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Changing A Culture

April 9, 2010

I’ve walked into a number of situations over time where the culture needed to be changed. People simply weren’t into what they did anymore. I also find “How would you go about changing our culture” a frequent question in interviews.

My answer is simple: give them something to believe in. I’ve found that if employees really believe in what the company is trying to do the good ones engage.

I’ve also found that in most places the employees already know what needs to be done, even when they don’t. I’m sure you read that and thought what? If you talk to the employees they won’t be able to articulate what needs to be done, but when you ask them what they would change, you’ll most likely find a lot of commonality.

When you enter a new situation and you are expected to change the culture, there is a reason why the job was open. The most common reason is the management of the person before you. You’ll also find that their management fit one of two scenarios. First, and most likely is that they gave up trying. Nothing kills morale more than a leader that simply gave up. Second and almost as common, the last guy went nuts. This is the person that tried to the bitter end. You know what they say, if you keep doing the same thing and expect a different result…

If the person before you gave up and you paint a compelling vision and do it with passion, you’ll see the attitude change quickly. If you followed the second type of person it’s harder. Think of it like being the second husband of a wife that was abused by the first. The employees are ducking for cover before any words come out of your mouth. In this case you need to be supportive. It takes time to recover from this. If you need to do it quick, bring in a couple of helping hands and spread the load.

Culture change is not as hard as it seems, and it isn’t as touchy/feely as all the books make it out to be. Keep it simple, and you’ll be surprised. People want to contribute and feel good about what they do. Show them you care, give them a chance, and they’ll surprise you in a positive way.

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Update

April 5, 2010

You might have been wondering if I gave up writing this blog already. The answer to that is no. Since selling Captaris in the Fall of 2008 I took some time off to enjoy life, and I also explored a couple of startup possibilities. Going into this year I thought one of the startups was about to take off, and I was locked and loaded on making it happen. Unfortunately, it was dependent on third party IP that never materialized.

When the startup fell apart it was only a couple of weeks from the Olympics. A life long friend and his family were going to joining my family on our Olympic trip. I decided to throw all my energy into making it the trip of a lifetime, and it was.

Now you’re probably wondering what does this has to do with the blog; I’m getting to that. I also promised myself I would start writing a blog and begin looking for the next interesting challenge on the other side of the trip. Last week the second part of that promise was realized.

For the next nine months I’ve taken an assignment as the Interim COO in an early stage company (I’ll share the name when the contract gets finalized) that has developed cutting edge digital video surveillance and analysis technology. Like many early stage companies they have interesting technology, but haven’t found their niche in the market. My job is to determine the right market fit, package the product, and bring focus to the company. This is a role I have played several times over my career, and it should make for interesting new blog postings.

Unfortunately the job isn’t local, so last week I spent a fair amount of time planning an extended commute. The good news is the job is in Michigan where I have lots of family. I start tomorrow, so you should be hearing about it soon. I look forward to getting this company to the next level of success and sharing what I learn with you, so stayed tuned.

I’ll try not to have such a big gap in the future, but last week was very busy.

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One Step Towards Happiness

March 23, 2010

Do what you do best. Sounds simple doesn’t it? Well I can’t tell you how many people I’ve met along the way that fail to follow this simple advice.

Everywhere I’ve been I’ve found sales people who think they can run the operation. Operating people who are sure the sales people aren’t doing anything, or see the commissions they make and think they can do that. Everyone thinks the marketing and financial staffs are a waste of money.

Have you ever seen someone cross over? How did it work out? Well I can tell you that most of the time it doesn’t. If the person is really good at what they do they probably won’t be a failure, but they will struggle. My experience tells me that nine times out of ten times this type of move will only make you miserable.

To illustrate this let me tell you a story about one of the nicest people I ever met. Early in my career I was supporting this sales guy, let’s call him John.  John had been a successful sales person for over 10 years. He seemed to truly love his job and life in general. He was a truly enjoyable person to be around, and you really got the sense that he had it all. I remember my wife and me driving by his house before we got married and commenting that someday we’ll have that. I wasn’t just talking about the house.

John inspired me, but about a year after I started working with him our manager changed. This was common at our company; I had eleven managers in my first six years. This time the manager was someone who was in John’s training class when he joined the company. This shook John at his very core, because it made him feel he could have done more with his life.

