The Executive Edge (“Must have” skills to get to the corner office)

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Published by CPA Canada in CareerVision

Throughout this series, we have explored a wide range of skills that are integral to performing well at the executive level.  Think of these as positive lessons.  There is much to be learned, however, by watching weak (to downright awful) executives at work.  Think of these as the executive you never want to be.  Look around; they’re out there.

Although it might be surprising, negative lessons have a way of resonating and reminding over the long term, perhaps serving as a guide to keep high potential executive candidates from wandering too far off the path.  Since careers are long and the executive journey often includes many challenges, regular reminders and “check ins” are a good thing.  Think of it as taking the time to gauge we’re you’re at and adjusting, as required.

One of the benefits of not being at the top of an organization is having a ringside seat to watch those who are.  Make this time worth your effort, by learning from both good and bad leaders.  Here’s a rundown of what you can learn from the “anti-bench strength” bunch.

Where it Goes Wrong (and Wrong, and Wrong)

Although there are lots of negative “leadership” examples, there are some fundamental types that you never want to emulate. See how many you can recognize from your career travels thus far.

  • Not sharing the wealth: From taking credit for the ideas of others to making sure that team members never see the limelight for a job well done, these people seem to hold the view that anything (and everything) good that happens in an organization is because of them. Team members might let this behavior go by a time or two, but after that, it too often becomes apparent t hat this type of person is no better than a thief!
  • Not having your back: This person gives the reassured impression that they’re “right behind you” and “on your side”, only to mysteriously evaporate at the first sign of trouble. Loyal to no one but themselves and always looking for opportunities, they’re like that person at a cocktail party who’s scanning the room while they’re supposed to be talking to you! Bottom line, this person can turn on a dime and cannot be counted on for support.
  • Not minding their own business: Simply put, this person meddles in the work of others to no end.  Instead of providing executive support, guidance, and direction when needed, they barge in where they aren’t needed; a disruptive force that, in time, runs the very real risk of creating a dependency between the organization and themselves, making the decision making ability of anyone else obsolete.
  • Not resolving problems: When difficulties arise in an organization, the staff group counts on management to resolve the issue; good leaders understand this.  Executives who kick the can down the road or listen to valid staff member concerns, but fail to take action can quickly lose the confidence of others.  Staff members eventually come to recognize that the leader “won’t do anything about it”, resulting in disappointment, a lack of respect, and, often, departure.
  • Not the learning type: If smart executives understand that knowledge is power and continuous learning at all levels is an investment, weak executives live with their head in the sand.  Put off by smart and keen staff members, this person would rather limit their knowledge, claiming that they “know enough” or that their business “isn’t that complicated”.  Organizations led by this type of person tend to become isolated, antiquated, and stuck in routines.  Over time, they often lose their market position, due to leadership that resists what’s needed in order to keep up with those who know better.
  • Not a nice person: Although it’s true that people can work together without really liking each other, on some level, the most basic of respect and decency are required to develop a relationship that can generate success.  Leaders who are rude, insensitive, or just plain unpleasant to be around are ultimately unable to generate loyalty, no matter how well they do their job in technical terms (and competency is no excuse for bad behavior).  Over time, staff members move on and word gets around that this is a person best left on their own, as it should be!

Although many executives who exhibit these behaviors thankfully don’t last long, enough time often passes for damage to be done; to companies, people, and sometimes, even more.  Using interactions with weak leaders to your benefit is extremely worthwhile, as each lesson is a valuable one.

Get the Executive Edge

You have the opportunity to chart the career path you’d like to travel.  Take the time to think about the type of leader you truly want to be, in terms of how you approach and conduct your role.  Technical ability aside (knowing how to do the job is a given), when you think of a leader, who do you see?

The reality is, successful executives know that they are always on the path of their journey and never quite at their destination.  There is much to learn, practice, and do, so take each step out to the very edge of your ability.

The Executive Edge (High Performance Teams)

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Published by CPA Canada in CareerVision

It’s been said that if you’re the smartest person in the room, you’re in the wrong room.  This statement has never been truer than in today’s business world.  As our global environment continues to grow and becomes increasingly complex, so must the many companies that seek to meet the needs of customers and stay ahead of the competition; in the absence of doing so, they will cease to be relevant.  As a result, leading businesses must continuously improve what they do and develop and offer the products and services that best fit with a rapidly changing world and ever discriminating consumer.  There’s no doubt that a high level of bench strength is required in order to do so.

Seasoned executives recognize that one of the most powerful components for generating success is a high calibre team, both at a senior level and throughout an organization.  It is through great minds, creativity, and heartfelt commitment that teams can soar to achieve uncommon things, to the benefit of the company and the consumers that they serve.  In these types of situations, barriers are overcome, new ways to do things are found, and true market leaders are made.  Team members recognize the unique component that they bring, and have the right attitude for encouraging the success of others, realizing that empowered groups can truly achieve more than individuals.  What is critical, however, is a talented leader to bring it all together.

In this series, we have already considered the importance of a number of Executive Edge skills, including generating results, role engagement, and professional development.  Here’s more about why successful executives understand how critical it is to surround themselves with high calibre people, always.

