys working on all the company fun events.   More important, Lucy's in Human Resources are usually the voice of the employee to Senior Management, which is a good thing. 

When working with, or managing Lucy's,  it is really important to provide them very specific objectives and structure, even for higher level employees, which they typically lack and dead line dates; otherwise weeks turn into months and then years.   Since Lucy's usually lack detail orientation, there must be others behind them dealing with the loose ends.   For example, while Lucy's in Sales can close business, it is probably a Pricing Department that deals with the numbers and a Contracts Department, that will ultimately finalize the deal.   And, specific to training, Lucy's glaze over information very quickly if presented with too many facts.  This has nothing to do with intelligence.  Lucy's can be just as smart as any other personality style.   It has more to do with their inability to focus on any one thing for very long because other things come along that are more exciting and therefore distracting.

Learning for Lucy must be hands-on, fun and experiential, rather than rote book learning.   And, retention is always on a need to know basis.   So Lucy would have been the kid that studied for the test to get the A or B; but then probably forgot most of the information quickly thereafter because it did not relate to daily life.  This is particularly problematic now because Lucy knows that all he or she needs to do is Google it to access whatever information is needed in real time; so why commit anything to memory.    

Working with, or managing Lucy's can be very challenging; however, with an understanding of this personality style, their talents can be channeled to achieve big things.   There are times when dealing with a Lucy is very frustrating; but since they are charmers, we all love Lucy. 

Tuesday, October 16, 2012

Talent Management - A Critical Company Function

The new term for Career Development and Succession Planning is Talent Management.   This change in terminology has occurred because Consulting Firms have figured out that companies may need more formalized help with developing their employees.  Talent Management, whether implemented internally, or with outside help is critical to the growth and development, not only of individual employees; but to the company at large.   While company senior management should put structures in place to develop employees, ultimately, any manager with direct report employees should spend considerable time helping employees grow in a current job to create a longer term career path.  

This does not just happen by accident.  Companies typically invest in Learning Resources to provide training and development first to make certain that employees are prepared to do the current job; but almost more importantly to help position employees for future jobs.  Many firms, ours included, offer tuition reimbursement programs to encourage employees to go back to school to further their education to make them more valuable to the company.  

The role of the Direct Report Manager is critical to this process since he or she should be making sure that employees are funneled into these programs.   In addition, assigning employees special projects and or participation on various committees, or task forces is a great way to provide an employee broader exposure and experience related to the workings of the company.   

There should be upward mobility in the salary structure that rewards experience.   For that reason, it is entirely appropriate that there be levels in all jobs so those at entry level can be paid differently, related to base pay, than those with many more years experience.   This also allows for promotional opportunity within the same position.   This is particularly important during bad economic times when there may be limited promotional opportunities.   

Finally, all companies should have a succession planning process in place to identify internal candidates for future jobs and or promotions.   This Blogger CEO really likes the notion of rotating employees into various jobs to gain additional experience; though employees are often resistant to trying something new.  Really valuable employees do not need to worry about promotions.  Talent is always in demand as Managers will gladly take someone into their department, division or subsidiary viewed as a hard working, super star with a great attitude.   The opposite is true related to employees with a poor attitude.     

Talent Management is a critical company function requiring time and resources.   Senior Management has a role to play; but most of the work needed to develop employees should be done by Human Resources, Learning Resources and the Direct Report Manager.  In addition, the individual employee must also take responsibility for his or her own growth and development.   Talent Management is necessary to company success.  It cannot happen any other way.     

Monday, October 15, 2012

Dress For Success Not A Garage Sale

Ever since Corporate America went Business Casual about ten years ago, many companies have struggled with the issue of proper dress in the work place.   Younger employees, in particular, that never experienced Business Formal Dress, suits, ties, white shirts have no point of reference and as a result are often clueless related to proper attire.  I am sure that if we permitted it, we would have some employees come to work in flip flops and a tee shirt.  To prevent that from happening we have had to issue very specific standards defining Business Casual Dress and still some employees don't understand that wearing clothing to work, that would be better used to clean out the garage, is inappropriate.   In fact, rather than refer to what is allowed in Business Casual, it really should be called Business Professional to properly describe what is suitable for work. 

