First Time CEOs

By Mike Myatt, Chief Strategy Officer, N2growth

Don't just roll the dice as a new CEO...Today’s Myatt on Monday’s question was posed by a new CEO who asked: “Do you have any tips for first-time chief executives of a start-up company that would allow for a faster and more effective transition?” Virtually all of the advice and counsel I provide to CEOs is just as applicable to first-time CEOs as it is to tenured executives. Moreover, while start-up and early stage companies certainly have unique issues, great executive leadership is really not life-cycle centric. While I could suggest you buy a copy of my book, or read other posts contained on this blog (not bad suggestions by the way), I thought it might be interesting to see how other CEOs would answer the question. In the text that follows, I have provided a variety of answers to today’s question, which have been put forth by a number of different C-level executives and directors… 

“Take a very critical look at your product, how competitors will respond, and why customers are going to give you a chance. The high tech landscape is littered with companies that had great ideas and were even first to market, only to be crushed. Netscape is a great example, along with countless PC companies, dotcoms, and yes even wireless companies. Patents in theory are great, in reality they are easy to get around and expensive to defend, so you can’t hang your hat on that. The bottom line is that founders are rightfully proud of their product, company and strategy; and this often blinds them to the competitive threats in the market place and the challenges of entering/penetrating the market and gaining market share. The best question to ask is why.”
CEO of a Service Company

“Retain a CEO Coach…someone who’s been there before and knows how to avoid the land mines that you would undoubtedly uncover if left to your own devices”
CEO of a Technology Company 

“All that matters when you are starting is funding. Period. If you don’t have the money backing you, the best laid plans in the first 100 days, or rallying your troops to support your efforts won’t matter. Number one priority should be an excellent member of the team who is LOCKED into the venture community that has done this before.”
   ~ CEO of a Technology Company

“Build a customer value analysis spreadsheet or table that succinctly quantifies the value to a potential customer. If you can demonstrate an overwhelming or compelling customer benefit (e.g. X months payback, Y percent IRR [internal rate of return] etc.), then investors will be intrigued. It’s not the technology; it’s the value it creates for customers, and your ability to defend your unique intellectual property, through patents and trade secrets, that should be emphasized.”
Senior Executive of an Energy Company

“I cannot overemphasize the importance of having a skilled and trusted finance professional on your team from day one. I would recommend that you not even make the first phone call to a VC or Angel without this person in place (either a full time or trusted contractor/CFO for hire type). Second, you must get referenceable customer traction (installs and most importantly revenue, however little) as soon as possible. Third, from day one, make sure you build a workable/trusted alliance with the founders and that they are in agreement that you ’are‘ the CEO both outside and inside the company.”
CEO of a Software Company

“You need to take some fast actions on low-hanging fruit to show the organization and team that you are quick on your feet and a decisive leader. They (your new team) all know the low-hanging fruit, pick some. And as the CEO, you are responsible for the Corporate Culture, so make it clear early on what type of culture you are driving.”
CEO of a Telecom Company

“Talk to everyone in the organization and in the industry as soon as possible; deliver bad information immediately (and don’t try to ’spin‘ it); and remember to breathe!”
CEO of a Consumer Services Company

“1. If you haven’t already, draft a ‘first 100-day’ plan.
2. Start-ups and early stage companies are fun to run; but you need to move quickly….constantly work at creating a higher sense of urgency — even when you think things can’t possibly move any faster.”
President of a Media Company

In the start-up operation, it is very important that you do the ‘SWOT’ analysis (Strength, Weakness, Opportunities and Threat). Moreover, a pilot run based on a predetermined period would unfold all the problems related to your start-up operations. Isolate them, and find solutions and alternative methods to address the same and move forward. The key is to have a positive cash-flow at the end of the first year.”
President of an Apparel Company

“Surround yourself with trustworthy people as quickly as possible. With so many decisions to make in a short amount of time, you will often have to move forward without having all of the information you would want. This works best when you can tap into people who have relevant, specialized expertise and are not afraid to challenge your thinking, while at the same time have demonstrated a commitment to making the overall business successful (not just about themselves). Then you will be more likely to make fewer critical mistakes.”
Senior Executive of a Biotech Firm

“Understand the culture and the current people who play in that culture. I found that some have hidden agendas that will undermine what you were brought in to accomplish.”
Senior Executive in the Food and Beverage Industry

“You need to be a good listener. Hear what your people have to say about what is working and what is not. Make them feel that they are part of the change process and you will have their buy-in along the way. Create an action agenda that outlines clearly where the company is going and what needs to get done along the way to achieve the desired results and continue to keep people updated on the company’s progress.”
Senior Executive of a Pharma Company

