Creating a Leadership Team That Works Powerfully Together
Midsized companies with strong leadership teams outpace competitors in generating growth and profitability, developing competitive advantages, and keeping customers and employees satisfied.
But for the CEOs who run midsized firms, creating an exceptionally strong management team is not easy. They don’t have the resources to invest in extensive training and development programs. They typically can’t match the salaries of Fortune 500 firms. And many of these CEOs would rather focus on strategy, financial management and sales opportunities than troubleshoot a problematic top team
Yet top management team members who aren’t working well together or, on their own aren’t performing at the level they need to be, carry a considerable cost. Decision-making slows, and poor decisions are made. Infighting creates morale problems. Disagreements about the firm’s strategy results in functional heads working at cross purposes.
Growth can slow to a crawl, and in the worst cases, turn negative.
What We Can Do
CEO to CEO has been brought in by CEOs of numerous midsized companies over the last 10 years to help them create an exceptional leadership team whose members work well together and raise each other’s game.
Our impact can be rapid: Far better decisions, made much faster; the end to infighting; key initiatives put back on track; much better team performance; and individual performance improvements that can be surprising.
What’s more, our CEO clients have told us we helped them shed huge concerns and frustrations about their team. The most notable one is that they no longer feel like they’re the only engine pulling the train, that in fact the whole top team is pulling it with them.
How We Do It
Our approaches to helping CEOs create exceptionally strong management teams fall under three categories:
- Getting the top team to click. We do this through such measures as setting rules for behavior at meetings; getting CEOs to master the art of asking questions and listening well to the answers (both what’s said and not said); designing the right cadence of meetings – types of meetings, frequency and content.
- Evaluating individual team members and helping them power up their performance. Here we establish what a team member must be able to do given the company’s size, competitive standing, and future challenges. Then we evaluate performance through 360-degree feedback as well as the executive’s own perceptions. Then we prescribe the right education, training, incentives, roles or other measures that enable the company to achieve the performance it needs from a certain executive role.
- Coaching the CEO to make decisions faster, and with greater confidence. We understand why many CEOs hesitate to make changes to their top team and we partner with them to analyze, understand the risks and costs and to make difficult steps forward.
- Helping to develop and implement an outward mindset. Imagine what would happen in an organization if every person was invested in more than just their own personal success? What if they all focused on the success of everyone around them and of the company as a whole? Interested and want to know more? Call Jan Dare Brown @ 925-829-8190 ext 101 or email her at JDare.Brown@ceotoceo.biz and she’ll book you for a personal conversation about Arbinger Training with one of our Principals. You can also Click here to learn more about Arbinger Training: Developing and Implementing an Outward Mindset.
The case studies below will give you a flavor of how we’ve helped CEOs of midsized companies elevate the performance of their team.
Client Case Studies
Ownership Regaining Control Over Management: Silvaco
Guiding A Pioneering Software Company Into A New Era
Silvaco, a Silicon Valley software firm, lost its founder and CEO when Dr. Ivan Pesic passed away in October, 2012. His wife, Kathy Pesic, became owner of the company, without a clear succession plan. CEO to CEO helped the Pesic family navigate the management transition and transform the business, from a centralized, “founder runs everything” company to a collaborative enterprise positioned well for future growth.
Kathy Pesic had worked as a process engineer at HP and done real estate investment, but had not been involved running Silvaco. She wanted guidance as the company faced the difficult transition.
Dr. Pesic, intent on beating cancer, had not made specific succession plans in the event of his passing. The COO by default moved up to CEO and the head of accounting took the CFO position. Mrs. Pesic took the role of Treasurer, and her son, Iliya Pesic resigned from a five-year position as a biomedical engineer to work at Silvaco, learning the business and the industry. Neither one had senior leadership experience.
Silvaco’s industry is Electronic Design Automation, creating software tools that enable engineers to design semiconductors. Ivan Pesic had been an early innovator and Silicon Valley pioneer, founding the firm in 1984. The Santa Clara firm had grown to 180 employees with offices in California, Massachusetts, and Texas, as well as the United Kingdom, Japan, Taiwan, Korea, and Singapore. Customers include leading fabless semiconductor companies, integrated semiconductor manufacturers, foundries, flat panel display manufacturers and universities.
