Practical Advice for Businesses in Crisis – Emerging

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The following is a guest blog written by Mike Sayre.  It is a companion to the interview with Paul Gibbons titled Impact-Leading Change in the Digital Age that aired April 21st, 2020 on Innovating Leadership, Co-creating Our Future.

 

What to start pushing forward on as you think about emerging from this crisis. You do need to push forward!

In the a previous two article, you learned about communicating openly and honestly with your team and understanding your cash and credit resources to push forward. But what do you push forward on?

Because this blog series is meant to be both practical and tactical, I am assuming that you and your company already have a mission, vision and values that are all in alignment and are the basis for the culture of your business. If not, please check out my At C-Level blogs 2, 3 and 4 at the Innovative Leadership Institute website.

As I write this, much of the world is in some kind of lockdown status for “non-essential” businesses. A major indicator that your business is not as essential as you might like it to be, is that during the pandemic, your business was either designated as “non-essential” or your sales dropped like a rock and will take months, if not years, to recover. Whenever your sales are falling off significantly, most of the following applies as well. You always want your business to be “essential” to fulfilling the needs of your customers!

Of course, there are varying degrees of “essential” and some businesses will rebound more quickly than others. What degree of “essential” is your business?

To get a gauge on that, ask yourself, “What are people doing or buying right now instead of what we provide and, more importantly, why?

Then ask yourself,

  1. If the pandemic ends tomorrow, will they immediately come back to us as customers?
  2. If not immediately, is there something we can start doing now to incentivize them to come back sooner?
  3. Is it possible they will continue on with what they are doing now and not need us at all, or nearly as much, going forward?

In any of these three cases, it’s time to engage with your customers and your team to come up with appropriate incentives to insure they come back and as soon as possible, or come up with new directions to keep them from splintering off to those new-found alternatives…which, actually, you and your team should be doing on a regular basis anyway!

If that all sounds like Marketing 101, it is. But it is amazing how much we forget and how far away we can get from our customers in a pandemic, or when things have just been going really well for a while! Your owners, customers, employees, suppliers and communities are all depending on you and your team to be thoughtful and committed in this process!

What does the business and/or its offering need to look like to not only keep current customers, but also to attract new customers as your business emerges from your crisis? Fact is, you will need new customers to fill in for current customers who just won’t come back no matter what you do, and to grow the business and thrive again going forward. What are your competitors doing? Is that what your customers want? Is your new offering really a compelling proposition for your customer and for your business?

Sales in our profitable electronics repair business (something like $12M-$15M at the time) with customers like Oracle, HP, Xerox and IBM were in decline…a crisis for us. Our customers told us we were being excluded from new bidding processes because we only had one location, which made the shipping cost of doing business with us too expensive. To be added back to the bidder lists, we needed to add our own repair locations in Europe and Asia like our much larger global competitors. Our vision had to be “adjusted” from being “the best in the business at what we do” to being “the best in the world at what we do!” We already had an international salesperson selling our customized electronic solutions who had made some nice partnership connections for us in The Netherlands and Hong Kong. So, we cultivated those connections into relationships, raised money from investors, bought a small well-run repair business in The Netherlands, and partnered with our repair contact in Hong Kong to create a small joint venture operation there. We were then put back on the bidding lists, the repair business started growing again, and we eventually achieved our vision to be “the best in the world,” according to our largest customer! Yes, this is a much bigger story, but I think it illustrates the point.

Now that you have some ideas on how you want to emerge from this crisis, you need to focus on what will have the biggest impact for your customers and business, based on what you can actually do considering your resource availability and/or constraints.

I sometimes use a quick model to evaluate such ideas/alternatives with my team:

“Impact” can be short term or long term. So you have to consider your time horizons on each alternative.

“Resources” can be financial, expertise, people, equipment, facilities, etc. Considering all of these, how would you rate it in terms of being possible for your business to do it?

“Score” is just multiplying your two ratings. This is where your risk analysis comes in.

Idea #1 is a slam dunk for an okay impact at best.

Idea #2 would have a huge impact, but is really beyond your resources in a big way.

Idea #3 would have a sizable impact, and you have the majority of what you need…do you have the money or other less obvious resources to fill in what’s missing?

This is just one way to look at it and a place to start. The larger the potential investment, the more analysis you really need to do. If you have the resources to do more than one of the alternatives, and they all make sense strategically, redo the model by taking out the best alternative and assume those resources no longer exist. Re-rate, score, and decide.

Please don’t let any model substitute for your common sense! Your results should mirror your intuition. If not, I’d think it through again.

Now, it’s time to think about the people and capabilities in-house that can be redirected to build up new business capabilities without causing major disruption in the current business, depending on how large the challenges are in the current business.

To become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

Check out the companion interview and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, Google Play, TuneIn, Stitcher, Spotify and iHeartRADIO. Stay up-to-date on new shows airing by following the Innovative Leadership Institute LinkedIn.

 

About the Author

Mike Sayre has successfully piloted businesses through difficult times of crisis for over 20 years – as a CEO, COO, CFO, and/or Board Director. He is currently an independent executive leadership consultant working through Civilis Consulting and the Innovative Leadership institute, trusted partners inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses.  If you would like to learn more or get help, please contact Mike through LinkedIn.

 

 

At C-Level #19 & #20: Crisis…Starting with People & Cash

To start or to continue receiving the weekly blogs via email, please sign-up using this link: subscribe to Innovative Leadership Institute weekly blog.

The following is a blog written by Mike Sayre, President & COO of Innovative Leadership Institute.

 

PEOPLE always come first!

Businesses are built and run by people. As a C-level leader, losing the trust and confidence of your people during a crisis can create serious challenges and make your crisis worse!

How you treat your people, especially in times of crisis, will be remembered for a long time.

Having successfully led a number of companies through financial and/or operational crises, here are a couple of recommendations:

  • Transparency and timely communication are essential, whether the news is good or bad.
  • Deliver bad news with some kind of credible plan for how your organization will move forward with specifics on what you need from your people to make that happen.
  • If the plan will take more time to develop, don’t wait to communicate. Let your people know that and what they should be doing while the plan is being developed.
  • Hone and know your message so you can communicate it clearly, consistently and constantly.
  • Be visible, available, approachable, and open to the input of others, even if it needs to be through video conferencing, the telephone, text or email. Showing that you are available and open to input, shows respect. And, you may just get some better ideas than you currently have in mind.
  • You can’t lead others if you can’t lead yourself! Right now, during the Coronavirus (Covid-19) crisis, there are plenty of great posts, blogs, articles, and activities on the internet (and through other sources) that are focused on helping you get through this crisis by improving both your physical and mental health.

In addition to your people…the future of your business starts with CASH!

Do you know how much cash you have immediately available in the bank for the business? Do you have enough to cover your next payroll, the one after that, etc.? Do you have alternate sources of cash set up for temporary needs? If you use them, do you have any idea when you’ll have enough cash to pay them back?

Okay, so maybe this blog isn’t for you. However, there are lots of businesses owners out there who do not know the answers to those questions. I’ve seen them and I’ve helped them, so before it’s too late…please share this blog with others in your network who may not be able to answer these questions for their business!

If you can’t answer those questions, you are not the alone! Even if your business has been going really well over the past couple of years, the current pandemic may be creating new challenges that you really need to be preparing for now!

You would not believe the number and size of businesses that don’t have this relatively simple information to help keep their business running in the short term, especially during a crisis period.

Further below is a simple cash flow model in a spreadsheet. It is really no more than:

Cash in the bank today

plus      Cash coming in (customer receipts, loans, investor cash)

less        Cash going out (payroll, benefits, rent, and other expenses)

equals   Cash in the bank at the end of the period (week, month, etc.)

 

OMG…Duh…you say? Then go and ask your controller or accounting manager for the answers to those earlier questions. If they can easily give them to you, awesome! If not, read on.

Do not put this off and do not overthink it! Have your controller to put together a spreadsheet similar to this for your business, and tell them not to put this off and not to overthink it! Just make sure you are estimating to the best of your ability what the big and important numbers are and lump the rest into an average number for whatever period you use.