“Make sure you have a clear understanding of the priorities of your Board of Directors, both individually and collectively, and establish good frequent dialog with them. No matter how brilliant your action plans and strategies, you must be in alignment with your board’s expectations and priorities to be successful as CEO.”
Managing Partner, Private Equity Firm

“Take some private time. Don’t let the job define you.”
Senior Executive of a Telecom Company

“One sure way to win respect and loyalty is to find out what the key priority of the team was that was dismissed by the former CEO. If there is any kind of consensus that the company was being held back in an area by your predecessor, you can look like a hero; show that you listen to and value your subordinates’ ideas, and there is a good chance that they are right and the company will pick up in performance.”
CEO of a Marketing Company

“Leadership is the key attribute for ensuring success as a CEO; and leadership, in my opinion, is very much driven by one’s ability to manage expectations of the numerous constituencies a CEO must deal with — employees, board members, investors, strategic partners, community, industry associations, etc. To accomplish this requires clear and precise communications with all, combined with the ability to adjust your/their expectations as critical information is obtained, assessed and addressed.”
~Senior Executive of a Financial Services Firm

“My advice would be to develop your personal networks while in the CEO position, to have a support system outside the company, and to develop a net in the event that the position does not work out to your expectations.”
~Director of a Phara Company

“It is all about expectations! Or, more to the point, the difference between expectations and reality. Try as we might to control the reality of our surrounds, it is far easier to control (or at least moderate) the expectations.”         ~ CEO of an IT Consultancy

“If possible, a few days before you actually start, have the HR person or CFO hold a short meeting of all your direct reports to be; the person controlling the meeting asks, ‘What do we want to know about John/Jane Doe?’ The second question asked is, ‘What do we want him/ her to know about us as a group?’ The third question is, ‘What do we want him/her to do for the company?’ The fourth question is, ‘What do we want him/her to do for us as a group?’ The responses are noted and presented to you when you first take the chair. It can be quite surprising what comes out of these questions asked when you are not there and may never know (at least for sure) who asked what, unless the one raising the question tells you.  The one critical point is that when you reconvene the group to give them your answers, to be done within 72 hours of your start, you are totally honest and candid, as you will be measured against your initial statements. This does not mean that actions cannot be flexed from the initial statement but do them with recognition of what you said and give comment as to why, so all can understand; it helps the trust factor significantly. Obviously the objective is to shorten the learning period in a structured way, and for me it has always proven beneficial.”
CEO of a Manufacturing Company

“1. Meet with your board members individually (typically over lunch or dinner).
2. Find a very good mentor.
3. Stay calm, stay cool, stay collected.”
CEO of a Bank

“It is all about making money! Nothing more, nothing less. You’re in because they made a bet that you will make them more money than the other guy. You’re out because you did not make very much money for them. Don’t ever forget that.”
CEO of a Professional Services Business

“What is success as a CEO? It’s simply this: Living life without fear in your gut (living with peace) and looking back and being proud of yourself for the positive impact you made on people, both high and low in rank. You see, it’s all about your attitude and how people see you. What’s inside can be contagious.”
CEO of a Manufacturing Company

“Do not hesitate to make a decision. Hesitation or being indecisive will become rampant in the organization. Do not be shy about laughing at yourself in front of others. Never compromise your personal ethics and beliefs. Finally, know when it is time to go home. It is a job.”
President of a Manufacturing Company

Due Diligence – Not Optional…

By Mike Myatt, Chief Strategy Officer, N2growth

It pays to do your homeworkAs much as you wish it might be so, due diligence is really not an optional consideration. Have you ever made a decision based upon what you thought was a thorough understanding of all pertinent information only to find out after the fact that you didn’t know as much as you thought you did? It’s not much fun to find yourself on the wrong side of the information gap…Incorrect data, omissions, information that is biased or skewed, misrepresentations, misunderstandings, or any number of other scenarios that lead to the creation of information gaps can be very costly in today’s business environment. In today’s post I’ll discuss the critical nature due diligence…

Quality information enables good decisioning. While at face value this would appear to be a rational statement, the problem lies in the fact that it is also a relative statement…Over the years I’ve witnessed business people that make critical decisions based on nothing more than gut feel or instinct. I’ve observed others that rely on the use of detailed internal checklists and/or processes to validate their assessments, and I’ve known others who won’t make a critical decision unless they hire third party professionals to conduct due diligence on their behalf. Regardless of your method (or lack thereof) managing information and decisioning risk has never been more important than it is today.

