Dr. Earl R. Smith II

Change - Two of Many Perspectives

Dr. Earl R. Smith II — Tue, 18 Nov 2008 19:37:31 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

During my six tours as a CEO and through the years of working with other CEOs, I have developed an understanding of the process of change that is considerably different from the one I learned at the Sloan School. I find that helping CEOs understand the subtleties of change is one of the major contributions that I make to their future and the future of their companies. Although I do not see change dualistically, it may be helpful to describe two of the major approaches to change in the constellation.

Action That Creates Change: I see this first approach to change in modernist and primarily tactical terms. It is presumptuous. CEOs often style themselves as visionaries or in messianic terms. Their self-images are ego-focused; they proceed as actors - proactively driving change often over the resistance of the world as they find it and the people on their team.

There are times when envisioning change in this way can be very productive. Change focused on a clear understanding of the needs of an organization is a good example. This is a form of engineering - tactical and directed. An example might be a company that is poised to move to the next level.

There are other times when this envisioning of change can be destructive. Change based on a self-serving misunderstanding of an organization’s need or a projection of bias onto those needs is a good example. This is a form of transference. An example might be the ego projection of a CEO onto a company. Here, the issues involved are inherently psychological.

Context That Creates Change: I see this second approach in post-modernist and strategic terms. It is inherently reactive. CEOs see themselves as pragmatists or in opportunistic terms. Their self-images are context-focused; they proceed as reactors - coactively managing change as they take advantage of the evolving business context and evolution of the people on their team.

CEOs that are good at dealing with this kind of context-driven-change have keen eyes and ears that are sensitive to trends within their space. Being able to pick up the ‘thin edge of the change wedge’ is such an important capability in a postmodernist world where change is the one constant. This is an exercise in highly sensitive perception.

The destructive side of this approach to change comes when context is overridden by a counter tendency. I have encountered CEOs that attempt to deal with rapidly changing context by rapidly changing their approach to managing their company. This amounts to moving the flatware around on the table. Each new period brings yet another ‘visionaries vision’. The roiling waters of a CEO’s capricious nature mask the evolution of context and limit potential.

Change Is: An effective approach to dealing with change involves considering these and other visions. It requires a constantly readjusted balance among them as developments demand. It is an extremely subtle dance. Difficulties in effectively addressing change come from not only the inherently complex nature of change and the human reaction to it - but also from ineffective understandings of the situation present. Simply put, approaching change from an egocentric perspective when contextual evolutions are driving the need to change is a kamikaze raid on a vacant lot. Alternatively, approaching change as a reaction to contextual evolutions when tactical responses are called for generates a similar result. Both are a waste of energy, resources and time.

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Dr. Smith is a proven senior executive, successful entrepreneur, published author and public speaker. He serves on boards of directors and advisory boards or as a strategic advisor to CEOs. Dr. Smith specializes in turnaround management, strategic planning, leadership development and executive coaching. He also works as an executive and/or life coach in the areas of personal growth and spirituality. He is the author of Amazing Pace: Turbo-charged Business Development - a book that shows how Advisory Boards can dramatically increase revenue. Dr. Smith is also the author of Dream Walk: Parables for the Living - a book of Raven Tales and exploration.

EXIT PLAN

Dr. Earl R. Smith II — Tue, 18 Nov 2008 19:24:43 +0000

The speaker opened his presentation to a group of small business CEOs with a challenge: ”If a bomb exploded right here, right now, who would replace you as the executive leader of your company, and how well would they perform?” Most CEOs acknowledged that they had no clear successor, and the few who had designated one expressed substantial doubts about his or her ability to grow the company. Even though my company was seventeen years old at the time, I was in the majority who didn’t know who their successor would be. My company probably would have disintegrated if I had been hit by the proverbial truck.

It was a jolting wake-up call for me. Like most CEOs, I was focused on growing the company and streamlining operations to increase profitability. I fantasized about the cash I would receive when I sold the company, but I had done little to build a management team that was capable of succeeding without me. When I returned to my office that afternoon, I e-mailed the top people in the company and asked: “If I got hit by a truck on the way home tonight, what part of our operations would be your biggest problem in the morning?” Their responses were intense and spanned a wide range of areas.

