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Monday, 29 August 2016

Moving Up To Be Chairman? It Can Be Very Painful!

A very sensitive issue has been exercising the minds of some of my Vistage chair colleagues of late and it can be summarised as follows:

The owner/founder/Chief Executive of an SME decides that the time has come to move upwards to the position of Chairman.

To enable this a CEO/Managing Director has been appointed to run the business on a day-to-day basis ostensibly with full autonomy.

The Chairman, however, cannot leave well alone and continues to take an active although unspecified interest in the daily workings of the business that the new CEO/MD views as interference.

Question: what can be done to resolve the situation?

I can fully understand the Chairman wanting to keep his/her eyes on what is happening in the business.  After perhaps many years in an executive role it is very difficult to readjust to one that is largely advisory and sometimes not even that.  The level of trust that is needed for the Chairman to accept the way that the new CEO is running the business could actually be an improvement is one that can be very difficult to achieve or even accept.

The discussions in the Vistage chair community covered a large range of solutions most of them based on some form of outside help for the Chairman to understand the new role and to at least modify his/her approach as a consequence.

For example we have in Vistage several excellent speakers on the whole subject of Directorial roles.  In addition the Institute of Directors publishes a very good interactive Competency Framework for all functional directors.

All of this is admirable and can often contribute positively to the discussion.  However, we must realise that this dilemma is based on emotion rather than rationality and consequently can be an extremely painful exercise for the Chairman.

The feeling is that he/she is being sidelined even though it was their idea in the first instance, doesn’t know what is going on in their own business and generally feels as though they are not needed anymore.  That can be a deeply emotional issue.

As a consequence they try not to interfere while checking that things are going as well as can be expected.  The effect is that everyone in the business sees the Chainman as usual, accepts that there is another member of management there as well and isn’t always certain as to where the power now lies.

There is possibly every reason to suggest that the role of the Chairman needs to be learned because it is very different and demands a great deal of trust in the new regime and its methods.

The question is: does the Chairman understand the new role and importantly, is he/she willing to learn new tricks?  Even more importantly, who is going to suggest that to the Chairman?

There is an old story about the mice in a barn who were being decimated by a cat that regularly dined on a member of the group and they convened a meeting to discuss the problem.  One clever mouse suggested that the cat moved very silently so if it had a bell on its collar the mice would hear it coming and could get out of harms way.

This idea received great enthusiasm and acclamation until one of the mice said:

“Yes, but who will put the bell on the cat?”

I wouldn’t presume to offer a magic bullet solution to this difficult emotional issue because there isn’t one.  As I said previously every situation is different.

Appointment of a successor even in a family business can be fraught with difficulties especially when the Chairman knows that it is the right move but is reluctant to let someone else look after his/her baby.

Whatever the situation it needs to be treated with great discretion, compassion and sensitivity on the part of the newly appointed leader.  It will take time and that can be an irritation but with care and understanding the situation can be resolved.










Sunday, 21 August 2016

Too Much Fire-fighting? Concentrate On What Is Important!

One of the constant cries that arise from a busy leader (or anyone else for that matter) is a complaint about the shortage of time.

This is, of course, nonsense because we all have exactly the same allocation of time as everyone else.  It is just the way in which we allocate the requisite amount of time to the action or inaction in hand.

Professor Stephen Hawking says that asking the question of what was there before the big bang is like asking what is north of the North Pole.   It is, on the face of it, an unanswerable question because the general onion is that there was nothing or in Kabbalistic terms, no-thing, prior to the creation.

Inherently there was neither space nor time both of which came into immediate existence at the big bang. Space was ever expanding to what we call infinity and time was reckoned from that point, 13 billion years ago.  Even that is an estimate based on our conception of time.

It is interesting to take a quick stroll through Google to see what brilliant minds have made of this concept and have tried to define time.

For example:

That which is measured as seconds, minutes, hours, days, years, etc.
That doesn’t define time, merely the way in which we measure it..

A non-spatial continuum that is measured in terms of events which succeed one another from past through present to future
Once again this depends on how we see the way in which time is measured.

The Greek philosopher Plate expressed it more poetic terms:
Time is the moving image of eternity

The fact that great minds have been unable to derive an understabable concept of time without resorting to the method of measurement is a testament to its mystique while at the same time (!) dominating our very existence.

Money has been made from training courses on Time Management when the real issue is not in terms of management but rather of time allocation.

This, I suggest, depends then on what the individual considers to be important and that needs to be prioritised.  If we have a certain amount of time in order to achieve something then it makes sense to be sure that the right amount of time is allocated to the action.

That is obvious but how many times do we allow things that are actually only urgent to get in the way of those that are important.

Consider this thought.   In business, urgency is almost always communicated to us by someone else.  If we succumb to the tyranny of the urgent, more often than not the really important takes a back seat and a severe attack of fire-fighting takes over.

If we consider one of those quadrants so beloved by consultants this time with the vertical axis labelled Important and the horizontal axis as Urgent, then the box in which the leader should be operating is the Important/not Urgent.

It is self evident that the not Important/not Urgent box can be discarded and the other two should be delegated.

The art of the management of the time available to us is to decide what is important to us while not necessarily being urgent and then make the time to do it.

Sometimes, by the way, doing nothing is a great option.  Golfer Sam Snead said that we should take time out to smell the roses.  Taking time out to think is never wasted and it is more often than not the most productive thing that a leader can do.

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Sunday, 14 August 2016

What D Your Sales People Sell? It Shouldn’t Be Just The Product!

