The right way to find a new CEO

The boards of most company’s invest a great deal of time and money in executive searches and assessments prior to appointing a C-level employee. Boards will typically review the performance records of current company employees while concurrently looking at outside prospects. However, many times little attention is paid to whether executives who have actual CEO experience are directing the search. This is an important point as only someone who has experience in a C-level position will have the knowledge to know what to look for in potential candidates.

As an example, in Microsoft’s search for a successor to Steve Balmer, who began running the company in 2000, two well-known, respected and experienced CEOs, Steve J. Luczo, of Seagate, and John Thompson, formerly of Symantec, took point on the search committee, showing the world’s largest software company understands that it probably takes one to know one. In conducting the search both Luczo and Thompson will have two main options in choosing a candidate, looking inside the company or expanding the search to outside prospects. This article, written by Michael Useem, Ram Charan and Dennis Carey provides more detail on the Microsoft situation.

1) Staying Internal
When looking at internal prospects Luczo and Thompson will consider several current and former Microsoft upper-level managers. However, when considering internal candidates the main issue is Microsoft’s long-term strategy and whether Microsoft should continue on its current path or reinvent itself. Typically, insiders are prone to gravitate towards the former as they will have been responsible for implementing the outgoing CEO’s strategies.

2) Looking Outside
When looking at candidates outside the company there are two options:

A) Search for a tech-savvy manager possessing a proven track record who is capable of running the company for the next decade or two. This clears the way for a larger change of direction, but it comes at the cost of any passed-over internal talent heading out the door, and this is exactly what happened when Boeing hired James McNerney from 3M and lost Alan Mulally to Ford, who then took Ford Motors to new heights.

B) Search outside the company for an experienced CEO with the ability to further develop Microsoft’s best talent, with the understanding the new CEO would step aside in a few years, when an internal prospect becomes ready to step into the position. This adds the advantage of being able to hold off on coronating an internal exec that may just not be quite ready to take the reins, while still retaining top prospects and permitting strategic redirection.

Tax credits offered to raise funds for small business

The Certified Capital Company, called CAPCO, allows states to offer tax credits to attain venture capital to start small businesses.

The program utilizes insurance companies, who are encouraged to invest in companies. The states give those insurance companies tax credits. Those tax credits eventually result in a large amount of money to be used to invest in small businesses.

It is a government program, but it utilizes private money which is attracted by offering tax credits. Small businesses are a key player in job creation in any community, and providing small businesses money to develop more business, will add to the economy by creating jobs and expanding those small businesses.

The program will encourage small businesses to grow, and will provide more revenue for local government as well, with minimal public money being used.

Louisiana was the first state to use this system, starting in 1983. Since then, Missouri, New York, Florida, Wisconsin, Colorado and Texas have added the CAPCO programs to their economic development incentives.

Economic policies have changed over the past 20 years or so. No longer are states relying on attracting huge businesses that will bring in hundreds of jobs at a time. Instead they are focusing on helping small businesses.

Attracting big businesses is expensive. States are therefore trying to create a more business friendly environment for smaller businesses. They get the same benefits over time but do not have the big expense. Helping several small businesses in the community will offer just as many jobs as one large industry would.

It makes sense for government to help small business, as 24 million of these businesses make up 69 percent of the total workforce, and create 60 percent of new jobs that are created, according to government statistics.

Programs like this recognize the relationship between small business and a growing economy, and it makes sense for states to provide these incentives and programs to help small businesses.

The federal Small Business Administration gives the states some leeway in how they set up the program, and what exactly constitutes a small business. There are federal guidelines but the states may set their own. Wisconsin calls a small business one of no more than 100 employees, for example.

States may also set their own eligibility guidelines. Florida prohibits funding for oil and gas exploration, for instance. Florida’s program is restricted to companies involved in manufacturing, processing, or assembling products; conducting research and development.

Head hunters used by CEO’s

It is important for a company to focus on attracting top-level talent to the firm. Finding the top-talent can sometimes be tough. It is sometimes worthwhile to engage the services of an executive search firm. Bad hire might be more expensive as you would be forced to redo the process and even pay for the termination of the contract for the unfit employee. Here are few tips that come in handy when dealing with an executive head hunter.