Where it Goes Wrong

One of the biggest threats to putting together a high calibre team is ego, closely followed by insecurity; there’s really no other way to say it.  When business leaders take the focus away from what’s in the best interest of the company and instead dwell on their own personal needs, making the right decisions can become elusive.  This is best illustrated by asking the question “why wouldn’t a business leader want to be surrounded by the absolute best people they can find?”  The answer, too often, relates to their own personal issues.

Although it might seem exciting to have a group of less accomplished people take direction and follow without question, this situation can quickly run its course, especially when competitive challenges, risks, and complicated issues arise (and, they will.  This is the business world!).  A loyal, but poorly equipped team of can quickly end up over its head, with few resources that have the capability to help the company survive the situation.  It’s at times like this when a business leader might look around and see lots of faithful colleagues, but little in the way of actual help.  And, as the ship slowly sinks, the realization that leadership is often judged by results brings into clear focus that success in business is much more about meeting customer needs than personal ones.

Get the Executive Edge

Striving for success on an individual level might be what’s needed to make career progress; however, the senior leadership level is much more about assembling a stellar team and working effectively to generate results.  Here’s how to shift your mindset and get started:

  • Define your strengths. Recognize what your best talents are and articulate them well, as this knowledge will help to identify your best team role. This is no different than determining if you play best at forward, defence, or “in net”.  Make a commitment and move forward from there.
  • There is no “I” in TEAM. Perhaps a cliché, but it’s true.  Being successful as a high calibre team member is understanding what your strengths are and bringing them into the group.  Integrate, participate, collaborate, and achieve results, together.
  • Focus on the business perspective.  Objectives should be derived from what’s in the best interest of the company, and this generally comes from what customers and the marketplace want and need.  Position the business for success and then focus on getting there, without interference from the inside.
  • Recognize the learning benefits. Being in a room with lots of smart and accomplished people is a great learning opportunity, and the knowledge that you gain is portable and can be taken wherever you go.  Think about it: spending your career years in a learning environment is so much better than the alternative.
  • Soar.  Perhaps, the greatest feeling in the business world: supreme success! Earn it, live it, enjoy it, and then, repeat.  This is what successful companies (and teams) do.

The day will come when you will be looking back on your career, instead of looking forward.  Ask yourself what you most want your achievements to reflect.  If real success is at the top of the list, chances are, it will only be achieved if you are able to be part of a “super smart” team that will challenge its members in the spirit of getting to the best result.  If you’ve been there, you wouldn’t have missed it for anything else.

The Succession Conundrum: Business leaders, the weak link to successors, and the companies who try to finance them (Part 2)

Published by the Canadian Venture Capital Association in Private Capital

If succession planning is a challenge for business leaders, potential successors might describe the process as mysterious.  While a business leader or founder has typically been at the helm of a company for some time (if not a prolonged period of time, in many cases), potential successors are often just trying to find a way to get to the table.  One day, the founder is keen to “step back” from the company, while the next day, “retirement” seems vague and far in the future.  For someone wanting to aspire to a leadership (and ownership) role, this type of situation can be a difficult to deal with on an ongoing basis.

Whether a potential successor is a longstanding “2-IC” (2nd in Command), management team group, or family member, their vantage point might provide relatively little information in terms of how the company actually operates, the business leader’s true expectations around succession, and what it would actually take for a transaction to occur.  Add in the mixed messages that can be so common with the issue of succession and it might be enough to cause a potential successor to scramble for the door, vowing to create an opportunity all their own (and on their own terms).

This reality should be sufficient to get the attention of business leaders who are contemplating succession, if not outright relying on it as a means to monetize their ownership position.  Given that a recent survey conducted by the Canadian Federation of Independent Business (1) found that the top barrier to succession planning is finding a buyer/suitable successor (56%), those seeking to exit their business should recognize that finding (and keeping) a potential successor is not to be taken lightly.  Unfortunately, too many potential successors find just the opposite to be the case.

The Successor Perspective

Something that many potential successors have in common is that they are keen; to implement their ideas, take the company in a new direction, and just “get started”.  Many have a reasonable expectation that succession will occur at some point in time, either by virtue of previous conversations on the topic, or perhaps, in the case of a family business, where succession is “expected”.  Call it an informal succession plan.

As a result, potential successors want to better understand how and when a transaction might occur.

This is particularly true in the case of individuals who have invested a number of years working in a company, learning how it operates and directly contributing to building its wealth.  They reach a certain age or point in their careers when they truly need to know: (i) if a succession opportunity actually exists; (ii) when it would occur; and (iii) what the financial implications would be, particularly in terms of the cost to undertake the transaction.  In the absence of this information, a successor’s next best alternative is to move on to other opportunities, and given the effort they have invested in building the company (often, to the direct benefit of a shareholder group in which they are not included), this is understandable.

The Opportunity

Identifying a qualified and willing successor is only the beginning of the succession process, as there is often still plenty of learning to do in order to fully assume and conduct the leadership role.  But even before this can happen, the parties need to be able to arrive at an agreeable value and the successor has to have the ability to pay, either by way of their own funds or through securing financing (in the absence of either of these options, it often comes down to the departing business leader to agree to be paid over time).  Since the  Canadian Federation of Independent Business survey found that valuing the business (54%) and securing financing for the successor (48%) are the second and third highest reported barriers to succession planning, all involved in the process need to take note.