Here is the model:

Some things to note:

  • The company in this example is a software-as-a service (SaaS) provider…don’t get caught up in that, the model needs customized for your business!
  • Rounded numbers are close enough.
  • This company only pays its bills once per month (less expensive to do, easier to manage the cash flow, and most great partners will accept this…if not, pay twice per month).
  • Notice that if the company does not borrow on its line of credit, or provide the funding from somewhere else, it can’t make payroll in the week of 4/11/20. In this model, ABC borrowed $150,000 on its line of credit or from investors and is going to start paying it back by the end of the month, when the crisis is over.
  • This model is only for one month. You may want to do a couple of models so you can better plan what you will do if things don’t work out like you think they will over a longer period of time.
  • If you can’t make that next payroll, and you don’t have the ability to borrow from anyone or pull in additional investor cash, you have a major problem that would be better to figure out and address now, rather than when your payroll person tells you…which may not be until the day payroll is supposed to go out.

Some potential options?

  • Step up collection efforts from your biggest customers (be careful of setting off their alarm bells!)
  • Delay vendor payments (not a big impact in this model)
  • Delay payroll (I’d suggest being honest and transparent with your employees on how they get caught up on their pay based on your cash forecasting model)
  • Temporary layoff or shut down (if you are being transparent, your employees may be more willing to work with you than you think!)
  • Permanent layoff or shut down (what we are trying to avoid here!)
  • Others?

In any case, I hope you can see how this simple cash flow forecast is worth the effort, if you pay attention to it.

Once again, please do not overthink it and try to be any more precise than you really need to be! Getting a decent picture of where you are on a timely basis is of the essence right now.

The goal of this blog is to get business owners and C-level execs to be more proactive in managing their business through this and any other crisis. Don’t let your business crash because you did not pay attention to PEOPLE & CASH.

Next up…ADAPTING YOUR BUSINESS FOR POST-CRISIS SUCCESS!

 

To become a more innovative leader, you can begin by taking our free leadership assessments and then enrolling in our online leadership development program.

Check out episodes of Innovating Leadership, Co-creating Our Future, via iTunes, Google Play, TuneIn, Stitcher, Spotify and iHeartRADIO. Stay up-to-date on new shows airing by following the Innovative Leadership Institute LinkedIn.

 

About the Author

Mike Sayre is a highly experienced and successful startup, turnaround & growth specialist in the software, e-commerce, and manufacturing service industries, leading organizations as CEO, COO, CFO, CIO, and/or Board Director over the past 20 years. He is currently the president & COO of the Innovative Leadership Institute, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their organizations.

Thanks for following me! If you would like to learn more or get help, please email me at msayre@innovateleader.com .

 

 

At C-Level #18: Three Successful Transformations – Evolving Leadership Perspectives

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

This is the wrap-up of a 9-blog series on real-life organizational transformations, At C-Level #10-18.

In At C-Level #10-17, I wrote about three successful transformations I’ve had the opportunity to lead in my career so far, using a seven-step transformation model closely aligned with the Metcalf & Associate’s Innovative Leadership Transformation Model below.

 

 

 

 

Prior to this series, in At C-Level #9, I wrote about leadership for an increasingly complex world. I believe the exponentially increasing rate of change and complexity in technologies, our organizations, and the world in general – today and for the foreseeable future – will increasingly require the application of the Level 5 and Strategist leadership competencies discussed in that blog for long term organizational and personal leadership success.

 

As a reminder, the competencies of Level 5 or Strategist leaders include:

  1. Being professionally humble and focused on organizational, not personal, success
  2. Having an unwavering commitment to right action
  3. Being a 360-degree thinker who takes a balcony view of the organization
  4. Being intellectually versatile with deep interests outside of the organization
  5. Being highly authentic and reflective
  6. Inspiring followership
  7. Being innately collaborative

 

Now, let’s look at how these competencies were applied in the three transformations discussed in this series, resulting in the organizational successes previously discussed, as well as personal career success. Being focused on organizational success does not mean you have no interest in personal success!

 

  • Large Manufacturing Company. Here the focus was on the transformation of basic accounting and financial reporting controllers into financial business partners for the leadership teams in business units across a $2B corporation.

In this large manufacturing company, focusing on the organization’s mission, recognizing my own shortcomings in company history and experience, pulling in people who could make up for my shortcomings and collaborating with them to figure out the best ways to achieve our vision, resulted in

  • our ability to gain approval and successfully implement our transformation initiatives for the benefit of the company, and
  • an accelerated education process and a couple of significant personal promotions for me in just a few short years.

Some believe that to get ahead in a large organization you must be very competitive and aggressive at the expense of others. The challenge I had with a previous organization. However, I believe that paradigm is, by necessity, dying a slow death. I also believe that if you focus on getting done what is in the best interest of the company and its stakeholders, and are aggressive in your own self-development and ability to lead and get positive results benefiting your organization, the opportunities will present themselves, even if they sometimes end up with you being in a new organization.

  • Mid-Size Electronics Manufacturing Services Company. In a $75M publicly-held electronics manufacturing services company, I led cultural, operational, and financial transformations, and an international expansion, as that company’s CEO.

In this, my first, CEO role, I came to realize the importance of understanding the needs of all of our stakeholders (a 360-degree or “balcony” view of our business). They were all taking significant risks in supporting the company. Investors and bankers were putting in their hard-earned money; customers were risking the quality and delivery of their products by putting our products went into theirs; our employees were betting their livelihood and family’s health on our success; suppliers were spending their capacity and resources to fulfill our needs; and the communities in which we operated were depending on our economic success and good citizenship. In any major decision, and even in some minor ones, the team and I had to keep these dependencies in mind and do our best to maximize the success of all five stakeholder groups the best we could. We all carried a small card spelling it all out, and we referred to that card all the time.

In addition, the company culture had not kept up with the company’s early commercial success and was challenging, at best, when it came to supporting all of our stakeholders and growing the company. So we also codified our values on the back of that small card, referred to them all the time, and, more importantly, were unwavering in upholding those values, even in the most difficult situations.

Similar to the large manufacturing company story, focusing on the company’s success and collaborating with the rest of the experts on the team, as well as the combination of 360-degree thinking and our unwavering commitment to take the right actions based on our vision and values, totally transformed this organization, resulting in an eventual sale to a global industry leader who realized the value in the organization we had created.

From a personal standpoint, I was first the company’s CFO, doing whatever I thought best for the company, before being asked to become its CEO.

  • Global Internet Payments Company. As a consultant, I was brought in to fix a particular control issue that had resulted in some erroneous money transfers. To save the financial team the time to try to figure “the new guy” out, I handed them a list of my values and how I work, and, more importantly, I reflected on and authentically lived that list every day.

 

While working through the transfer issue, plus several other issues that came up during the engagement, that values list was given by the finance team to others in the company. I also started attending the weekly leadership meetings working on other challenges around the company, and just trying to make the company better. My intellectual versatility is in my interest in learning about different businesses, business models and people’s perspectives in varying industries – it’s curiosity. Learning gives me energy, and the capability of developing new ways of thinking about old and new challenges in different situations.

 

As several months passed, I was asked to join the company as its President & COO and help the team build more value in the company for its owner. By then, my 360-degree view of the business revealed a highly evolving organization and operating environment, in constant change, suffering from instability, inconsistency, operational silos, and distrust – resulting from a distinct lack of consistent and clear communications. Common challenges in growing businesses.

 

In my view, the people in the organization needed shared goals and incentives to give them more reasons to communicate and collaborate. So, I implemented a profit sharing plan for all employees, as well as a plan for the leadership team to personally benefit from that value creation, so everyone would gain from our collective successes.

 

I was a little off in thinking that money would be a strong motivator for this group. But I was still going in the right direction. More than the potential for additional pay and bonuses, these plans created a whole new level of transparency about the company’s financials. Trust continued to build, our Agile implementation resulted in more cross-functional collaboration, we made major improvements in our performance, we coalesced as a team, we had great success in turning the business around, and we had fun!

 

The company’s value increased 3X in less than two years. In the process, I advanced from consultant to President & COO, thoroughly enjoyed my time with the company, and benefitted from an eventual majority interest sale of the company with rest of the leadership team.