As Mrs. Pesic and Iliya Pesic learned the business and connected with employees and customers worldwide, they decided to set the company on a growth path to become an industry leader, which required transitioning to a professional management team that had already walked this path. The Pesics reached out to Robert Half Management Resources, looking for both interim leadership and help identifying a consulting firm that could coach them through the management transition. Steve Hall, Senior Director Client Services at Robert Half Management Resources partnered with Robert Sher, Founding Principal of CEO to CEO, given its specialization in midsized companies, to present a full solution.
Hall and Sher worked together to gain a full understanding of Silvaco’s needs in a series of interviews at Robert Half’s San Jose offices. They shaped a proposal that would ultimately be accepted by Silvaco as the best option for support during this critical transition.
CEO to CEO brought in principal David Dutton and together, Sher and Dutton led the engagement, laying plans for the transition day and beyond, coaching the Silvaco board (Iliya and Kathy Pesic,) and coordinating with legal advisors. The pair also helped the board evaluate interim leadership candidates presented by Robert Half. Steve Hall led the Robert Half team, pulling resources from Management Resources, Accountemps and the company’s Executive Search team. Dutton, with a long background in the semiconductor industry, was selected as the interim CEO.
Robert Half led the search for the interim CFO and HR leader, who were selected after a series of interviews in quick succession at an offsite location. Kathy, Iliya, Dave Dutton and Steve Hall interviewed as a group.
A transition day preparation list was built that included job descriptions for interim executives, a dismissal plan, a legal checklist, communications, interim governance plans, expected obstacles and risks, a financial review, and much more.
The weekend before transition day, the interim team attended a half-day orientation along with the Pesics and team members from Robert Half and CEO to CEO. An overview of the company was given, as well as the near term vision from the Chairman. Interim team operating principles and the Phase 1 team tasks were finalized. The transition day schedule was reviewed and rehearsed to help ensure flawless execution. The team decided on operating principles that included full transparency with owners and team members; maintaining honesty, integrity and respect for everyone; making hard decisions quickly; communicating frequently and focusing on key objectives.
On transition day, September 22nd, 2014, the minute-by-minute schedule that had been rehearsed proved key to success. It kept everyone on the same page, and when deviations arose, the team addressed the situation quickly. The day went according to plan as the CEO, CFO and VP Engineering exited, and interim CEO, CFO and Director of HR began. Executive Chairman Iliya Pesic says, “With the help of CEO to CEO, we planned very carefully for this difficult day. The planning paid off. The changes were made with respect and the company and our industry reacted well, and as expected. None of our fears were realized.”
During the first week, the interim team, CEO to CEO, and Kathy and Iliya Pesic met daily, identifying a list of critical issues and tackling them. Within a week, the stability of the organization was confirmed, and within two weeks phase one of the transition plan was complete. New leadership took firm control of the company.
As the engagement rolled forward, Rob took on the role of owner’s advocate, making sure the Pesics’ voices were heard, and that they understood and agreed with the rapid-fire decisions the management team made. Steve Hall also stayed involved, watching that the interim team he had placed was firing on all cylinders. He marshalled the resources of Robert Half in the search for permanent executives. Regular calls and meetings between Rob and Steve kept them in sync.
The second phase of the transition encompassed the fourth quarter of 2014. Key objectives included: Finding and retaining the permanent management team; installing a basic planning discipline throughout the organization such that always-precious engineering resources were deployed to the highest potential opportunities; confirming the financial record keeping of the firm; and if necessary, right-sizing the workforce globally.
In November, it became clear that Silvaco needed to increase its headcount in engineering, and decrease overhead spend. A small reduction in force, the first in many years, was made to allow the shift in resources. The new team handled it without any significant issue. The company completed a follow-on restructuring in Japan in early 2015 with the support of Robert Half consultants from Tokyo.
Throughout this time period, the team ensured that management’s actions were fully transparent, and that ownership could oversee all activities without infringing on the normal decision making latitude that management must enjoy. CEO to CEO instituted an oversight and communication cadence that allowed for this, with defined roles for the board versus management, and a board meeting and reporting process.