For potential successors to chart their course, there are a number of things that can be done on a proactive basis to better understand the particulars of the opportunity, as well as getting a plan into place.  Seeking advice from those who have undertaken or financed business transactions can help to bring context to the situation, in terms of its appeal and how to help move the process forward.  Here’s how:

Look in the mirror. The truth is, not everyone is cut out for a leadership role. Leading a company, in terms of both the role and ownership aspects, can be significantly different from the experiences of a potential successor thus far, including the scope of responsibility, level of risk, and degree of commitment.  As an example, in the event of insufficient cash flow, owners typically bear the responsibility to inject additional funds or decrease their own compensation to cover shortfalls.  This type of uncertainty might fall outside of a potential successor’s risk tolerance level.

Potential successors need to take a hard look at all aspects of assuming a leadership role, objectively balancing both the risks and rewards of ownership.  Advisors can help by providing independent feedback or helping successors to undertake a self assessment to better understand the types of roles in which they fit best, before proceeding any further.

Assess the situation objectively. Due to the inherent uncertainty that often clouds the succession process, potential successors need to be able to get to the heart of the situation, to first understand whether or not an opportunity actually exists.  This uncertainty is a relatively common frustration, and the reality is that succession is only going to happen if a business leader is committed to undertaking the process.

Advisors can help potential successors to see the situation for what it is, as well as suggest approaches to further discussions with the business leader or how succession could occur.  In addition, successors might need to take action to put the situation in context, by identifying other possible succession opportunities as a comparison.  Although business leaders might not like this very much, the reality is that there are situations where succession simply will not occur, no matter how much a founder might indicate otherwise.

Communicate.  Given that succession can be a sensitive topic, it’s not uncommon for the parties to have difficulty having meaningful conversations around the issue; this can be particularly true in family businesses.  Since succession represents a complex business transaction with numerous details to be considered and negotiated, it won’t just magically happen.  Given the sensitivities, these conversations tend to get deferred and delayed, making succession seem less likely as each day passes.

Starting the succession dialogue between the parties is critical, to map out an agreeable approach, but to also identify situations where an arrangement might not be possible, allowing both sides to pursue other opportunities.  Advisors can help to start the conversation in a non-confrontation manner, in an attempt to find common ground, where it exists, and cover off areas that need to be addressed.  This approach can also help to fill in knowledge and experience gaps that are common in the case of potential successors.

Financial implications. Discussing money is often tough, not just because of the calculations and various financing structures, but simply because the parties might find it difficult on a personal level.  In the case of family businesses, parents might be sensitive to the financial situation of their children, while the next generation might be concerned about not “offering enough” as compensation for all of the work that has been put in to building the company.  Couple this with a founder’s understandable desire to receive fair compensation to finance the retirement they have been dreaming of and negotiations can stall.

Potential successors often do not have a lot of experience in this area, and financial partners can be helpful in terms of transferring knowledge and suggesting approaches that could meet the needs of all parties.  Regardless, those who are serious about taking on a leadership and ownership role at some point in the future need to ensure that their professional development program includes business financing, sooner rather than later.

Although it’s true that good successors are in short supply, all potential successors need to take a hard look at not only what is required of them, but also whether or not the opportunity at hand is viable.  In times of investment (and that’s what succession is), bringing a professional approach to the table is a must to ensure that the right deal gets done.

Source:

Passing on the Business to the Next Generation, Canadian Federation of Independent Business, 2012

The Executive Edge (Market Focus)

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Published by CPA Canada in CareerVision

As much as executives have to manage what’s going on inside a company, external developments and the environment at large are at least as important, if not more.  If being in business is all about developing and delivering products and services, it is the marketplace (including customers and competitors) that makes this effort relevant.  Think about it; in the absence of a customer need for a particular product or service, businesses really don’t have much to offer.  Similarly, the presence (or absence) of competitors can also determine whether or not a company has a meaningful market opportunity.  This reality should be a humbling reminder for all executives.

Successful business leaders know that it’s critical to pay close attention to what’s going on outside of their company; committing at least 50% of their time to keeping a close eye on the external environment.  This includes monitoring things like customer preferences and demand levels, competitive developments, and emerging trends on a number of fronts, including consumer behavior, product development, regulatory matters, technology, and economic conditions.  Staff members at a less senior level might think that these areas don’t have much to do with “making the product”, but in fact, it is the marketplace that should drive a company’s internal efforts.  Afterall, what is the value of a product or service that no one wants, is obsolete, or readily available through multiple sources?

In this series, we have already considered the importance of a number of Executive Edge skills, including, risk management, generating results, and communication.  Here’s more about why successful executives understand the importance of integrating an external focus into their perspective.

Where it Goes Wrong

Companies have a tendency to get caught up in internal matters, including roles, staffing, and “the way we do things around here”.  Another area where businesses often spend a lot of time (and in many cases, too much time) is in contemplating the products and services that they deliver, particularly when technology is involved.  Although having great products and services is important, the level of effort in this area can at times far exceed what is actually required, often due to the natural passion so often associated with invention, as well as this area being at the core of how many businesses were founded.  Couple this with attention grabbers such as personalities, politics, and other people related issues and the risk of distraction from what really matters can soar.

