I am currently serving on a search committee for a new executive director for the National Adult Day Services Association. It’s been a long process where we have had to identify transitional leadership, do some significant strategic planning, and identify and then interview candidates. I’ve learned so much during the last few months.
A friend of mine and a fellow search committee member sent our team a link to this article by James Citrin of Spencer Stuart: How Boards Interview CEO Candidates.
The article is an interesting guide for a board to use when hiring their next CEO or Executive Director or other leadership position. He’s has hit on some great questions that cover a wide range of a CEO’s responsibilities. In his interview guide, he covers the following areas:
- Growth, Financial, and Operational Management
- Strategy and Vision
- Leadership and Team Building
He includes some additional interview questions that are useful, but a bit outside of the above categories. The most important question according to Citrin: “What questions do you have for us?”
Read the article. Here’s my question for the small business owner: can you answer these questions about your company? In a resource constrained environment, how do you lead your company forward?
At least those were the questions I was asking myself. I’ve got some work to do.
Recently, I had a run in with a sales person from Patch.com. He had met my marketing person who thought that their service sounded like a good idea. I met with them obtained a quote and let them know we were putting everything into the budget. We decided to move some of our advertising dollars from a local paper to Patch.com.
The follow-up lost it for them. The sales representative came to our office and explained to my marketing representative that the offer was set to expire that day unless I signed the deal. The sales representative informed my employee that he had explained this deadline at the meeting, emailed me about the issue, and called me to discuss the issue. The voice mail was left a couple of minutes before contacting my employee and there was never an email or any mention of a deadline. We probably could have gotten the same deal if we wanted to today, but do I really want to deal with such silliness and lack of integrity in selling?
I do not. Life is too short. The medium they have to offer won’t make or break us, though it might expose us to a different audience than what we could get elsewhere. But, I don’t want to work with sales people who treat my company this way. More importantly, I don’t want my sales people to think that it’s appropriate to treat their customers in this fashion.
Clearly, services and products need to be sold, but the credibility of the sales person will disintegrate quickly once falsehoods and misrepresentations enter the equation. It’s not as though the deal was tiny or unsubstantial. Our lifetime value (LTV) to the Web site would be measured in tens of thousands of dollars if he got us through the first year successfully. Instead, our LTV to Patch.com is zero.
In the world of technology startups, four ideas/books seem to be quite influential: Business Model Generation, Steve Blank‘s Customer Development model, Eric Ries’ The Lean Startup, and Agile Development. I’m not a technology guy, but they talk about launching companies often and with abandon. What can we learn from them that we can apply to the non-web venture.
We’re in the process of launching a new company. Really, we’re spinning out our transportation operations into a separate company. I’m in the process of reading Business Model Generation and The Startup’s Owners Manual. I’ve read The Lean Startup. I’ll be looking for a book about Agile Development.
We’re starting out with the Customer Development model and speaking with many potential customers. We’re working on a Business Model Canvass. One initial thought is that we’re moving pretty quickly. We’re starting to send proposals out. If we create customers, we’re on to something. If not, we’ll have to try again.
We’re starting a new venture; rather, we are in the process of spinning off some transportation operations into it’s own company. We’ll be in the transportation space, so it’s a service that everyone needs (but will anyone pay for it?). There’s lots of competition: planes, trains, and automobiles. We’ll be focusing more on non-emergency medical transportation, shuttle services, and senior living services. We’re writing a business plan or perhaps we will use the ideas presented in Alexander Osterwalder & Yves Pigneur’s Business Model Generation using their Business Model Canvas. What questions do we need to answer? I came across a great article by William Sahlman in the Harvard Business Review entitled: “How to Write a Great Business Plan.” We’ll explore the ideas more fully in future posts, but here is the basic framework:
- The People
- The Opportunity
- The Context
- Risk and Reward
The questions begin with who is involved and what expertise do they have. Then we want to understand the opportunity, who the customers are and why they need our services. Can we create economic value? or Will we simply be throwing money down the drain? We need to understand the context of the opportunity. This clearly looks at the industry and other macro-questions. But, it also asks the questions about LEGAL requirements. We’re looking at transportation, so we’ll be spending a lot of time at the US Department of Transportation Web site. Finally, we need to understand the risk and the reward. The article has a great chart showing this: consider the hole created at the beginning of the venture as well as the possible positive outcomes.
A while back, a colleague invited me to partner with her in her business. I was intrigued by the possibility, but ultimately decided not to do it. The key morsel of advice came from my attorney, who begged me: “Don’t do it!” I’ve been thinking further about the partner/no partner question:
- Does the partner bring something to the table that you don’t have besides money?
- Can the partner round out a management team?
- Can you work and live with the individual for a long period of time?
- It’s hard to get a divorce. Who has control? How do you escape?
It’s probably inevitable that a partnership will develop. There may or may not be ownership in the company, but if there are any employees, the operating owner-employee relationship will start to look like a developing partnership.
One last thought: find a good attorney. Ultimately, the partnership needs to be put in writing with an operating agreement. The agreement will have a lot of boiler plate language in it, but it needs to spell out who the decision maker is and how control is divvied up. It better also represent how the partnership will dissolve whether for amicable reasons (one person wants to move to Hawaii) or because of more nefarious reasons.