Accounting for Business Growth and Transition Course Now Available!

I’m pleased to announce that my new course, Accounting for Business Growth and Transition, is now available!

Growing companies are dynamic places and there are a number of specialized issues that could arise during the lifecycle of a business. These include the complexities related to expanded operations, entering new markets, and undertaking business transactions.  It’s critical to understand these areas proactively, as well as how to add value to the company during the process.

Too many companies barely manage to do the minimum; resulting in the accounting function being little more than a place where transactions are recorded and reports are filed away.  The opportunity to learn how to develop and manage an accounting function that not only helps to improve operations on a day-to-day basis, but also provides a valuable support in times of transition is a powerful one!

This course addresses a range of areas that might be encountered during the evolution and growth of a company. Topics include organizational structures, consolidated financial statements, foreign exchange, due diligence requirements, and understanding approaches for structuring a business transaction.  Those who work in the accounting function will gain an understanding of how to take a leadership role in creating a value centered department that can play a key role in not only a company’s current operations, but also in whatever the future might hold.  Register today!

 

 

Getting Started: Preparing for the world of entrepreneurial adventure (Early Stage Financing)

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Published by CPA Canada in CareerVision

One thing that most start up companies have in common is a lack of resources, including people, capital, and “stuff”. The root of this shortfall (or the thing that can resolve it) is money, something that can be hard to come by in the startup world.  Once entrepreneurs have exhausted their own funds, and often that of friends, family, and anyone else they can convince, the only remaining option is to find an investor.  This is a big step for many young companies, as it represents the first time that the money ask goes outside of “the circle”.

There’s another important reason why approaching an investor is such a significant step, and it is simply this: most entrepreneurs have no idea what investors need to know in order to make an investment decision. Put another way, investors, be they experienced angels or institutional funds (such as venture capitalists) have very specific expectations in terms of the information they require.  This includes content and format, as well as fitting within the investor’s particular mandate.  While it might sound simple, it’s anything but, and most of what investors receive doesn’t meet their needs at all.

Life in a corporate job usually doesn’t involve spending time in this area, especially in terms of just how critical it is to success. Financing matters are typically handled by others, and access to this type of external party is limited.  In this series, our focus is on understanding the significant differences between a startup environment and the corporate world so that you can place a greater amount of emphasis on developing some of the skills that will serve you well in advance of when they’re actually needed.   So far, areas we’ve considered include risk, rejection, and money.  Understanding the expectations of early stage investors couldn’t be more important!

Why it Matters

Entrepreneurs tend to show a lot of confidence when discussing the topic of investors. They’re excited about the product/service they’ve developed, and generally expect that others will be equally impressed.  Comments like “so-and-so wants to invest” or “is ready to cut a cheque” are often heard, but as the process moves forward, these seemingly slam-dunk situations tend to fade.  Impressed or not, entrepreneurs are often left to wonder where the money went.

A big part of the reason for this is that young companies lack the ability to package an investment opportunity in a manner that meets the needs of investors. Be it the business plan that lacks context, too much emphasis on the product, or a financial forecast with questionable assumptions (or none at all; startups can’t forecast!), investors aren’t buying.  Entrepreneurs tend to respond by offering up information that is used to run the business, or even worse, more technical information, in the hopes that the tide will turn.  No such luck.

Get Started

Not understanding the needs of early stage investors is a very common problem in the start up world. Rise above it by taking the time to understand what investors want to know, well in advance of when the bank account is empty:

  • Research the topic of early stage financing: Venture capital and angel investing are specialized areas that are not understood well, and reading about it in a text book isn’t sufficient. Tap into resources produced by investor networks, associations, and similar sources to understand how it works and the preparation that is required.
  • Recognize that investors have specific needs: Many entrepreneurs simply do not do this. They believe that all they have to do is provide “what they have” and the investor will adapt. In a world where deal opportunities vastly outnumber the supply of capital, this isn’t likely to happen anytime soon.
  • Learn how to write a business plan: Bypass the folklore that “investors don’t read business plans”; they do. In addition, they challenge entrepreneurs on their business model, target markets, and the financial outcome of implementing the plan. All of these areas are very difficult to address well in the absence of having developed an investor ready business plan.
  • Network with experienced advisors: Those who specialize in the area of early stage financing have a clear understanding what is needed to raise the likelihood of getting to yes. Although there are no guarantees in life, their expertise can be invaluable. Look for those with a demonstrated early stage financing background, such as a former venture capitalist.
  • Practice accepting rejection gracefully: As simple as it sounds, doing this well can be the difference between ultimately receiving capital and burning your bridges. Chances are, you won’t raise money on the first (or even on the tenth!) try, so learn how to make the most of these interactions by asking questions, seeking out network contacts, and leaving a professional impression. Too many entrepreneurs do the opposite.

Thinking that your product or service is so great that investors will line up to put money in is a path to failure. If there is a scenario out there where all of the stars will line up to secure easy capital, chances are, it won’t be your company.  These are rough lessons that are best learned before they happen, so take the time to understand the complex world of early stage investing and prepare for it.

COVER STORY: Canada’s Venture Capital Report Card- Building on regional successes to stoke the long term fire

Cover story, as published in Private Capital, Q4 2015

The Conference Board of Canada’s most recent Innovation Report Card includes some impressive venture capital benchmarks, but there’s much more to consider when looking beneath the surface.

Decreased venture capital investment levels in peer global markets, which are largely a lingering byproduct of the financial crisis, coupled with brisk, but isolated investment activity in select geographies here in Canada raises questions about our ability to sustain a high ranking when conditions improve elsewhere.  Perhaps, even more importantly, these findings put the focus on what actions should be taken to bring improvement to Canada’s weaker markets, of which, there are quite a few.

The Findings

Canada

Increased venture capital investment, primarily in Canada’s large provinces, coupled with lagging investment in European countries since the recession have resulted in Canada moving from being one of the weakest performers to one of the strongest. Specifically:

  • Canada’s ranking has improved from third worst in 2009 to second best in 2014 in venture capital investment, relative to 15 peer countries. Canada earned a B grade and a fifth place ranking overall.
  • Canada’s venture capital investment has more than doubled, from nearly $1 billion (.07 per cent of GDP) in 2009 to over $2.3 billion (.12 per cent of GDP) in 2014.
  • The number of companies receiving venture capital in Canada has increased from 378 in 2009, to 416 in 2014. Peak levels of approximately 450 companies receiving venture capital in 2011 and 2012 have not been met in recent years.
  • The vast majority (80 per cent) of Canada’s venture capital investment in 2013 was later stage, with only 20 per cent taking the form of early stage financing. This falls well short of international trends where more than 60 per cent of venture capital targets early stage financing. The report notes that Canadian venture capital took a much more balanced approach in 2009, when financing was more evenly split between early and later stage.

The Provinces

Provincial venture capital investment levels and rankings vary widely, from A to D-, with six provinces receiving a D or D- ranking. Specifically:

  • Both BC and Quebec rank as A’s in terms of venture capital investment (representing .16 per cent and .14 per cent of GDP, respectively), outpaced only by the US (.17 per cent of GDP).
  • Although companies in Ontario received more venture capital money than that of other provinces, the venture capital investment level of .11 per cent of GDP was sufficient to earn a B ranking.
  • Propelled by two venture capital deals totaling $60 million in 2014, Newfoundland and Labrador received a C ranking.
  • Canada’s remaining provinces received a D ranking in venture capital investment, with Manitoba and Prince Edward Island receiving a grade of D-.
  • Substantial increases in venture capital investment levels from 2009 to 2014 have occurred in four provinces; Ontario (117 per cent), BC (91 per cent), Alberta (81 per cent), and Quebec (61 per cent). All other provinces have experienced declines.
  • In terms of the number of Canadian companies that received venture capital funding in 2014, the highest levels occurred in Quebec (151), Ontario (142), BC (60), Alberta (27), and New Brunswick (19). The remaining provinces ranged from one to nine companies receiving venture capital.