 

From a Strategist leadership perspective in these transformations, it is important to understand that while I started and/or led these transformations, the bulk of the real work was done by the teams I worked with. More than anything, in all three transformations, people just needed

  • high level direction (agreed to purpose, mission, and/or vision),
  • agreed to operating parameters around how we work together as a team, that also gave them autonomy to make more decisions on their own, and work their own magic,
  • constant communication and reinforcement around the purpose, mission, vision and values (“talking and walking the talk”),
  • early assistance and support in “walking the talk,” until they were comfortable doing it on their own,
  • positive reinforcement on the bad days and celebrations on the good days,
  • understanding, honesty, and fairness when difficult compensation and personnel decisions had to be made,
  • that when things weren’t going well, to be part of the plan to turn it around, with the specific knowledge of what they personally could do to help, and the empowerment to do that,
  • goals and timetables they helped set, and
  • regularly scheduled and adhered-to progress meetings (no longer than absolutely needed) to discuss status and give everyone the opportunity to connect with their needs from the other team members to keep things moving.

 

I hope you have enjoyed the transformation part of this series.  Just writing about these transformations has brought back many great memories. But, more importantly, taking the time to reflect back and write about them has been another great learning experience for me as well.

 

Thanks for following us!  Please look for new At C-Level blogs over the next several weeks!

At C-Level #17: Embedding Transformations

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

 

In At C-Level #10-18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

 

 

 

 

 

Embed Transformation

 

Merriam-Webster defines embed, “to make something an integral part of,” and integral as “essential to completeness.”

 

Based on these definitions – and my experience – for a transformation to become embedded in the organization, its purpose and initiatives must be essential to achieving the organization’s mission and vision, and how it operates every day.

 

Embedding transformations requires a well-defined purpose and initiatives that clearly

  • support the organization’s mission and vision,
  • have the total commitment and support of the organization’s leadership,
  • improve the lives of those responsible for making and sustaining the changes (Why else would they support it?), and
  • include implementing enough structure or process to make the initiatives easily sustainable long-term, with feedback loops and action cycles built in to keep them relevant to the business of the organization as it changes over time.

 

Also, important to embedding transformations is maintaining consistency in leadership and purpose. I would not recommend investment in transformational change if the window of consistency in leadership and/or purpose is not expected to be long enough for your organization to see the positive return on its transformation investments.

 

Are major changes in your organization coming that could disrupt consistency in the leadership and purpose of your organization?

 

Let’s see how we did in the three transformations I outlined in At C-Level #10:

 

  • Large Manufacturing Company. In our transformation to upgrade basic financial reporting controllers into true financial business partners in a large and growing company (our vision), we had two major initiatives:
    • implementing new automated accounting and financial reporting systems; and
    • creating a “controller-in-training” program to prepare up-and-coming and new controllers for the growth of the business and being true financial business partners.

 

By all measures, both initiatives independently met the requirements for success and were successful in this company, embedding many great changes in its financial organization for several years.

 

The system was essential and integral to the controllers’ function and gave them more tools and time for the reporting, analysis and business partnering for which we had hoped.

 

And, over about five years, the controller-in-training program had 40-plus participants, with over 25 percent of them landing internal controllerships – several being chosen for financial leadership in new facilities each representing investments of $100M to $200M.

 

These two transformation initiatives completed, changes were embedded in the organization, and the returns on those investments were realized.

 

At the overall transformation level, we lacked deep definition of our purpose and vision and how that supported the overall vision of the organization. We had not taken the time to dive into the details of what the controllers being business partners would really look like with some measurement of on-going success and sustainability, and we did not have any initiatives specifically for that. That lack of definition and clarity around the vision resulted in the same effect as having our purpose change.

 

So, while I’d say we made great progress toward the vision and embedded change through our initiatives, we fell just short in achieving our vision and embedding the overall transformation in the organization. Over time, changes in leadership and purpose came and more transformation in different directions followed.

 

If you are planning a transformation within your organization, is its purpose and vision well defined, including how it directly supports the purpose and vision of the overall organization?

Can you complete the transformation and realize its return on investment before significant changes in purpose or leadership start a new transformation?

 

  • Mid-Size Electronics Manufacturing Services Company. In our transformation “to be the best in the world at what we do,” with our mission to improve the lives all our five stakeholder groups, we had three major initiatives:
    • implementing Lean Manufacturing,
    • putting repair operations in Europe and Asia, and
    • developing and implementing a strategy to better leverage our engineering and manufacturing capabilities, and earn higher margin work.

 

The company very successfully implemented Lean Manufacturing, driving major change and improvement throughout the business, and becoming a new a way of life, the very definition of “embedded.”

 

A repair operation was acquired and expanded in Europe and a new operation set up in Asia with a trusted joint venture partner, resulting in robust growth in the high-end electronics repair business.

 

The new strategy to better leverage our capabilities and increase our margins was in the process of being implemented.

 

Then a major economic downturn hit that resulted in our losing the funding to complete the third leg of our transformation. We were forced to downsize the company in the middle of implementing our higher-value strategy. We had not implemented that part of our strategy quickly enough. Our purpose changed from transformation – to survival.

 

However, our completion of the lean operational improvements, international expansion, and downsizing carried the day for the company, quickly returning it to profitability and ultimately resulting in a successful sale to a much larger global company that was able to put it back on a growth path again.

 

I left the company during this time, so leadership changed as did the purpose. Remember, when leadership changes, there is a new transformation that takes place, whether it is stated explicitly or not – and it did for this organization as well.

 

Have you ever tried to implement major changes in your organization, only to have a new leader come in and change the direction and/or goals of your organization requiring a dismantling or major change in the work you were in the middle of or had just completed?

 

For much more on how this transformation unfolded for the company and me, please see At C-Level #1-8, about being a first-time CEO.

 

  • Global Internet Payments Company. In our transformation journey to turn around the culture, improve the operational and financial performance of the company, and increase the company’s value, we had three major initiatives:
    • a company culture change driven by a stated mission and operating guidelines, and a change in leadership mindset, communications, and actions,
    • the implementation of Agile software development in our company, which requires the involvement of all major functional areas of the company, and
    • new strategy development and implementation in marketing and sales.

 

By all measures, the initiatives were successful, as were we, in achieving our mission and vision of increasing the value of the company for the ownership.

 

Then, majority ownership of the company was sold at a markedly increased valuation over pre-transformation and new leaders were brought in to take the company to the next level. As in the mid-sized electronics manufacturing company transformation story, the ensuing purpose and leadership changes began yet another totally new transformation.

 

Key takeaways from these transformations

 

In all three of the above organizations, much was embedded and achieved in these organizations, including how these organizations were prepared for and adapted to major change. However, the overall visions of these transformations, for the most part, were never completely realized, due to changes in leadership and/or purpose over time, and for a variety of reasons.

 

In fact, the rate of change in our world today is, and for the foreseeable future will be, exponentially increasing! So, it is even more likely that the time frames for large transformations will get shorter and shorter as we move forward. This makes the organization’s purpose, the leader, and that leader’s purpose in life ever more important in driving focused organizational change and transformation every day.

 

That increasing rate of change also makes the ability of your organization to adapt ongoing with continuous processes to evaluate and respond to near-constant changes in its environment an absolute necessity to transform, adapt, survive and thrive in the future!

 

Today, 5S/Lean/Six Sigma and other continuous improvement processes are used to continuously improve products, services and processes, while Agile methodologies are used to run software development that continuously evaluates changing needs to develop and maintain more relevant software products.

 

These are all transformative changes that become embedded in the organization. Just remember that they are all means to an end – that of carrying out your mission every day and achieving your vision.

 

In addition, our individual and collective knowledge sets are continuously updated and expanded every day through online content, customized automated news feeds, the use of search tools, webinars, social media, et. al.

 

But what are people doing, and what specifically are you doing, to continuously update their/your leadership skills today, when the environment in which we are trying to lead is constantly changing, and the people we are attempting to lead are as well? See “At C-Level #9: Evolving Leadership for an Evolving World.”