The telling tale was when we had one of our young female employees walk into our office in California, our corporate headquarters, wearing a see through white blouse with a black bra underneath.  Our office manager happened to be in our reception area when this particular employee asked if what she was wearing was appropriate for work.  Of course, our office manager instructed her to leave immediately and go home and change.  It is hard to imagine that anyone could have such poor judgement to wear something so inappropriate to work; but it happens all the time. 

When I was first hired as a young manager at Merrill Lynch, 33 years ago, I had two plaid suits; one in blue and one in beige.  Initially, since they had no office for me in New York, I was assigned a work station right outside Executive Row.   I quickly noticed that there really was a uniform.  Men wore navy blue or gray pin stripe suits in various shades of gray or solid navy blue or gray; never black or brown.  Shirts were always white.  Ties could vary some; but not really much by today's standards.  Business Casual in those days was a navy blue blazer, with gray slacks and a white or light blue shirt with a tie.  In fact, when all Managers got together for a Business Casual event, we looked like the Vienna Choir Boys in our Navy Sports Jackets.  Once I realized what was needed to dress appropriately, I got rid of those plaid suits. 

Women were able to dress with a little more variation; but always in suits, or perhaps a dress with a blazer jacket.  Never anything sleeveless.  Pant suits came much later for women and were more acceptable as Business Casual.  Shoes for men and women were always polished and never open toe for women.   These were all unspoken rules as we "Dressed For Success" not a garage sale.   OK, OK, I know I am an old fuddy duddy; but even so, employees that aspire to promotional opportunities really need to Dress For Success even today. 

That does not mean suits in a Business Casual environment; but it does mean great looking clothes, in better fabrics, that fit properly.  Fortunately, there are many discount stores where employees can find nice clothing at good prices, so cost should not be an issue.   However, about 50% of Americans, in particular, are pleasantly plump, or even obese, me included.  We therefore must be much more careful in choosing our clothing.   Some people believe that wearing tight clothing is slenderizing when in fact it is just the opposite.  Those of us that are over weight should wear looser fitting clothing, jackets and solid, darker colors to look best.  

Employees who succeed in business have the whole "package", education, experience and image.  By the way, smoking is a real NO NO too.  Smoking not only causes cancer, which is bad enough, those who smoke smell of cigarettes; not good at all.  Smokers may not realize it; but they are probably not only shortening their lives, they are limiting their career opportunities.  It is important that employees Dress For Success if they aspire to higher paying jobs.  It is what it is.   

Sunday, October 14, 2012

Contracts - Words Matter

When any of us makes a simple retail purchase, there is an implied contract that for the money we pay, we will receive the product or service we are buying.   When that does not happen, though there may need to be a stern discussion, we are entitled to a refund.   Complex businesses often require complex contracts to define not only the pricing; but the terms and conditions of the contract, which in many ways are far more important than the pricing.   In particular,  the termination provision is very important since in some cases it may be necessary to cease doing business. 

Sales people intent on closing a deal often do not understand, or appreciate the need for many provisions in a contract that they see as potential deal breakers.   However, contracts tend to evolve over time as problems come up.   Provisions are usually added to address things that happen causing additional risk, or liability to the company.   As such, there are some provisions in every contract that are non-negotiable because they deal with issues so critical that if missing in the contract,  the potential benefit from gaining the business is lost. 

As someone that has negotiated many complex contracts in my 33 years in business,  I believe in win-win for both parties.   It is only when the other party believes in win-lose that it is time to walk away from the table.   Nearly anything is possible, as long as legal and ethical, if the client agrees that profitability is necessary in the deal.   There are some big name clients that do not believe in this premise.   They actually operate on the notion that their name is so important on a client list that the supplier should lose money for the privilege of doing business with them.   We walk away from those deals because they are win-lose and never work out. 

Several years ago, we spent six months negotiating a ten year joint venture deal with a large company.   Since there were penalties for termination, I was much more concerned about the termination provision than the actual provisions allowing for the joint venture.   I insisted on terms and conditions for termination, without penalty, that seemed ridiculous at the time because this particular company was so large.   It was presumably unthinkable that the things I specified could happen to this very successful company.   In fact, within five years of signing that contract, all of the negative things I insisted be in the contract did happen, allowing our company to terminate the contract without penalty.  