The Fuel

Canada’s much improved ranking was assisted by the fact that, with the exception of the US, venture capital investments declined in all of the other peer countries between 2009 and 2013. Canada weathered the recession better than many countries, contributing to more stable venture capital investment levels. In fact, venture capital investment levels have now returned to the pre-recession level of $2.3 billion. Contributions from the Venture Capital Action Plan (VCAP) have helped, as well as the ongoing participation of BDC Capital, which the study cites as Canada’s largest and most active early stage technology investor.

Venture capital investment in Canada from foreign sources has continued to rise. Traditionally, it has represented approximately 30 per cent of the total, but increased to more than 37 per cent in 2014 from US sources alone. Clearly, venture capital investment levels are positively impacted by foreign participation and our own public policy that encourages investment.

However, we must also be wary of the fact that Canada is currently standing out in a cohort that is performing well below its pre-recession standards. What we do next to continue to separate ourselves from the pack now could have long-standing consequences.

Viewing Canada’s current position of strength as an opportunity to make the necessary improvements to “lift the level of all boats” is a much more proactive approach than simply benefiting from the rise of the tide.

The Fire

Improving venture capital investment levels across the country and generating long term sustainability are important areas of focus. The Conference Board cites a number of factors that contribute to establishing a successful level of venture capital investment, including the presence of those with money to invest, companies that are investment worthy, and a means to connect the two.

Much could be said about the challenges of establishing venture capital pools in particular geographic areas and the difficulties of allocating a portion of funds in existing pools to investments with a higher risk profile. Regardless, fueling the venture investment process requires a stable of “investor ready” companies, enabling venture capitalists to invest well, work with high potential businesses, and generate the returns that are so important in attracting fundraising over the long term.  These are critical components in generating a sustainable venture capital environment.

Venture capitalists recognize that the presence of investor ready businesses and the right approach to get there are, in many ways, the fuel for generating a vibrant investment environment. Too often, the focus tends to be on leading with capital, and although this approach might find some initial success to “get money out”, it does little to generate the level of returns to stoke the fire for the long term.

Speaking Tour, Day 4

DAW traveled to Toronto for the fourth and final stop on the Fall, 2015 speaking tour.  We were greeted by sunny, warm weather and an enthusiastic group; a great way to end our tour.  The mix of participants in the room, the services they provide, and their client experiences always make the sessions interesting and unique.  Recognizing that a real opportunity exists to build a growing client base for the long term is an exciting prospect!

Key thing to think about for Day 4: It’s been raised on every stop of this tour that some clients tend to fall into the same difficulties time and time again; why is this the case?  Much of what needs to be learned represents a mind shift, a new way of thinking, and although these concepts might be understandable, they can be very difficult to put into practice.  This is just one reason why advisors have an important role to play in supporting and coaching their clients to meet and beat the challenges they face.

Thanks everyone who came out to see us, participated, and stopped by to share experiences and tell us that they enjoyed the day.  It means the world to us!

Speaking Tour, Day 3

Our tour travelled to Calgary for the third day of the Distinguished Advisor Family Business and Yearend Tax Planning Workshop  Another great group, with lots of interesting questions and experiences.  It’s always a privilege when advisors share their experiences, with the goal of identifying how and where they can better help their clients.

Key thing to think about for Day 3:  Identifying the right role for a business leader to take on as a company grows is critical, as time is a precious resource that needs to be channeled effectively.  Advisors can play a key role in helping their clients understand where they fit best, setting the stage for bringing in the right resources to build growth capacity.  Too often, clients make the wrong choice, resulting in costly setbacks for the company.

Thanks, Calgary, for the participation and hospitality. Next stop: Winnipeg (to take in some Halloween festivities!), and then on to Toronto!

