Section 1

ACTION

"You do not lead by hitting people over the Head-- that's assault not leadership."--Dwight Eisenhower

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You have now been appointed Interim CEO, CFO, CMO, or CLO. Great! Title does not qualify anyone to lead, direct, manage, or take charge of an organization. What do you do?

You will quickly discover that 80% of the resources, energy, ideas, and experience required for the success of your "mission" sit across the table from you. You must develop the trust of these individuals in order to take them where they want to go.

If you introduce yourself as the expert who knows it all to an already apprehensive management team, you may increase the chance that they will resist even good ideas!

The very first action for an Interim Executive is to listen--and listen carefully. Adding value in a short period of time is your goal. There are many names for the listening process (for example, Tom Peters referred to it as "management by walking around"), and they all result in developing a process for decision-making and developing trust.

The Vice Presidents are the first line of management, and they are important; however, they are generally defensive and sometimes find it difficult to understand how an Interim Executive can come in and tell them what to do when they have years of experience in the company. This is human nature and not unreasonable; however, it is not helpful.

The Tier 2 and Tier 3 people are the keys to success. The Vice Presidents will help you to identify the outstanding individuals in their departments. Discussions with these people will then identify their "go-to" individuals in each area, and so on. If you are listening, you will become part of the culture and less of a threat to the people.

Listening is continuous. It does not stop because you believe that you have the answers. Start to develop areas of focus for the discussions.

Ask one of the key marketing individuals to develop a list of customers organized by revenue (or margin--or both) from the largest revenue customer down to where 75% to 80% of the revenues are listed. In a large, multi-product, broad market company, this approach needs to be refined and segmented in order for the data to become meaningful.

Ask another marketing expert to do the same thing for the products by revenue and margin contribution.

The expectation is that a modest number (Pareto's rule of 80/20 usually works) of the customers/products will represent the majority of the revenue/margin. How does the company make money? This is a reasonable question, and yet few executives can provide an informed response.

Have the individuals share some of this information with everyone. This brings focus to the listening process. "You mean only 20% of our products provide most of the revenue and margin?" "That product has been around forever. I thought it was profitable." This usually leads to other questions, such as, "What about this product/customer?"

Do the same thing in engineering, product development, manufacturing, and all other departments. This includes Human Resources. HR knows that a small group of employees call in sick more frequently than other employees, a small group of individuals are working two jobs and supporting a number of children, and other interesting information about the workforce that will aid in determining priorities if a lay-off is required.

Everything that you do expands the curiosity of the people and demonstrates that you are interested in what is going on in their world.

Active listening is defined in Wikipedia as "a communication technique that requires the listener to feed back what they hear to the speaker, by way of re-stating or paraphrasing what they have heard in their own words, to confirm what they have heard and moreover, to confirm the understanding of both parties."

It seems simple and it is; however, in a community such as a company, individuals will have variations in understanding or communication style (sometimes slight, but not always) about the same issues or topics. The good news is that the knowledge base inside of a company does not usually contain wild variations of opinion regarding the company itself, its products, markets, manufacturing, etc.

The basic rational for listening is to achieve a common understanding between the speaker(s) and listener. It is important to restate issues and responses several times in several ways to make sure that you are on common ground.

In the case of a company, you may talk with several people and find that you need to get them in the same room and discuss the issues to make sure that the understanding developed is really a shared understanding.

There is no room for interpretations or assumptions that lead everyone in different directions. The simple act of restating several times what you heard in different ways assures that everyone is on the same page.

Listening is critical. Now what are you going to do?

Retaining, remembering, and being able to restate what you have learned is important. Write it down. Identify the individuals who champion this perspective as well as those who may not agree.

Inevitably, you will meet an individual or team that is right on the mark with your direction(s). Use this team and their process to your advantage. Recognize them. Reward them. Work with them more often.

Remember that adding value is your objective. Listening is a gentle approach to establishing a solid understanding of where the organization stands on key issues and what the organization believes is important.