Contracts are critical to complex businesses.   Protecting a company from unnecessary risk and liability is particularly important.  In addition, there must be a relationship between risk, profit potential and service requirements.   The scope of work must be clearly identified to prevent service creep.   The time spent negotiating a contract on the front end of a deal will prevent the need for countless hours dealing with issues during service implementation and or if contract termination becomes necessary.   There is no doubt that when dealing with Contracts, words matter. 

Saturday, October 13, 2012

Dealing With Difficult People In Business

People often bring personal baggage into the workplace.   As one of our Senior Vice Presidents often says, "People Are Messy".  This baggage may be the result of childhood upbringing, failed marriages and other relationships, substance abuse, or financial and other family issues.   This is the reason, in the United States, our company screens for substance abuse and credit issues before hiring a new employee, even though this process alone does not prevent us from hiring employees with other issues.   There is no doubt that employees who come into the workplace with unresolved baggage and various other problems are not as productive as employees that are not troubled by these issues. 

That would be bad enough; but some times these issues result in the need to deal with "difficult" people in business.   Clearly, employees that demonstrate anti social, or destructive behaviors that may impact other employees, customers, or our clients cannot be tolerated.  After serious counseling, if these behaviors do not end, termination must be quick.   Other employees experiencing personal issues that may impact job performance must also be counseled related to their performance.   While we would always be sympathetic and it may be difficult, people must be counseled to leave their problems at home in order to be effective at work.   When that is not feasible, generally continued employment becomes impossible. 

In some sense, though often difficult, dealing with employees is much easier than dealing with difficult customers, or client contacts because ultimately, employees can be terminated.  While it is true that a company can refuse to deal with a customer, or client by cancelling a contract; that would always be a last resort.   Specific to a customer, there is a fine line between dealing with a demanding customer, which is normal and dealing with an abusive customer.   Abusive customers in a business to business relationship must be brought to the attention of their employer.   No company would support abusive behaviors by one of their employees toward anyone because of the legal liability. 

During my 33 years in business, I have encountered perhaps 5 or 6 very difficult and even abusive client contacts.   Though it is not our job to be a psychologist, these people all brought baggage into the workplace that caused their horrible behaviors.   And, in doing so actually created a "hostile work environment" for our employees assigned to work with them.   As a senior manager in any company, since tolerating "a hostile work environment" created by anyone in the workplace, has legal implications,  when this occurs, action to stop it is required. 

The first way to handle a difficult client contact is for the day to day account manager to confront the individual by saying that while we are in business to provide great service or products, we cannot allow the contact's abusive behaviors to create a "hostile work environment" for our employees.   This should be a heart to heart discussion; but one that is clear and forceful.   If the abusive behaviors don't stop, it is time for the company's senior management to contact the senior management of the client company. 

As the CEO of a global company,  I would want to know if one of our employees was improperly representing our company.   Be assured, if confronted with this occurrence, after investigation, our employee's abusive behaviors would either stop, or our employee would be gone.  Unfortunately, dealing with difficult people in business is a fact of life and a management responsibility.   It is not always pleasant; but it must be done for the good of all concerned.  

Friday, October 12, 2012

Implementing Quality Services

It goes without saying that any service company is in business to implement Quality Service.  The real question is how to do it when there is always pressure on pricing and costs continue to rise.  The first and most important thing necessary to implementing Quality Service is hiring people that are committed to providing Quality Service.   Without the right people, nothing else matters.  

This means a robust performance evaluation system that helps identify A and B Players who can be A Players and weeds out employees that do not have the service orientation necessary to provide outstanding or extraordinary service.   In addition, on going training is required to make sure all employees have the tools they need to succeed in providing high Quality Service.    None of this happens by accident; that's for sure.   

Beyond people, service companies must implement a continuous improvement process that is focused on every dimension of service delivery.   This means using every service issue as an opportunity to improve service.   And, this is not just about front line people that interact with customers or clients; but rather every function within a company.   Metrics and customer and client surveys must be in place to measure all aspects of service delivery and used regularly to identify weak areas requiring improvement.