 

In “At C-Level #18: Three Successful Transformations – Common Threads,” we’ll look at the three transformations we’ve discussed in At C-Level #10-17 and the key takeaways that you may need to think about in your own organization’s transformative journey.

 

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.

At C-Level #16: Implementing Transformations and Measuring Success

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

 

In At C-Level #10-18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

 

Implement and Measure

 

Preliminary planning is communicated to the organization and transformation initiatives are ready to kick off. Those initiatives have metrics and goals for success that will naturally drive improvement in your overarching transformation metric(s), showing progress toward the mission and vision for the overall organization.

 

So, now it is time to start executing and your team is ready to go.

 

But, what about you? As a leader, your visibility, support, and participation are key to the implementation of these initiatives and how your transformation progresses. Your absence would show a lack of resolve and support for the transformation that YOU kicked off! I hope you’ve done some planning for this as well.

 

The level of your involvement will vary depending the needs of your team and the organization. Your vision, mission and values should drive a lot of decision making at the functional level, so you should not be needed to micro-manage the process. Let your team work their magic, grow, and develop during the transformation.

 

However, your visible support is critical. Be present, generally aware of happenings at the functional level, and, most importantly, be the main reporter of the major challenges and overall progress to the organization’s stakeholders on a regular basis.

 

Here is how we implemented and measured progress and achievement throughout the three transformations I outlined in At C-Level #10:

 

  • Large Manufacturing Company. In our transformation to upgrade basic financial reporting controllers into true financial business partners in a large and growing company (our vision), we had two major initiatives:
    • implementing new automated accounting and financial reporting systems, and
    • creating a “controller-in-training” program to prepare up-and-coming and new controllers to be true financial business partners helping to grow the business.

 

To implement the new systems, we created a formal project team of current controllers serving as project managers and subject matter experts, accountants and clerical people with significant tenure in their jobs, and an internal auditor, using a well-known project management software. The make-up and experience in this team was key to the success of the initiative. The project re-energized team members who were ready to move on in their careers and were excited to contribute their company and functional expertise to making the implementation successful. They were among the most trusted professionals in the organization, maximizing the acceptance and the benefits of the new systems. The implementations were well managed, tracked, reported on, and successful, although they did take 30 to 40 percent longer to implement than originally expected. We opted for quality over speed – not an unusual tradeoff in these types of projects.

 

The controller-in-training program was modeled after comparable sales and operations training programs and consisted of potential controller candidates spending three months rotating through all the sales and operational departments in their facility, then spending three months in accounting and three months in activity-based costing and financial analysis roles. A team of senior financial people selected and hired the participants and I tracked their progress, but the facility people really made the training happen. About 25 percent of the participants landed their first controller jobs backfilling for turnover or being placed in the large new facilities the company was building at the time.

 

We were pretty good at implementing these projects and programs. However, I think we could’ve done better in terms of having more definition around what achievement of the vision would look like, as well as the metrics and goals that would validate our progress in transforming our controller group into “true financial business partners.” Our success on vision achievement would probably get mixed reviews depending on who you talked to in the organization.

 

In your own transformation journey, how will you measure ultimate success in achieving your mission and vision?

  • Mid-Size Electronics Manufacturing Services Company. In our transformation “to be the best in the world at what we do,” and improve the lives all our five stakeholder groups, we had three major initiatives:
    • implementing lean manufacturing,
    • putting electronics repair operations in Europe and Asia, and
    • developing and implementing a strategy to better leverage our engineering and manufacturing capabilities and earn higher margin work.

 

Having the right people in the right seats on the bus was key to our execution.

 

In a conversation with our quality manager about his wanting to leave the company, I discovered he was a Lean Manufacturing expert! He agreed to stay and took on the role of leading that initiative. We also hired an operations vice president with significant Lean experience. Their execution on the implementation, including ongoing measurement and reporting was incredible!

 

The executive team leveraged the work of our global sales manager in identifying the right acquisitions and partners for us to expand our operations in Europe and Asia.

 

We also implemented lean in our new facilities.

 

Not planned, but totally in line with our mission, our first Agile software development resulted in a company-wide repair tracking system across all our facilities and lauded by our global customers.

 

We hired a new sales vice president with an engineering background who had significant experience growing companies in the embedded computer industry, which leveraged our engineering talent and commanded the much higher margins we sought.

 

Everything we did had measurement and reporting systems, and our execution was great.

 

Did we achieve our vision? We decided early on that we would have to hear that directly from our stakeholders – the ones we named in our five-stakeholder mission statement.

 

Eventually, we did start hearing from them. You can read more about this in At C-Level #4.

 

Do you have the right people in the right seats on your bus? Is there any unknown or underutilized talent in your organization that could help lead your transformation?

 

  • Global Internet Payments Company. In our transformation journey to turn around the culture, improve the operational and financial performance of the company, and increase the company’s value, we had three major initiatives:
    • a company culture change driven by a stated mission and operating guidelines, and a change in leadership mindset, communications, and actions,
    • the implementation of Agile software development in our company – which requires the involvement of all major functional areas of the company – and
    • new strategy development and implementation in marketing and sales.

 

The culture change was all about leadership communications and “walking the talk.” See more about that execution in “At C-Level #15 – Transformation Communications.”

 

We measured culture change in the success of the Agile implementation. Agile requires so much cross-functional collaboration and communication that if the culture did not change, that implementation could not succeed.

 

We measured the success of the Agile implementation,

  • quantitatively, by the 40 percent increase in our software development productivity, and
  • qualitatively, by the increase in the usability and functionality of our product.

 

Our software was easier to use, looked more professional, helped our sales efforts, and benefited from the input of all the major functional groups in the company.

 

And, we measured marketing and sales success and the achievement of our mission to help sellers sell more by increases in customers and transaction volume.

 

But were we achieving our vision of increasing the value of the company for its owners? We were. The company realized a 300 percent increase in value through a major financial transaction within two years of the start of our transformation.

 

Do you have regular reporting and review cycles for all your initiatives and the achievement of your vision?

 

Key takeaways from these transformations

 

Discipline and focus are key, as is building repeatable processes that become a way of life.

 

Metrics and goals were either developed in planning or were built into the implementation processes of lean and Agile. Follow-up reporting, reviewing and analysis for progress and completion were part these processes as well. And where we did not use Agile or lean, we still had regular reporting and progress reviews.

 

There was so much going on in each transformation, I couldn’t manage it all…so I directed it and left the management to the functional experts and leaders on the team. I constantly and consistently pushed the vision and mission and lived our values to the best of my ability, trusting the team to give them life by making decisions that were similarly aligned. If they were not, we stopped, discussed them, and did the right thing. This is typical of Strategist or Level 5 leadership. See “At C-Level #9: Evolving Leadership for an Evolving World.”

 

To see more about the results of these transformations, please see my LinkedIn profile at www.linkedin.com/in/mikesayre.

 

In “At C-Level #17: Embedding Transformations,” we’ll look at what I’ve found to be the most challenging part of transformation work and the key takeaways that you may need to think about in your own organization’s transformative journey.

 

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.

At C-Level #15: Transformation Communications

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 “Innovative Leaders Driving Thriving Organizations” interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

 

In At C-Level #10–18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

Communicate

 

It is unlikely that you will ever over communicate in a transformation effort, unless what you are communicating does not resonate with your audience—and, in that case, it isn’t a matter of over communicating, it’s more likely that you are miscommunicating. Communication is effective when your audience feels you are sharing your passion and that you are authentic, see the path forward, and feel their contribution is vital to making a transformation.

 

Simply setting the example, saying it once, posting it on every wall, and thinking that it will sink in by osmosis just isn’t enough. You must live, breathe, and give testament what you believe every day!

 

So, before you start, you need to work with your team on the messages you are sending to your various stakeholder groups—your owners, board (if you have one), employees, customers, suppliers, and the various communities in which you live and work. Your messages need to be

  • consistent with your vision, mission, and values,
  • directional,
  • important to your audience,
  • delivered with an appropriate sense of urgency,
  • clear and concise,
  • translated into the languages the people in your organization speak and understand best, and
  • communicated consistently and often by your transformation leadership team.

