This is going to have to be a different story to the board next year, the CEO thought as he wrapped up his accomplishment report for the fiscal year. I’ve guided the corporation through a difficult period. Not as dire as in other industries, but I made some tough calls the board should appreciate.
Take training: While the complete ban I imposed was unpopular, it did save dollars and time:
- Freed from new product and skills training, the sales force could spend more time with customers.
- The scary-smart talent in R&D stayed in the labs inventing, not out at conferences networking for new ideas. Same with our marketing staff: Its training and conference budget was cut to nil.
- Newly promoted managers didn’t bother senior executives with mentoring meetings, so my execs could focus on work and let the cream rise to the top like the old days.
- Business teams throughout the company got to work. They didn’t sit around contemplating esoteric topics such as ethics and inclusion.
Explain Away the Numbers
The CEO’s self-satisfied glow began to fade as uneasiness crept in. Rereading the numbers portion of the year-end results, he wondered, so how do I explain this to the board?
Market share was down five points. The sales force did have more face time with customers, but its effectiveness wasn’t impressive. In fact, comments from the CEO of one of our most important customers were concerning. Our team botched the proposal and let the competition come in at the last minute and steal the contract. Something about misreading the client’s real needs.
In defense of the sales force, it really didn’t have anything that revolutionary to sell this year. For some reason, the pipeline of new products thinned out in the past year.
But I can’t be hard on the R&D leader either. Marketing really dropped the ball, missing new trends, and we were blindsided with that new product announcement from our key competitor. I guess the high level of turnover and churn in marketing this past year kept that group in turmoil.
He glanced at the resignation letter on his desk, the latest defection of promising marketing talent. I don’t understand this new generation, he thought, leaving for a role where she felt more commitment to her professional growth, even if the salary and responsibilities aren’t that different!
Those losses have put our new product platform launch behind six months. It’s not like I don’t give these new leaders visibility. How do I explain to the board the two, bright international leaders they met last year are now gone, as well?
The next line of the CEO’s report seemed to promise a better story. Head count and overhead expenses were down, below target levels. Defections during the past two years really helped our bottom line for SG&A (sales, general and administration). In fact, no department in the company has a full staff right now. HR seems to take longer and longer to find new recruits. I don’t know what to make of HR’s complaint that our “employment” isn’t compelling enough to attract top talent any more.
I’m starting to get uneasy that some managers may grab whatever talent comes in the door, and the new recruits aren’t hitting the ground running like they used to. They’re “C” players.
That’s about right. It’s been “C” performance here. We survived, but I’m not sure we are ready to grow. Next year is going to have to be different. It’s clear we’ll have to make some bold decisions to turn this around. We’ll have to have the courage to make some new strategic investments.
The sales force will need to gain competence in front of customers; R&D will need to get out more to challenge traditional thinking and bring more innovation. Marketing also will have to get out more, and senior leaders will have to carve time out to help the newer generation feel valued and pass along lessons of experience so we can do a better job retaining our top talent and regaining our reputation as a place to grow.
There hasn’t been much formal training around here lately, the CEO concluded, but maybe I did learn something valuable.
© Kevin D. Wilde