To deal with pricing pressures that could impact Quality Service, if not addressed, service companies must find better, faster, cheaper ways to implement services.   The emphasis here must be on "better".   In our case, moving certain back office accounting functions to India, allowed our firm to commit more resources to front office jobs that have direct interaction with our clients and customer, without sacrificing Quality Services.   In addition, state of the art technology must be part of the mix to give clients and customers access to live information 24/7, particularly for global companies.

Providing Quality Service requires a never ending process of improvement.   It is hard work.  All employees within a service company must be totally committed to the organization's reason for being.   The reward for implementing Quality Service is both customers for life and new clients attracted to service companies that deliver on their promises.  

Thursday, October 11, 2012

Great Managers Make Big Things Happen

In the 33 years this Blogger has worked in business and even during the years I worked in education,  I have had the good fortune to work with many Great Managers.   The one thing they all had in common was that they knew how to "manipulate" their companies to get big things done.   I use the word "manipulate" in a positive sense, not to mean something devious or underhanded.   Great Managers understand the levers of power in a company and build alliances to use them to make important things happen.  Great Managers are never business as usual. 

Years ago, when I was a young manager, working with a client contact at a major bank to make major changes to their relocation program, I marveled at how well this particular woman was able to "manipulate" her company to get the job done.   She had worked for the bank for many years and she knew exactly who the power brokers were within the company and how to work through them to achieve her goals and objectives.  

She implemented the process through a series of moves, just like a chess game, in a logical order to make change happen.   It was both a science and an art.  This particular woman was terrific at managing up, sideways and down in her organization to achieve success.   It was really fun to watch and a real learning experience for me.

Companies and people are naturally resistant to change.   Given a choice, inertia will always win out.    This is the reason every once in a while, 3 or 4 times a year, I must raise my hand as CEO of our company, to push through change for the good of our company.   Most Managers are not risk takers and it is much easier to do nothing than to push for change.  

Managers that can't deal with change, usually do not go far within an organization because they do not master this important skill set to make things happen within their companies.  And, by the way, this does not mean being a steam roller to get things done.   That does not work for very long.  

While working in Consulting years ago at Merrill Lynch, I was building and implementing new methodologies that had never been done before.   No one told me to do it.  I just did what was needed to succeed.  Fortunately,  the methodologies I developed worked out well to produce new business for the company.   I really did not think that much about it, until one day, one of my eight bosses, many years my senior asked me if I had ever considered what would have happened if I had failed. 

The truth was since I had come out of education a few years earlier, where it was almost impossible to be fired, I never considered the outcome of failure.  My boss went on to tell me that I would probably have been fired if I had failed.   I thanked him for not telling me that sooner because it might have altered my behavior and my success.   In other words, he was saying that risk taking is only rewarded when things work, or at least that was the case where I was working at the time. 

Great Managers act within legal and ethical bounds to get big things done.  They don't ask for permission to do their jobs.  Great Managers take prudent risk to achieve big things.  They know how to "manipulate" their companies to positive effect.   Great Managers are few and far between; but they are absolutely necessary to the success of every company. 

Wednesday, October 10, 2012

Working With Fred's - The Quantative Personality Style

On the I Love Lucy Program, the Fred Mertz character was the cheap, numbers guy.  Fred always wanted to know what it was going to cost.  Fred's in all companies can be men or women and represent the quantitative personality style.  Fred's tend to work in Accounting, Finance, Law Departments, Information Technology and the Sciences, jobs that require intense detail orientation.   All companies need Fred's because all companies have functions that require their skill set.  Oddly, Fred's often resent being told they are Fred's because they don't like being pigeoned holed into a personality style; but it is what it is.

In the extreme, Fred's are the nerdy, funny, Scientist characters on the show The Big Bang Theory.   Fred's take most things literally.  Fred's tend to have a very dry sense of humor; but they can be very funny.   Our former retired CFO, a real Fred, used to come to the office on Halloween dressed as Barbara Bush.   To make the point that Cash was King, he often wore a crown to management meetings. All of this is great; but there is another side to the Fred personality that requires some management over sight. 

Fred's are not real sensitive to the needs of other people.  And, it is not because they themselves are not nice people, it is that they sometimes just don't see people in crisis and or, they are uncomfortable with having  personal involvement with the people that work for them.   Fred's are definitely not touchy, feely people.  As a result, those of us that manage Fred's sometimes must help them see the people that work for them; otherwise, Fred's can cause turnover.  Fred's need help with social interaction; which they often view as a waste of time.