We compiled the responses in a written plan, and prioritized actions to address concerns held by multiple members of the management team. The most common concerns were about my relationships with key clients and strategic partners, with the company’s outside Board members, and with the CFO relative to the company’s financial management processes. It had taken me years to build those vital relationships, and letting go of them was difficult. However, after a year of conscious effort to share the relationships with the management team, I was surprised that the company increased its growth rate and was more profitable. The management team expanded existing client relationships and made better financial decisions. In addition, I was able to reduce my workweek to four days (and after the second year to three days), and apply more of my time to find and cultivate new clients. The employees joked that the company operated better than when I worked full time! That may or may not have been true, but clearly my company was stronger because it could operate without me and it commanded a higher price in an M&A transaction.

It may seem paradoxical, but your company would be stronger and more valuable if it could operate without you. More than ever before, relationships propel growth in today’s global economy. One individual, even someone as plugged-in as an effective CEO, can cultivate only a relatively small number of relationships. Therefore, sustained growth depends on transferring current client and operational responsibilities entirely to the management team, and freeing yourself as CEO to pursue new clients, strategic partners, and markets.

Tame the No-one-can-do-it-as-good-as-I-can dragon by ensuring your team can operate effectively without you, and concurrently prepare yourself for the new opportunities coming your way. As the leader of a business organization, expanding your success in a changing world depends on your answers to the following questions: Whose job am I doing today? Who can I transfer these tasks to? What new things should I be learning? What new opportunities should I be preparing for? and When should I leave? Highly successful executives ask themselves these questions regularly, and use the answers to change their behaviors.

Dick Stieglitz consults with small business owners about improving operations and preparing for M&A transactions, and is author of the book Taming the Dragons of Change in Business.

Coaching Can Help You Become a Great Leader

Dr. Earl R. Smith II — Tue, 18 Nov 2008 16:03:05 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

Leadership coaching can help you to improve your leadership and personal growth dramatically. You can enhance your professional and personal relationships with the help of an efficient leadership coach. You can gain confidence and increase productivity. In today’s busy world, many people struggle to balance leadership skills and personal growth. This often results in work stress and family problems. They feel lack of support and a sense of isolation.

Some strategies help you to achieve and maintain a healthy work and personal life. They help you fulfill your responsibilities as a leader while maintaining personal development. The first and foremost step in balancing leadership and personal growth is to know yourself. Personal leadership coaching can help you identify your inner vision and dreams. It helps you recognize whether your work reflects your values. If you start knowing yourself better, you can easily sort out the priorities and respond to any situation more appropriately. An experienced leadership coach can help you become a better, more effective leader and improve your personal life.

Even if you are already a successful leader, you should always seek to achieve more in your personal or professional life. It is important to seek the help of a leadership life coach. Leadership coaching helps you get clear idea about what you really want. It helps to create plans that align with your values and strengths. A leadership coach helps you to make the essential changes required to achieve the desired results. Effective coaching can help you attain happiness and fulfillment in leadership and personal growth.

If you dream about something more than your current situation, then you may feel stressed. You can find support from leadership life coaching that helps you make important changes in professional and personal life. The trained leadership coach who has experience and knowledge can help you meet and master your leadership challenges. He will focus on what is important for you to learn and then suggest ways to make improvements.

Personal leadership coaching enables you to focus your strengths and passions on your best interests. You get better and more significant results. Coaching offers a trustworthy and supportive relationship that assists you in moving up faster. It facilitates making meaningful changes in your life. It provides the motivation to accomplish important tasks. As a result, you will get more satisfaction in leadership and personal growth.

Today’s business world brings ever more challenges. If you remain an ordinary leader, then you may struggle to achieve success. A high-impact leader will get more success in their professional as well as personal life. In order to achieve better leadership skills and personal growth, you need to acquire some tools. Living in the present moment is the most important tool to attain high-impact leadership skills and gain personal development. Coaching helps you to understand the value of presence. You can think more clearly and efficiently. Since you are relieved from unproductive thoughts of the future or past, you can work more creatively.

Personal leadership coaching can help you know the significance and value of openness. Most of the difficulties in life arise from resisting ‘what is’. This error causes pain and drains your energy. Instead, opening to ‘what is’ can energize you. When you are open, you can see endless possibilities.

