Making Cents

Welcome To Our Blog. Read our opinions and perspectives on the market and share some of your own.

Promote, fire and hire, or redeploy: Strategies for growing your management team

 

How do you build out your management organization as Screen Shot 2014-01-27 at 12.33.00 PM  Rob Bernshteynyour company grows? It’s one of the toughest challenges high-growth companies face.

 

As your employee headcount grows, you need to layer in more management. You also need to recognize that the growth of the company will expand some roles beyond their original scope, such that they effectively become new roles. For example, someone who was hired to manage 10 people in the U.S. could now be managing 30 people globally. That’s become a new and much more demanding role which the original occupant may or may not be suited for. 

 

How you fill these leadership roles will have a big impact on the success of the company-- for better or for worse. A big company can survive a few bad management hires; a high-growth company not so much. It’s important to go about this strategically and deliberately. 

 

In management circles there are different schools of thought about how to approach this:

  •     Promote from within
  •     Fire and replace
  •     Retain, develop, and re-deploy
  • The key is to success is knowing when to do each.

     

    Promoting from within

    Let’s look at the first option.  The path of least resistance is to promote from within. One of the reasons people sign on with a fast growing company is for the opportunity to rise along with the company.  There will certainly be individuals who are ready, willing and able to move up into newly created or vacated roles. In that situation, promoting from within is straightforward, fast, and a win for everyone.

     

    Unfortunately you can’t fill every role that way, management growth strategyAs your company grows, there are three options for filling open positions.because as you grow and your needs change you won’t always have the right person internally.

     

    Moreover, if you blindly follow this strategy, promoting people just because they’ve been there for a certain amount of time and performed their current job well and it’s the next logical step, you risk seeing your company become an illustration for The Peter Principle. The Peter Principle says that when people are promoted solely based on their performance in their current job, eventually they rise to their "level of incompetence.” If this practice is institutionalized, over time every position comes to be occupied by someone who is not up to the job and that’s not an easy situation to deal with.

     

    You need to know when to take the risk of promoting people based on past performance. A good risk might be to promote a high-potential person that has a wide range of abilities, has learning agility and ambition, knows the domain and has some crutches to support him or her in the new role. That could mitigate any risk of them petering out.

     

    I see many companies promote from within just from expediency--they’re in a hurry to fill the role, or afraid of losing the candidate. A better option would be to promote on an interim basis, letting that person know they are on a trial period. They get a tryout, and you get some productivity while you continue your search.

     

    Fire and hire pre-qualified people

    Now, lets look at the second option: Fire people who can’t be promoted, and hire new, pre-qualified people--people that have already done the job before. It’s painful for everyone but it’s straightforward, fast and is proven to scale.

     

    If this is your core strategy, you risk destroying morale and motivation. The best and brightest will leave if they don’t see the opportunity to advance. Plus, you lose a certain amount of continuity and institutional knowledge as people walk out the door. Besides that, it’s always tough to lose a colleague.

     

    Still, there are inevitably times when you get to a point in the company’s growth where you need a particular skill set that doesn’t exist within the company, or you need someone with a track record of managing successfully through the range of challenges similar to those looming for your company at the next stage of growth. Or, you may be trying to shift strategy and need to bring in people with completely different D.N.A.

     

    In situations like these, we have to face the fact that the people who led the effort to get the company off the ground aren’t always the best ones to lead it forward at subsequent stages of growth. Startups take a different kind of person and a different skill set than is needed at a more established company. Not everyone can make that transition successfully. And there may not be another role for them or they may not be temperamentally suited for development. So, in some situations, this can be the best thing to do.

     

    Retain, re-deploy and develop 

    Now let’s look at the last and most challenging option: Retain, re-deploy and develop.  This strategy is to pass over but support development of high-potential employees. That may mean shifting them into a role different than the one they wanted or thought they should be promoted to, or keeping them in place but handing out what is effectively a demotion by bringing in a higher ranking person above them.

     

    This can be a hard one and very often it fails. It depends very much on the individual.  Being passed over can be a tough pill to swallow.  They have to swallow this bitter pill gracefully, and at the same time be open to investing effort in their development and willing to accept more oversight. It takes a special kind of person to be able to put their ego aside and do something constructive with that opportunity.

     

    When would you do this? When you’ve seen a good pattern of learning and development, but moving the person up to the next logical role is too big a stretch. I also look for a certain existing fundamental company D.N.A. that you'll never be able to get from outside the fold. They understand the domain and the core values of the company deeply. They carry the torch of the company with them. They bring it every day.

     

    Essentially you have a plant that’s growing a little slower, but it's still growing. You don't put it as the centerpiece of the garden, but you put it in a sunny area and give it some extra food and water and by doing that you can unleash potential that'll pay rewards down the road. It’s a great thing for the company and the individual when this strategy pans out.