Further, Fred's do not understand corporate speak, or inference.   For example if I said to a Fred, "I am concerned that the building is burning down".   A Fred is likely to respond by putting this on his list of things to do, rather than recognize that a burning building must be a higher priority.   Of course, this is an extreme example; but not by much.   Knowing that corporate speak does not work with a Fred,  communications must be much more direct.   So in this instance if the building was burning down, a Fred must be told,  "The building is burning down around you.  Stop everything you are doing, evacuate and call the fire department NOW."   

This tendency has nothing to do with intelligence.   Fred's are probably smarter than most people; but their personality style is very linear.   Fred's think in a straight line.   Anything that gets in the way is not going to have a very high priority in Fred's mind.   In addition, Fred's are generally not risk takers.   Nor are they intuitive, or prone to work off gut reaction.  Fred's must spend hours on a computer proving the end of a story before they will offer a conclusion. 

Fred's are absolutely critical to the success of every company.   Cards talk and numbers don't lie, which Fred's will always rely on to argue their case.   Most of the time,  decisions should be made based on the numbers; but some of the time, as a CEO, who is not a Fred, it is necessary to make decisions based on 5th grade math, instinct and experience.   This drives Fred's crazy.   Oh well, CEO's get to have some fun too; though Fred's rarely see the humor when this happens.     

Tuesday, October 9, 2012

Pay For Performance

This Blogger CEO is a big believer in Pay For Performance.   First, base pay should be based on experience, education and other factors; what I call  "the package".   But then after that, various commission, incentive and bonus plans should be in place that reward both team and individual effort.  And, those plans should be in writing and as specific as possible.  

When I worked at Merrill Lynch years ago, we were often paid bonuses, however, there was no written plan, or basis for the payment.   One of the years I earned bonus, I was driving my boss, an Executive Vice President to the airport, when he told me I had earned $8,000 in bonus.   To this day, I don't know why I earned that particular amount.  At the time, my boss just said thanks for a job well done after telling me the amount.   That was it and this interaction was rather common the entire six years I worked at Merrill Lynch.   Paying a bonus should buy Good Will with an employee.   The way it was done when I worked at Merrill Lynch, years ago, bought none. 

As a result, when founding our company, I was determined to put specific commission, incentive and bonus plans in place to drive the work and results we wanted achieved in our company.   While all of this drives our Human Resource Department crazy and it is a lot more work, at least our employees know the basis for these payments.  There are no surprises. 

In only took me about 20 years to figure out that Sales People should be paid commission based on the profitability of the deals they bring in the door.   Well dah!.  Most companies pay Transactional employees  transactional incentives as the best way to achieve specific results.     It is not uncommon for other exempt employees to be on some sort of a bonus plan that is both based on team and individual effort.  

Compensation and Benefits practice is both a science and an art.   There is no perfect compensation plan, however, I am a big believer in rewarding individual performance, rather than just team effort.  Specific Pay For Performance is the key to company success. 

Monday, October 8, 2012

Managing A Sales Super Star

Most successful companies have sales people they would characterize as Super Stars.   These sales people consistently win new accounts.   They are referred to as Closers.   If they are really good, they make lots of money.   And, they are among the hardest people in a company to manage.  First, these Sales Super Stars usually have out sized egos, which is also the basis of their success.   Sales Super Stars are sometimes like a boat that creates a wake.   They do sign business; but can cause chaos within an organization.  Sales Super Stars often have an immature "Bad Boy" image, which is never good. 

Generally, despite the problems Sales Super Stars cause, they are tolerated for a time, as long as they don't cross the line into unethical, or illegal behavior.   If and when that happens, no matter how much a Sales Super Star sells, he or she has to go.   Sales Super Stars are usually sole contributors, often with few supporters within an organization, because they are seen as totally self serving, out to earn commissions, no matter how it might impact the organization, or others within it. 

For the good of the Sales Super Star and the organization, certain Sales Super Star behaviors must be tempered by management.   Integrity is non-negotiable.  In addition, treating others within the company with respect is essential to working relationships.   And, it is important to constantly remind the Sales Super Star that success is a team effort. 