With the constant pressure to compress transaction timeframes in an effort to remain competitive, many firms are actually doing less due diligence on larger transactions involving more potential risk…While this may sound ridiculous, the sad truth is that it is a scenario which is all too common. Hedge funds, venture capital and private equity firms, asset managers, investment banks, or corporations involved in anything from early stage investments to real estate transactions to mergers and acquisitions have intense pressure to get deals closed quickly in a market that has never been more complex to navigate. 

While you by no means should ignore due diligence, you also cannot allow yourself to fall prey to being paralyzed by analysis paralysis. To balance the main topic of this post with the transactional realities present in today’s market you should also read a previous post entitled “Timing Is Everything.”  

Let’s put aside the obvious reason for thorough due diligence (making a good deal), firms that don’t have rock solid due diligence capabilities may find themselves in arbitration, litigation or under the scrutiny of regulators as a result of poor decisions. Public companies dealing with Sarbanes-Oxley should be terrified of not crossing every “t” and dotting every “i”…

Bottom line…No amount of due diligence can protect you against flawed decisions or a bad deal, but if a thorough due diligence effort can manage or transfer risk in the majority of situations it is well worth the time, effort and cost to do it properly. If you short cut the process you’ll likely find yourself being held accountable for that decision someday…

CEO Profile: Steve Ballmer

By Mike Myatt, Chief Strategy Officer, N2growth

Steve BallmerI was recently asked if I would share my insights on some of today’s high-profile CEOs. I assume that the thought underpinning the inquiry was that since the majority of my working life is spent coaching and mentoring CEOs, or evaluating and assessing CEO performance for boards of directors and investors, that I might be able to provide some insights on their performance. I thought this might be an interesting exercise, so today’s post will be the inaugural piece in a new category entitled CEO Profiles. I’m going to attempt to provide a balanced scorecard approach in reviewing the performance of the lucky CEOs profiled so that there will be actionable takeaways from each assessment. You are invited to send me the names of CEOs that you’d like to see profiled, and if they’re not a current or past client I’ll add them to the queue.  Today’s Profile…Steve Ballmer, CEO Microsoft.

When it comes to CEOs, Steve Ballmer may be one of the more controversial chief executives of the last several years. There isn’t a lot of middle ground with Steve…you are either a big fan, or not. On the plus side, Steve has been running things at Microsoft during a time period when technology has been changing and evolving faster than ever before, and the company has continued to operate profitably under his leadership. On the negative side, Steve’s tenure has run coterminously with Google’s unprecedented rise, the failed Yahoo acquisition (and many other missed M&A opportunities), a plodding mobile effort, and many other sub-par initiatives. So, this begs the question, is Steve a winner because of Microsoft, or is Microsoft a winner because of Steve?

Steve Ballmer is a living dichotomy, which perplexes many people smarter than me. As perhaps is the case with most people, Steve’s most admirable qualities (his passion and company loyalty) may be the root cause of some of his greatest failings as a chief executive. His passion and loyalty while sometimes inspiring and motivating, have also at times led to blatant acts of arrogance and impulsivity resulting in PR disasters.  To get a better feel for Steve I offer the following two videos for your review. The first video demonstrates the completely contagious passion and confidence that Steve brings to the table as a leader. By contrast, the second video shows the impulsivity, arrogance, and lack of decisioning skills that has continued to plague his career:

Following is my scorecard evaluation of Steve Ballmer rating him on a scale of 1 to 10, with 10 representing the highest mark:

  1. Talent Management- 7.5: Steve is well know for his nose for talent. He is a prolific recruiter, and has been involved in most all of the key hires Microsoft has made. He is a motivator and a believer in developing a positive culture. My only knock on Steve in this area is that he doesn’t always seem to recognize where Microsoft’s considerable talent should be deployed to generate the best return.
  2. Brand Champion – 5:  This is a tough one for Steve…If I were solely grading his ability to evangelize the corporate brand to Wall Street I would score him much higher. However his constant PR gaffs, his abrasiveness, and his impulsivity don’t make him the ideal corporate spokesperson. 
  3. Innovation – 3: Unlike another Steve (Jobs), Ballmer is a lagger and not a leader when it comes to innovation. Worse than his own lack of innovative vision, is the fact that the company as a whole has embraced a “big is better” mentality, such that they’re sold on the concept that their size and history will always insulate them from changing market dynamics…
  4. Leadership/Decisioning – 5: Steve has leadership skills and ability, but they are often misdirected in their application. History is full of examples of inspirational leaders who were ineffective. Getting someone to follow you is just a small part of the battle; knowing where to lead them is more important.
  5. Intelligence – 8: Is Steve a bright guy? Sure he is…Is he the smartest CEO around? Far from it…You don’t accomplish what Steve has accomplished by not being intelligent. That being said, raw intelligence and savvy business acumen are not always one in the same. The raw tools are there, but the refinement, discipline, and polish are clearly missing.
  6. Strategic Vision – 5: I give Steve credit for recognizing he has some huge problems facing him, but I don’t give him much credit for how he is addressing them. Microsoft’s vision is being constantly eroded by other companies who embrace social relevance, innovation, and velocity as key business drivers. The Microsoft strategy and tactics are outdated, and misdirected. The fact is that you cannot play effective offense or defense with a poor game plan.

