Posted tagged ‘strategic planning’

Why most companies hire a Chief Operating Officer to fail?

December 4, 2015

By

Michael Fanghella

Managing Director

Santa Fe Advisory Services/IMS

A while back I put this summary together of how to interview and determine if you are going to select a Chief Operating Officer from a seminar I had put on for mid range business, all looking to make the next step. Its point and purpose was to show owners what the person you are looking to bring in believes and sees as their job going forward and what they as owners/visionaries should be thinking to ask or prepare.  For their (the Potential COO candidates) purposes note their typical skill sets and how they think is shown below by how they rank them and see as their purpose is when coming into a firm:

  •  Change management ranks highest; and
  • Setting and enforcing robust operational controls; and
  • Engaging in strategic board level discussions
  • Implementing the organizational and operational model ;and
  • Extracting operational efficiencies; and
  • Industry & Market knowledge and bringing a multicultural management approach ring last on the criteria  that you should expect this person to have.

Nearly all Chief Operating Officers will, at some point, have to take the lead on these issues: from the basics of ensuring vigorous operations, to creating a new operational structure, through to the change management aspects of execution. Beyond this list are the things you should know when looking for such a person and is why I address getting the organization in place with defined operational procedures and systems prior to hiring a person to fill this role assuming you have truly articulated what that role means in your search. Oft times we are over impressed with the CV of the person in front or us and what they did at a company most likely with systems and processes in place”.  If you don’t have those, then you are hiring someone to mix up the batter with a finger, when they are used to having a high powered blender.  I trust you see what I am addressing here as an important component to addressing your strategic vision of growth.

Key questions for you to present to them:

  • What kind of post-induction/acquisition/growth integration strategies does he know, and which will be most effective?
  • How adept is he at reassuring in-house stakeholders about the change, while still transforming the company’s approach to innovation?
  • How will he balance the conflicting views that will emerge on the best approach to innovation?
  • What is their approach to maintaining morale and retaining key talent?

Rethinking Strategy

  • What other tactical risks and opportunities could emerge from the changeover?
  • How would the new approach fit with the company’s existing resources and capabilities, and where would the gaps lie?
  • What would a roadmap for transforming the business look like?
  • What level of investment would be required to support it?

 Compliance: setting and enforcing vigorous operational controls

Questions the Owner/CEO should be prepared to answer:

  •  How well do you know the area of the business that has been exposed in articulating your searches needs, and what systems and processes do you have in place?
  • To what degree do you think we need to comply with current regulatory guidelines?
  • What are the alternative oversight frameworks that could be more effective for your sector?
  • What are your thoughts as applying good practice and corporate governance in our industry?

Designing and implementing the organization’s operational model

  •  What is their method for handling this?
  • What kind of modeling methods will they rely on?

They should ask

  • How are your competitors dealing with the issue?
  • How can you best determine a most advantageous operational model?

(The issue is do you know why you are hiring someone to solve your everyday problems.)

Performance: proficiency in identifying and extracting efficiencies.

 What is their structured approach for finding new efficiencies within the business?

  • What are the factors that most affect overall costs?
  • Which big data-related tools they intend to use that can help pinpoint the efficiencies in your company’s network that will ensure smoother operations?

Insight: deep industry and market knowledge

  •  How well can this person translate the industry’s dynamics into a strong proposition for how overall industry trends are changing and how he will take advantage of them?
  • What are his/her clear facts to back this up?
  • What is his/her stratagem for broaching sensitive issues in high level meetings, while demonstrating interest for this new strategy?
  • Which approach do they follow for determining who supports your views behind the scenes?

Finding a multicultural management approach

  •  What techniques do they know that can help bridge cultural differences during this process?
  • How can they ensure positive knowledge sharing across cultures and time zones?
  • How attuned is their appreciation of when “yes” might actually mean “no”?

A cross-functional background is a common feature of the career paths followed by today’s leading COOs so to not address this internally is like judging the book solely by its cover.

The corporate assessment for a new COO appointment

  1. Do you have a process in place for reviewing and defining the links between the corporate strategy and the competencies required of the future COO?
  2. Is your board involved in this process?
  3. Is there an appropriate job description that gives a complete picture of the role?
  4. What profile does the individual need to possess, including the academic background, experiences and competencies (KSA)?
  1. Have the relevant key performance indicators been defined?
  2. Have you decided whether you want to hire internally or externally?
  3. Is a competency-based selection process in place?
  4. Is there an overall development framework for the role, including coaching, action learning and mentoring?
  5. Have you created an induction and compensation plan in advance of this process?
  6. Are you prepared for the need to communicate extensively across the business to ensure that key stakeholders are prepared and available to support the new COO?