Suddenly enjoying life and being successful was no longer enough. John needed to be a manager. Now almost every sales manager would tell you that if you are consistently successful in a direct sales position stay there. You make more money and don’t have half the hassles of management. John knew this, but it didn’t stop him.

Becoming a manager involved going to corporate for a couple of years. We use to joke that they sucked out half your brain and then sent you back as a manager. John took this path and about two years later he became my manager.

John was a truly uninspiring manager. Not only did he seem to be missing half his brain, but he also lost a great deal of his passion. The reason for the loss of passion was simple: John hated being a manager. John was a sales person. It was truly who he was and the only thing that really made him happy.

The point here is that a sales person enjoys the thrill of the hunt. He enjoys knocking on doors, competing, and most importantly winning. Most are very focused on the money and fame that comes with the job. On the other hand a manager needs to be nurturing, and understanding. The manager is satisfied by getting the most out of the team. Fame and money go to the person who got the deal, not the manager.  This is why most successful sales people make lousy managers.

This isn’t exclusive to sales, as I found this simple philosophy applies to most people and jobs. I’m not advocating settling, but I am advocating personal awareness. My advice is be very careful at each step. It is important to understand your core skills and what makes you happy. If you can marry the two you can be successful and enjoy it, and I believe this is a key to a happy life.

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Size Matters

March 19, 2010

A common mistake organization’s make is to assume if someone can run a large organization they can run a small one and vice versa. In my experience this is rarely true. The size of an organization plays a big role in determining the proper person to lead. I’ve been fortunate to have leadership roles in businesses as small as startups to as large as Fortune’s Top 50. I’ve personally experienced the demands on senior management at each level and can testify that it is very different depending on the size of the company.

When I started my first business I was the only employee, so I needed to do everything. In this environment you quickly find yourself moving across disciplines like finance and accounting, sales and marketing, and product development. Most people can’t do all of these jobs and hiring or contracting people eats up cash. Cash is like air in a startup; without it you die. The CEO’s ability to do multiple jobs conserves cash and this is absolutely critical.

Now contrast this with a large company. The biggest business I ever managed was a couple hundred million in revenue and was part of a $1 billion dollar company. At this company I worked for someone who, prior to joining the company, ran a large high-end consumer goods company (Fortune Top 50). This person was extremely intelligent and very well respected, but he struggled to lead the billion dollar company towards his vision.

He believed his vision was clear and couldn’t understand why the organization wouldn’t follow his leadership. I was on the senior team and had a firsthand view of what was happening. My belief was that he simply didn’t understand that a vision alone would not suffice. A company this size requires the CEO to develop a clear plan that can be executed, a high level vision is not enough. Strangely, the problem wasn’t that he couldn’t develop the plan he simply didn’t recognize the need to do it. In the consumer goods company the vision alone enabled his staff to execute. In a smaller company more is required of the leader.

To illustrate this point further let’s look at another company I led as CEO that was approximately $20 million in revenue. I had a competent CFO and CTO, but as CEO I was required to be the chief product strategist, marketing department, and get directly involved in sales. I also had to manage outside investors and a law firm. This was a very mature business, which made the Board and Investors easier to manage. If the business had been a startup that rapidly achieved the same revenue the Board and Investors would have been pushing for a liquidity event. Driving for a liquidity event is like taking on another whole job. You still have to do everything above, but you also must find a willing buyer and negotiate the sale. This is burnout central for most executives.

From the above I can see how you could come to the conclusion that it is easier to run a larger business than a smaller one, however this isn’t necessarily the case. Running a large highly complex business is very difficult and very demanding. There are lots of moving parts and understanding the business and competitive landscape is a real art form. You have to have excellent business instincts and the ability to digest and analyze enormous amounts of information. You also have an incredible amount of noise coming from outside of the organization in the form of Directors, Investors, Banks, and even the Press. Everyone has an opinion and everyone is playing backseat driver. This is why they get paid the big bucks. In a small company there isn’t anywhere near the complexity or noise and you are free to focus on executing a core vision.

The maturity of the market and organization also plays a big role in what is required of management. Early stage companies are all about growth. Late stage companies in more mature markets are generally earnings driven. Early stage companies focus on exit strategies while late stage companies focus on growth through acquisition. Acquisitions also require integration planning and implementation skills.