 

At first, writing the messaging, as well as potential questions and answers, with the transformation team may be helpful. After a brief time, it should become second nature to everyone if it is constantly and consistently reinforced by the team’s leader(s).

 

When was the last time you stood in front of the organization and discussed your vision, mission, and/or values? When was the last time, someone brought a major challenge to you and you said, “Well, our vision is ____, and we say that we value ____, so we should ____.”?

Here is how we communicated throughout the three transformations I outlined in At C-Level #10:

 

  • Large Manufacturing Company. In our transformation to upgrade basic financial reporting controllers into true financial business partners in a large and growing company (our vision), we communicated our vision, plans and progress:
    • at two to three regular or specially-convened controller conferences every year, where the controllers and their assistants traveled to our headquarters,
    • during trips we made to our various business units to keep up with our colleagues and talk about our vision and plans,
    • through conference calls and e-mail with the systems project team,
    • calls, e-mail, and visits I made to our business units, and
    • generally, not enough.

 

Yes, “not enough.” We communicated a lot on how we were getting the new system implemented and how our controllers were getting better training on the business and the new system. And, while we spent some time communicating our vision of the controllers becoming better business partners, we did not spend enough time communicating more precisely how they would do that with their new systems and training!

 

That’s not to say that we did not make significant progress. We made a lot of progress that had been needed for some time. But, did we communicate enough about our vision and the progress we had achieved towards it? In “At C-Level #16: Transformation Implementation and Measures of Success” I write more about this transformation.

Are there clear links between what everyone is doing in your organization today and, if you have them, your vision, mission, and values? What about your goals?

 

  • Mid-Size Electronics Manufacturing Services Company. Leading a transformation “to be the best in the world at what we do,” with our mission to improve the lives of all our five stakeholder groups, left a lot of room for interpretation. There was a lot we did not know yet.

 

However, we did know that we had a basic command and control environment with a very high-revenue growth rate in low-to-no margin integration work. The combination was driving a high-pressure and negative working environment, inefficient and costly operations, unacceptable quality, poor on-time shipping performance, and low and inconsistent earnings. The good news was that we had revenue. We just had to figure out how to solve many of these other challenges before that revenue went away.

 

We started out doing what most companies do with their vision, mission, and values. We had posters made and hung them on the walls. We had wallet cards made and gave them to all employees. We had a couple of kick-off meetings. And that’s where we’ve seen a lot of companies stop.

 

But we continued. We had daily 15-minute order review meetings, daily and weekly Lean Manufacturing implementation meetings, weekly leadership team meetings, bi-weekly company update meetings, and company quarterly results meetings. In almost every meeting, we would ask people to take out their cards, read something from them, and/or talk about some examples where they were used or applicable, always pointing to the card and quoting from it. Our vision, mission and values were always front and center and a part of our daily lives.

 

More important and impactful than our meetings, was that we consistently communicated our vision, mission, and values through our actions. We simply walked the talk.

 

You know you have the right vision, mission, and values when you and your team are passionate about them, can talk about them, and live them out almost effortlessly every day.

 

Do you have posters of your organization’s vision, mission, and values hung up around your place of work? How often do you talk about those? When was the last time you discussed a particular challenge with your team and it was pointed out that the solution was already in your vision, mission, or values statement?

 

  • Global Internet Payments Company. In our transformation journey to turn around the culture, and, in turn, the operational and financial performance of this 10-year-old company now hampered with a start-up mentality that was very difficult to scale, group communications were vital. However, individual communications with the leadership team around the almost daily challenges that came up were even more important.

 

Structured functional and cross-functional Agile meetings with top leadership involvement and support keeping the mission and values fully integrated into how those meetings were conducted, started breaking down the silo walls that had been built.

 

However, there were still competing priorities at the functional leadership level that needed to be re-prioritized for what the company was trying to achieve. That meant a lot of impromptu discussions with individuals and small leadership team groups caught-up in the siloed culture that had developed in recent years. It meant a lot of repetition talking about what the company was all about, how we could move forward more successfully together, and how the practical day-to-day application of our mission and stated values would help us accomplish that. Eventually, the repetition metamorphosed into muscle memory and the leadership team members felt empowered to communicate in and between the functional teams without any facilitation.

 

How much of your time do you spend facilitating discussions and/or making decisions for functional team leaders with competing priorities? Does or could your organization’s vision, mission, and values reduce the need for your personal facilitation time and free up that time up for higher-level strategic interactions, discussions, planning, and execution (with internal and external partners)?

 

Key takeaways from these transformations

 

You cannot communicate enough. Pull people in early and keep them engaged.

 

Take the time to craft messaging around your organization’s driving vision, mission, and values that can be clearly understood at all levels inside and outside your organization. You don’t want to have to adjust your messaging around your high-level purpose and operating guidelines for different groups. You want them all to be disciples. Communications must be easily understood and easy to repeat, so they can be ingrained in the organization and people can easily rally around them over the longer term.

 

Having said that, getting the various stakeholder groups on board requires that they know what’s in it for them and what they have to do to help make it happen. Those communications must be more tailored to the audience within the context of the broader overall messaging.

 

Communicate and gain support at all levels of the organization, starting with your board, your boss, and your team, before going broader across the organization. They should all be part of developing the desired future state and crafting the messaging that helps them buy in.

 

In “At C-Level #16: Implementing Transformations and Measuring Success,” we’ll look at how the transformations of these same three organizations were implemented, how people were further motivated and their success measured along the way, and what the key takeaways are that you may need to think about in preparing for your own organization’s transformative journey.

 

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.

At C-Level #14: Transformation Planning

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president and COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 “Innovative Leaders Driving Thriving Organizations” interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

 

In At C-Level #10–18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

 

Plan Journey

 

Now that you have your vision, situation, strengths, team, and resources for this journey, it’s time to do some planning!

 

Any real transformation is going to take a significant amount of time – at least a year or more.

 

Your first plan will likely get you off in the right direction. However, the further in the journey you get, the more likely you will have to deviate from it, especially if it is a very detailed plan. I mention this so that you will not:

 

  • over-plan at the expense of getting started, or
  • stress out when the plan must change, which it undoubtedly will.

 

Most consultants I’ve used start with a high-level current/future state model. Then, they break that down into functional current/future state models to distribute planning, execution, responsibility, and accountability across the team.

 

It’s also the time to plan how functional initiatives and overall transformation progress will be measured and reported. Each functional initiative must have its own metrics and goals that will contribute toward the achievement of the transformation goals. All metrics and goals must be well-thought out and clearly represent the transformation’s positive impact on the organization.

What does your organization look like today? What will it look like years from now? What metric(s) would indicate the progress of the entire organization toward its vision?

Here is how we approached planning in the three transformations I outlined in At C-Level #10:

 

  • Large Manufacturing Company. After our transformation to upgrade basic financial reporting controllers into true financial business partners in a large and growing company (our vision), we believed the future state would include:
    • an updated accounting and financial reporting system freeing up controller time for additional analysis of the periodic financials, trends, forecast comparisons, capital investment justification and progress reporting, financial consulting within the business, and people development;
    • controllers with the skills to use new systems and perform the analysis and business partnering functions as we envisioned them;
    • a pipeline of controllers for new plants and businesses with these skills; and
    • bottom-line results to show for it all.

 

The current state included:

  • a main-frame computer-generated trial balance manually input into spreadsheets for financials with a lot of detailed information and limited analysis;
  • some controllers with the skills to perform financial analysis and some with the business knowledge to also be a financial business partner, but few with skills in newer automated accounting and financial reporting systems;
  • some accountants/assistant controllers capable of being controllers with little to no development provided to get them there; and
  • a bottom-line that could be improved by this transformation to the future state.

The project team was formalized and began reconciling what had to be done to move from the current to the future state on automating the systems. Simultaneously, as the lead controller in the largest business group, I began working with the general managers and the rest of the controllers on controller development programs.

 

Later I realized that only planning out milestones for the completion of our initiatives in the transformation and not having any metrics or goals for the overall transformation created longer term challenges with sustainability. You’ll see how that played out in future “At C-Level” blogs.