One of the biggest mistakes companies often make related to the Sales Super Star is to promote this sole contributor, who is not a team player, into Sales Management.   In my 33 years in business, I have never seen that work.   More often that not, many Sales Super Stars self destruct.  And, if the day comes when the accounts stop coming in the door, the Sales Super Star is usually terminated, or forced to quit because amassed enemies, with long memories, within a company will show no mercy. 

As someone with a healthy ego, who has been successful in Sales,  my advice to Sales Super Stars is to be cognizant of the big picture and the long term.   Recognize that success is a team sport.   Instead of creating enemies within an organization, build alliances.   Develop a collaborative personality style.  Spend as much time networking internally as externally.   A healthy ego is healthy.   An out sized ego is destructive and usually leads to crash and burn, particularly if the Super Sales Star only has superficial knowledge, which is often the case.  

Managing Sales Super Stars takes a lot of time and energy.   There are days when it seems like more trouble than it is worth.  Yet, company growth and development is often tied to these personalities.   So, for better or worse, Sales Super Stars must be managed to achieve company success, even if it means a little pain and suffering for all concerned, now and then.    

Sunday, October 7, 2012

Managing Company Money

Simply put, profit is the difference between top line revenues and expenses.   As such, managing expenses is the key to profitability.   In our company about 65% of our expense line relates to headcount.   For that reason, as CEO of our company, I approve all new headcount to make absolutely sure we need to add staff.   And for us, adding staff could either be in one of our offices around the world, or in our off-shore engagement in India.  

In addition, I sign off on base pay to make sure that we have consistency in our salary administration and that we are not paying more for talent than necessary.   Obviously, this level of CEO involvement would not be possible in a Fortune 500 company, however, even in larger companies, new headcount in general, often requires senior management approval because of the fully loaded cost of people. 

The next big expense item is lease expense and or if buildings are company owned, property mortgage, tax, maintenance, insurance etc.   Often companies find themselves with too much space, which must be disposed of to eliminate unnecessary expense.   This leaves about 25% of a company's expense line as discretionary expenses that must first be prioritized and then managed.   These expenses are the responsibility of every employee of a company.  

Many years ago, we had a manager who was very focused on expense management, so much so that she controlled the doling out of pens.   This is an extreme example; but it makes the point that saving nichols, dimes and quarters add up to dollars that can impact profitability.   We once determined that we were spending $20,000 a year on file materials, when older files could be reused four or five times before becoming useless.   That one was a no brainer.   There are many similar examples of wasted money in day to day company management. 

We have now equipped our major offices with video equipment to cut travel costs.  It is highly likely that with focus, discipline and maybe a little passion, it is not too hard to cut discretionary spending by 10%, without negatively impacting company operations.   And, why not do it when employee bonuses are at stake.  

Aside from very nice working conditions and the typical employee benefits and recognition awards, we provide very few other perks for our employees because once offered they are hard to take away in Bad Times.   Free coffee and pizza Friday once a month to celebrate birthdays, anniversaries and our annual holiday lunches are the extent of our employee relations.    We do not fund first class travel for anyone, including me, the CEO of our company.   To do more would not only impact profitability; but the annual bonuses we pay our employees.   In essence, any money we waste is coming out of our bonus pool, so our employees are directly impacted in their paychecks.  

We take managing company money very seriously, which is usually the case with all successful companies.   The process starts with the President and CEO of the company.  I question all expenses and very often Just Say No.  In my 33 years in business, I have seen many companies fail that did not manage expenses.  Since we have been in business for more than 20 years, while many other companies have come and gone, it would appear that our strategy is the right one.     

Saturday, October 6, 2012

Managers Who Need To Be Loved

In the age old book, The Prince, Machiavelli poses the question, "Is it better for the Prince to be loved or feared".    This book has become a treatise on both politics and management in general.   Theoretically, anyone is a leadership position would want to be loved; but is it even possible when  tough decisions are often required in management.   On the other hand, there are managers that failing everything else use fear as their management style.  

Years ago, when I was a young manager working for a subsidiary of Merrill Lynch, the CEO of our company, with a Napoleonic Complex, kept a hard hat right outside his office door.   The implication was that when you entered his office, you were going to get your head beat in.  This fellow was a little tyrant and like all tyrants, he failed as a manager.   Fear is never a good long term management style.   In fact, Managers that use fear as their management style should not be tolerated because it is destructive behavior in an organization. 