Speaking Tour, Day 2

The second day of the Distinguished Advisor Family Business and Year End Tax Planning Workshop was in Vancouver; thanks to everyone who participated!  I’m always interested to hear the questions that are raised, as well as the experiences that advisors have with their clients.  This active, in the field interaction helps to keep my presentations practical and real, as I believe that this experience puts advisors in the best position to help others.

Key thing to think about for Day 2: Investor ready business planning isn’t just for start up and early stage companies; it is also extremely important for growth stage businesses, as well as those that are considering succession. As I’ve raised on every stop of this tour, the vast majority of business plans I’ve seen in my career are not investor ready (most are nowhere near ready!), and this is a significant problem for those seeking capital.  I’ve developed an approach based on my years in the venture capital industry, so if you’re going to invest the time to develop a business plan, do it the investor ready way!

Thanks to the Vancouver Club for their hospitality.  Up next: Calgary

Speaking Tour, Day 1

 

A big thank you to everyone who joined us in Winnipeg yesterday for the kick off of the Distinguished Advisor Workshop Family Business and Year End Tax Planning session.  Lots of lively discussion and great questions in my sessions!  The real benefit of attending this type of event is being in a better position to help clients improve what they do, fuel successful growth, and generate business for both clients and their advisors over the long term.

Key thing to think about after Day 1: How to put your business clients in the best position to capitalize on opportunities in the marketplace.  As far as I’m concerned, someone will benefit from marketplace opportunities; why not your company?  I’ve developed strategies to help companies do exactly that, so contact me directly for assistance with your business.

Thanks to the Manitoba Club for such a great venue!  Up next: Vancouver!

Getting Started: Preparing for the world of entrepreneurial adventure (Rejection)

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Published by CPA Canada in CareerVision

Chances are, you’ve had some real success in your life thus far.  Perhaps, you’ve graduated with a business degree, obtained a professional designation, won a job or two, and maybe even received some awards or honours along the way.  Although you might have experienced some disappointments, they tend to pale in comparison to the accomplishments that are well worth celebrating.

As you progress in your career, the odds are that you might experience a setback or two unlike anything you’ve encountered thus far.  As the stakes get higher, the likelihood of success can get proportionately smaller, and what keeps us trying is the realization that the potential rewards are often greater.  Having said that, in the corporate world, jobs can be like buses, with another one coming along at any moment.  If you miss the first one, sit tight, as another opportunity isn’t far away.  There is a certain kind of comfort in this.

Working with a start up company can be quite different in this regard, and it’s important to understand the implications if you’re considering making the switch from a corporate job.  In this series, our focus is on understanding the significant differences between a startup environment and the corporate world so that you can put a greater emphasis on developing some of the skills that will serve you well in advance of when they’re actually needed.   So far, we’ve considered the implications of risk, the ever expanding job description, and money.  Let’s talk about rejection.

Why it Matters

If you’ve met someone who works with a startup company, they can probably tell you lots about the upside; the excitement, thrill of doing something new, and the opportunity to “chart your own course” (they will soon learn otherwise!).  What they probably don’t talk much about are the odds of getting to the point of real success, which can be startlingly bleak.

With an abundance of new ventures launching wherever you look, the reality is they are challenged to find the necessary resources, customers, and capital to be successful.  In a world where demand far exceeds supply, many upstarts don’t last very long.  This reality is particularly true in the case of seeking the necessary capital to expand products, market effectively, and support growth.  Many entrepreneurs consider this to be the easy part, as who wouldn’t want to support their venture?  As the months go by, it becomes clear that just getting an investor meeting is difficult, much less making a pitch and getting funded.

In reality, the odds are stacked against startup companies.  Chances are that your venture will be rejected again and again; by potential customers, investors, and partners.  Those that work with startup companies, regardless of their level of success in life thus far, are likely to face rejection in a way that they never have before.  This can be disheartening, as well as quite a shock to the system.