 

If you have a transformation you are contemplating, how will you measure and report progress and success in the initiatives for the transformation and for the achievement of the vision?

 

  • Mid-Size Electronics Manufacturing Services Company. As you can imagine, leading a transformation “to be the best in the world at what we do” left a lot of room for interpretation, but so did our future state:
    • a perpetual earnings per share growth engine for our shareholders;
    • a work environment our associates embrace each day with opportunities to grow in their careers;
    • the status of “Most Valued Partner” to our customers;
    • providing opportunities for our suppliers to grow and prosper with us; and
    • giving back to the communities in which we live.

 

The current state:

  • fast growing sales, yet little to no improvement in profitability;
  • high-potential employees in a work environment that was difficult to embrace with little apparent opportunity;
  • customers upset with quality and delivery;
  • suppliers growing and prospering while we were not; and
  • only occasionally giving back to the community.

 

We were not serving four of our five stakeholders very well. Several company-wide strategic areas quickly needed to be addressed, with the highest priorities given to initiatives that would have the greatest positive impact to current customers, whose purchases were required to fund our transformation to the future state.

 

Given that, our top priorities were customer service improvement, employee engagement, and profitability. Focusing on those would better serve our suppliers and communities as well.

 

We decided that a lean manufacturing implementation would quickly start to improve customer service, engage our people in what they viewed as a worthwhile effort, and result in service improvements and cost savings for current customers that also could improve our profitability—while we figured out what to do about our top line value and margin challenges. Lean requires the identification of key metrics, the ongoing monitoring and reporting of those metrics, and rigorous continuous improvement processes focused on metric improvement.

 

Our overarching metric was growing profitability. We already had a quarterly gain-sharing plan for all associates and it became a great measurement of our progress and how we were all working together as a team.

 

What are the priority areas in the transformation you are contemplating? Have you considered how you will fund your transformation? How would you measure the overall success in your transformation with a metric that the whole organization could relate to personally?

 

  • Global Internet Payments Company. The desired future state:
    • helping our sellers sell more (measurably);
    • providing a collaborative and fun work environment with great career opportunities for our best associates;
    • facilitating cross-border transactions and e-commerce globally, and creating more jobs;
    • providing software as a service (SaaS) and back-end payments processing to simplify the entire process for our sellers, while adhering to the underwriting requirements of the industry and governments;
    • building a platform company that could acquire other processors and their seller customer bases; and
    • building value for an eventual financial exit for the owner.

 

The then current state:

  • A $200M transaction volume processor still trying to run in start-up mode, highly siloed, not collaborative, lacking in product development, with flat top-line and declining bottom-line performance.

 

With our SaaS model and software development driving so much of our desired future state— and that development stifled by the functional siloes in the organization—we decided to implement an Agile product development environment that required constant communication, collaboration, and coordination across all functional areas of the company. Like Lean, Agile puts your organization into a more structured continuous improvement/development environment, and its implementation requires a level of rigor that becomes a new way of life within the organization.

 

We had many detailed metrics as you might imagine for a SaaS payments company, but we also implemented a profit-sharing program—both a measurement and reward system for how we were coming out of silo-mode and performing as one team.

 

Lean and Agile concepts have much broader applicability than just in manufacturing and software development, as well as across different industries, with similar benefits. Have you ever considered either program? What about profit-sharing as an overall metric of success to increase cross-functional collaboration?

 

Key takeaways from these transformations

 

Planning for transformations can be highly dependent on organization size, maturity, current state, desired future state, and available funding.

 

There was much more up-front planning in the $2B global Large Manufacturing Company and it was a well-defined functional transformation. The company also had significant resources to contribute to its transformation project.

 

The other two transformations were in comparatively smaller companies, requiring major strategic, cultural, and operational change across the company. Their businesses were technology-based and their business environments were quickly changing. The people transforming these companies had to do it while concurrently accomplishing their ongoing business objectives. We had to figure out how to reallocate resources and squeeze more profit out of both companies to finance our transformation efforts. In both cases, sharing those profits was a nice perk, but it was also a great measurement of team progress and a source of team pride.

 

The increasing pace of change in our world will likely require these kinds of ingrained continuous improvement processes in most organizations to simply survive, let alone thrive. Think perpetual innovation, evolution, and change going forward!

 

In “At C-Level #15: Transformation Communications,” we’ll look at the communications frameworks in these three organizations and what you may need to think about in preparing for your own organization’s transformative journey.

 

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.

At C-Level #13: Pre-Transformation Analyses

 

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

 

In At C-Level #10-18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

 

Analyze Situation & Strengths

 

To plan your transformation journey, you really need to know where the organization is at the start. In planning a family trip from Atlanta to San Francisco, isn’t it important to know how much time you have for the trip, what your vacation budget is, if you can afford to go by plane, train, or automobile, and if all your family members can withstand the rigors of the transportation you choose?

 

I’ve always found that great SWOT analyses (Strengths, Weaknesses, Opportunities, and Threats), if done thoroughly, candidly, and by a knowledgeable team, are a good place to start to understand where your organization is today. Further, SWOTs of individuals in your organization (including yourself), competitors, and just about any other entity that could have a significant impact on your business round out that understanding even more. I’ve performed SWOTs on each of these entities at one time or another in transformation processes for the following reasons:

  • to help in idea generation and decision-making;
  • as a baseline to understand where the transformation is starting and what the priorities are coming out of the gate;
  • to help decide if the right people are in the right seats on the bus for our journey, and
  • for developing competitive strategies, both short and long term.

 

What is your vision? What are your company’s strengths and weaknesses? What opportunities could be most impactful for your organization? What are the threats?

Here is how we analyzed our situation and strengths in the three transformations I outlined in At C-Level #10:

 

  • Large Manufacturing Company. Leading a transformation to upgrade basic financial reporting controllers into true financial business partners began with a lot of analysis during my discussions with the plant controllers, general managers, and corporate people as well. The vision was a result of those informal interviews, discussions, research and analyses.

 

Early members of the transformation team then did a SWOT analysis on the company’s controllership function to help put the interview results into more of a framework and to help justify the project. Improving the skills and utilization of our controllers to reach our vision included the need to expand their training and upgrade their tools with a new integrated financial system. To properly evaluate software platforms, we needed an in-depth understanding of what we were getting out of the then current systems to understand the minimum functionality we needed the new platform to be able to provide, plus what new functionality we wanted. We used a standard template from a Big 4 accounting firm to do that evaluation.

 

With our vision clearly in mind, we also needed to take a forward look at our need for controllers in several large new steel processing facilities planned over the next several years (investments of $100M to over $200M in size). Evaluating our current controllers and up-and-comers and the development they needed for this transformation, as well as what we should be looking for in potential new controllers, was required as well.

 

These analyses of situation and strengths took around nine months to complete while still performing our regular jobs.

 

If you lead an organization within an organization, what are your internal customers telling you about your strengths, weaknesses and opportunities? Is your vision aligned with your internal customers’ needs and the company’s best interests?

 

  • Mid-Size Electronics Manufacturing Services Company. As a new CEO in this $75M electronics manufacturing company, leading a transformation “to be the best in the world at what we do” required evaluating literally everything we were doing, starting with a deep dive SWOT analysis on what we did as a business! Our engineering talent and capabilities were our biggest strength. Our good margin OEM electronics repair business having only one location, our recent focus on the growth of our low-to-no margin integration business, and our overall negative morale were weaknesses. The opportunities for international expansion of our OEM repair business and building high-value engineered products with higher margins were exceptional. But low-funding and our timing in the economic cycle for these kinds of changes were threats to our transformation journey.

 

On the other side of the equation, we also did a SWOT on our operations. Our strength was the desire for new leadership and change throughout the organization. Our weakness was our lack of structure, discipline, and processes for continuous improvement. Becoming our customers’ most trusted partner was a huge opportunity. Our biggest threat was turning all this around in a reasonable time frame before we started losing our much larger and more demanding customers.

 

Having this knowledge in a well-rounded framework, gave us the ability to develop new strategies and new priorities, and really get creative about how we were going to move into the future to become “the best in the world at what we do.”

