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short-term uncertainty

The Strategy and Mindset You Need for Short-Range Uncertainty

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This is Part 2 of our two-part series about planning for uncertainty. In this blog article, I talk about short-term uncertainty. Check out the first part on long-range uncertainty here. 

This is the second part of our two-part series on strategizing for uncertainty. Last time, we covered long-range uncertainty. This time, we’re going to talk about how to act in the face of near-term uncertainty, and especially about the way that mindset can translate into strategic action. 

The truth is that most of the issues that we find with long-range uncertainty start out as near-term uncertainty, or worse, as near-term crises. The pandemic was a near-term uncertainty (remember those two weeks of lockdown?) that has irreversibly changed and shaped the world we live in today. Massive turnover starts with one person, and dipping sales can start with one PR scandal.

The good news is that the strongest and most sustainable businesses can handle near-term crises—even ones that they couldn’t have planned for. This is because they have the right mindset that translates to the right strategy and the right communication. Let’s break this down to help you weather the next near-term uncertainty that awaits you. 

Get Real About Your Goals

Let’s rewind to March 1, 2020, and pretend I asked you about your goals. Maybe you would have told me that you wanted to be the #1 car sales company, for example. You were planning on hitting record sales and expanding your personnel. To top it off, you had an unbelievable PR campaign planned. If you were on your strategy game, you would be able to tell me what your goals were and the steps that supported each of those goals. 

Fast forward to April 15, 2020. What are your goals now? Or in May? Or June? If your goals were the same as they were in March, you’d have your head buried in the sand. Right?

I make this point for two reasons. First, the most resilient companies revisit what they’re trying to accomplish in the face of major events. A car sales company that survived the pandemic might have revised its goals: I need to keep my car lines operating, keep my people employed, and keep my teams engaged. In other words, priorities had to shift in order to better serve the longer-term goal (e.g., survive the lockdown and work towards being #1 at some future point down the line). 

Some companies made this mindset shift faster and more effectively than others. Making this shift doesn’t mean your ultimate purpose changes, but it does mean that what it takes to achieve that purpose might need to be reassessed. 

From Mindset to Strategy

Mindset has become a bit of a buzzword these days, but for good reason. Sometimes mental blocks, that we don’t even realize we have, get in the way of establishing sound strategies that can withstand the rough-and-tumble of the economy and world today. I want to share a few of my favorite reminders for the mindset that translates into real action. 

Operating in the Gray

This is a mantra of one of my favorite CEOs. I love it because it is true and it works. 

Life is lived in the gray area. When we face a new quarter, a new team, or a new challenge, there are always unknowns. We don’t know how things will turn out, but we have past data, and we need to try something. We can take a small step and assess little by little. 

Here’s one way to put this into action: If you know it’s time to increase brand awareness, you might take a big bet for a short time. We call this a fail-fast mentality. 

Say you decide to invest 80% of your marketing budget into LinkedIn and see what happens. The trick is to make it time-bound (e.g., invest for 6 months) and be practical about what you can expect within that boundary (e.g., grow your followers by 500). The only way to move out of the gray and into technicolor is to try something and see what happens.

Set Up Choice Sets

Anyone who has ever known a toddler knows that it is a fundamental truth of human nature that we do better with choice sets rather than infinite choices. You can decide to grow 10%, increase profitability by 5%, increase your customer base, build your talent, or overhaul your brand, but you probably can’t do all of these. They might all go together, but you have to prioritize your investment priorities. 

Perhaps your company hasn’t been profitable and you need to be more profitable before making other investments. You might need to look at costs and pricing before deciding to bring in other customers, or else you’d be bringing them in at a lower profit. 

Look at your goals, assess them, and figure out how the pieces fit together (or hire a pro to help you get an objective look at what your most strategic moves are). Then figure out which choices to make now and which to save for later after a few more of the pieces have fallen into place. By the way, this advice works both when you’re in crisis and when it’s business-as-usual.

Just Do It 

This is true when it comes to long- and near-term uncertainty. Not knowing what the future holds can lead us into what is sometimes called analysis paralysis—wanting to maximize our actions can result in us not acting at all. Or, being perfectionists and wanting to keep our options open means that we end up doing nothing and closing off all of our options. Neither of these is ideal. 