Action is critical. Listening provides data and eventually valuable information about individuals, products, customers, and the organization. Listening is the critical first step in the development of a solid process for decision-making. Report writing is for consultants. Executives act, implement, and execute!

Challenging the ways in which decisions are currently made does not add value. Instead, consider yourself the designer of the new decision-making process rather than the decision-maker. Create a discussion forum where people feel free to speak up. Discuss what people think works and what they believe does not work and why. Let people know that uncertainty is challenging and that no one has the perfect answer.

The leader of today is open to feedback and focuses on communication, collaboration, and coordination!

The best listening and analysis of issues, opportunities, challenges, and current directions is useless unless there is a solid decision-making process that includes communications with the employee population and recognition for the individuals who have provided major contributions to the process.

Section 2

DECISION-MAKING

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There will be decisions that can be made quickly. The general rule for these quick decisions is that they should be directionally correct and include the ability to fine-tune or even reverse them without any major negatives. The real strategic decisions require a clear and visible process.

It is rare that an experienced executive is going to be confronted with an idea, issue, problem, or opportunity that he has never before seen in one form or another at some point in his career. This is a major value that an Interim Executive brings to the table. The listening process has provided information and identified leadership-caliber individuals across the organization. It is now time to put this all together in a way that allows everyone to participate in the process. In large organizations, this means at least one or more representatives from each area are invited to listen or present their information and ideas. Subsidiaries and divisions should be treated as individual entities unless they are a functional (manufacturing) entity.

This is a point where the Interim Executive's experience is important. The statement, "If you are not confused, you are not paying attention" (Tom Peters) is fitting. Experience gives the Interim Executive comfort in the knowledge that all this data eventually becomes information and then, through the decision-making process, becomes actionable.

This is not an opportunity for the Interim Executive to "tell" everyone what is going to be done. This is the opportunity for individuals to present key information to their peers and to identify areas of uncertainty or concern. This can include customer/ product line analysis, inventory analysis--particularly slow moving inventory--receivables, critical vendors, quality control, and customer support.

The Vice Presidents do not do the presentations. Vice Presidents have moved up the hierarchy to a position where it is very difficult to admit that they do not have an answer or that their judgment is not perfect. They are, however, very valuable in discussing the pros and cons and moving towards a solid actionable decision.

The individuals should be directed to work as a team with someone from accounting and other departments depending on the product, function, or issue. All numbers must be accounting numbers; therefore, a key accounting person should be part of each team (in a small company, this is sometimes the same individual). They are to put everything together without any guidance or direction from above. This should represent the accounting facts along with their team's thoughts, ideas, and concerns.

Everyone is invited to join the meeting, which may be similar to a town hall meeting. The business still has to run; therefore, a representative from each area is required. This includes administrative, shop floor, shipping clerks, and others. After all, everyone has an interest in the direction of his or her organization. Everyone should also have an opportunity to listen and speak their minds and to share their observations when they return to their jobs.

Good ideas and critical thoughts are as likely (or more likely) to come from the 100th person that you ask for ideas as they are from the first few individuals or groups. Do not stop asking just because you think you have the answers.

The role of the Interim Executive is to act as a facilitator for the discussion. The opportunity to provide direction and leadership depends on the success of this open discussion process.

People will not follow a leader unless they know where they are going and they agree with the direction. More importantly, they need to know and agree with their role(s) in the future and to understand that they will be supported in those roles.

The Interim Executive organizes the meeting, sets the agenda, and identifies the individuals who will do the presentations for each area. This may include areas that do not seem critical to the Interim Executive; however, it is the perception of the employees that is important. Pay attention! They have the knowledge and ideas needed for success.

The goal of the meeting is to let everyone "listen" to the information that has been gathered and formatted (such as 20% of our products represent 80% of our revenues) and to have the opportunity to voice their opinions and receive a respectful response for their willingness to speak up.