The search for the permanent team began as the dust started to settle from the changes. Ownership really appreciated Stan Jones, the interim leader of HR, and they made him an offer that he accepted in November, 2014. The interim CFO was a career interim not interested in a permanent position, so Robert Half conducted a search that brought a handful of top candidates from which ownership and Dave Dutton selected the permanent VP of Finance who began in mid-December. Finally, having seen Dutton’s high performance as interim CEO, Silvaco retained him as their permanent leader as of January, 2015.
In a crucial step, the new leadership gave Silvaco a more disciplined and effective approach to strategic and operational planning. By the end of 2014, just one quarter after the management transition, all functional areas had detailed operational plans. The engineering department rebuilt its roadmaps and engaged with product managers and the sales team more deeply, connecting customer needs with new products and features. Iliya Pesic says, “The teams are really excited at the heightened level of collaboration at Silvaco. The new leadership is truly inspiring and everyone feels that their contribution will impact the quality and value of our toolset.”
During the first quarter after the transition, the company’s leadership model morphed from centralized to collaborative and empowered. The team established current quarter plans and a first-ever annual operating plan, and turned a flat organization into a functional organization — allowing for clear decision-making, accountable execution, and strategic planning.
Dave Dutton says, “It was amazing how fast the leaders and internal people promoted to leadership shifted to collaboration, setting up a modern organization that is becoming competitive with top tier EDA competitors. We have seen immediate acceptance from customers who are willing to look at Silvaco with the new changes.”
Six months after the transition, the company released critical new products that had been failed projects previously, and completed a key acquisition that expanded the company’s design flow to include verification.
“Silvaco has a strong financial base, an experienced team. and leading products helping our customers accelerate electronic product designs to the market,” said Iliya Pesic, Executive Chairman. “We have an amazing future and I’m excited to field a team that can aggressively pursue that future.”
CEO Can’t Do It All: Helping Team Members Become Leaders
The CEO was at his breaking point. Everyone came to him for decisions, and only a few seemed to have the initiative to bring him solutions (not problems) or to make good decisions. He retained CEO to CEO to conduct an independent assessment of his team.
We flew in and held face-to-face interviews with all team members and found that many were in fact too junior to lead this $110 million revenue firm. But we also found that the CEO was contributing to the problem by telling everyone what to do, and not requiring them to come up with their own solutions. There were almost no team meetings, so everyone went to the CEO individually.
Over time, we helped them develop clear job descriptions and MBOs for every leader on the team. We helped design and kick off a meeting cadence, with weekly operational meetings and monthly plan review meetings. Finally, executives could communicate and work together more efficiently.
On average, performance by the leadership team moved up. Within a year, one or two executives had moved on due to underperformance and the firm recruited a new CFO and sales-side VP, bringing in much-needed experience.
Bringing In New Leaders Increases Growth From 7% To 18%; Profits up 6x
We were retained to help a company improve profitability and sales growth, but with the proviso that we not recommend firing anyone—this family-like company didn’t believe firing people was within their culture, and the CEO wasn’t up for it. Yet it became quickly apparent that the leadership team was not leading—only the CEO was—to the best of his ability.
We started by coaching the team on how to behave at meetings. A few non-stop talkers were coached to be quieter, and a few silent participants were called on to speak more. We helped the CEO learn the art of asking questions, then listening. Next, we created one page business plans with each leader, and helped them get used to focusing on key projects and objectives, and measuring and reporting on them monthly. Performance improved.
To improve sales, we prescribed sales training for the head of sales. This helped, but after six months it became apparent that the gap was too great. We coached the CEO and team through using a retained search firm for the first time in their history to find a VP of Sales to whom the prior head of sales would report to. With this change, sales grew from an annual 7% growth rate to 18%, within one year.
With sales running well, a marketing director was hired successfully, further increasing growth. Higher volumes put pressure on delivery, and we referred in a logistics consultant to help. As that process unfolded, it became apparent that a VP of Operations should be recruited. The CFO received support from one of CEO to CEO’s principals who spent 1-2 days per month guiding change.
Over three years, the firm’s revenue growth rate more than doubled, and its profitability grew six fold.