At some point, you need to call in the support systems you need to act. As Bréne Brown says, we need to get vulnerable and learn to rise. The way we develop confidence is by actually doing things. Not through observing, studying, or reading another blog—we develop confidence just by doing it. And then we’ve done it, and we have the momentum to move on to the next order of business. We may not have done it the most perfect way, or the way we thought it would be done. And yet, it’s done—we can assess, gather data, and use the results to better inform our next move.

Communication

The importance of communication in a moment of crisis or uncertainty cannot be understated. Solid communication with stakeholders—employees, leaders, investors, customers, and partners—is key to finding the support you need to stay afloat. At worst, flubbing communication in a crisis can leave your customers feeling confused or even deceived. 

How can you make sure you have solid communication in a crisis?

  • Communication has legs: What you say can and will travel. A solid strategy or an external communications team can help you ensure that your communications reflect your purpose, your commitments, your priorities, and your plans. They can also help you ensure that you strike the right tone when discussing your knowns and your unknowns. 
  • Be aware of your stakeholders: Know who you’re talking to in each communication. The message you give to your stakeholders might confuse your team members. Likewise, you might communicate a different level of complexity in one forum rather than another. Be consistent while also knowing who you’re talking to. And of course, make sure everyone who needs to hear from you does—don’t forget about your business partners and community supporters.
  • Moving forward: Even amidst uncertainty or crisis, let your customers know what there is to look forward to. Know your goals for the near term while keeping your eye on the prize. Stay bold and steady in your long-term purpose. 

Concluding: Progress vs. Perfection

This last piece is something I work on daily. Dealing with near-term uncertainty is a game of tricking yourself (if you’re a perfectionist) into making progress. It’s always going to be imperfect, whether you’re dealing with a crisis or not. And sure, as leaders we want to make the best choices. We want data, but we live in a world where there is infinite data. 

Sometimes we get caught in a trap of thinking, “if I only had one more piece of information, I’d feel so much better.” There are diminishing returns, though. You get that 80% solution, but you want more. And chasing that last 20% can keep you from making the decisions that will help you come out on top once the near-term crisis is over. 

Ultimately, dealing with near-term uncertainty comes down to two pieces of advice: 

  • Strategize and plan ahead, as always and as much as you can. 
  • Get comfortable with being uncomfortable. 

Also, know your own blind spots—the mindset traps you fall into as a leader that keep you from making progress. Figure out the mantras, the advisors, and the reminders you need to help you move your team forward through any crisis, any uncertainty, or any gray area.

Are you still trying to figure out how to make sure you’re rock-solid when the next challenge comes? Our team of experts can help you make sure you have a strategy that works for the near term and the long term—don’t hesitate to reach out to us for a consult. 

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long-term uncertainty

The Strategy and Mindset You Need for Long-Range Uncertainty

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This is Part 1 of our two-part series about planning for uncertainty. In this blog article, I talk about long-term uncertainty. Stay tuned for the next installment of the series where I discuss planning for short-term uncertainty.

Uncertainty is a part of doing business. We simply don’t operate in a world of perfect information in economics, in business, or in life for that matter. Sometimes the unknowns are known unknowns (e.g., the price volatility of raw materials in a product), and sometimes the unknowns are true unknowns. The true unknowns are the big ones like climate, geopolitical circumstances, and health crises. Even having a C-Suite leader out sick for a week can throw a wrench into the best-laid plans. 

McKinsey has a framework for thinking about uncertainty, and here there are four different levels: (1) a predictable future, (2) alternate futures, (3) a range of futures, and (4) true ambiguity.

With our clients, we like to focus on two different kinds of uncertainty: long-term uncertainty and short-term uncertainty. The strategies we suggest account for what kind of uncertainty we face within this framework. Often, the first part of the work is getting leaders to make time to think about these issues at all. 

There are different reasons businesses and leaders often avoid thinking about uncertainty—it’s unpleasant, there are no easy answers, and it takes time away from the day-to-day aspects of doing business. Yet, building a bold and sustainable business means asking the hard questions and laying out the contingency plans you hope you never have to use. 

In this blog series, we’ll go over some of our top tips—for strategy and mindset—for approaching long-term and short-term uncertainty. 

Let’s start with long-term uncertainty: how should we think about uncertainty? And how should we plan for it? Here, we’ll walk through a few examples of long-term uncertainty to give you a map for the right kinds of questions to ask and the general mindset to have when approaching different kinds of long-range uncertainty.

First Principles 

When you’re asking difficult questions in your business, it can be helpful to ground into the things that you know and that you have control over. These are your first principles. The idea of first principles comes from ancient philosophy—what are the bedrock beliefs and ideas that we build everything else upon?