I don’t believe Steve Ballmer will remain CEO of Microsoft for much longer…The company needs a fresh perspective, and a new focus, which Steve cannot offer.

Employee Onboarding

By Mike Myatt, Chief Strategy Officer, N2growth 

Get it right from the beginningEmployee onboarding is not something for CEOs to take lightly. The ability to scale your company will be largely dependant on your ability to recruit, retain, and properly deploy new employees.  While certainly important, recruiting is not the end-game, but rather it is the very first step in the talent management lifecycle. Over the years I have watched great recruiting efforts fall prey to a sudden death when everything that management communicated to the new hire during the interview process was completely unwound by the reality of what they experienced on their first day on the job.

These days there seems to be a “buzzword” for just about everything in business. This article will focus on the topic of employee “onboarding” which is a combination of employee orientation, integration, and socialization. Onboarding is part compliance, part training, part PR, part branding, and part cultural socialization. A new hire can finish his/her first day on the job by feeling exhausted, frustrated and second guessing their decision to come to work for your company, or they can go home feeling energized, motivated, valued, and lucky to be part of such a great company.

Never will your employees be more motivated and impressionable than on their first day of work. You can recognize this as an opportunity, and exploit the dynamic for the mutual benefit of all concerned parties, or you can waste the opportunity the choice is yours. The guidelines listed below will help you create an employee onboarding system that will add value to your recruiting efforts:

  1. Develop a new hire punchlist that coordinates efforts between HR, Admin, IT, MarComm, Legal and Accounting departments so that nobody is caught off guard or is unprepared for the arrival of a new employee. This simple step will allow for enough lead time to coordinate the logistics of securing work space, provisioning computers, phones, business cards and office supplies, for the configuration of security access and permissions, the preparation of press releases, preparation of training, to allow for payroll and benefits to be set-up etc. 
  2. Assign all new employees a mentor, and make sure that the mentor is not on vacation or under deadline during the new employee’s first few weeks on the job. The mentor should send out an introductory e-mail to all employees in advance of the new hires start date providing a brief background on the employee, as well as an overview of the position they were hired for.
  3. Plan out and/or script as far into the future as possible for all new hires. At a minimum their first week should be scripted and preferably their first 90 days. The schedule should include orientation, training, shadowing more tenured employees, regular interaction with their mentor, etc.

Nothing dampens the spirit of a new employee faster than having them show up for the fist day of work only to sit in the lobby for an hour while the administrative staff attempts to figure out who they are and where they’re supposed to be. Remember deployment begins on day one and the first day on the job will set the stage for how the new employee feels about both the company as well as their position within the organization.

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Improving Sales

By Mike Myatt, Chief Strategy Officer, N2growth 

Improving SalesThe topic of improving sales should be near and dear to the heart of any CEO. Is your revenue flat or declining? Has the market shifted such that your sales model is showing signs of obsolescence? Are you tired of hearing the same old excuses from your line managers and staff professionals? A challenge that every CEO and entrepreneur is faced with, is the pressure to create consistent quarter-over-quarter sequential growth in revenue and earnings in an ever increasing competitive market. In today’s post I’ll put forth some suggestions to both help you assess your sales model, and to take the right steps towards jump-starting new sales…

The first thing to do when assessing your sales model is to take a giant step back, and critically examine the current landscape. You can’t fix a problem that you don’t understand, and implementing change for the sake of change will likely only make matters worse. While there are few one size fits all recommendations with regard to improving sales, there are some basic principles that if applied situationally can have an immediate impact on catalyzing sales. The following suggestions should at some level have applicational value for anyone reading this post concerned with increasing sales revenue:

  1. Upgrade Sales Techniques. Like any other professional discipline, sales methodologies have continued to evolve in the sales arena as well. However unlike more technical practice areas, many sales organizations still operate with the same principles and techniques they were using in the 70’s and 80’s. Traditional sales strategies proffered by sales gurus 20 or 30 years ago are not nearly as effective as they once were. Trust me when I tell you that your prospects and customers have heard it all before. They can see the worn-out, old school closes coming a mile away. They can sniff antiquated selling strategies and will immediately tune out on presentations not deemed relevant. If your sales force is still FAB-selling, spin-selling, soft-selling or using any number of outdated selling methodologies, your sales are suffering whether you realize it or not. If you are operating on a franchised one-size fits all sales model, you are likely missing substantial opportunities and are not even aware of it. Read “Don’t Negotiate…Facilitate” and teach your sales force to become true professionals focused on helping their customers for all the right reasons vs. closing the big deal for personal benefit. 
  2. Assess your Go-To-Market Strategy. Many companies have used a singular go-to-market strategy for years without ever examining the benefits of expanding their horizons. How do you sell your products and services? Can pricing be modified, increased or tiered to create more revenue per sale or greater lifecycle value? Can you expand your distribution channels, create more velocity through existing channels or both? Are you maximizing multiple mediums and markets? Are you leveraging strategic partnerships and alliances? Can you create other revenue centers around existing product lines? Effectively managing distribution efforts can afford many new sales opportunities.
  3. Assess your Brand. How is your brand perceived in the market? How are your products and services perceived in the market? Has your branding evolved over time by default, or is it actively managed as a strategic asset? Have you chosen the proper brand architecture with the right brand components? Is your brand equity recognized and growing, is your brand in stealth mode, or do you have a brand in decline? A strong brand can leverage selling opportunities where a weak brand can taint selling opportunities. The choice is yours…choose wisely.
  4. Assess the Competition. Conduct a competitive analysis. Which competitors are market leaders or lagers, and where do you objectively fall within that group and why? Is your competitive positioning by design or by default? Evaluate competitive opportunities looking for low cost, high return selling advantages. Profile key competitive accounts that would make an immediate impact if you were to gain their business, and develop strategic and tactical plans to acquire that business. Could there be a possible JV or merger with certain competitors that would be both accretive and synergistic?
  5. Assess your Talent. Do you have the right sales talent performing the right duties for the right reasons? Are you maximizing the sales efforts of your top talent by leveraging their efforts and supporting their needs? Are you commoditizing support functions by driving them down to the lowest possible level with the best available talent? Do not tolerate non-performers. I’ve always subscribed to the philosophy that the only thing worse than someone who quits and leaves, is someone who quits and stays. You must constantly seek to drive your non-performing reps to an intersection of choice…they either need to step-up or step-out. By always looking to upgrade the bottom 20% of your sales force through development or termination you will consistently raise the mean. Are you looking to recruit your competitor’s top producers? Is your sales team mentored, trained and developed, or are they ignored? If you expect A level performance from B and C level talent you are likely to be disappointed.
  6. Assess Your Selling Cycle. How long does it take to close a sale and what is the average sale? Can you compress the sales cycle, increase the average sale or both? Can you increase the quality of the sales being made? What I mean by this is can you focus your selling efforts on relationship sales that have significant lifecycle value as opposed to one-off selling opportunities or adjust the mix to favor the former over the latter?
  7. Assess your Sales Plan. Yes I said sales plan, and no this doesn’t mean a pipeline report. If your sales force is not accountable to achieving the attainment goals outlined in a sales plan it is likely that your sales organization operates like a rudderless ship. A sales plan is much more than a production quota. In addition to production hurdles a good sales plan will talk about product mix, account mix, penetration, reach, profitability and other important key sales metrics.

The bottom line is that selling is not all finesse and innate ability. While highly productive sales teams certainly leverage the finesse and ability of their talent, they also support the talent factor with strategy, systems, support and resources. You can clearly engineer your sales to new heights of success with commitment, knowledge and attention to detail. However the most important factor in selling is the client/customer/end-user. If you don’t engineer your sales process around the client, your client relationships will vanish before your very eyes. I would strongly recommend reading “Understanding Your Customers.”

Good luck and good selling.

Why Coaching Works

By Mike Myatt, Chief Strategy Officer, N2growth

If you watch this video clip and don’t walk away with a complete understanding of why coaching works then there may be no hope for you…All kidding aside, we all need a coach whether we realize it or not. As a CEO Coach my mission is to help clients become better and accomplish more than they could if they were left on their own. The simple truth of the matter is that coaching works. Regardless of how some people spin their story, there are no self-made individuals, and everyone is better-off with someone in the corner pulling for them. I hope this video encourages you to move past your comfort zone and be your best…