Hopefully you are starting to get the picture. The entrepreneur that starts a business, achieves rapid growth, and then drives towards an exit is not a likely candidate for CEO of a Fortune Top 50. These two jobs require very different skill sets. This is why when BigCo acquires SmallCo the CEO of SmallCo stays a year and moves on. They are simply a fish out of water.

The thing I don’t get is why no one seems to recognize this when they are searching for the next CEO. SmallCo always wants BigCo’s executive and BigCo always wants the SmallCo entrepreneur. This is because SmallCo thinks the BigCo executive knows what it takes to get big, and BigCo thinks the SmallCo entrepreneur knows how to innovate. I’ve got news for you, the BigCo executive knows how to manage it when it’s big not how to get there, and the SmallCo entrepreneur is more likely to suffocate in BigCo than innovate. The lesson here is: If you want to find the right person don’t factor out the environment because size really does matter.

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Making the Tough Calls

March 12, 2010

Today, I’ve finally decided to get off my butt and start contributing again. The leadership team at my last company achieved a successful exit in late 2008, and since then I’ve pursued a couple of startup ideas and have taken some time to enjoy life. I’m now itching to get back into the mix and I’ve also decided it time to start sharing what I’ve learned along the way. This is the first of hopefully several postings on what it takes to be an effective leader. I hope you enjoy it.

One of the most important traits of a leader is the ability to make tough decisions. Have you ever sat in a meeting where a topic is being discussed with two or more opposing views and no conclusion? I’ve sat in far too many in my career. There is nothing more frustrating than an endless debate. Everyone leaves dissatisfied and it doesn’t take long before no one wants to go to another meeting. If you are in this situation it is because the leader of your organization is not making the tough calls.

The reality of being a senior executive is that you are paid to make decisions and you will be judged on how well you do it. One thing I don’t think many executives understand is that ultimately they get the recognition or the blame for how their organization performs. Organizational performance is almost always closely associated with how effectively the leader made decisions.

Many executives think they can avoid making decisions by simply surrounding themselves with a strong team. Sometimes this is true, but if you hire good people they will want to explore all sides of ideas and opportunities. Leaders have to be careful that the best debater, or the person with the most data, doesn’t simply overwhelm the rest of the group. A strong leader will make sure all sides are heard. I often take an opposing side of an argument, even when it isn’t what I believe, just to make sure I’ve looked at all points of view.

Beware of the meeting where only one person is really prepared, or the opposing voice isn’t in the room. Politically astute up-n-comers love to use this tactic to get their way. Leaders need to cut it off at the kneecaps.

Sometimes the best decision isn’t the one supported by the data. Another thing senior executives are paid to do is to make the controversial call. I’ve often said that if you find yourself agreeing with industry analysts it is probably because they got their input from people just like you. I always look for where I disagree strongly with the analysts, because that is usually where the biggest opportunity can be found.

The speed of the organization is also a factor of how effectively the senior people are making decisions. People can’t act if they don’t know they have support. If the executives take a lot of time to make decisions the organization will move slowly. If the leader doesn’t make decisions it may stand still. If you make decisions quickly it buys more time to adapt when you are wrong.

Oh yes, expect to be wrong. Strong managers love to believe they are infallible, but the reality is we all will make wrong decisions. The best leaders know how to recognize a bad decision and take action to correct it.

Early in my career I took on a product management position with a Fortune 50 company. I soon found myself in endless cross functional meetings. A cross functional meeting is one where each organization discipline (sales, marketing, manufacturing, engineering, etc) is represented. Everyone in these meetings was at the same level and the meeting chair would moderate discussions related to the purpose of the team. Many of these discussions were endless, for example sales always wanted more product features and service needed to contain cost. It didn’t take me long to get very bored and frustrated.

After a couple of weeks of going to meeting after meeting where nothing was decided I chose to try to change the game. I went to the meetings and started making decisions, as if I was in charge.  Soon after this the attitude of everyone in the meetings improved and we started getting things done and building momentum. At the same time I received a number of anonymous email and voice mails expressing concern for my wellbeing and cautioning me to be careful because “they” (I never did find out who they were) could hold me accountable. What these people didn’t understand is that I wanted to be held accountable. I was amazed later to watch these same “anonymous” people take credit for the good decisions, and deny anything to do with the bad. It’s not a perfect world, but don’t let that stop you from making a difference.