If you don’t have a value proposition, it’s an important part of long-term planning. What are you here to do? What are your goals and purposes in the business? Having a clear idea of who you are, what you stand for, and what your business does best can help you ground your future planning. Having this written into the DNA of your company and how you communicate about your company gives you something to work with if it becomes time to pivot. 

Long-Term Uncertainty: Case Studies

Long-term uncertainty concerns those uncertainties that might stretch a long time into the future without knowing when or how they will resolve. These are the things that pose big existential questions to your firm, or at least bring up existential questions, while you’re busy figuring out what to do. Here, we’ll walk through how we like to think about some case studies in long-term uncertainty.

Recession

At the time of writing, it feels like economists have been forecasting an imminent recession for the last five years. It can be hard when we’re all waiting for the other shoe to drop. In general, responding to market conditions, doing market research, and doing regular brand assessments are great ways to make sure you’re staying competitive in any environment. 

But let’s say a recession is announced. What do you do? The first question is: What is the best path forward from a long-term growth perspective? Depending on how your company’s finances were panning out in the recent past, one might decide to sell, IPO, take on additional investments, or bootstrap. There’s uncertainty attached to all of these options, and they’re going to depend highly upon several factors. 

What doesn’t change across different kinds of companies and different levels of performance is the importance of being in it for the long game. You don’t just want to think about the next five months, but about what moves will serve if different conditions pan out over the next two, five, ten, or 20 years. 

Personnel 

Your people are your greatest asset—hopefully, you know this already. And you also probably know that life happens. Yet, when the CEO or CFO walks out the door, or your best graphic artist steps out for a family emergency, it can throw you for a loop. 

Planning for this is tricky. In general, I don’t encourage redundancy. That’s a surefire way to create a tighter budget that—most of the time—won’t make sense. Instead, I encourage awareness of what everyone is working on. It’s important to know what everyone is doing; yet, it’s also important to be humble about job creep. Even if you’re the boss, you might not realize just how far your Database Manager has strayed from their original job description. It’s good to be aware of this both for understanding how all of the pieces fit together and for understanding who is responsible for what. 

Grasping the strengths and weaknesses of your team can ensure that you can figure out where other folks can step in and take on an entire job, or some parts of it. In some cases, people will be applying skills they’re already using on your team. In other cases, you might get the opportunity to help your team with professional development by teaching them new skills or discovering untapped talent. 

Ultimately, having a pulse on your team, avoiding silos, and understanding how everything fits together allows you to best direct your team towards a common goal.

Climate Change

This is a big one and a difficult one. There are more floods, more heat waves, and more wildfires than there used to be. How do we plan for this in our companies? I’ll walk through a few different lines of questioning that can begin to guide your game plan.

Location-specific climate change: Does it make sense to build a HQ in New Orleans? Or should we move back to northern Louisiana? What climate needs does your facility have (e.g., are there a lot of computers?)? What are the risks to your infrastructure? Do hotter summers or colder winters pose a risk to materials you might be transporting? Is water scarcity something that you need to be thinking about?

Disaster Preparedness: If the worst happens, are you insured against flood damage, wildfires, or whatever is most likely to affect your area? What kind of resources do you need to make sure you can support your employees if a disaster happens at work, or even in the general area? What will you need to reach out to employees? Will operations continue, and if so, how?

Communication: How will you communicate with your employees and customers if something happens? How will you communicate with key stakeholders and investors? How important will it be to communicate quickly? Do you have emergency contacts with important partners or plans that can be quickly enacted across different locations if coordination is necessary?

Global strife: It’s crucial to think about how disasters and climate issues will affect populations globally. Map out where your supply chains are so you can quantify the potential risks to materials, investments, economics, and of course, the human toll. 

Climate change presents some of the biggest unknowns we have—there are predictions, but we never know in what state or town disaster might strike. Ultimately, we are all on one planet. Animals are adapting (see: all the beach closures due to sharks!), and we have to make sure we do the same. 

Gap Assessment

When it comes to long-term strategy, some unknowns are—thankfully—a little closer to the business-as-usual that we know and love than climate change. For example, you might set a goal to increase brand awareness in 2024. This is long-term uncertainty because it has the potential to change the course of your business, and because if you’re doing a brand pivot you have no idea how it might be received by customers. What might your strategy be in this case? 