Clarity is another powerful skill that you can learn from leadership coaching. A coach can help you achieve clarity in thoughts, emotions and behavior. This relieves you of negative feelings like envy, insecurity, guilty and greediness. Most people suffer from these feelings and waste time doing negative things. If you learn to suppress these unhealthy thoughts, you gain a great advantage. If you are openhearted and have genuine appreciation of others, you can succeed in leadership and personal growth.

Communication is the most important skill for a successful leader. Coaching can help you develop that skill. People understand your vision and mission clearly only if you are able to communicate them well. Effective communication can inspire others to results that are more productive.

A hallmark of my leadership coaching engagements is the realization on the part of my clients that they are actually a far better leader than they have been giving themselves credit for. Every businessperson - every leader - no matter what the cause or business - can improve. There is a great leader in each one of them. Helping bring those leaders out is one of the greatest satisfactions in my coaching work. If you want to get in touch with the great leader inside you, send me an e-mail and we will arrange a time to talk.

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How Small Business Owners Benefit from Coaching

Dr. Earl R. Smith II — Tue, 18 Nov 2008 15:17:05 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

Small business owners run a high risk of becoming isolated. No one likes to feel alone. Often times they get to feeling that it is them against the world - that no one is willing to help fight the battle of keeping the doors open for business. Every so often, I get a call from one of these business owners. The engagements that result are among the most enjoyable. They find a coach who provides a new perspective and helps them develop a stronger skill base and fresh vision. I get a chance to reinvigorate a dream and help it grow.

If you are a small business owner, you might consider working with a coach. If you find the right one, you will realize significant benefits. For instance, you will gain a valued and trusted advisor whose agenda matches yours. The person helping you has your best interests and success as their number one goal. No alterative motives or plotting - just a drive to help you succeed.

Good coaches help you quickly identify and address important challenges. They help you identify your problems and determine the best way to eliminate them. A coach represents a fresh set of eyes; they can see issues clearly that, for you, were blurred or invisible.

The first step any good coach will take is a management or leadership assessment. This reveals your leadership style and management skills. With this baseline established, the coach will develop a program tailor-made for your situation and potential. The coach will suggest areas of focus - through either leadership development or management training.

A second step might be to review your business plan. Often times, small business owners that I work with have not carefully thought out their plan - there are a lot so untested assumptions and inadequate analysis involved. Quite often, this step has resulted in a complete recasting of the business and the value proposition.

The value of good coaching is well established. Top CEO or Chairmen employ coaches to help them refine their decision-making, leadership and management skills. They benefit from having someone to help them maintain their equilibrium in the ever-changing and highly competitive world of business. It can seem overwhelming with the weight of the company’s success bearing down on them every moment of the day. The same benefits come to the small business owner.

When resources are scarce and the team is small, high productivity is critical to success. A coach can also help address your productivity and that of your team. He can help develop an effective plan for improvement. A coach will help you identify and correct problem areas and improve your results and profit margins.

A corporate coach focuses on developing and implementing a plan to bring your company into alignment with your goals. They are vital in creating your new guidelines and aiding in your decision-making process. Some of the areas a coach will focus on are goal planning, organizational skills and of course time management. Another great skill that a business coach can teach you is how to develop a system to keep you on task and focused on the true priorities.

Coaching can mean the difference between succeeding and failing. This is as true for small business owners as it is for executives in large corporations. The business world has become more competitive. Even small mistakes can cost a business its future or an executive their career. Small business owners - because of the tendency to become isolated - are particularly susceptible to this risk. Coaching at key times can radically reduce the changes of loosing your business or missing a change to make it soar. If you want to know more about how coaching can help, send me an e-mail and we will arrange a time to talk.

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Non-profit Boards - Supporting and Governing

Dr. Earl R. Smith II — Tue, 18 Nov 2008 14:18:29 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

Non-profits corporations are often the governance model used to address community-based problems. Non-profit boards are often composed of community leaders with a common goal of eradicating issues affecting the quality of life in their community. Boards of directors of these organizations serve as supporters, fundraisers, officers and staff members of these critical organizations. Boards of directors of non-profits must find ways to establish missions, map strategies, demonstrate fiduciary compliance, and provide oversight for the organization with a goal of supplying the maximum funds to carrying out the organization’s mission.