When business leaders spend too much time focusing on the company and don’t pay enough attention to the external marketplace, they run the very real risk of the business veering off course and becoming out of step with the needs and expectations of customers.  In addition, less attention is paid to competitive and other market developments, which can result in displacement of position, as well as a decreasing relevance to customers.  And make no mistake, this can happen quickly!

Get the Executive Edge

Learning how to take a balanced perspective, including both internal and external viewpoints, takes practice and can be a significant shift from that of less senior roles, where the focus is typically more internal.  Here’s how to start developing the ability to have a greater external focus:

  • Understand the meaning of “industry”. An industry is a segment of the economy, where a company operates in its broadest sense, and is typically considered on a global or continental level.  Although some might ask “how does what’s going on half-way around the world impact my business?”, it actually does, particularly in terms of consumer and technological trends and developments.  Learn about the industry in which your company operates and monitor developments on a regular basis.
  • Understand the meaning of “market”. The market is the next level down from the industry, and often encompasses the area within which a company operates on a national or regional basis. Closer to home, developments are very relevant, particularly in terms of competitors and customer preferences.  Within markets, companies can chart an expansion strategy.  Consider this in the context of your business.
  • Articulate the target market.  The target market includes potential and current customers, and businesses need to have a strong understanding of developments and attitudes towards the company.  Know who your target market is, the potential for growth, and the level of satisfaction with your company’s products and services.
  • Stay connected with customers. Finding ways to connect with customers on a regular basis is a great way to integrate an external focus into your role.  Customer service calls, surveys, appreciation events, and seminars/training can be great ways to interact, receive feedback, and “be seen”.  Make a conscious effort to be active within your company’s customer base.
  • Get involved on an external level. Taking an active role in industry or community associations, participating in events, and networking help to keep the level of internal focus in check and provide a different perspective. Seek out these opportunities and choose wisely.

Over time, it’s not uncommon to notice a shift in terms of how time is spent and the increased external perspective that is generated.  A balanced approach is powerful, so make a real effort to “look out the window” every day.

The Executive Edge (Generating Results)

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Published by CPA Canada in CareerVision

Although it’s true that executive level roles have a greater strategic focus and are further away from the front line action, senior level people still have to be able to get things done.  Whether it’s helping a management team to solve problems, identifying an expansion path, or overseeing core business activities, executives are accountable for (and often judged by) results.  This is not an easy place to be, particularly in times of change or declining performance.

So, if people at the senior level of an organization are less involved in front line work, how do they get things done?  The answer might be as simple as comparing a successful executive to one who is less accomplished in this regard; think: sound planning and direction; ensuring that a company has the right systems in place that allow staff and management team members to do more; generating a motivating environment; and, of course, having all of the right skills on hand.  This could be described as a “gentle push”, that allows a company to move forward with decisive support, as opposed to stagnating or being plagued by indecision.  Smart executives know that getting things done is, in part, about decision making, but also about having the necessary experience and judgement to make good decisions.  It is this ability that fuels the critical act of implementation and the results that follow.

In this series, we have already considered the importance of a number of Executive Edge skills, including collaboration, professional development, and generating respect.  Here’s more about why successful executives understand the importance of implementation and getting things done.

Where it Goes Wrong

Executives who lose focus on the importance of generating tangible results might find themselves on the outside of relevance.   Whether leading a for-profit business or managing the limited resources of a not-for-profit organization, results and productivity matter.  Those who spend too much time on unfocused or theoretical efforts run the risk of leading an organization to a point where it will ultimately do less; this is the risk of becoming too far removed from the front line work.

Before too long, organizations can start to have a lack of urgency; a dangerous place to be in a competitive, and resource constrained world.  What doesn’t get done today gets put off until tomorrow, as the weeks and months go by with little achievement in the way of tangible results.  From a customer standpoint, who wants to deal with these companies?

Get the Executive Edge

Ensure that upward mobility on the career path includes sufficient focus on turning the wheels of productivity.  Here’s how to keep focused on generating results:

  • Use meeting time wisely. Meetings should be used to communicate important information, seek input, confirm action items, and move forward.  In order to ensure that the focus is kept on getting things done (and not just talking about it!), meet only when needed, maintain focus by using agendas and action items, and curtail non-productive chit chat.
  • Pay attention to standards and systems. Although some might consider processes and standardized approaches to be mundane, remember that they not only benefit the company, but also those who perform well enough to meet or exceed targets. Use standards and systems as an opportunity to accelerate performance.
  • Measure and monitor results.  Once standards are in place, they have to be managed, which means measuring actual results to target and taking corrective action where required.  Those who have the discipline and talent to do so are well regarded by the senior ranks.
  • Compensate based on results. Structures that include a meaningful variable component tied to performance tend to focus people’s efforts on what’s important.  Good compensation structures include short term and long term incentives, as well as measures for individual, departmental, and organizational performance.  Roles that are structured in this manner can be a good opportunity for those on the way up to demonstrate their worth in tangible terms.
  • Watch competitors and the marketplace. Paying attention to what’s going on in the outside world can be an important reminder that organizations need to take action in order to remain relevant to those that they serve. Remembering that any organization should be thinking about customers, competitors, and markets at least 50% of the time can help to instill a results oriented mindset.

