How CEOs Can Prepare for the Coming Change
By Ed Lopit, Owner at Best in Class Solutions
Competition for the talent that will be needed to capitalize on a recovering economy will be fierce. As I mentioned in a previous post about challenging the status quo, success for many CEOs will be dependent upon an ability and willingness to break with tradition. New and innovative models for acquiring needed skills and experience will be required if they are to effectively compete.
For CEOs sensing the need to change, the time to prepare is now. Begin by taking the following steps:
Assess your current “performance readiness”.
Make certain your goals are clear. Chart a course for where the business will be two to three years from now, given the market opportunity and objectives of owners.
Clarify what it will take to get there. Challenge the existing formula for achieving success in your situation. Spell out the critical outcomes needed to accomplish your goals. Define the strategies needed to deliver these outcomes.
Take stock of the tools you have at your disposal. Can your team execute your strategy? Do you have strategic thinkers who will anticipate and effectively address the challenges inherent with pursuing your mission? Do you have individuals with the business acumen necessary to adequately deal with the financial, operational and cultural aspects of running your business? Can they construct the operational and technological road maps necessary to achieve your objectives? Are they able to execute plans in a timely and high quality manner? Do they possess experience in dealing with the challenges you will face or are you betting they can “learn on the go”? Do you and members of the team possess the capacity needed to get everything done?
Develop a model for acquiring talent that is customized to your specific needs:
“Every Day Players” versus “Role Players”. As I’ve met with CEOs, there is broad consensus among the majority that their Executive Team can run the business. Taking on strategic imperatives needed to pursue their visions – such as spearheading expansion or rapid growth, driving a turnaround, or preparing the organization for infrequent events such as an acquisition – are a different matter. A CEO needs access to all the tools needed for the job at hand. Executive Teams should be supplemented with the addition of Role Players (independent experts) if needed.Consultants are great fits for addressing things the company does infrequently or not at all (such as training, special analysis and process redesign). In contrast to the consultant, interim executives can address needs the company would typically be assigning to a full-time member of the team. Their advantage lies in having unique experience and/or skills that allow them to do tasks faster and better. They can also bring capacity that doesn’t currently exist within the firm as others are consumed with day to day challenges. In addition, both consultants and interim executives can bring fresh perspective and a willingness to challenge the status quo that may be lacking from Everyday Players.
“Permanent” versus “Interim”. Not all business needs are permanent and new models must reflect this reality. While the concept of lifetime employment was a worthy goal in the 20th century it is sadly outdated. An exceptionally long career at any one company has become relatively rare. It’s not at all unusual these days for an executive to spend no more than two or three years in a job. Whether services are retained as an employee or independent the term and structure of the relationship must effectively align with the duration of the organizational need.
“Full-time” versus “Part-time”. Traditional models rely heavily on utilization of full-time resources. Given the expanding number of executives pursuing independent careers, new models need to incorporate best-fit strategies given both current and long-term needs. The contribution of part-time resources should not be undervalued. These resources can bring significantly greater horsepower and deliver more than a full-time resource with less skills and experience. While the up-front rate may be higher, a part-time heavy hitter can very often do it better and in less time to deliver a significantly higher ROI.
“W2” versus “1099”. New models must be able to incorporate W2 (Employee) and 1099 (Independent) contractual formats. The approach should be dictated by circumstance rather than familiarity. A comparison of the some of the key differences includes:
When incorporating outside talent (employees or independents) models must be prepared to address transitional challenges. In a comprehensive series of CEO interviews I conducted last year, common comments included, “We have found it very difficult to bring in people from outside and have them fit well into our culture.” Without question, bringing in someone “from the outside” means having to deal with such factors as cultural fit, the ramp-up time to productivity, dealing with resistance to change, logistics (such as office space availability) and, of course, capital constraints. These issues will need to be addressed regardless of whether the resource is secured as an employee, consultant or interim executive. But in the same set of interviews, those who had boldly moved forward noted it was entirely worthwhile. Typical comments from these CEOs: “Bringing in the new guys brings us fresh outlooks and new perspectives.” And, “Hires from outside bring in new ideas and help us in areas where we don’t have the expertise on staff.”
Successful CEOs know they can’t do it alone. Profitability, growth - even survival in today’s economy - requires the combined efforts of trusted, insightful, experienced and talented individuals who they can rely on to get the job done.
As CEOs prepare to respond to the opportunities presented by a recovering economy the challenge of assembling an effective leadership team will be tougher than ever to achieve. Large numbers of talented individuals are retiring, or pursuing alternative career paths decreasing supply just as demand is increasing.
Have you started this adapting process? What’s been your main challenge along the way?
Other posts in this series:
CEOs Need Help
CEOs Need a Game Changer
About the Author: Ed Lopit is Principal of Best in Class Solutions, a provider of coaching, consulting, and interim services to small and medium size businesses (to 500+ employees). As advisor, confidant, and hands-on executive, Ed brings great ideas to life by building profitable, sustainable businesses that are the absolute best at what they do.