The one thing I have observed is that people tend to either prejudge candidates from being too impressed by their current status, and or their resume or they don’t really understand what their true needs are.  They will over look someone of age, but who is capable and in place to handle your real needs and hire someone who has neither the experience and or the patience to mentor those around them. As I mention above, owners don’t clearly look at their operations and analyze whether they would be  bringing in a personality that hasn’t gone through that transition in a long time and will adjust purely by change management so it fits his/her comfort zone.  One thing is for sure, unless you spend the time prior to even running a search, you are not prepared to hire anyone.  I handle executive searches, but only if the company hires me to come in and analyze their business, its operational strengths and weaknesses, seeing the functional status of its existing employees.  Only then can I address the potential candidates, which are now sought out in relationship to their KSA’s (Knowledge, Skills and Abilities) and how they would meld into a scenario that to date has been unmanaged by such a personality. Most medium sized companies don’t really need a COO, but they most probably need a Chief Growth Officer, they equate their need to grow with a parallel need to have experienced managers of that growth.  When often as the saying goes, “if you build it they will come” .  To me that means you can attract a better person when you are a successful growth entity rather than when you are a need entity.

To find out more about how to really have a successful executive search experience you can reach us at 858 432 6066 or michael@santafeadvisoryservices.com

Procedural Guidelines in Marketing Business Strategy

April 2, 2012

By Michael Fanghella

This is a topic where we could get lost pretty quickly as the sands shift almost daily and a new idea promotes a new strategy as quickly.  But rather than go there I am going to suggest we look at just taking the issue at hand simply.

You spend lots of money to hire and train if needed sales personnel.  But have you made clear to them what you desire as a result from them and have they done the same with you?  Or has it been a sales effort by you when you were impressed with the candidate in front of you.   Often we get caught up in what we want so much we forget to review what we need.

If you can’t explain to a new hire or a veteran who is anticipating coming on board for employ what your company does in 30 seconds or less, be able in that discussion, explain what the company’s desired results are and allow the candidate to speak freely to see how they can achieve them, how can you expect them to figure it out on their own.  Truly you need to answer the following issues internally before asking your newest employee to charge out there. I find it amazing how many hiring directors hire without making sure of the prospect that everyone is on the same page.  Little things like who does he/she speak to when there are questions, where else in the organization can answers be gotten.  What procedures for pursuing and accomplishing the results so mutually set out are and what means of sitting down to review them by and between both of you to see if results aren’t forth coming have they been followed on both your accounts.  Often I will see the hiring entity explain away the question because honestly they have never thought about it.  They are too worried about “do you have industry contacts or background”.  I have seen more great sales people fail because they went to the next level with a firm that was not connected to the procedure to ensure success concept by having it mapped out.  Without a good process the sales person will in all probability fail.

This may mean that if the employee is off course a few adjustments can have a beneficial effect because when in review either they or you are off the guidelines as to what was originally discussed.  But that those procedures were set out to allow this analysis and correction on a weekly basis.   How often do we hear where a salesperson gets a 30 day probation notice after 60 days being there?  Were any procedures reviewed, did the manager sit down and review as to whether or not he and the company were fulfilling the compact by and between both parties.  You waited 60 days before noticing?  What it really means is that you don’t have a procedural guideline for this sales person to follow.

I have built multiple sales teams successfully because of this basic concept. I have multiple sales efforts fail because of its absence.  Sales people like structure, they want and need feedback, want to understand how they fit in.  Most of the time we hire them and throw them into the that red ocean of competition without a thought or plan as to  how that one person will meet both you and their results by procedure.  It is like golf, you only have to miss the ball by a degree for it to land in the rough.

You see there is this leap of faith that says as an employee, “I will work and give you my best effort on the proposition that you will pay me for that time”.  But it goes much further than that.  It really goes to whether the employer really has their act together, has a strong vision and a result in mind that calls for procedures to be in place so that when hiring someone they can start working immediately on meeting the result driven thought process versus doing what we have all seen in the past spending time building a lead generation system on his/her own, spending as much time branding the company as being able to sell the products or services available and having a mutual respect process that keeps everyone on their game.  As too often the whole result driven paradigm at the moment is on the shoulders of the salesperson to meet expectations that while they may have bought in on they had no say so in the how to get there.

One of the worse things I heard from a marketing person that worked for us was I don’t now what do to make it better, can you tell me.  Well eventually I did it is what spurred my beliefs as you see them today.  I was not going to waste our training expenses just to go out and repeat the mistake.  In doing so this person latterly was transformed over night into being the most successful marketing assistant and from where her territory sales people wanted to get rid of her she was nominated for employee of the year.  It is not rocket science, but you do have to care as much as you say you do.

This concept I speak of and the one utilized with my employee is based upon the book I believe is one of the best guides ever printed and if you get the chance read it and get the CD to listen in your car on the way to work.  Stephen Covey of Franklin Covey has been at the forefront of this thinking for years and his book Principled Centered Leadership is to me at least its bible.

It is much more complicate than just this but….If you have been following this blog you know I started out preaching the need for vision and then a mission statement then once achieved the focus starts getting narrower.

So stop today before you go on Craigslist or LinkedIn to place that ad and ask yourself, “Am I hiring a person to do what?, and am I am hiring them because I know how we want it done?, and am I providing this person with the resources when they have questions to learn? and am I committed to this being a successful hire because we will have accountability sessions where we review the whole process including my effort and what we have promised.

If you do this, your interviews will be much more focused and your hires will understand why they are there and when the process is followed goals and results will not get away from you.  If you would like more information this and other thoughts about your hiring strategy call us at 619 550 1198 or email me at Michael@santafeadvisoryservices.com