The reality is that the more senior a position becomes, the more directly accountable it is for the performance of the entire organization, which, in turn, reflects how well the actual job is conducted.  This is a significant shift from that of less senior roles, so the sooner that the “results” skillset is developed, the better.

The Succession Conundrum: Business leaders, the weak link to successors, and the companies who try to finance them (Part 1)

Published by the Canadian Venture Capital Association in Private Capital

Business succession planning is tricky; part old, part new, part money, part emotion; it’s no wonder that so many business leaders put it off.  The reality is that an abundance of Canada’s small to medium sized businesses (more than half, according to a survey conducted by the Canadian Federation of Independent Business) don’t have a succession plan at all.  Since companies in this category are responsible for generating approximately one half of the Canadian economy, there is undoubtedly cause for concern.

Consider some of the key survey findings (1):

  • 51% of business leaders surveyed indicated that they don’t have a business succession plan.  Of the 49% that have a plan, only 9% have a formal, written plan
  • Approximately 48% of business leaders plan to exit their company within the next five years
  • 48% plan to exit their business by selling to buyers unrelated to their family, while approximately 37% plan to sell or transfer the business to family members
  • The top barriers to succession planning include finding a buyer/suitable successor (56%), valuing the business (54%), and securing financing for the successor (48%)

Those who have even a moderate interest in the issue of business succession likely realize that various surveys and sources of information have yielded similar results.  Delving beneath the surface, however, reveals interesting implications for business leaders, their potential successors, and those who seek to finance the transition, some of which should be sufficient to kick-start those seeking an exit anytime soon into action.

The Business Leader Perspective

Since over 85% of business leaders surveyed identified retirement as their reason for exit, it stands to reason that many have invested a considerable amount of time and effort into building their company.  As a result, a transfer of ownership represents the primary opportunity to monetize value that has appreciated over what could be a lengthy period of time.  Although this increase might be significant as compared to that of inception, business leaders are often dissatisfied with the offers they receive, which reinforces the need for thorough, early, and practical succession planning to maximize value wherever possible.

What’s even more compelling is how dependent a business leader’s ability to cash out at what they consider to be an acceptable value actually is upon the ability to identify a potential successor who has the: (i) skills to lead the business; (ii) interest in doing so; and (iii) ability to secure financing.  This is a tall order, since many successor candidates might only meet one or two of these requirements.  Couple this with a lack of experience in terms of developing a business plan to take a company forward in a manner that provides the necessary level of comfort to secure enough financing to close the deal.  In the absence of third party financing, business leaders are left with the gamble of whether or not the company, under new leadership, will be able to generate a sufficient amount of cash over time to pay what could be a significant portion of the proceeds related to the transfer of ownership, a scenario that doesn’t end well far too often.

The Opportunity

Business leaders and those in the financing field both have a vested interest in terms of how Canada’s succession planning future plays out; the former wants to cash out and the latter wants to roll cash back in.  In order to avoid a time-consuming stalemate in a situation where time is of the essence, an opportunity exists to help potential successors become real successors, by providing the tools to take companies forward; the right skills, plan, and leadership ability (and a bit of extra effort to help get the deal past the goal line wouldn’t hurt!).  Here’s how:

Business leader skills. Many potential successors have played a second tier role in their careers, without having had the opportunity to ascend to the CEO level. Since the top job can be quite different from what has been the experience thus far, potential successors need a transfer of knowledge, mentoring, and practice in abundance, prior to formally assuming the CEO role.

Existing business leaders can help by creating professional development plans, delegating areas of responsibility in a meaningful way, and taking the time to provide practical mentorship.  Potential successors often complain that leaders don’t take the time to provide meaningful coaching; sadly, this is too often the case.  Doing so can be the difference between a well prepared leader and one who stumbles out of the gate.

Investor ready business planning. Many potential successors don’t have experience with developing a business plan that is sufficient to secure financing, let alone the process of raising capital.  Business leaders who have lost interest in the company, not stepped up internal planning and control processes, or haven’t had the need to seek financing for long periods of time don’t help the process, resulting in a lack of information and competitive positioning to develop a compelling business plan.

Business leaders can make sound business planning a reality by ensuring that the right systems and information are in place within the company to support successors in putting together a plan that can be financed.  Making the effort to critique existing business models, consider new markets, and understand important industry developments can help to identify opportunities for the company well into the future, all of which bodes well with financial partners, and, in turn, benefits those who are seeking to exit.

Leadership ability. Those who have spent years at the helm of a company understand the importance of leadership skills, particularly in terms of the impact to the business as a whole.  Being a good manager doesn’t ensure that a company will be well led, a reality that is too often overlooked when passing the torch.

