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Of Course … The Tragic Mistake – Part Three Let the Coaching Begin

Of Course … The Tragic Mistake – Part Three Let the Coaching Begin

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It was one thing to reach an agreement on the focus and goals of the coaching engagement but another to actually kick the process in gear. I could tell by her body language that the CEO was nervous about getting into the thick of things. In such situations, I find it useful to begin with more of an intellectual discussion. Somehow, working with concepts softens apprehensions and allows the discussion to begin in what feels like a safer place. And so, that is what we did.
It was one thing to reach an agreement on the focus and goals of the coaching engagement but another to actually kick the process in gear. I could tell by her body language that the CEO was nervous about getting into the thick of things. In such situations, I find it useful to begin with more of an intellectual discussion. Somehow, working with concepts softens apprehensions and allows the discussion to begin in what feels like a safer place. And so, that is what we did.

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Categories:Business/Law, Finance
Published by: Dr. Earl R. Smith II on Apr 16, 2010
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04/15/2010

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Of Course  The Tragic Mistake  Part Three: Let the CoachingBegin
Dr. Earl R. Smith II
 DrSmith@Dr-Smith.com www.Dr-Smith.com Prior articles in the series:
y
 
Of 
Course  The Tragic Mistake  Part 
O
ne: Diagnosis 
y
 
Of 
Course  The Tragic Mistake  Part Two: Designing the Fix ~~~~~~~~~~~~~~~~~~~~
Let the Coaching Begin!
 It was one thing to reach an agreement on the
ocus and goals o
the coachingengagement but another to actually kick the process in gear. I could tell by her bodylanguage that the CE
O
was nervous about getting into the thick o
things. In suchsituations, I
ind it use
ul to begin with more o
an intellectual discussion. Somehow,working with concepts so
tens apprehensions and allows the discussion to begin inwhat 
eels like a sa
er place. And so, that is what we did.We began with a discussion o
the role o
metrics. Here is some o
 what I laid out:
y
 
I
you dont know where you are going, how will you knowwhen you get there?
y
 
 Are you really willing to bet the
arm on an un
ocusedstrategy?
y
 
 Y 
ou know as well as I do that most companies
ail, not 
orlack o
ability, a good value proposition or an e
ff 
ectivestrategic plan but because they have never organized their energies around a set o
speci
ic goals and per
ormance metrics.
y
 
 Y 
ou have become so overwhelmed with the challenge o
being a CE
O
and havelost track o
the basic
act  success is the issue. Being right is
OK 
in school but being success
ul means being pro
itable.
y
 
 Y 
ou have experienced the positive e
ff 
ects o
setting and reaching goals  yourpast investors showed you. Now you need to revisit those experiences and learn
rom them.My core message was that you have all the experience and knowledge you need towork through this. I can help you but this is your journey to make.
So, Where Do We Start?
 
 
By this time I could see that the CE
O
was beginning to warm to the challenge. 
OK 
,where do we start. she asked? We start 
rom where we are, I responded. What isthe challenge be
ore us? To get me over my aversion to per
ormance metrics, she suggested. Wrong, I replied We need to get you back in love with them. Metrics helped makeyou a success in the past. They will increase the chances o
your investment paying o
ff 
.So, lets start 
rom where we are. How do we know that we are succeeding?What 
ollowed was an exhaustive  and exhausting  analysis o
the
ocus o
thecoaching engagement. We kept at it 
or a couple o
hours and produced what has to beone o
the most heavily de
ined coaching agreement in history. We broke down eachstep in the process and subjected it to the
ollowing tests:Is the goal and associated metric 
y
 
speci
ic and well de
ined  in other words, do we know exactly what the goal andassociated metric is.
y
 
is this a goal which is achievable  have we de
ined the goal and metricsu
ff 
iciently to be able to measure progress?
y
 
have we set clear time constraints on achieving the goal  and are thoseconstraints both sensible and relevant to the overall process? We dont want totake
orever on a process that should be completed in a day.
y
 
can we measure progress? Have we de
ined the goals and structured the metricsso that they help us determine i
things are actually moving
orward?
y
 
have we contextualized the goal and metrics within the larger picture? Letsmake sure that the minutiae doesnt become the enemy o
real progress.
 A
nd Then the Sun Came Up
 
Of 
course, our short-term objective became how can I, the CE
O
, get the most out o
 this coaching engagement  but that was the main point o
the exercise. Towards theend o
the session the CE
O
suddenly stopped talking, gave me a sly smile and said, 
OK 
, I get it, I am the investor and you are a port 
olio company. I knew that we weremaking progress, nodded and grinned back at her.Things became much easier a
ter that. The issue was a delicate one. The balancebetween her prior role at a CE
O
and current one as an investor was at the core o
theproblem. In the past, her investors had set per
ormance metrics and insisted on theiruse in determining both compensation and levels o
interest in the company. Then shewas the
ocus o
those metrics and had to live by them. I
she succeeded, hercompensation and equity interest in the company increased, I
she and her team didnot meet them, they su
ff 
ered a loss. But now things were di
ff 
erent. I
the metrics weremet, she su
ff 
ered a loss  two losses actually. The increased compensation resulted in
 
lower returns  she had to make sure that the additional payments were justi
ied anddid not dilute her returns. Secondly, meeting the metrics cost her in the
orm o
dilutiono
her equity stake in the company. suddenly the behavior made a weird kind o
senseto her. I know why I have been acting this way, she said. My whole experience hasbeen on the other side o
the metrics and I have always gamed the system to maximizemy and my teams interests. Now, I am on the other side. Every metric that is met, cost me. So I have avoided metrics and the costs. For the
irst time she began toappreciated the position o
her prior investors and the role they had played in helpingher succeed. She began to appreciate how their role di
ff 
ered
rom hers and how thetwo combined to make
or success. So you sabotaged your own interests to keep
rom being in opposition to the peoplewho were playing the role you used to play, I suggested.We sat in the bar
or a long time without either o
us saying anything. I turned myattention to a particularly well made martini and a
ine Dominican cigar while shesipped and thought. Finally she look up and said, I need to learn how to be aninvestor, dont I? 
 Y 
es, I said quietly. 
 Y 
ou need to
ill that new role as well as you did your other ones.It is a di
ff 
erent role.
 Y 
ou are a parent now and have children o
your own to see to.They will do better i
you supply the proper adult supervision. She made a
ace andsipped her drink. Im not sure Im ready to be an adult, she o
ff 
ered. But one thing is clear to me now.I
I am going to be an investor, there is no way to avoid it.We both agreed that enough heavy li
ting had been done
or the day. She le
t me to
inish my cigar and martini. I le
t her to
inish the thoughts that had started during ourconversation. It was a
air trade.
N
ext Time  To Be Or
N
ot To Be
 © Dr. Earl R. Smith II~~~~~~~~~~Related Articles:
y
 
Turnaround Engagement  Part I 
y
 
Turnaround Engagement  Part II 
y
 
Turnaround Management  Cash Flow 
y
 
Turnaround Management  the Income Statement 
y
 
Turnaround Management  the Balance Sheet 
y
 
Turnaround Management  Initial Steps 

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