Managers who need to be loved are problematic, as well.   These Managers usually cannot deal with conflict.   They want to say Yes to everything when No is the answer.   As I often said to our sons when they were growing up, "What part of No don't you understand".   And,  good managers must be able to make tough decisions.   Managers that need to be loved run from tough decisions and as such are usually pretty ineffective. 

There is a third choice and the one that I prefer as the CEO of a global company.   I neither need to be loved, nor do I want to be feared.   My goal is to be respected as a result of my experience, good humor and sound decisions, particularly during Bad Times.   Remember, the first job of a CEO is to insure the survival of a company, doing anything and everything necessary, within legal and ethical bounds, to make sure that a company is fiscally sound and in business to fight another day.   In bad times, that could mean lay-off's, or other cuts in spending, all of which requires tough decisions that often do not result in being loved.  

Making tough decisions, based on sound reasoning, not fear, should be the basis for respect.   Effective Managers cannot worry about being loved because that would be a road to paralysis.   Managers who need to be loved might be better placed in a government job, charity, or other non-profit organization; though it is hard to believe that even there, this management style would be beneficial.   In any case, if you are a Manager who needs to be loved, snap out of it, or find some other vocation that works for you. 

Friday, October 5, 2012

Account Management - New Reality

Years ago, Account Management meant relationship management.  And, while that is still true today, as a result of all the downsizing that has taken place in corporate America in the last 10 years,  the typical manager and our client contact often wears multiple hats in their company.   As a result, the ability to focus on any one function becomes difficult at best.  This often means that the interaction that we do have with our client contacts is usually to discuss problems, or exceptions to company policy.   These discussions sometimes involve higher cost than was anticipated, which is never a pleasant conversation, particularly if it means having to go to senior management for approval.  

As such and since Account Management is often focused on problem resolution rather than more positive social interaction,  it can be difficult to develop the kind of relationship that was prevalent years ago in our industry.   Our client contacts just don't have the time to attend the two day educational conferences we used to implement, or to attend our industry conferences because many of them do not specialize in our function.  This means that we are often dealing with client contacts that do not fully understand the function they have been asked to manage, which is really problematic.

About the best we can do is hold a series of hour long Webinars, throughout the year and encourage our client contacts to attend.   Occasionally, we can do a lunch or dinner tied to a semi-annual, or annual review; but at least in our industry, the days are long gone when we could establish a more social relationship, centered on the provision of information, that often was really beneficial to later problem solving.   

In many ways technology has made matters worse.   All of our clients and customers can access information at their finger tips, on line, that in the "old days" would have required personal interaction with one of our employees.  Obviously, this trend has positive service aspects; but it also results in less people interaction, which is not necessarily a good thing.  In 2013, we will attempt to remedy some of this disconnect by implementing video connectivity so that our employees can at least have face to face interaction when they do talk to our clients and customers.  

Putting a face to a name, as often as possible, will help with both Account Management and client and customer relations.   Account Management is critical to any business.   To do it effectively, we must face the New Reality of what Account Management means in business today. 

Thursday, October 4, 2012

The Budgeting Process - Not Pie In The Sky

When this Blogger worked for another company, every year, we did pie in the sky budgeting that never came true.   In other words, we assumed new business added to top line revenues that just never happened; but still built an expense line as though the money would be there to pay the bills.   The result was a Firm Annual Plan (FAP) that was anything but firm.   And, instead of comparing actual results to the original budget,  about every two months, our parent company asked that we adjust the budget so that there was FAP 1, FAP 2, FAP 3, FAP 4 and eventually even FAP 5.   To be candid, this process was just plain ridiculous and a bit delusional. 

That process was good experience for this Blogger.   As such, when founding our company more than 20 years ago, I was determined to implement more realistic and dependable budgeting.   While I really like the idea of Zero Based Budgeting, often discussed, where every expense is put on the table every year and justified before being approved in a new budget, that approach too is not very practical because every company goes into the year with various fixed expenses that cannot be cut.   Instead, we utilize a very practical and conservative approach to budgeting that has worked for us for years. 