     

    When do you not take that path? When you think that the person may not have the emotional intelligence to take some pruning and come back stronger. All that person's going to do is waste any investment in them you might make. Worse, they might become negative inside the company and wind up leaving anyhow, but not without causing some collateral damage first.

     

    What you don’t want to do is blindly pursue any of these strategies for theoretical reasons, or make these kinds of decisions based on pressure from people outside the company such as investors or board members who may not fully understand the internal dynamics with the employees involved.

     

    Ideally you’re going to employ a mix of all three strategies. I’d like to say I’ve come up with some formula for what that mix is, but there isn’t one. You have to take it on a role-by-role basis, looking at the risks, opportunities and resources relative to each situation.   The ultimate goal is to build out a thriving organization that delivers for customers, employees, and shareholders.  It’s an art, not a science.

     

    Rob Bernshteyn is CEO of Coupa. This article previously appeared on Forbes.com.

     

     

    Coupa customers, partners rock Inspire EMEA

     

    inspire emea collage

     

    We're making a splash across the pond with amazing new customers in EMEA. We were proud to host many of them at the Rosewood Hotel in London last week for Coupa Inspire, and we were humbled by their enthusiasm for Coupa and their willingness to share it with the world.

     

    This was a beautiful event with outstanding food and company. inspire emea-bernshteyn mcgeeverNetSuite COO Jim McGeever and Coupa CEO Rob Bernshteyn. It was quadruple the size of last year's event, which is a testament to our record growth in the region.

     

    We were delighted to play host to so many procurement and finance leaders from 16 countries in the region, and to see them so engaged in connecting and sharing information and best practices. Their energy and excitement throughout the day was almost tangible.

     

    In addition to sharing case studies and best practices, we had several Coupa announcements, including Coupa Release 12, a new partnership with NetSuite and our new customers in EMEA.

     

    What really made our day though was how many of these customers showed up to share their successes using Coupa, including Amber Ritson from infrastructure services company Cofely UK, who posted this photo on LinkedIn:

     

    inspire emea linkedin

     

    TD Bank was also among customers presenting compelling successes they've achieved in just a short time using Coupa:

     

    inspire emea tdbank

     

    We're thrilled to be able to help customers achieve these kind of results, and were quite flattered that UK procurement advisor, mentor, coach, and trainer Grahame Ball took notice, tweeting:

     

    inspire emea grahame ball

     

    If you missed the event we'll be making some of the presentations available on our website over the next few weeks.  Be sure to join us next year. As Simon Hurst says, we do know how to put on a show. Our secret -- it's all about the guest list, which includes the best customers in the world. 

     inspire emea thanks

     

    Thanks to all of you for making Inspire EMEA a smashing success!

    Why Coupa 12 is a milestone release

     

    We were very excited to announce Coupa Release 12 at Inspire EMEA in daryush mistry  Darayush MistryLondon today. This is a milestone release because it disrupts traditional supplier business network concepts to further consumerize business-to-business transactions between buyers and suppliers, creating efficiencies and cutting costs while meeting the most stringent global regulations. With this release we've also raised the bar on user-centricity. These are the cornerstones of our strategy to help companies get results through unprecedented user and supplier adoption and with Release 12 we’ve taken our game to the next level.

     

    The most important and innovative element is what we’ve done with

    Read more...

    SaaS Customer Success movement pushes customers to redefine "success"

     

    In a previous post, my colleague Ravi Thakur eloquently articulated the kevin turnerKevin Turnerevolution of the Customer Success movement in enterprise software, and outlined the differences between customer service and Customer Success.

     

    As he explained, Customer Success represents a shift in the mindset of how software vendors interact with customers. SaaS companies are aligning on this more proactive, partnership-oriented approach to software implementation, and the term Customer Success is popping up in marketing materials and org charts across the industry.

     

    Using the system does not equal success

    Now somebody just needs to tell the customers. Customers can benefit greatly from leveraging this more proactive approach on the part of vendors, but what I find working in the Customer Success

    Read more...

    Get Inspired at Coupa's coming out party in Europe

    I'm very excited to be welcoming over 250 finance and alex kleiner  Alex Kleinerprocurement leaders from all over Europe to Coupa Inspire EMEA next Thursday, 16 October at the Rosewood Hotel in the heart of London. This is Coupa's "coming out party" in Europe.

     

    For the past couple of years, we've had a big, multi-day Coupa Inspire event in San Francisco for our North American customers and prospects. Last year we had a half-day mini-Inspire event here in EMEA. This year we have a full-day event, from breakfast through to evening reception.