The Interim Executive (facilitator) asks questions to clarify, expand, or respectfully challenge the information and to ask everyone for their thoughts on the subject under discussion. (It is of no value to have someone, after the meeting, state a view that was not presented and vetted.) He/she then writes down the issues, comments, ideas, and actions that arise out of each presentation/ discussion for everyone to remember, comment on, and/or finetune. This is done as the discussion takes place so that everyone can see and comment on each issue in front of their colleagues.

I prefer to write on several easels so that the paper documents can eventually be moved and grouped with other similar comments, ideas, and actions. The walls of the meeting room will generally be filled with poster-size documents. This gives people the opportunity to continue to comment on, debate, and fine-tune all of the areas of discussion rather than just moving on and closing the discussion of any issue.

The facilitator has the responsibility to provide an opportunity for anyone and everyone who wants to contribute. In a large group, it is rare to find those who do not want to make a positive contribution. This is their organization, their culture, and their future--they want to be part of the team!

Listening has provided the Interim Executive with some insights regarding the individual personalities of the team members, so that those who might be more reluctant to voice their opinions are also heard. In addition, the "undecided" are encouraged to become more involved rather than waiting to see which direction is set.

The Interim Executive recognizes that even if he/she has solved these issues in other organizations, the role of facilitator does not permit him/her to provide solutions other than to offer some thoughts similar to "Okay, we seem to have defined the issue. Now what do we do? What alternatives are available? Could we do both? Does anyone have a different view or perspective? I do not want to hear comments tomorrow or next week that should have been shared at this team gathering. What about you, Mr. Undecided?"

After the presentations/discussions on Customers, Products, New Product Development, Manufacturing, Suppliers, Inventories, Receivables, and other core issues, it is time for the facilitator to place the information into meaningful groups and to establish priorities for actions and resources. This is not a forum for all final decisions on all of the issues and opportunities presented. Some areas may need further research and definition. However, you cannot leave the meeting with everyone wondering, "What is going to be done?"

When the individuals return to their posts, they need to be able to say, "This is what was discussed, and this is what we are doing."

Responsibilities can be assigned with dates and milestones so that everyone understands that movement is forward as well as knowing who is responsible for each area.

Further discussions with team leaders and fine-tuning of the missions and timelines can be done in smaller, more focused discussions.

Preparation is critical if these presentations, discussions, debates, questions, and collaboration are to be completed in one day. Organize the format so that presentations require less than 30 minutes, including brief questions, and then provide time for discussions, ideas, and potential alternatives. Work with the presenters on the structure of the presentation (not the content)! Do not focus on solutions too early, or the discussion will go on and on.

Recognition and Rewards

An individual may suggest that the "slow moving" inventory issue could be solved by finding a company like Big Lots, Overstock.com, or other non-traditional outlets and getting cash for inventories that are just sitting there. My reaction would be to ask her to gather together the people she believes could help her accomplish that, organize the team, and offer them a percentage of the sale of goods right on the spot (usually keeping the first 50% for the company and then measuring the % against the rest). This provides a visible incentive (not a small one in the case of slow-moving inventory), which shows everyone that good ideas and positive work will be recognized and rewarded!

Do not rush into this particular solution on slow-moving inventory. The first person is likely to suggest a deeper discount on the products through traditional channels. Interim Executives know that the traditional channels, sales force, customers, and support teams are the ones who made this into slow-moving inventory in the first place. They are not likely to do better with a simple discount. Albert Einstein said, "We can't solve problems by using the same kind of thinking we used when we created them." If that expected response is stated, I simply make the comment that our traditional channels are what made this slow-moving inventory in the first place. Can anyone think of anything outside our traditional areas?

There are several reasons why direction must be provided right there, with participation from everyone. This is where the experience of the Interim Executive provides guidance. The best analysis without support has zero value!

Agreement

This is a time to agree on a big picture of where the company is today. It is the moment to have a solid consensus on those actions that are required to move the company forward. Everyone should evaluate the information and contribute to establishing the direction of the organization. This approach provides ownership for everyone and the understanding that they are all part of the team.

The good news regarding the "big picture" is that almost all of the information discussed can be designated into a few solid categories for action.