We help a lot of young go-getters build strategies to move into executive positions. Here’s an experience you’ll need to be on the lookout for as we’ve seen this scenario increase over the last few years. It’s a situation where your credentials don’t matter to anyone in the management ranks.
Venture capitalists (VCs) buy companies. They do this in order to resell it later for a profit. Most of us think they only invest in startups but this isn’t the only financial support they provide. They also buy failing companies where they have an expertise and feel they can turn it around for a profit. Often the life cycle between buy and sell is around 5 years or so. The VCs will take an active role in the company, often being the board, and by putting certain high level executives in place to run the company. With small companies, this usually means they will only put one or two people at the top.
Here’s where the excitement comes in. Once the new leader is in place, he’ll have to figure out how to fill the remaining positions in his leadership team. Sometimes this leader will bring in some friends to establish a circle of trust. Other times, the remaining leadership positions are filled with previous leaders from the company (before it was sold). But before we talk about the process for filling these positions, it’s important to understand the value of these positions. Remember, a VC owns the company and it’s likely the company will be sold again in several years. High level management positions are contract positions and are usually well compensated when the company is purchased. Some managers will stay and continue with the new owners, while others will have their contract “bought out” by the new owners. Money is the driver in this situation.
Before the new leader assigns his new team, those individuals who want to lead will begin to push themselves into higher positions. If these individuals were managers in the old company, they’ll “assume” a higher role. I say assume because they aren’t necessarily appointed yet but they will act in this role in the hopes that once assignments are made, they’ll own that position officially. We’ve watched quite a few companies over the years go through this scenario. The dominant personalities usually win out, especially if the new leader isn’t a strong leader. Some companies have allowed individuals to assume management roles with no experience or credentials for such a position. For example, a high tech company had put an English major into a product development management position. The key to earning these positions is to exert your influence. You have to be pushy. Most individuals miss out on this type of opportunity because they wait to be identified as worthy of such a position. In this situation, waiting to be recognized might only keep you in your existing position.
It’s important to note that this type of transition in a company is highly political. Building alliances with other managers is difficult as the environment becomes one of “survival of the fittest.” It’s unlikely that other managers will help you move into a higher position. Why? Because they want a higher position and they aren’t interested in giving away opportunities to someone else, regardless of how qualified you are. Yes, I know this goes against the advice that you usually hear, but we’ve seen this in numerous situations.
Now, if you happen to be one of those managers who gets pushed out, you’ll have options too. One of the most obvious and most likely to work is to seek employment with your competition. Of course, you’ll have to ensure a non-complete clause doesn’t get in the way. To make this type of move, you need to find a competitor who looked at your company as a real threat to their business. They’ll hire you to understand how your company operated their business. It’s often an inexpensive way for companies to capture competitive intelligence.
I understand that this type of transformation in companies isn’t pretty and isn’t what we would expect it to be. Common sense might suggest that companies would seek out the best people to put in the leadership roles, but this isn’t what we see happening. Those with less impressive qualifications are aware of their shortcomings, which drives them to push themselves into these positions. Why? It’s the only option they have and….it works.
This scenario is more common during economic downturns where organizations experience more volatility. While organizational change is painful, it is also the land of opportunity for those who seek to gain from the transformation. Organization change is NOT a time for you to sit back and wait for your name to be called out in the draft as the next member of the management team. It’s a time where you push yourself into a position that will propel you into the ranks of an Executive. Why? From what we’ve seen, the payouts are worth it. Sure, it’s a side of business that colleges don’t tell you about, nor will your company. It isn’t pretty and isn’t always the best path for the long term viability of the company, but it can make you into an executive and provide a big bump in your salary. Yes….it’s a short term mentality but that’s usually what happens in tough economies.
If you’ve got an MBA, you’ve probably already realized that getting the MBA doesn’t lead to more money, despite what the statistics say (at least not immediately). When I was working on my MBA, I had three friends who were earning their MBA too but at different schools. We were quite competitive with each other and were very interested to see who would benefit the most after graduation. You see, we all worked in the same company. I hate to admit it, but I didn’t win the free lunch, which was the prize for getting a raise upon graduation. If you’re looking to make some money after you graduate, you’ll want to read about our little experiment. Here’s what we did to earn a raise with our MBA.
There were four of us enrolled in four different universities. Three were in the traditional brick and mortar MBA and one was in an online MBA program. In the last semester, we all began trying to figure out how we would sell our new skills to management in the quest of that trophy of champions, the raise. And who doesn’t want that?
The first brick and mortar MBA graduate felt that his university had significant brand power (well, it was a top 25 program). So, he didn’t do anything. He felt that once management caught wind of his new accomplishment (MBA from a top program), he would instantly gain access to the club, more money and a new position in the upper echelon. Unfortunately, his was wrong. Management didn’t throw a party for him nor did they offer any of the accolades he had dreamed of.
The second MBA graduate had a little more strategy to his plan. He took some of his learning and used it to find ways to reduce the cost of operations. Surely, creating a list of activities that could help the company save money would be worth something. So, he studied and researched some effective methods. He even put some probabilities, budgets, schedules and return on investments in his analysis. It was an impressive list. But, alas, it turned up no coins to jingle in his pocket. Management was happy to receive it but wasn’t moved enough to reward his behavior.
The third graduate took a slightly different approach than the second. He didn’t focus on saving money. He sought ways to make money. To begin his pursuit, he asked management what were their biggest challenges they had. Then, he knew what problems he needed to solve. So, he worked just like the second graduate by researching and studying the challenges the managers identified. He outlined several ways to overcome the challenges and created plans for achieving them. Even though a couple of these plans were acted upon later, this effort did not yield any money for the graduate.
The fourth graduate tried something totally different than all the others. He set out to prove that he had acquired some desirable skills from his MBA program. He focused his efforts on marketing since this was a passion of his. He worked with several departments to understand what their marketing challenges were. Then, just like all of the others, he set out to find solutions. Once he found them, he put them into action, without discussing it with upper management. Risky move? I thought so too. However, when he presented his list of problems and solutions, he included one piece of information that the rest of us failed to do. He presented results. “That’s the initiative we’re looking for” was management’s response. They didn’t want to know what the problems were; they knew that already. They didn’t want to know what you thought would work; they wanted to know what would work. That meant you had to do something to understand what would work. They could then take the methods that really worked company-wide but they had to know what worked first. Needless to say, the fourth graduate got the raise.
The lesson we learned that semester is that it isn’t about what you know nor is it about what you can do. It’s all about what you actually do. Your value isn’t based on what you have. It’s based on what you give. In learning to earn a raise, three of us found that potential energy is nice but you’ll gain much more if you convert it to kinetic energy. In short, do something. An MBA is not proof that you have any specific skills, knowledge or ability. It’s only proof that you took some classes. Accomplishments are the real proof that earns rewards. When you think about asking for a raise, don’t go into the discussion empty handed. Don’t give them ideas or possible solutions. Give them a clear view of your drive and determination to make the business a success; that is to say, a clear understanding of what they can do to make the company more profitable as determined by what you’ve already done.