Managing People Challenges

There are no more important words in any relationship – business, personal, or family –than “I trust you.” We give our trust slowly but take it away instantly when something is said or done to put that trust in question. And communications experts tell us that others believe our behavior when our behavior and words don’t match.

In crises, when we and our colleagues are feeling most anxious, trust is central to pulling out of trouble as a team. But when colleagues sense they are not hearing the truth – when our actions don’t match our words – we lose their trust. And restoring it is extremely difficult.

“I trust you until there is doubt; then I never trust you again.” You may not have said those actual words, but you may have thought them. So the words, “ I trust you” are priceless.

What can we do to cement trust in our relationships?

• Tell the truth. If you can’t share information, say so. Never lie.
• Meet your commitments. If you agree to do something, do it. If you can’t meet an agreement, say so. If you say you’ll call back next week, do it.
• Keep unkind thoughts to yourself. A cutting remark might make a point or evoke a laugh, but it also sends a message that you will hurt others.

Sound simple? Yes. But simple doesn’t equal easy.

Consider this dilemma: A friend is a vendor to one of your customers. The friend shares some confidential information about your customer that you could use to position yourself to garner all of your customer’s business. Acquiring all of this customer’s business would enable you to exceed your sales goals for the year and guarantee your team generous bonuses.

If you use the knowledge, however, it will be evident that you got inside information. You have built a strong relationship with this customer and want it to continue. How do you manage this information? And what do you say to your friend?

Your actions will influence your relationship with the customer for the foreseeable future. How do you maintain the trust of this customer? “I trust you” are the most important words in any relationship.

Life as you know it has changed. You have private equity investors.

The trends are shifting. Are privately held companies becoming more like public companies? The move for a privately held company to assume debt in the form of ownership by a private equity firm has changed the landscape. The private firm, once a stand alone entity, with the ability to make quick, responsive decisions, to invest in new projects, capital equipment as company needs dictate, now experiences the challenges of more structured decision making, more people involved in the decisions, more approvals, and most vexing, a requirement demonstrate profitability quarterly.

This last demand is a most onerous challenge. Now the leaders must approach their decision making much like public companies with quarterly results pressure and yet another ‘boss’ looking over their shoulders.

How will this growing trend do to change the world of privately held businesses? In the nineties we experienced the dot com boom…and it seemed that dot coms could do no wrong…. If you were looking for a place to realize terrific financial growth, invest in a dot com. We came to learn that the dot coms that succeeded were those who managed well. “Good management is good management” said Harvard University’s Rosabeth Moss Kanter.

Today the ‘hot’ area appears to be private equity. Lots of money flowing in, lots of opportunity to invest in privately held companies, turn them, make your fortune and move on.

The problem is the individuals companies are now managing significant debt. The good news: the company has been able to use the money infusion to penetrate new markets, generate higher profits, and create growth. Or perhaps, they are simply burdened with more debt.

But now the way the company is managed must change. Obviously some change is inevitable and necessary….but managing to quarterly financial expectations can create barriers to innovation and reinvestment in the core business.

Someone may have seen great return and maybe the only lesson is ‘Shame on me’ for not being a part of the investment team. So be it. But if you are the CEO left to manage the lesson you may learn is, ‘Be wary of quick fixes. They may bite more than you ever thought possible.’

Managing the new relationship with the equity owner is one more crucial mission for the CEO. This mission unmet can result in a new CEO at the helm. Life as you know it has changed.

Managing the new relationship presents tremendous personal and professional demands. Yes, you know how to manage your company as it has been, but the world of private equity presents additional challenges. Get some help from someone who has learned t manage up successfully.

Before you sink, get some help.

The Nielsen Group                                             It’s Always About People.

One of the most difficult management challenges for the small to midsized business owner or CEO is to release a long employed key manager who is no longer performing as needed in the company. These typically are well liked people whose poor performance has been tolerated for far too long. It is critical to manage terminating employees in a way that respects long service, former stature and, most likely, many contributions of the past. Frequently the pressure on the CEO requires that a move be made and this feels quite painful, and frustrating to the CEO. There are ways to assist the CEO, and the key manager, to make the right decision while maintaining dignity for all. We work with CEOs in managing their most diffiuclt people problems.

It’s Always About People.