Boards of directors of non-profits act as supporters by bringing clout to the organization, and by overseeing the activities of the organization. The directors must also provide sound governance to protect the assets of the organization and credibility of the board of directors.

The leadership of community-based organizations is usually civic and business leaders working together to address issues important to their community. These organizations often address hunger, poverty or education and in some cases leadership development for the community.

Non-profits are often governed entirely by volunteers with no paid staff. Board members serve the function of staff members and as corporate management. They provide skills such as accounting, legal, and administrative and establish controls to ensure compliance with regulations and good governance practices. With no paid staff, the board must provide the arms and legs to carry out the mission it establishes for itself.

Non-profit boards must also provide governance for the organization. Good governance has the goal of protecting the organization and its ability to carry out its mission. The board of directors must select a CEO or Executive Director and other officers from among the board to perform the tasks of operating the organization. The CEO and other officers must be willing to devote a great deal of personal time to the organization. The board must establish policies of oversight to ensure the donors and other stakeholders have confidence in the integrity of the board and the CEO. The more transparent the organization’s fiscal activities are the more confidence donors will have in the organization. One practice is to establish an audit committee to oversee all corporate finance activities. The directors with delegated authority to sign checks or other financial instruments should not serve on the audit Committee.

Non-profits boards must also plan to achieve its goals. Strategic planning is the responsibility of the board of directors. Non-profit boards performing the task of staff members often fail to plan; electing to execute the same strategy as past boards. A lack of fresh ideas causes board members to loose their excitement for the organization. Boards of directors must conduct assessments to determine the level of effectiveness of programs. One of the most challenging assessments is the evaluation of the performance of the CEO. This is especially difficult when the CEO is volunteering to perform the role.

Non-profit boards choosing new directors must provide an orientation package for new members. These organizations operate in the same challenging business environment as for-profit corporations. New directors must learn to be both governors of the organization and staff members. Directors must be able to fill both roles effectively.

Non-profits must establish effective succession committees to search out capable people willing to volunteer time and talents. The high burn out rate among volunteers requires boards to maintain a list of potential new directors. The new directors must be able to bring influence and sound governance reputations to the board to assist in carrying out the fundraising activities of the nonprofit.

Non-profit boards have some limitations in self-governance. However, dedicated volunteers make this governance model work in many communities.

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Coaching Through Tough Times

Dr. Earl R. Smith II — Mon, 17 Nov 2008 17:04:07 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

“There are two kinds of tough times”, an old friend used to say. “Times can be tough because that’s the way they are - and they can be tough because that’s the way you are.”

Many of my coaching clients start out with the first type of problem. My job is to get them working smart - avoiding the kinds of mistakes and missteps that had cost them so dearly in the past. My definition of effective coaching focuses on reducing those ‘tough times’ to a bare minimum. Then there is the other ‘tough times’. We are in the middle to plenty.

It is during times like these that CEOs discover how challenging it sometimes is to be a leader. They strive to keep themselves and their people motivated and aware of the prospects for business. The CEO knows that tough decisions are coming - and so do his people. Rising uncertainty is going to increase apprehension within the team. Senior team members are also going to face some tough challenges. The focus within the team is going to become very instrumental - improving sales, lowering expenses, or improving client service. The CEO has to find a way to keep the team productive and focused.

Earlier this year I began organizing a series of triage session with each of my clients. The initial meeting in each series occurred during the spring of 2008. In each case, we began to plan responses to potential developments. Because of these sessions, the team developed a confidence in their ability to adapt, innovate and overcome. Over time, we involved more of the employees in the process. They took to referring to the sessions as the ‘disaster du Jour’ parties.

In each of the companies, something interesting and quite unanticipated happened. The confidence levels of the teams increased substantially. They became used to dealing with crises - even through they were f aux crises. The teams became more agile and focused. When the real crises set in, they were better able to respond.

I do not mean to suggest that things are sunnier within these companies. There are tough times out there. However, they are dealing with them more effectively than most of their competitors.