Get Started

Although no one likes to spend time thinking about the downside, doing so is a good way to strategize to get to a better place.  This includes planning to face rejection and how to rise above it:

  • Develop sound problem solving skills: Those who find resilience in difficult times tend to have an ability to think creatively and solve problems.  As simple as it sounds, many people just aren’t very resourceful and lack the ability to determine what to do next.  Practice problem solving by approaching situations with a Plan B, Plan C, and even a Plan D.  Make it a “game” for yourself to strategize how you might get over hurdles, even in situations where they don’t actually occur.
  • Adopt a flexible mindset: Those who last the longest during difficult times perhaps have the greatest ability to be flexible, in terms of adapting to circumstances that are different than what was expected.  If funding isn’t received when anticipated, or turns out to be less than planned, surviving the setback can be all about how flexible a company can be.
  • Learn about early stage financing: Since financing is so integral to success and so elusive at the start up stage, it’s an important area to learn about, sooner rather than later.  Understanding how this niche area works and what investors look for can help you to be better prepared to respond to challenging situations.
  • Have an outlet for countering setbacks: Rejection and setbacks are stressful, and having a coping mechanism for challenges that are unlike anything previously experienced is important in order to keep going.  Find what works for you, be it creative interests, sports, exercise, or meditation and practice on a regular basis.  The startup world is truly a marathon and it’s important to develop longevity.

Preparation won’t end rejection, but it might help to make it less frequent.  It will also put you in a better position to withstand the many setbacks that will come and find the ingenuity and wherewithal to keep going.  The entrepreneurial world isn’t like where you’ve been.  You’ve got to train for it.

Fiscal Responsibility: Understanding your club’s financial position

Published by The Canadian Society of Club Managers in CMQ (Summer, 2015)

It’s been said that money “makes the world go ‘round” and looking around the room at many clubs often reveals an impressive display of successful members who have accomplished much.  Money is typically equated with success, and generating it over the long term isn’t just about bringing in sales, as sustainable results are often much more about managing the “bottom line”.  This can only be done by keeping a watchful eye on expenses, among other things, which isn’t always as easy as one would think.

Most club managers know, on at least an intuitive level, that finance is an important aspect of running a successful club.  But, with so much to do to ensure that service offerings are great, staff members are doing what’s required, and facilities are in top shape, financial management tends to find itself on the backburner.  If left unattended for too long, it becomes the proverbial pot that boils over.

There is a lot that club managers need to know when it comes to keeping tabs on a club’s financial position, and although most have at least some knowledge, how much is truly understood?  There are many areas to address, including managing cash flow, tracking expenses, budgeting, and understanding which areas are making money (and those that are not!).  Although it might be relatively easy to monitor information on a frontline basis (such as in the case of food costs), understanding where a club is at on an overall basis, and where it’s heading, isn’t so easy.  Seasoned leaders wouldn’t dream of lacking skills and attention in the finance area, as they truly understand that the buck stops with them!

Trouble in the Club

In a competitive world, it’s critical that all businesses have products and services that customers want and for which they will pay (the more, the better).  In the case of clubs and similar establishments, it’s also important that they are places where people want to be.  As a result, there is often a lot of time and effort expended on achieving this ideal; however, in the process of doing so, there are things that can get lost in the shuffle.  One of those things is money.

Like the successful members that keep clubs in business, their managers need to be equally savvy in making the most of the financial opportunity.  This means being on top of a club’s financial position at every moment, as well as having a good sense of what the way forward looks like.  In order to do so, it’s not just about a casual perusal of what accounting staff produce; rather, it’s about setting and maintaining expectations around how the accounting and finance function is established and operates, in a consistent manner.  Technical skills are important, but the approach and belief that financial management truly matters are equally important.

Failing to do so can lead to a host of problems, including incomplete (or incorrect!) information, staff members that lack the necessary accounting skills to do the job properly, and poor application of policies and procedures.  The result is too often financial information that isn’t worth the paper it’s printed on, despite the fact that club managers rely on it to manage a critical aspect of their operation.  This is a frightening scenario with potentially disastrous outcomes.