 

Think about your vision for the organization and the transformation required to get it there. How long could it take? Will you have the needed resources and funding for this transformation? Look at your competition. Does your vision propel you ahead of the competition? What do you think they are working on?

 

  • Global Internet Payments Company. Our mission was providing the highest value to our clients (the sellers using our payment services), growing the company’s financial value, and getting everyone working in harmony and enjoying their jobs working toward those two goals.

 

This team of very talented individuals who had grown up with the company from its start-up roots were now encountering growing pains and industry changes they just didn’t have the background to effectively work with. The business model that the company was founded on was becoming outdated and less profitable, and significant changes in the model were required to remain competitive and increase profitability again. In addition, the global payment industry’s rules and its application of them were also changing rapidly. The company’s whole operating environment was in a constant state of change and what used to be strengths were now becoming weaknesses.

 

So, we did some, but a lot of group analysis on situation and strengths up front was a challenge. We had to prioritize and improve our capacity to collaborate, innovate, and change so we could start to figure out and do what we needed to do to keep the organization moving forward on its mission. Planning for the unknown was a little unsettling at first, but also exciting at the same time!

 

Is your business and industry in a constant state of flux? Welcome to the future! Is your organization prepared for perpetual innovation, evolution, and growth? If not, where will you start?

 

Key takeaways from these transformations

 

You need to know where you are to plan how to get to where you are going. That’s a very logical and structured approach to transformation (current state versus future state) that has worked very well in the past and is still relevant in larger, more complex, slower evolving and/or more mature environments today. I’ve used it many times and it has worked.

 

However, in cases where the organization is extremely challenged, the pace of change in the operating environment is extremely rapid, resources are scarce, and time is of the essence, there may not be enough time for long protracted analyses and planning before action.

 

In the case of the Global Internet Payments Company above, the pace of change in technology, global e-commerce, and the payment industry was so fast that we could not pin down the current situation and strengths fast enough to go into a traditional planning process. We had an idea of where we wanted to be, but we were running out of time! In many industries, more and more, we see strong high level missions and visions, more on-going analyses of situation and strengths, and more agile planning and execution becoming the norms.

 

To better understand how much of the world has gotten to this point and what it will take to lead in this kind of fast-paced environment going forward, please refer to At “C-Level #9 – Evolving Leadership for an Evolving World.” And I hope you’ll keep up with the rest of the At C-Level #10 through #18 series on transformation to see how these three very different transformation journeys played out.

 

What is the pace of change like in your organization and its environment today? What does that mean for its ability to assess its situation and strengths, as well as its capacity for perpetual innovation, evolution, and change going forward?

 

In “At C-Level #14: Transformation Planning,” we’ll look at how planning for the transformations of these same three organizations was approached and what the key takeaways are that you may need to think about in preparing for your own organization’s transformative journey.

 

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.

At C-Level #12: Building Transformation Teams

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

 

In At C-Level #10-18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model like the Metcalf & Associates Innovative Leadership Transformation Model below.

 

Build Your Team

 

In At C-Level #9, we discussed how leadership is now entering what we call the Integral era. In this era, technological, economic, and geopolitical change outpace the abilities of most Modern and Post-Modern leaders who think in terms of tasks, processes, and systems.

 

Leading transformations in the Integral era requires strong functional leaders on your team who can supplement and/or complement the strengths, abilities, and knowledge of the team leader, and who are very collaborative, adding mental and physical horsepower to your transformation engine.

 

Building your team to make the transformation successful and sustainable requires assessing your needs for the transformation, as well as assessing the people working with you today and their abilities and potential to fill those needs in their current or alternative roles (reference Collins’ “getting the right people in the right seats on the bus” in his book Good to Great). It may also include adding, subtracting, or replacing team members to get the right mix.

 

What are your personal strengths and weaknesses? Are you surrounded by people on your team who can fill those gaps today and bring their competencies and knowledge to the team in an additive way? Any gaps still?

This is how the teams were built in the three transformations I outlined in At C-Level #10:

 

  • Large Manufacturing Company. Leading a transformation to upgrade basic financial reporting controllers into true financial business partners by implementing a new and fully integrated financial system needed more horsepower than I had alone. I was a just a new corporate financial analyst in this $2B heavy manufacturer with operations world-wide. There was too much I did not know that could keep the transformation from even getting off the ground. However, my research and our vision led me to develop strong relationships with the controller of the largest BU, one of the most senior controllers in the company and one of the most progressive information technology leaders in the company. All were passionate about our charge and we teamed up to co-lead the transformation. After selecting the software platform, we needed to make some role changes to benefit the transformation (“get the right people on the bus in the right seats”). The controller of the largest BU became the project leader, I was promoted to the controller position to lead one of the first BU implementations, and the senior controller joined the implementation team full time. With those changes, we were all more energized than ever and ready to drive the transformation forward (which we did)!

 

Thinking about your vision for your organization and the transformation to get it there, do you have all the right people in the right seats on the bus? Okay, clear your mind of all biases. First, what seats on the bus are required to drive it forward? Now think about the people. Who belongs in which seats? Are you the best driver of this bus?

 

  • Mid-Size Electronics Manufacturing Services Company. As a new CEO in this $75M publicly-held electronics manufacturing company, leading a transformation “to be the best in the world at what we do” required evaluating our core businesses, our growth in them, and questioning the value of our offering going forward. My promotion had been packaged with the exit of the president and head of sales and I had too hastily promoted an internal candidate to vice president of sales who was already familiar with the current direction and leading an international sales initiative. The international initiative was to develop technology integration customers around the world, presumably because we had exhausted what we could do domestically in this highly-commoditized business. So, I went on one of our standard worldwide sales excursions that visited three to five countries with only two to three prospects per country and quickly decided that initiative needed to be terminated. After a longer and more thoughtful search, we hired a new vice president of sales who was very experienced in highly engineered electronic products companies, could leverage our high level of engineering expertise, and get us into a much higher value and margin business. I also brought in a high-powered industry operations person from a much larger company to help lead that part of the transformation. I just had not realized the overhead that came with an executive from a much larger company to a company our size. The next vice president of operations was very talented and hired from a larger company too, but was also ready for a step up in responsibilities.

 

Already extremely fortunate with our administrative and technology department heads, we were off to the races a little over a year after I took on the role. A big lesson for me – I had made my earliest choices to lead both sales and operations before I had a clear vision in my mind. The results could’ve been catastrophic, and I took full responsibility for those hires not working out.

 

How clear and committed are you toward your organization’s vision? Is your passion for your organization and your vision so strong that you could make the really difficult decisions regarding who the right people are for the required seats on your bus?

 

  • Global Internet Payments Company. Our vision here was transforming this 10-year-old fast-growing, but under-performing, “start-up” into a next-level high-performing and growing company. Our mission was providing the highest value to our clients (the sellers using our payment services), growing the company’s financial value for an eventual exit for its founder, and everyone working in harmony and enjoying their jobs working towards those two goals. I inherited a team of very talented individuals who had grown up with the company from its start-up roots and were now encountering growing pains they didn’t have the background and experience to effectively work with. The company had grown into functional siloes that were just not collaborating anymore. Its performance was suffering, as were its employees (a close correlation).

 

In the software development world, an Agile development environment requires the various functions of the company to work very closely together, and a software-as-a-service provider can be a great candidate for Agile. We did not have a high level of Agile expertise in-house, so we added a vice president of information technology experienced in leading Agile implementations. We had a vice president of operations who had been a terrific developer early in the company’s history and who had become an industry expert in all things payments. She was not particularly happy leading operations, which needed an overhaul the likes of which was not in her previous experience. She became a sorely needed vice president of compliance and I, as COO, took direct responsibility for the various operations areas. Additionally, in this business, accounting was a vital part of operations. I promoted underutilized and knowledgeable internal talent to backfill openings created earlier in this process.

 

In fast growing companies, the mostly highly talented individuals do not necessarily want to become vice presidents of much larger organizations, nor are they prepared to do so. Do you have anyone in your organization who may have those kinds of challenges in their current role and would be happier in a role more closely aligned with their qualifications and experience?