Something else has happened. In the midst of dealing with the current situation - while cutting budgets, putting orders on hold, reducing staffing and the like, the team is also getting the company ready for the upturn. They are planning beyond the current crisis. This is extraordinary. The ‘disaster du Jour’ parties have trained them to respond to crisis by focusing on challenges and quickly and proactively developing solutions - then implementing them with confidence. The teams are not cowed by the crisis - they are planning through and beyond it.

One of my clients - a CEO of a middle market company, put it this way, “Now is the time to engage our people to create the future. We need to tap into the talents of our people and get ready for the coming good times”.

When I asked him to expand on that he said, “We need to focus our efforts on the future. The team needs to develop a clear vision of the road ahead. My senior team needs to rally the troops and keep them positive and eager for the coming upturn. We need to form and empower teams to address the opportunities that are inevitably going to come to us. I need to make sure that we are keeping track of our progress and preparation - and I need to make heroes out of those who answer the call - come to the line and contribute.”

This experience has reminded me that much of what I do - much of what I contribute as a coach - involves teaching and preparation for events that have not happened and may never happen. Nevertheless, even if they never happen, the residuals of the training and the experience of successful teamwork are positive. The ‘can do’ attitude that each team developed during the ‘disaster du Jour’ patries has carried over and is now delivering real benefits during the current storm. They know how to deal with it and they know they can beat the odds. The team is stronger than the storm.

If you want to learn more about my team coaching approach, send me an e-mail and we will arrange a time to talk.

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Effective Project Management Interview Questions

Dr. Earl R. Smith II — Mon, 17 Nov 2008 14:57:26 +0000

Question 1: Describe a recent project where you were responsible for managing multiple people or teams. What were some of the key challenges and how did you handle those challenges?

This question demonstrates a result-oriented leadership behavior. Project managers need to demonstrate delivery and a desire to attain the end goal. Staffing project managers who simply point out problems but do not help resolve them will not drive the project to completion. Effective project managers demonstrate how they’ve managed a project, coordinated across multiple teams, overcame obstacles and delivered the project’s goals.

Question 2: Describe a time when you implemented a new idea without being asked or pursued a new opportunity that could improve the project or company.

Demonstrating courage and a willingness to take action without being asked is a key delivery characteristic of effective project managers. Project sponsors entrust the project’s goals, budget and their own reputations on their project managers. Project sponsors don’t have all the answers and need intelligent and motivated people to solve problems, identify new opportunities and take action without being prompted.

Question 3: Describe a scenario where you had to balance competing customer demands with project constraints. How did you ensure customer satisfaction while maintaining the goals of the project?

Maintaining a customer focused approach while ensuring the project deliverables are completed on time is a delicate balance. Business partners don’t understand all the technical details required to turn business processes into software solutions. They just want the system to work and accommodate their changing business needs. Effective project managers build rapport with their business partners, seek to understand the underlying needs and proactively address their concerns. It is a difficult balance as project managers commit to delivering the project scope while addressing a business customer’s changing requirements.

Question 4: Describe a time when you had to balance quality management with a challenged project schedule.

As projects execute and schedule variances occur, there is a tendency to shorten the quality testing cycle to maintain a project end date. In some projects, the end date can be extended, and in other projects the end date must be maintained. Effective project managers recognize the importance of quality management in the software development cycle and prioritize the test cases and test cycles that deliver the project’s critical functionality. These project managers successfully commit to a quality mindset and ensure defects are resolved or mitigated.

The project manager should also recognize the challenge of managing the triple constraint and maintain a commitment to quality. Recognizing delays in the schedule early will help project managers adjust testing schedules so the support team isn’t called in from a day off or a holiday.

Question 5: Describe a time when you had a difficult situation working with a vendor or another peer? What was your approach to resolve the issues while maintaining a positive relationship?

Without a cohesive team, a project manager can not be effective. Projects often depend on vendors and supplier team members to provide services. The nature of the client-vendor relationship emphasizes mutually beneficial goals. However, the vendor doesn’t always prioritize the client’s interests as heavily as their own. The ability to effectively develop teams across corporate borders is critical to project delivery. Clients will always try to maximize services at a minimal cost while vendors are motivated to increase costs for additional services.

In a challenged project with strained vendor relationships, it becomes even more important to focus on the critical issues to work together and deliver the end goal. The same skill is needed when working with other peers who are not necessarily motivated to help the project team. Strong relationships help solve problems and support project delivery. The best project management system, tools and techniques cannot replace the power effective relationships have across multiple teams.

Inadequate framework of corporate governance main reason behind BoI calamity

Dr. Earl R. Smith II — Mon, 17 Nov 2008 14:52:39 +0000

Monday November 17 2008

It’s not an exaggeration to describe Bank of Ireland as a calamity. That certainly must be the view of the 74,000 people who own up to 10,000 shares in the bank.

At the peak last year, each of those shares was worth €18, and now the share price is hovering just above €1. Collectively, those small shareholders, many of them elderly, have seen €2bn of their wealth evaporate.

Larger shareholders, such as pension funds, must also be dismayed. Since February 2007, the stock market has marked down the value of Bank of Ireland by €16bn.

The situation is so bad that, for the first time in living memory, the dividend has been scrapped.

What may puzzle shareholders is how it went so badly wrong. Bank of Ireland, established in 1782, used to have a reputation for being conservative, even old-fashioned.

Other banks have a board of directors but Bank of Ireland has a court, and the board chairman carries the title of ‘Governor’.

Leaf through the annual report and you get the impression that Bank of Ireland lends money reluctantly. The section explaining the bank’s risk management policies runs to 16 pages.

We learn that proactive identification and management of risk “underpins” operations. Bank of Ireland has a Group Risk Policy Committee, headed by the Chief Risk Officer.

This committee has oversight of the Group Credit Committee, the Portfolio Review Committee, the Asset and Liability Committee and the Risk Measurement Committee — to name but a few.

Now it looks like another committee will have to be set up to review the workings of these committees. Because, for all the oversight, the interim results issued last week suggest an attitude to risk more appropriate to JP McManus.

The results revealed that €9.8bn of the bank’s loans have increased risk profiles that are subject to closer monitoring and scrutiny.

Other loans, not in arrears but described as “lower quality” and amounting to €1.4bn, require a “workout of the relationship”.

On the investment side, the scorecard for the bank’s liquid asset portfolio shows that losses on asset-backed securities and bonds have escalated by €640m over the past year.

Who’s to blame for this financial carnage? Though chief executive Brian Goggin takes the heat publicly, the buck stops at board level.

The “group risk framework” is decided upon by the board, which is responsible for deciding on the nature and scale of risk that the bank is prepared to take on.

It’s notable that of the 10 non-executive officers and directors on the board, only two people — George Magan and Dennis Holt — have banking experience, and that was in the UK.

It’s hard to avoid the conclusion that Bank of Ireland is a calamity because its corporate governance framework is entirely inadequate — and that’s putting it politely.

Nick Mulcahy is editor of Business Plus magazine

Leadership Development Coaching

Dr. Earl R. Smith II — Sun, 16 Nov 2008 22:45:12 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

Good leadership coaching provides direction and guidance, support and counsel, during an executive’s personal development efforts. Personal growth accelerates with the support of a coach. My coaching engagements are fast tracks to improvement. One client described them as “coaching on steroids”.

Leadership coaching is about more than lifestyle or quality of life. The aim is to help you make lasting, positive changes in your leadership style. The best type of coach helps you set your sights on the important changes. They brainstorm with you and provide suggestions and guidance. They stay with you until you have successfully made the changes and turned them into habits.

Leadership-development poses many challenges. Each challenge represents a door - the other side of which is a new world. A few examples of these challenges are:

o identifying your strengths and weaknesses
o deciding on what needs to be worked on first or the most
o identifying priorities to be developed aggressively
o setting goals and establishing metrics
o planning the steps to achieve each goal
o discovering your hidden talents
o remaining on track and never giving up

In my role as a leadership coach, I work closely with my clients through the temporary moments of excitement, despair and discouragement. I help them return to course when the rest of their life sidetracks them. I make sure they keep focused on their goals.

Personal growth and leadership development is a path that is best traveled with an experienced guide. Support is extremely important to success. A coach can offer this and so much more!

In many of my leadership coaching engagements, the primary objective is achieving the personal growth that will allow career mobility. Some of my clients have stayed in jobs that they hate or in situations which make them miserable. They know that they are missing the joy that life has to offer them. They are also putting their own physical, emotional and mental health at risk. They are highly motivated to make changes.

All of my leadership-coaching clients want to improve - become better leaders. Some of them are motivated by personal reasons while others feel a need to contribute more to their company or organization. In the end, it does not matter what the motivation as long as it is strong and deeply felt.

Before beginning any leadership coaching engagement, I ask the client a series of thought provoking questions - give them some homework. Over the years, I have refined this list and it always gets them thinking in new ways. I also conduct a leadership assessment. This gives us a baseline on their strengths and weaknesses. It also allows us to develop a program that is based on their situation - not a one-size-fits-all program. We always start out by figuring where we are and then begin to plan where we are going.

Here is one of the assignments that I give new clients. “On a scale of 1 to 10, where 10 means that you are a being a good leader and 1 means that you are really more trouble than you are worth, where would you rank yourself today?” This gets them to focus on their leadership in a highly personal way. No matter what their answer, we work to improve that rating - and their perception of themselves as a leader. The process here is as important as the program. Leadership is a skill that can be learned and every leader can improve those skills.

If you want to learn more about leadership coaching, send me an e-mail and we will arrange a time to talk.

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Determining Board Compensation Structure

Dr. Earl R. Smith II — Sun, 16 Nov 2008 15:40:52 +0000

By Dr. Earl R. Smith II
DrSmith@Dr-Smith.com
www.Dr-Smith.com

A board’s primary responsibility to the shareholders of the company is to protect and enhance the value of the shareholders interest in the company. This responsibility has not changed with the business environment today’s boards operate in, however the work boards engage in and the scrutiny directors now fall under has changed drastically. Sarbanes-Oxley ensures that directors now face legal consequences for board decisions as SOX attempts to codify good governance policies. Corporate governance demands more from directors than ever before, while at the same time a negative wind blows against the compensation levels directors enjoy for their services. As part of governance activities, boards assess compensation policies, set benchmarks for the level of director compensation and document its method for future compensation assessments.

As a first step in determining a director compensation policy or beginning an assessment of current compensation policies, the board should establish the framework for director compensation. This will address several issues including:

o How should the directors be compensated
o Meeting fees
o Retainers
o Equity options
o Cash bonuses
o Additional compensation for officers or chairman

Most for-profit board members today compensate directors for their services, and most boards have a mixture of some or all of the above compensation practices. Compensation Committees often determine the exact mixture and the total compensation by reviewing the board’s performance. Equity and cash bonuses are usually tied to specific goals to be achieved. By offering equity-based stock options, boards attempt to align the interest of individual board members and stockholders. Often times the CEO receives additional bonuses for his/her leadership of the board and the company’s corporate management team.

Once the compensation framework for how directors is set, the next step is to benchmark the level of compensation. Every company strives to have the best leadership and offer professional governance for its stockholders and stakeholders. Corporate boards must attract talent to the board just as corporate management must attract engineers or machine operators. Sarbanes-Oxley addresses board member mix of insider and independent directors, but leaves it up to the board to decide in a very broad sense which directors qualify as independent and which do not. Otherwise, boards must determine how to attract talent and what role compensation plays in attracting the highest level of talent needed to meet the organizations strategic goals. The board should consider the following as it addresses compensation levels:

o What is the desired talent pool?
o How many industry professionals are needed with specific high-demand skills?
o Should high-demand skills command more compensation?
o Should corporate performance affect director compensation?
o Should employee directors receive a higher bonus than independent directors?

Boards come under intense scrutiny when stockholders, analyst and news media question director compensation versus corporate financial performance. To combat this scrutiny and to erase any ambiguity board members may have regarding director compensation, boards should have a written director compensation policy. Any bonuses tied to obtaining specific strategic goals should be documented and provided to the Compensation Committee prior to awarding any bonuses or other compensation. These guidelines should be posted publicly on the corporate website and become a part of the company’s annual statement to shareholders.

Most boards today hire outside advisors to assist with appropriate director compensation policies. Corporate ethics and culture often are major factors in setting director compensation, and determining compensation for the CEO and corporate management. Good governance dictates that boards should attempt to attract the best talent to achieve the company’s mission and attracting the best talent needed by the board should play a major role in establishing the company’s compensation policy.

If you are dealing with issues surrounding board compensation, send me an e-mail and we will arrange a time to talk.

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