Recognizing the value of practical leadership development programs and forums and encouraging involvement can help to groom the business leaders of tomorrow.  Starting well in advance and providing practical opportunities to put learning into practice are not only a powerful combination for success, this approach can also identify situations where an individual is not a good fit for a leadership role.  Business leaders that do not encourage this type of development are effectively “boxing themselves in”, in terms of viable succession options.

Facilitating the exit. Financial partners can work with companies approaching (or well past) the need for succession by bringing options to the table, in terms of acquisitions, mergers, successor candidates, and other types of transactions.  In the case where financial partners identify “to do” items to improve a company or go-forward plan to the point where a succession transaction could be financed, facilitating the introduction to advisors who can help makes all the difference, as the complexities of the succession and financing processes make it difficult for business leaders and potential successors to identify the right advisory resources.

The reality is that business leaders have to “help potential successors to help them”; the same is true for financial partners.  In the absence of this approach, it might be difficult to affect a successful transfer of ownership in many cases.  Seasoned business leaders know that a big part of their role is to create an environment that will make those around them successful; addressing the issue of succession really isn’t any different, in this regard.

Where does this leave potential successors?  This topic will be considered in the next installment of The Succession Conundrum.

Source:

(1)  Passing on the Business to the Next Generation, Canadian Federation of Independent Business, 2012

The Executive Edge (Respect)

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Published by CPA Canada in CareerVision

Being a leader means many things: having the necessary expertise to perform your role, overseeing the efforts of others, with a balance of support and direction; and fostering an environment that allows people and the organization to perform at their very best.  This is a tall order for any executive, and at the end of the day, real success is only generated in situations where a leader is able to provide compelling reasons for others to follow, as well as fulfill their role.

An integral part of this process is generating respect, not just in how an executive performs in their role, but also in terms of how they treat others.  This doesn’t mean behaving in a manner designed to win a popularity contest (being an executive often involves making decisions that might not be particularly popular); but rather, approaching a leadership role in a fair and balanced way and with respect.  Although executive workdays are often characterized by too much to do and too many requests to do even more, successful executives recognize that they are always “on” and how they approach their role and interact with others is in full display at all times.  Yes, living in the executive fishbowl can be a lot to handle.

In this series, we have already considered the importance of a number of Executive Edge skills, including collaboration, risk management, and professional development.  Here’s more about the importance of developing and maintaining respect at the executive level.

Where it Goes Wrong

Although there are leaders out there who can generate results by using less than desirable tactics (think fear, intimidation, and other forms of pressure), this approach is far from acceptable and is not sustainable in the long run.  After all, who wants to work for these people?  The reality is that everyone in an organization has an important job to do, and companies need people at all levels; this means that all roles are deserving of respect, provided that they are conducted in a respectful manner.

Executive roles, by their very nature, typically impact a wide range of people, both inside and outside of a company.  Those who don’t take the time and effort (or don’t have the skills) to treat others in a consistently respectful manner ultimately take more from an organization than they provide.  It doesn’t mean that the parties have to like each other; but staff members, as an example, need to know that a leader will view business situations in a fair manner, be humane, and not bring personal bias into the mix.  Having said that, those pursuing the Executive Edge have the opportunity to bring so much more to a leadership role.

Get the Executive Edge

Generating respect from others is something that won’t happen overnight, which is one of the reasons why it is so important to adopt the right mindset now to ensure great preparation in advance of stepping into an executive role.  Here’s how to get started:

  • Keep a long memory. You should be able to relate to many of the people in your workplace by virtue of having held less senior roles earlier in your career.  By never forgetting the issues relating to those roles and what was important at that moment in time, you will be in a better position to relate to those who are currently in the job.
  • Practice empathy. Remember the human aspect of any organization. Simply put, people are people; they have the same kinds of hopes, dreams, and feelings deep down that many of us do.  A big part of respect is treating people humanely, regardless of the situation at hand.  Even in bad times, people will remember those who treated them with grace and respect.
  • Put things in context. Not everything in business life is critical, but many things are important.  Let recognizing situations for what they are and not overreacting be your norm.  Taking the time to fully consider the situation and reacting in a professional and pragmatic manner can help to generate respect.
  • Do your job well. Competence is important in generating respect, as it’s difficult to look up to someone if they aren’t very good at what they do. Respect isn’t about high-fives and fist-bumps around the office; it has many layers and is far more complex than that.  Be the person who can always be counted on to get the job done.
  • Pay careful attention to role models. Observing experienced executives in terms of how they handle all types of situations and the human element throughout is a great way to learn; both in terms of the leader you want to be and behaviors you never want to repeat. Well respected executives are easy to spot.

Remember that respect is a two way street; you have to give it to earn it, and around it goes.  At the end of a difficult day, you will be glad that you have this important skill in your corner.

The Executive Edge (Collaboration)

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Published by CPA Canada in CareerVision

Career advancement at any level typically involves generating success on both a personal and team level.  As positions become more senior, the collaborative and team component can become much more significant, in terms of the amount of time spent and the degree of complexity of the task at hand.  Smart executives know how to bring the right expertise to a team situation, both in terms of their own skills and drawing on the abilities of others to generate a great result.