     

    The expansion of the event is indicative of the market interest we're seeing all over EMEA. Over 40% of conference attendees are coming from outside the U.K. Fourteen different countries will be represented, so this is truly an opportunity to connect with and learn from

    Read more...

    Customer service is dead. Long live customer success!

     

    Customer success has become a buzzword in high tech ravi thakurRavi Thakurover the past few years, with the phrase increasingly cropping up in sales presentations, on business cards and org charts. But what does customer success really mean? Is this just customer service with a fancy name?

     

    Done right, customer success is more than just an aspirational job title or a new spin on the customer service function. It’s really an evolution of customer service, requiring new skill sets and mindsets to staff the customer success organizations that are cropping up in tech companies.

     

    The customer success model aligns the interests of the service provider with the interests of the customer in a quantifiable way. It denotes an organization that’s much more

    Read more...

    Sales negotiations should be a tango, not a breakdance

     

    It’s the end of the quarter, and I’m in my office, tied to my Screen Shot 2014-01-27 at 12.33.00 PM  Rob Bernshteynphone and email waiting for the last few outstanding deals to come in, same as at the end of every quarter. This is business as usual in virtually every company in my industry, enterprise software, and in countless other industries as well: many of the deals close at the last minute of the quarter or end of the year.

     

    We all know the drill. Customers think they’re going to get the best price and terms by waiting until the last minute, when they have the vendor’s back to the wall.

     

    There are good reasons for that, mainly that it very often works. As a vendor I’d be lying if I didn’t say that there is a strong incentive to lower prices to make the quarter, especially for a public company. Many companies do just that.  But, does it have to be this way?

     

    For enterprise software, the shift to the cloud and its subscription-based, recurring revenue business model lowers the stakes around the one big bang sale somewhat, but let’s be

    Read more...

    How Software as a Service is like eating pizza at a restaurant

    What does pizza have in common with software? It comes in four pizza pie

    different delivery models, as outlined in this brilliant infographic designed by Albert Barron, a software client architect at IBM.

     

    As Barron explained in a recent LinkedIn post, he coined the "Pizza as a Service" analogy to help explain the modern software business landscape to a non-techie friend. 

     

    As Barron notes in his post, techies rival texting teens for figuring out ways to communicate with as few characters as possible. That was the case during a bike ride where Barron and friend were talking technology when his friend got lost--not literally, but by all the technical jargon and TLAs (three letter acronyms) Barron was tossing around. Somewhere in the conversation

    Read more...

    The Coupa Fast 5: Filling the digital leadership void

    Who should lead organizations into the digital future? digital voidHow involved should procurement be with payments? Can you automate and centralize procurement without centralizing AP? Leaders at Coupa customers Juniper Networks, TD Bank and Molina Healthcare contribute their thoughts on these matters, and we also look at two new supply chain and procurement studies. 

     

    Keep up with the changing finance and procurement landscape by reading the latest and greatest articles about the cloud, strategic procurement and finance and supplier innovation, all in one place.

     

    Coupa 1CIOs should step into the digital leadership void

    In many instances, a company’s most promising digital leader is the CIO, says Bask Iyer, CIO of Juniper Networks. "Good CIOs have experience leading the organization through transformation. They have the real world experience of delivering change over and over again.”

     

    Coupa 2Focusing on payment terms delivers value

    Payment comes at the end of the procurement process, so not your job, right? TD Bank's Carolyne Booth argues that recognising the value of payment terms and activities in the procurement process is actually core to good procurement and deserves more attention than it sometimes receives.

    Read more...

    Square CFO Sarah Friar: Mentoring, code camps can help advance women in STEM

     

    Earlier this year, The Financial Women of San sarah friarSarah FriarFrancisco selected Sarah Friar, Chief Financial Officer of Square, a Coupa customer, as its 2014 Financial Woman of the Year. The award recognizes Friar for her leadership roles in corporate finance and in high technology startups, as well as for her passionate advocacy for the advancement of women in STEM (Science, Technology, Engineering and Math) fields.

     

    Friar will be honored at a luncheon in San Francisco on October 2. Coupa is proud to be a co-sponsor of the luncheon, which benefits FWSF’s scholarship fund. We had the opportunity to chat with Sarah about her journey from intern at a gold mine in Ghana to managing partner at Goldman Sachs to the C-suite at Square, where she is actively involved with College and High School Code Camps that bring together young women studying or interested in computer science.

     

     

    Coupa:  It seems that many girls self-elect out of STEM fields at a young age. Why do you think that is? And how were you personally able to avoid that fate?

     

    Sarah: At Square, when we look at just how many female engineers are available to hire, we're looking at about 20% of the class. If you look up the funnel at the high school level,

    Read more...

    Like what you are reading? Subscribe to our blog.

    Enter your email address: