In a recent interview with The Philippe Matthews Show, Association of Interim Executives Chairman, Richard Lindenmuth sheds light on the most important component of any company in transition: its people. Lindenmuth, who has been an Interim CEO in a number of industries ranging from high technology to services shows how to gain people’s respect, trust, and engagement.
Interim executives are becoming a popular alternative to using a consultant or leaving a position vacant while a search for the right person is conducted. An interim executive also brings a fresh, unbiased review of factors driving organizational health and operational results. The interim executive does not waste time or company resources trying to secure a full time job, but is driven by the opportunity to make changes which lead to a sustainable value increase for all the stakeholders of the business. The client and their customers can expect immediate improvement in delivery, quality, and cost while a search is conducted to fill the permanent position.
Despite the bitter Chicago cold, wind, ice, and snow (sounds appealing doesn’t it!?), there is something energizing about this time of year. January is a fresh start. A blank slate. But also a time to apply lessons learned. It’s easy to jump back into the daily grind without first reflecting on what actually happened the previous year to set a strong foundation for growth in the year ahead.
There were a lot of moving parts that made up our year at the Association of Interim Executives. Thousands of conversations with owners and executives, further development of the Rapid Executive Deployment program, our first interim executive annual conference and more. While those developments were visible signs of progress, there were underlying themes that helped serve as a driving force.
Here are 5 things I learned from owners, entrepreneurs and other brilliant minds:
I was travelling recently near Guanajuato, Mexico, to the small village of Santa Rosa de Lima, population 3000. We visited a cooperative run by five local women called Conservas Santa Rosa. This company was founded in 1998 with support from the government, which sought to exploit natural resources such as wild fruits produced without fertilizers. They started making strawberry jam by hand for the local communities and now have a contract to supply a national restaurant. With this growth they have raised the standard of living of over fifty families and are now sending their children to school. They have been recognized by the UN as a successful rural productive project.
40 years in public company management, merchant banking and entrepreneurship in multiple industries has left an indelible imprint on me. In the two dozen businesses that I have been involved with as owner, investor, operator or contractor, my belief is that businesses that seek outside help tend to focus on fixes for weaknesses in growth or profitability. Whether it be failing or non-existent cash flow, troubled industries, poor strategic fits, etc. my belief is that the damage was done far before the negative symptoms occurred. Operating and financial weaknesses are the symptoms of the larger illness.
The root cause is always about two factors: people and leadership. A leader creates the culture for his company and that culture is palpable at every level of involvement including the C-suite, middle management, rank and file, customers and suppliers.
One of my early mentors inspired me to restart, after each painful management lesson, by paraphrasing the following excerpt from Teddy Roosevelt’s 1915 speech at the Sorbonne.
“It is not the critic who counts; not the one who points out how the strong stumbles, or where the doer of deeds could have done them better. The credit belongs to the one who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends oneself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if one fails, at least fails while daring greatly, so that one’s place shall never be with those cold and timid souls who neither know victory nor defeat.”
As the Red Queen told Alice, “My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.” This is often true with most companies, they must grow or the competition will leave them behind. In order to grow faster they must also make changes in their processes. The key to effectively managing change is to create a culture that is willing to embrace change as the new norm. To be effective, you must ensure the whole organization understands that the status quo will no longer be acceptable. The first step in creating a change-management culture is to get everyone’s head wrapped around some very basic definitions:
Organization and coordination of the activities of an enterprise in accordance with certain policies in order to achieve clearly defined objectives
To cause to be different
A structured approach to transitioning individuals, teams, and organizations from a current state to a desired future state
A person effective at change management
Business owners looking to find a way to share the wealth with those required to help create it have an option in incentive compensation (IC). This concept rewards performance and teamwork that produce results.
If you’re willing to invest in realistic incentives that reward achievement, you’ll reap the proceeds. When employees can see dollar signs, and their goals are clearly stated to clarify direction and eliminate confusion, their mindsets change and they become more creative.
The keys to success with IC are to:
1. Set realistic goals and time frames
2. Hold managers accountable for performance
3. Communicate measurement and reward methodology