On this basis, it stands to reason that there is a need to bring together a wider range of skills and expertise to address issues encountered at the executive level, rather than relying on the power of one.  It’s not surprising that the ability to work well on a team and collaborative level can be the difference between moving up to the executive ranks and staying in a position that doesn’t involve as much of this type of work.  This is only one of the reasons why it’s important to start practicing these important skills now, as experience can contribute greatly to developing talent as a collaborator.

In this series, we have already considered the importance of a number of Executive Edge skills, including professional development, communication, and managing people.  Here’s more about the why the ability to collaborate and be an effective team member are so important at the executive level.

Where it Goes Wrong

Those who are able to excel in the executive ranks understand that success generated as a team reflects well on both the group and its individual participants; this is a great reason to get involved and make your best effort.  There can be a fine line, however, between successful collaboration and taking too much personal ownership of the result.  Inappropriate behavior includes poor preparation, not seeing the perspectives of other team members, over (or under) contributing, and even taking credit for the ideas of others (yes, it happens).

The result can range from teams that don’t function well enough to accomplish much, to hard feelings between individuals.  Any way you look at it, this doesn’t bode well for a harmonious and effective work environment on a day-to day basis (and may explain why difficult team members are sometimes shuffled off to other tasks with little explanation).  Don’t let this happen to you!

Get the Executive Edge

Collaboration is both a state of skill and a state of mind.  Do it well, and you might just find yourself being approached to contribute to all kinds of initiatives, and that’s a great way to practice and network at the same time.  Here’s how:

  • Do the preparation. In order to give full attention and participation to team sessions, it’s important to be well prepared in advance (don’t consider meeting time as an appropriate place for speed reading of background materials!).  Be prepared to participate fully and take a leadership role where possible.
  • Be careful with “alliances”. Day-to-day working relationships can turn into informal alliances between individuals to move initiatives ahead. This type of situation can be tricky, as complex business problems often require a better level of objectivity to resolve.  Be sure to enter team sessions with an open mind to find the most favourable solution.
  • Listen and learn. Moments of team member contribution is not a time to “zone out”(look around the room at your next meeting and gauge the number of people who are actually listening to what is being said).  Make an active and deliberate effort to listen to the perspectives of others and learn.
  • Keep an eye on the big picture. Collaborative sessions can involve a lot of details, particularly in terms of problem solving and implementation.  Be sure to keep the “big picture” mandate of the team in mind to ensure that the process and your contributions are on point.
  • Share the wealth. Make the effort to give credit where credit is due and don’t ever take personal acknowledgement for the achievements of the team or contributions of others. These missteps do not go unnoticed and can generate a lack of respect that can be difficult to overcome.

Think about it: we learned most of what we need to know about collaboration at a very young age; play nicely with others, wait your turn, listen, learn, don’t be a copycat, and celebrate the accomplishments of others.  Some lessons are effective well into the future, so pull up your socks and start collaborating!

The Executive Edge (Human Resources Management)

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Published by CPA Canada in CareerVision

Although most jobs involve working with others, the complexity associated with people only increases when you enter the executive ranks.  Think about it: gone are the days when you just have to co-exist with co-workers, as executives are typically faced with people related responsibilities and relationships that are multifaceted.  In addition to the typical co-worker type relationship, add motivation, performance management, recruitment/termination, and broader supervision to the mix.  These areas must be considered in the context of senior level roles that can have a significant impact on an organization (good or bad), complex tasks, and perhaps a limited talent pool from which to draw candidates.  Given the circumstances, the human resource aspect of an executive role is one that often doesn’t get the attention that it should.

When it comes to dealing with senior team members, executives need to understand when to take what action; when to hire, when to fire, when to supervise more closely, and when to give people room to do their jobs.  This is a talent that isn’t common, and can be best cultivated through personal awareness and practice (remember that executives still have a need to recognize areas where they could improve).  The very best can come from senior teams that have the right skills and experience, are in the right roles, and have the appropriate balance of support and direction to get the job done.  This environment is one to strive for, and is far from a given in many organizations

In this series, we have already considered the importance of a number of Executive Edge skills, including risk management, professional development, and high role engagement.  Here’s more about the why getting the management of people right is so important to the executive ranks.

Where it Goes Wrong

We all can appreciate that the executive world is a busy place and there are many things involved in getting the job done.  Human resource matters, such as recruitment, performance management, and coaching can be time consuming tasks and often get shuffled to the next day (or month), particularly in busy times.  There is considerable risk in this on both sides of the equation; where substandard performers are allowed to continue in their role at a risk to the company and perhaps others, while the “stars” of the group become frustrated by spinning wheels and a lack of progress, having not received the support they need to keep moving forward.  Does this sound familiar?

Get the Executive Edge

Skilled executives know how and when to take the right action when it comes to managing people.  They recognize that the benefits are at least twofold: better performance to the benefit of the company and better equity within the executive group (no one likes to carry a marginal performer).  Here are some executive worthy tips to get the managing people aspect of the role right:

  • Don’t favour quantity over quality. Managing people effectively at the executive level isn’t about spending the day making the rounds with superficial chit chat and meddling in the work of others.  It’s more about understanding the level of executive development of each team member, their strengths and weaknesses, and when to provide support or direction.  The quality of the message and motivation approach matters.
  • Hire slowly, fire quickly. This mantra may be often said, but seems to be seldom followed. Take the time to understand the particular executive role that needs to be filled and identify a candidate that suits it well.  Conversely, when a team member is not working out, take the necessary performance management steps to bring the situation to an end, to the benefit of both the company and the team.
  • Communicate.  People like to be in the know and understand what is expected of them on an ongoing basis.  Areas for improvement, succession planning, and strategic direction are all important areas to address with the executive team, so don’t leave them in the dark.
  • Let high achievers fly (within reason). Good executives know that when they are fortunate enough to have a bona fide star (or two) on their team, they perform best by having the freedom to do their job, within corporate guidelines and policies.  These folks consistently turn out great results, are reliable, and will ask for assistance when needed.  Let them do their job and don’t meddle; a better strategy is to utilize your time working with team members who are not as well developed.
  • Learn to recognize the difference between high and marginal achievers. As strange as this might sound, some executives don’t do this well. If they believe it is possible to resolve a particular problem, they simply expect that it will be done, with little regard for the actual ability of the team member to do so.  This is a dangerous path, so make sure that you are not casting expectations that a team member is not capable of fulfilling. (this can be a good area to seek assistance from an experienced executive to provide you with coaching in this regard).
  • Recognize that a big part of an executive role is providing coaching when needed. The executive ranks are all about assembling a team that can lead the company to successfully execute on its business plan.  In order to do so, senior roles are less about doing the front line work and more about helping others to be successful in their role.  In order to do so, coaching and feedback are musts.

Executives who are able to manage people effectively at the senior level have a much better likelihood of generating success, on both a team and a corporate level.  It’s not about excessive “touchy/feely” stuff; rather, it’s about understanding who your team members are, in terms of needs and ability, and what their role is so that you can put them in the best position to win.

The Executive Edge (Risk Management)

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Published by CPA Canada in CareerVision

As your career progresses, a funny thing can happen: you actually start to realize just how complicated the business world and your role can be.  Long gone are the early career refrains of “how hard could it be?” or “why not?”; experience has taught you just how hard things and all of the trouble that arises when the task at hand and the actions that were taken to address it should have been contemplated much more thoroughly.  Does it seem like the reverse should be true?  Call it “experience”.

Experience recognizes the full magnitude and complexity of situations and the actions that should be taken, as well as the various options that should be considered when making a decision.  Those who have successfully reached the executive level know that business situations are rarely black and white, and in fact, lots of grey areas exist; this is often the culprit of complexity.  As a result, experienced executives typically have a strong ability to identify complex situations and bring the right balance of analysis and action to bear.  This is what experience can do, in terms of developing the necessary level of judgment to recognize business risk (that can be mitigated), as compared to catastrophic risk (that can be devastating to a company).

In this series, we have already considered the importance of a number of Executive Edge skills, including professional development, consistent reliability, and high role engagement.  Here’s more about the importance of sound risk management skills to the executive ranks.

Where it Goes Wrong

Inexperience is often coupled with high enthusiasm and impatience; to get the job done, be recognized, and perhaps make a “splash” to generate a promotion opportunity.  Although there can be positive aspects to bringing action and enthusiasm to a role, there is a fine line between a “just do it” attitude and barging ahead in a careless manner.  Too often, less experienced staff members approach tasks without fully appreciating the challenges of the situation or the outcome of their actions.  Fast forward, and you might just find yourself in a situation that you wish you could have avoided or approached differently.  By this point, it’s often too late to turn back the proverbial clock, resulting in possible damage to the company, your reputation, and perhaps others.

Get the Executive Edge

Recognize that business situations are often much more complex and risk laden than most might realize.  Experience provides the tools to recognize this, but also the skills to indentify options for resolution.  Here’s how:

  • Seek to fully understand situations before acting. Taking quick action without fully appreciating the situation is a likely path to trouble. The devil is, in fact, in the details, so take the time and effort to be in the know.
  • Identify the key things you need to know. When analyzing business situations, there are typically a number of important areas to understand: What is the situation? Who is involved/impacted? What are the limitations/guidelines that are applicable? What are the financial considerations? What is the timeline for resolution? Develop a list of the standard things you need to understand and use it as a guide for resolution.
  • Consider the outcomes fully. It’s important to understand the situation, but also the outcomes of the actions that could be taken.  This is an area that often doesn’t get as much attention as it should, resulting in the right solution, but the wrong approach.  Remember that executives often spend more time “thinking” and less time “doing”, so don’t rush to judgment.
  • Be patient. Senior level decision making often requires more thought and patience than new executives might expect.  In simple terms, executive level problems are more complex, can impact more people, and have greater consequences: all good reasons to gather information, think it through, and take a patient approach.
  • Get advice. Bring advisors and other experienced individuals into the process when needed.  Although an executive might understand their business and customers well, they may lack specialized knowledge in areas such as legal, tax, and regulatory, so advisors in these areas can fill important information gaps.  In addition, a sound second opinion from an experienced executive can be extremely helpful.

Executives who are able to weather the storms of the business world for the long term need to have sound risk management skills.  Failing to do so could result in unsuccessful ventures or a short-lived executive career; costs that are much too high not to prevent.

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