Leading Large

Remember the saying, garbage in, garbage out?  It’s never more true than in the accounting world.  Skilled leaders recognize the importance of the accounting and finance function, and wouldn’t make the common mistake of downplaying it as “not that complicated”.  Here’s how to ensure that you’re well equipped to lead the financial aspects of your organization:

  • Recognize what you don’t know. The biggest mistake that a leader can make is to marginalize accounting as “just processing” or “not that important”. It is true that accounting departments do record transactions and pay bills, but there is so much more that can be achieved from a value perspective.  This means: (i) knowing how to process transactions correctly; and (ii) developing and producing reports that communicate the right information in an appropriate manner.  Many accounting functions do not do this well, leaving leaders with a false sense of security, especially those without a finance background.  Recognize that this is a learned area and don’t assume that you “know enough”.
  • Hire the right people. Many leaders have difficulty understanding the type of help they need in the accounting area, mostly because they don’t understand the particular roles or what accountants actually do (closely followed by marginalizing the importance of the accounting function!).  People who work in this area, especially those with professional accounting designations, such as the CPA, understand that there are standard roles and tasks and that candidates can differ significantly based on their particular experience and qualifications.  Getting the right people in place usually means seeking the input from someone who understands this, so don’t go it alone.
  • Insist on timeliness. Financial information has its highest value at the point in time when it actually happened.  Like that delicious cream sauce that can quickly lose its appeal, financial information isn’t particularly helpful if it arrives a month or two after when it mattered.  Organizations can find reasons to delay generating financial information to when they get around to it; insist on timely month end reports, ideally delivered to you two weeks after the end of the previous month.
  • Ask questions. Financial reports are complex, especially for untrained readers. In order to fully understand what a financial statement or report is communicating typically takes years of education and practical experience.  Receiving information and filing it away is of little value; rather, the usefulness is in conducting a thorough review with your accounting manager, understanding what the club’s financial position is, and taking these findings to a front line level with your management team.  The process doesn’t stop with receiving the report; that’s only the beginning, as the real opportunity is to make the necessary adjustments to generate better results going forward.  This is how sustainable financial performance is achieved.
  • Utilize advisors well. Experienced advisors can help to improve the financial performance of your organization through various means, including reviewing current results and recommending improvements, assisting with budgeting and forecasting, and training your senior team (many of whom might not have a finance background) to better understand financial management.  The outcome is this: a higher level of financial acumen across the board and better results.
  • Invest in professional development. As a club manager, you hold the key to putting your organization in a position to move forward with strength.  If the accounting and finance area is not functioning well, get help!  Make a commitment to improve your skills in this area and let it permeate throughout your team, as it is an investment that will benefit your organization, as well as your own career.

Having been involved with numerous senior level management recruitments over the years, leaders who understand both what their organization does and the financial aspect of doing so are in high demand.  The supply is short.  Stepping up your financial acumen is good for the club, but it’s undoubtedly great for those who lead.

COVER STORY: Managing People- Understanding the strengths and weaknesses of your team

As featured on the cover and published by The Canadian Society of Club Managers in CMQ (Winter, 2015)

It’s obvious that people make the business world “go round”, and clubs are no different.  The complexity associated with people only increases when you enter the senior ranks, as club managers are typically faced with staff related tasks and relationships that include many components: recruitment, motivation, role definition, performance management, and broader supervision are only a few.  These areas must be considered specifically in terms of team members in senior level roles, which typically have a significant impact on an organization (positive or negative), more complex tasks, and a limited talent pool from which to draw candidates.  Perhaps, the result of this complexity is that the human resource aspect of a club management role often isn’t addressed as fully as it should be.

There is a lot that club managers need to consider and understand when it comes to dealing with staff members, particularly in terms of their senior team.  This includes knowing when action is required, in terms of hiring, firing, supervising, and simply providing support and giving people room to do their job.  Such an uncommon talent, of what to do and when to do it, can best be cultivated through personal awareness and practice, while keeping in mind the ultimate goal of creating a senior team that has the right skills and experience and well crafted roles, as well as a balance of support and direction.  Sound unachievable?  Think of it as something to strive for and an opportunity to seek out practical advice that can help to guide the process.

