Ever wish you could bounce your ideas off of 15 other experinced CEOS? You can!
Here's an example of how one of our members, Joe processed his issue.
Joe is excited to share plans for his first acquisition at his monthly CEO Peer Advisory Board Meeting. Today is his turn to bring an opportunity to the group and get their opinion. He can't wait because his plan is really "a stroke-of-genius"! This acquisition is going to accelerate his company's growth and diversify into brand new products and exciting new growth markets.
Joe has a PowerPoint presentation showing all the market research, the financial history, and the future projections. His attorney is drafting the purchase agreement. His accountant is finishing up the due diligence. His management team thinks it's a good idea.
I'm ready! This is going to be fun! The "Board" is going to love this!
This standardized ISSUE PROCESSING begins with Joe stating his issue as a question:
How do I do an acquisition?
This issue is important because this is a new opportunity that will make my company grow.
What I have done to date is I have negotiatied a preliminary deal with the seller. I've done the due diligence and I have my attorney drafting a P&S agreement.
What I want the group to do to help me with is since this is my first acquisition, share some of the pitfalls I need to avoid in combining the new company with my existing one.
The next step in the process is a round of "Clarifying Questions"
It's very difficult to ask a question without embedding an answer. We are very good as CEOs at solving problems. That's what we're paid to do. In this process, we're learning to ask questions to make sure we have enough information before we propose a solution. The Chair's role is to facilitate that discussion and stop people before they get to the solution.
Why do you want to do an acquisition? This opportunity just "dropped into my lap"- I wasn't looking for it but it seems like a great way to speed-up the growth of my business.
Does the new company make the same products as you? No. Different products.
Are they sold to the same market? No. New market.
Why do you want to get into that business? To keep my workers busy.
Why is that a problem? Because we've been so successful at implementing Lean Manufacturing that we don't need as many people as we did before. I REALLY don't want to have a layoff- these are veteran employees who have been loyal to me for a long time.
Have you looked at other alternatives for these people? I stopped hiring new people and was hoping that normal attrition would trim the workforce but nobody seems to be leaving because there aren't a lot of jobs around.
We often ask the presenter to restate. Are we still talking about the same issue or is there a different issue?
The issues very often presented are symptoms rather than the root cause of the issue. By asking the question, we get to the root cause.
"Now, Lets talk about that."
Who has a solution now, for Joe?
Then we talk about, "Well in my opinion, I think this is what you should do," and we go around the room and people give different possibilites.
"I think it is very risky to enter a new- unfamiliar market with new- unfamiliar products."
"I think you should take the money you were going to invest in the acquisition and invest it in marketing and sales to expand your existing product line into new markets."
"I think you should sell your existing products on the West Coast."
"I think the acquisiton is riskier than you think- they seldom turn out the way you expect."
"I need a good temporary workforce to ramp up an inventory build for a new product launch. Can I "borrow" your excess people for a couple months?"
Then the question to Joe is,
"What did you hear?
What are you going to do about it?"
This is all recorded, so John gets a copy of his issue so that he can actually listen to that again and again and again to really be sure that he heard everything that was said.
One of the things we always notice is that people get very defensive when they have presented an issue, “No, no, but you don't understand,” and “It won't work because...,” and when we have that recording and we can play it again and again, then it starts to dawn on us, oh, maybe I didn't really listen carefully that time.
Personal Action Summary
We also use a form called 'The Person Action Summary' which is a two-part form, a self-copying form.
People write down some actions they're going to take in the next month and they keep a copy of it and the chair gets the other copy.
Next month as we’re having our one-to-one, which is another part of the Vistage experience, as Chair, I bring those with me. At our private coaching meeting, I'll say,
WHAT VALUE DID JOE GET FROM HIS CEO GROUP MEETING?
Driving back home, Joe couldn't believe how "BLIND" he had been about the acquisition. Thinking honestly about it now, he had jumped at it because it would provide work for his underutilized workers. It was an expensive solution to a staffing problem.
"But why handn't my management team pushed back ? Why did they just go along with my idea?"
"Why didn't my attorney or accountant slow me down and challenge my plan?"
"At least when I go to my Vistage NH CEO Peer Advisory Board, I get honest opinions from the other CEOs. They don't "pull-any-punches."
"If my thinking isn't right- at least I can count on them to set me straight."
Do YOU have a place where you can go to get opinions, advice, and suggestions about your new ideas?