First, we determine our top line revenue by modeling the likely business we are going to get from existing clients.   We include revenues from new clients signed in the the current year; but not yet fully realized on an annualized basis.   While this is only a projection of likely revenues, it is based on discussions with our clients as to likely activity in the coming year.  In other words, it is a best guess of the business we are going to get from existing clients; but at least it is better than pie in the sky that has no basis in fact. 

Once we have a top line revenue number, we then pressure test our expense line derived from our Strategic Plan for the year that is the basis for our potential expenditures.   This tells us two things.   Do we have the money to pay for the goals and objectives we have established for the year through our Strategic Planning Process.   And, if not, what are we going to eliminate because we have over reached beyond our probable revenue line.   Further, we establish our profit target through this process as well.   So if we determine we would like to achieve a 10% Pre-Tax Profit, we further add that number into the calculations.  

So, we have a probable top line revenue number likely to occur from existing clients going into the year.  This basically tells us what we can spend in order to achieve a 10% Pre-Tax Profit.  What is important in this process is that we do not include any estimated revenues from potential new clients, signed in the new year, even though we know historically there will be some new revenues.   The reason for this is that unless we were to sign new business by no later than the end of the first quarter, its probable impact on the new year would be minimal because it takes several months for our revenue streams from new business to come in the door.   Our expense line is determined by what it would take to service the business indicated in the revenue line.   Every other expense becomes discretionary and subject to prioritization. 

Some expense lines usually turn out to be a traditional percentage of our budget.  For example, we usually spend about 10% of our budget on Sales and Marketing.   For our business, this appears to be a good rule of thumb.  Clear patterns do emerge every year.    Most important, this process is worst case budgeting, rather than best case, pie in the sky budgeting that ultimately includes a basis for paying bonuses in accordance with our profitability target.   As such, we have no need to adjust our budget as was the case when I worked for another company, so we can compare actual numbers with budget on a monthly basis.    While unknown variables can impact our budget, this appears to be the best way to avoid surprises. 

Managing to a budget every month is the way to insure reasonable profitability.   For the most part, we don't spend money we don't have.   And, we rarely need to use our credit lines to fund our operating expenses, except maybe to deal with seasonal revenue variances.   We run a very tight ship, which may be the reason we have been in business for so many years, while other companies have come and gone.   This is the lesson learned.   Don't count on pie in the sky that may never happen.   If it does happen occasionally,  it just means higher bonuses, which is never a problem for anyone. 

Wednesday, October 3, 2012

Disaster Recovery Planning

Bad things happen to good companies, which is why Disaster Recovery Planning is absolutely critical.   Whether dealing with an act of God, like a typhoon, tsunami, earthquake, hurricane or tornado, or an act of man, all of which can cause an office, or plant closure, well managed companies have Disaster Recovery Plans in place in an attempt to eliminate down time as much as possible. 

Since computer systems are so important to the running of any good sized business, particularly for global companies, there must be redundancy.   In our case, our primary data center is in a hardened co-location site built to withstand natural disasters.   But, just in case, we have a completely redundant secondary data center in the event our primary site goes down  in one of our office locations.   This is a very costly approach; but certainly a lot less costly in terms of loss of revenues and potentially clients in the event our primary data center was wiped out without the ability to flip a switch to get us back in business within a reasonable period of time; certainly not more than 24 hours. 

However, Disasters come in many forms that can cause business disruption.   As a result,  our Director, Corporate Services is in charge of our Disaster Recovery Plan to make sure that we have a plan in place to deal with any eventuality we can conceive.   Our Plan includes a call/email tree to inform our employees, clients, customers and suppliers of any service disruption.  In addition, since we have redundant service centers in place, we can actually switch work, for a short time, to one of our other office locations until we can properly deal with the disaster.   This includes shifting work from our off-shore service center in India back to the United States in the event that was necessary. 

Disaster Recovery Planning takes time, resources and work.  It is easy to push this process to the back burner; but very dangerous to the health of a company.   The time put into this process, on a regular basis, could determine if a company survives a Disaster or not.   Senior Management of every company should make sure that Disaster Recovery Planning is in place.  Failure to do so would be a huge mistake.   Remember, the first job of the President and CEO of every company is to insure the survival of the company doing everything possible within legal and ethical bounds.   Disaster Recovery Planning should be a very high priority.