As discussed in the last issue, there are fundamental skills that successful senior leaders typically exhibit and consistently practice, in terms of the approach that is taken to fulfil their role on a personal level.   Here’s more about the why making a concerted effort to manage people well is so important at the leadership level.

Trouble in the Club

Like many businesses, clubs are busy places. When the list of tasks is longer than what can be reasonably achieved in a day (or a week, or a year), it’s human nature to focus on the areas that represent a “comfort zone” of where we feel most competent in terms of our ability to make progress.  This often doesn’t include human resource matters!

Human resource related responsibilities, such as recruitment, performance management, and coaching can be time consuming and often represent the proverbial “can that gets kicked down the road”, particularly in busy times.  There is considerable risk in this practice, in terms of both strong and marginally performing team members.  Too often, marginal performers are allowed to continue in their role (“he/she isn’t doing that badly…”), while the “stars” become frustrated by a lack of progress and obvious inequity amongst team members (and who can blame them? No one likes to have to compensate for a marginal performer).

The big risk, which is often surprising to leaders, is that their best performing team members will leave the organization, due to frustration, a lack of fairness, and better career options, leaving behind the marginal performers.  This is a disaster in the making for any club manager, especially when a reputation of not dealing with problem situations is created within the candidate pool of potential employees.  Not to mention having to manage a club full of less than stellar staff members!

Leading Large

Skilled leaders know how and when to take action when it comes to managing people and never let this important area slide.  They recognize that the rewards are many, including better performance that benefits the organization and an improved sense of fairness or equity within the senior team.  Here’s how to get the managing people aspect of a senior leadership role right:

  • Hire slowly, fire quickly. This advice might sound obvious, but, too often, it simply isn’t followed. Be sure to take the necessary time to fully understand the particular role that needs to be filled before undertaking the recruitment process.  Once this has been done, let the needs of the organization and the role guide the candidate recruitment and selection process.  Similarly, when a team member is not working out as expected, act on a timely basis and take the appropriate performance management steps.  Carrying a marginal, weak, or disruptive staff member doesn’t help the organization or the team.
  • Lead with quality, not quantity. Managing people effectively at a senior level isn’t about hovering or offering up frequent (but unnecessary) advice, it’s more about understanding the stage of development of each team member, their strengths and weaknesses, and when to provide support.  Empowerment, creating opportunities for tangible learning, and the quality of the coaching message are what matters.
  • State the obvious. Although some leaders might think that knowledge or information should be obvious or implied, people like to be in the know and understand what is expected of them at all times.  New initiatives, key results and targets, strategic direction, and opportunities to improve are all important areas to share with a senior team, so don’t keep them guessing.
  • See situations as they really are. It might seem hard to believe, but some leaders operate on the basis that if it is possible to resolve a particular problem, it will be done, regardless of the actual ability of the team member to do so. This dangerous practice is analogous to the “out of sight, out of mind” concept, so be sure that your expectations are realistic and identify areas where training and support are needed.
  • The sky is the limit. Experienced leaders recognize that when they are fortunate enough to have a real star on their team, they perform best by having the freedom to do their job, within organizational guidelines and policies.  These people consistently generate great results, are reliable, and will ask for assistance when required.  Let them do their job and don’t meddle, as a much better strategy is to use your time to work with team members who are not as savvy.
  • Recognize that a big part of a leadership role is coaching. At its essence, leading is all about assembling a team that can successfully execute on its business plan, to the benefit of the organization at hand.  Senior roles are less about doing the front line work and more about helping others to be successful in their role.  Making this a reality requires coaching, feedback, and support on an ongoing basis.

Leaders are often judged by the company they keep, and integral to this is people.  Understanding who your team members are, in terms of ability and developmental requirements, as well as what their role is puts you in the best position to support their success.  Don’t miss out on this important opportunity.

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