Understand the fee structure and types of head hunters

There are three main types of search firms

Contingency firms; these are transaction oriented search firms that you only pay if you hire the candidate they present to you. They work on a twenty to thirty percent compensation of value of the candidate’s first-year total salary. Their focus is mainly on middle and lower level positions

Retained firms; the search firm is only hired when there is a need for a candidate. They take over thirty percent of the value of the candidate’s first-year compensation whether he or she hired. Pay is usually done in stages; a third initially, a third during interviews and a third if a quality candidate is found. They are best suited for senior level management positions.

Container firms; they are a blend of the two above. You are to pay an upfront fee when initiating a search and about twenty-five percent of the value of the candidate first year compensation.

It is important to check if the head hunter has the right qualities for your business. Consider if the firm understands your business, its location or if it has some personal references that may help. It is important to seek a company that has experience in filing similar positions like the one you have in your industry.

It is also good for you to ask about their recruitment strategies, how wide their network and reach is, and if they understand the kind of person you seek to take up the position. There are head hunters that are specialized in hiring the chief executive, the chief financial officers and so forth. They are a good choice when hiring the particular position that they specialize in. Finally, pick a head hunter who you can connect with and the chemistry is right. It helps to be on the same page with the recruiter.

E-Commerce, M-Commerce and How Are They Connected

growEverybody has heard of E-commerce, but the notion of M-Commerce is somehow new, due to the recent developments in technology. Let’s explain what this is: E-commerce is that commerce that takes place in the online environment. It is that part of business that is conducted in the online environment: selling, buying, and offering products, everything that has to do with the online businesses. You can’t say you contribute to the e-commerce without having an online business.

On the other part, the m-commerce is a new part of the same e-commerce, with only one difference: if the e-commerce is made in the usual ways – trading goods with the help of a computer, the m-commerce is that part when the same goods are traded with the help of another device: a smart phone or a tablet.

This part of commerce has grown continuously since the development of smart phones, that today it’s a “must” to have the site of your business adapted for mobile viewing.

Being Close To the Market

handshakeAs everybody with a smart phone or tablet is somehow addicted to online browsing, optimizing your site for the mobile experience will only increase your share of the market. For example – there are many people who don’t have the time to access a computer to make their shopping, but they have their smart phone with them all the time and they will use that device to look for something.

If you optimize your site to be accessible from a mobile device, then you will surely be more visible in the online environment. It needs a little investment, but the results are amazing.

You Are Expected To Do This

empower-your-businessWith so many users of mobile devices, you are expected to optimize your site for a mobile experience. If the site you have for your business is only for computers, then the end users won’t be always able to view it from a mobile device. You can do it with a mobile optimized site or even a mobile application, as this is the trend today. Either way, they will be able to see you easier and access what you offer with ease.

Better Communication

If you run your own business, you will have access to the same site – your own – all the time. Being optimized for a mobile device will allow you to see in real time what your customers want – they may leave replies, they might sent you messages and you might control what happens there. It’s easy and accessible and in the end, it proves to be the right thing to do.

The Sales

BusinessHomepageGoing mobile with your business will also increase the sales, as there are many people who can’t afford to look for something at work, but they do have their phones with them over lunch period. In only 15 minutes, they can use that time to both eat their lunch and also look for your products.

Your sales team will also be more responsive, as they can do their work from mobile platforms, wherever they are.

The Sale Conversion

Taking about the sale team leads us to tell you about the sale conversion. With a mobile platform, you will surely benefit. It was proven that those people who use mobile devices to search for products represent more than 25% in the sales conversion. Think about how much good it will do for your business if you choose to go mobile.

It is true that this step will have some challenges on the way, but it will prove out to be a good investment for the long run. Customers have evolving expectations about what is offered, and even if the market seems to be crowded with one service or another, you will offer a better communication and an improved quality. Your analytics will be comprehensive and you’ll also have better tools to transform your opportunities into income.

Think about all this, and come make us a visit at SPF Group to show you how to do it!