 

Key takeaways from these transformations

 

Hiring for top leadership team roles is better delayed until the vision is clear, you know what you need, and you get the right people in the right seats on the bus. The costs for the organization and for the individuals with short tenure may not be worth the short-term benefits, if there are any. Is your vision clear?

 

Some people promoted into top roles should probably be put in as interim leaders until everyone is satisfied that the best people are fulfilling the roles and that they really want to be in those roles. If it still doesn’t work out, thank them for contributing to the company in a time of great need, and try to place them in roles for which they are better suited so you don’t lose their valuable talents and company knowledge to someone else. Do your best to not let those shifts be negative experiences in any way, shape, or form.

 

When you need talent and experience that you don’t have – but know that in the long-term it will pay off – add someone to the team when you know they have a passion for the vision as well. Don’t hire them before the vision and need are clear, unless you need their help in that, too. Hiring a consultant to help work your team through a visioning process may be a better route. Is your vision clear (an intentional repetitive question to underscore its importance!)?

 

In “At C-Level #13: Pre-Transformation Analyses,” we’ll look at how the situations and strengths were analyzed for these same three organizations and what the key takeaways are that you may need to think about in preparing for your transformative journey.

 

Thanks for following us! For more information or help, please visit us at www.Metcalf-Associates.com.

At C-Level #11: Creating a Vision and Sense of Urgency

Mike Sayre is a highly experienced and successful software, e-commerce, and manufacturing services CEO, COO, CFO, and Board Director. He is also the president & COO of Metcalf & Associates, a trusted partner inspiring and enabling perpetual innovation, evolution, and growth in leaders and their businesses. Mike was featured in Maureen Metcalf’s May 2017 Innovative Leaders Driving Thriving Organizations interview on VoiceAmerica entitled “7 Characteristics of Leadership 2020 In Practice: A CEO Story.”

In At C-Level #10-18, I write about three of the most successful transformations I’ve had the opportunity to lead in my career so far, following a seven-step transformation model similar to the Metcalf & Associates Innovative Leadership Transformation Model below. This blog is about the first step in the process.

 

Create a Vision & Sense of Urgency

“Starting with the end in mind” is important when beginning any new transformation. However, having a vision of what is at the end of a transformation is not enough. The vision must be so compelling to those leading the transformation and those in the organization being transformed that all involved are impassioned and feel an intense sense of urgency to make it happen.

Do you and your team have a vision you are passionately working toward in your organization? How urgently is everyone working toward that vision? What drives that urgency, or lack thereof?

Here is how the visions were created and the sense of urgency developed in the three transformations I outlined in At C-Level #10:

  • Large Manufacturing Company. Early in my career as a new financial analyst at a $2B heavy manufacturer with over 60 operations worldwide, I wanted to learn all I could about the business and the people in it. I visited plants and met with plant controllers and general managers, I asked lots of questions to better understand their businesses and their needs. The controllers were still using antiquated accounting systems and spreadsheets to produce their monthly financials and had little time for much else. The general managers were anxious to better understand the financial aspects of their operations and the potential new investments they were proposing to Corporate. They wanted more resources, but didn’t understand that they had the right resources in their controllers—they just weren’t using them very efficiently.

The vision became clear to me and I began sharing it with everyone who would listen. The controllers spending most of their time in their offices working on accounting and financial reporting needed to be upgraded to financial business partners in their business units. That vision resonated with both controllers and general managers and catapulted me into leading a significant organizational transformation that affected a large part of the corporation and, up to that point, was the largest transformation project in my career.

What are the challenges in your organization that would have the greatest positive impact if things were changed? Do you have ideas on what those changes should be? Will people see the urgency in making those needed changes?

  • Mid-Size Electronics Manufacturing Services Company. As a new CFO in this company, I led a financial turnaround of an unprofitable $25M company to a $15M profitable one. Three years of significant revenue growth later, we had become a $75M company. However, we were making about the same profits as we did at $15M! I was then promoted to my first CEO job to “fix” it. I immediately jumped into talking with people across the company to get a sense of the challenges we were facing. We were still trying to run a $75M company like we ran the $15M company. Overall people liked the company, but they were lacking general direction, goals, motivation, processes—and more than a little structure. There was a lot of work to be done, but toward what? …and where should we start?

Having never been a CEO, I employed a leadership development coach who made me go deep into myself and define my personal purpose in life, as well as my own personal vision, that I could very closely link to a vision for the company. After much soul-searching, I also wrote draft missions and general operating philosophies for the whole leadership team to help me refine so that all could buy in. Knowing what we were doing was not working, and, with a downturn looming, we could be in serious trouble again, a very high sense of urgency drove us to a vision that was essentially “to be the best in the world at what we do.” As vague as that vision was, being the best in the world (not the biggest) mostly meant we needed to be a vastly different company than we were, in everything from leadership to strategy to execution. It opened people’s minds to substantial change.

The vision was a big, hairy, audacious goal (BHAG) and it drew people in. Do you have a BHAG that could energize your organization?

  • Global Internet Payments Company. As a management consultant in this business, I could see that the company was vastly underperforming despite having some great talent and a significant global business opportunity. The business had grown to processing over $200M in payment transactions per year in 200+ countries and was still operating as startup with the same culture it started with for most of its ten years in existence. The organization was operating in silos and simply just tossing their problems over the wall for other departments to fix, which never seemed to happen. People were no longer as happy working there as they once were. A significant cultural transformation was needed to get the company back to higher levels of profitability and prepare it for a possible sale. But what would that look like? And where should we start?

After a few months, I was hired as COO. I immediately drafted missions, visions, and operating guidelines for the executive team to further develop and adopt. We eventually dropped the idea of a stated vision and adopted a mission of “We help our Sellers sell more!” That mission really helped the leadership team focus every day, week, and month. But frankly, it was the combination of the mission, improvement in leadership (we brought in a leadership development coach for the entire leadership team) and the operating guidelines that drove the entire organizational transformation. While not stated, the vision was of a company providing the highest value to its clients (the sellers using its payment services), growing in its financial value, with everyone working in harmony toward those reaching the first two goals. We talked about these three things all the time.

If your vision is not stated, what might be the “behind the scenes” vision for the company? Could it be stated to rally the troops and reach it faster together? Do you talk about your mission and goals on a regular basis?

Key takeaways from these transformations

The larger, more complex and/or faster-evolving an organization’s environment is, the higher the need for a stated vision that everyone can rally around and work toward in transforming the organization to get it to the next level. Does your organization need a stated vision?

To develop a great vision, you must know yourself, your organization, and what will stir deep passion and a sense of urgency within you, as well as the people you will be leading on this journey. Involve the leadership team in the process and get out and talk to others in the organization who have been, or will be, key to the success of the business. If you don’t know where you are going, what path do you follow? How will you know when you’ve arrived?

You don’t have to be a top leader of a large organization to start a transformation. If you can create a vision that…

  • you and others are passionate about,
  • is well thought out,
  • leverages your area(s) of expertise,
  • is widely recognized in the organization,
  • is supported by your leaders, and
  • is believed to be an urgent need with a real return on investment (in other words, a priority),

…and you have the confidence to step up, then you will have the opportunity to lead it. Is there a transformation in your organization waiting for someone to step forward and lead?

And lastly, if there is no sense of urgency, progress will be slow, at best. There is urgency as in a challenge that must be overcome, and urgency as in a destination everyone can’t wait to get too. What drives the urgency of your organization’s progress today? Can you combine the urgency of the challenges you face along the way with the urgency of getting to your destination to speed that progress up?

In “At C-Level #12: Building Transformation Teams,” we’ll look at how the teams were built in these same three organizations and what the key takeaways are that you may need to think about in building your transformation leadership team.

To become a more innovative leader, please consider our online leader development program. For additional tools, we recommend taking leadership assessments, using the Innovative Leadership Fieldbook and Innovative Leaders Guide to Transforming Organizations, and adding coaching to our online innovative leadership program. We also offer several workshops to help you build these skills. You can download the first three chapters of the Innovative Leadership Workbook for Emerging Leaders and Managers for free.

Thanks for following us! To learn more about transforming organizations and/or get help, visit us at www.Metcalf-Associates.com.