How good are your sales people?  More to the point, how good are your sales methods and how good are your sales training methods?

A further question to ask yourself is, what is the focus for our selling effort?  Be careful if you discover that your sales people are concentrating on the product without any reference to the needs of the customer or indeed the true purpose of the sales function.

So many businesses think that the only function of the sales force is to sell the product or service and they reward this by offering commission on the sales achieved by the sales force.

Commission by definition encourages sales people to sell more product irrespective of the needs of the customer and it also encourages avoidance of follow up calls to ensure that the customer is satisfied.

Think about it.  When you are the customer what do you look for when a sales person comes to see you? 

In my earlier days I was a visiting lecturer at a noted Business School and was giving a presentation to a group of senior executives on sales and selling.  I asked them their opinion of the quality of their sales people and received a universally positive response.

I suggested that it was great that they were so confident about the quality of their selling effort and asked them what was their general opinion of the sales people from suppliers, either actual or hopeful.

Again their opinion was almost unanimous.  They thought that the standard of the people who came to see them to sell them something was pretty poor and sometimes dreadful.

I suggested that they take a few minutes out to think about what they had said.  They were correct, of course, that the general standard was poor and it made them look a little more forensically about their own people and methods.

The fact is that many businesses measure their rate of success by the invoiced sales they achieve when the gross profit is the real income of the business.   Again many businesses allow their sales people to negotiate prices and this results in the drive for the top line irrespective of the real needs of the business.

I am not an advocate of the business being bottom line driven at all costs but every business needs to make a return in their activities.  Net portability is derived from the gross margin achieved and this should be the main thrust of whatever the business is doing.

Selling price needs to be fixed by the business and should not be at the whim of a sales force.  Reward your people by all means but preferably against the gross profit they achieve.  The drive will then be to achieve higher rather than lower selling prices.

A colleague of mine in the chair community of Vistage USA says that we should sell the problem that we solve rather than the product.

Just think about it.  Every product that we buy either commercially or personally is bought for a reason.  We buy toothpaste to keep our teeth clean and the supplier sells toothpaste to the shop so that it can satisfy the needs of the customers.

Selling has often been described as an exercise in building relationships.  When those relationships are strengthened by solving the buyers’ problems then they are likely to be longer lasting.

The classic error that so many sales people make is to list with enthusiasm all the products that they have to offer and wait then to see if one of then strikes home.  Far better to ask questions to uncover the problem that they can solve, keep quiet and listen.

Good training, change of emphasis and constant monitoring of face-to-face performance can change the ethos of a sales force and it is well worthwhile to implement such a programme. 

Remember, it’s the problem that we can solve, not just the product that we sell.

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Sunday, 7 August 2016

Someone Made a Mistake? Sort It Out And Avoid The Blame Culture!

Those who know me are well aware of my rooted aversion to the BBC Radio 4 Today programme primarily because of their interviewing style.

The cricketer and commentator, the late great Richie Benaud, used tell new entrants into the world of communications that they should "never ask a statement".  How often does that happen and I confess to letting it irritate me.

It normally starts with "Do you think......?" and continues with a statement that is the opinion of the interviewer, in other words it is usually a biased question.

Even more toxic is that question after discussing a problem that starts with "Who do you blame?" and then moves into "heads must roll" or "someone needs to be held to account".

It is all very negative and leads to people avoiding making mistakes in any way which says that they tend to avoid doing anything with even a modicum of risk that might end up with a mistake and a reprimand.

In other words the blame culture is an inhibiting factor rather than an influence intended to encourage imaginative thinking and a willingness to take risks.

Generally speaking incompetent people need something or someone to blame for any perceived shortcomings. It leads to closed minds and low morale.

On the other hand great open-minded leaders value their people, they encourage them, they trust them, they reward them with praise and they get out of their way and let them get on with their jobs.

This is not to be a closed mind to the possibility of mistakes occurring. The clever thing is the way to handle the consequences

There is a story of a business where an employee made a mistake that led to a cost to the company in excess of £250K.

He immediately offered his resignation that was just as promptly rejected.  The leader told him that he was the best person to design a process to make sure that it wouldn't happen again.

Perhaps this is a rare and very enlightened approach to the situation. Nevertheless it is eminently sensible and accepts we are all vulnerable to the occasional error.

I accept that constant and repeated mistake making needs to be handled in a different and more positive manner.   Even so if you consider how infrequently this happens we can see that special though unusual actions are necessary.

There is no question that regular scheduled one-to-one meetings between the leader and members of the team are extremely valuable. Not only do they foster a better mutual understanding but also they encourage both sides to give and accept positive challenge.

A great one-to-one needs to be to the agenda of the team member rattan that if the leader.  The leader can prompt information and discussion through judicious questioning, drilling down in fact.  It is a ritual part if the leadership coaching function.

Leaders need to be on their guard against asking biased closed questions especially during one-to-ones with their ream members. We always need to ask the open questions that will bring out the deeper feelings of team members.

Rudyard Kipling wrote a poem that started:

"I have six honest serving men
(They taught me all I knew)
Their names are What and Why and When
and How and Where and Who"

Use these words as starters to any question and you are likely to have a considered response rattan than a simple Yes or No. By the way, try the What Else? question as a follow up then sit back and just listen.

You may well be surprised by the result.  Above all avoid looking to allocate blame for anything that has gone awry.  It is a futile exercise and will close down any reasoned debate.

An enlightened approach to resolving an error means that you take it seriously while accepting that we are not all percept, inclosing
ourselves.


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