By the end of 2023, take stock of where your brand is. What does the market look like, and how do you want your brand to be perceived within your market? What does this mean in terms of customer perception, digital awareness, website hits, inbound inquiries, social media followers, and so on? Figure out what your most important metrics are and begin with the baseline info that you do know. 

By the beginning of 2024, you want to figure out how to get data for the metrics you don’t know and figure out which metrics you most want to target in 2024. You can’t target too many at a time or else you won’t know what worked or why. If you want more inbound calls, you might do more LinkedIn advertising or more website content regularly. If you want more website hits, you might invest in an SEO overhaul. 

Finally, throughout 2024, you would want to keep sight of what you’re trying to accomplish. What outcomes do you want, and what do you have today? Once you set SMART goals, you can put plans together and reassess quarterly to see how things are evolving and continue reassessing to get you to where you want to be in the market.

The 20 Mile Analogy

So much long-term planning is about deciding that you’re in it for the long game. That decision means you adopt a certain mindset and a certain willingness to dive deeply and boldly into uncomfortable and difficult questions. 

Jim Collins has an incredible analogy for this process in his book Great By Choice. Imagine you and others are about to embark on a 3,000-mile foot race from San Diego, CA to the tip of Maine. One person decides to push as hard as they can and travel 40 miles the first day, then they are exhausted and need to rest. In fact, they need to rest the next day too. You, on the other hand, set out to do 20 miles a day, every day, no matter what. Whether the 20 miles takes you 12 hours or four hours, it doesn’t matter. 

You might be able to guess who wins the race. The runner that was sprinting and recovering didn’t win. When you plan and can keep steady progress and stay on track with your plans, you give yourself space to maneuver. Any marathon runner knows that one mile can feel different from day to day. But if you set yourself on a plan, you at least won’t be trying to achieve 40 miles in a day, but just 20.

As with business goals, long-term planning requires breaking large goals into smaller goals. That climate change conversation across your entire company probably won’t happen in a day—and that’s okay. More broadly speaking, making sure that you have a steady and sustainable business plan means that you won’t be as swayed by waves of uncertainty.

There are no perfect choices. In a crisis, we can’t afford to be perfectionists. Looking at reality and moving beyond the “what-ifs” allow us to take small actions and make the necessary plans that can buoy us through a hard period. Take your steps, measure your progress, and eventually, you might realize you’ve already gone 120 miles.

Concluding Thoughts

Long-range strategy planning is hard, but it can work. With the right mindset shifts and a willingness to ask hard questions, you can create a sustainable business plan that addresses business-as-usual alongside potential long-term challenges. The steadier you are on the day-to-day, the steadier you will be during a crisis. 

Finally, action begets action. Taking the first small step means that you can then look back, 20 paces later, and see how far your team has gone. This, in turn, inspires more action and ensures that we’re not waiting for life to happen to us. Creating bold, sustainable, and competitive companies today means going beyond the status quo. Ask the hard questions. Take the uncertain step. Look into the future with unflinching eyes.

Keep an eye out for the next part of this blog series on strategizing for short-term uncertainty. And if you want any assistance with this from a team of experts, don’t hesitate to reach out to us for a consult.

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employee engagement

Helping Employees Thrive Beyond “Business as Usual”

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The Gallup report on the State of the Global Workplace for 2023 is revealing, but not necessarily in a good way. 23% of employees are engaged in their work, which Gallup defines as “[finding] their work meaningful and [feeling] connected to their team, manager, and employer,” while 18% are disengaged. This leaves 59% of employees on autopilot.

With employee engagement at historic lows—though still higher than last year—some leaders are attempting to make positive changes. Unfortunately, they’re still looking through the lens of the past and trying to impose or return to old norms. 

Based on our research and experience, this approach is evidence of leaders being in denial. For a vast majority of industries, hybrid work is the future if companies want to retain talent, prioritize growth, and stay competitive. 

And yet, some people suppose that remote work is to blame for employee disengagement. “Of course my employees aren’t engaged when they’re sitting in their pajamas and only seeing people on Zoom!” While I think this is far too simple, there are real challenges that arise in our new hybrid work world. Some are inclined to brush these under the rug, but that is a one-way ticket to building a company that is living in the past. Let’s walk through some of the biggest obstacles to employee engagement and some solutions.

Business as Usual?

Let’s start with a story. One of our clients has two private equity firms backing them. When the back-to-work conversation began, Firm A said great—five days a week, business formal, and we’ll see you at 8 A.M. on Monday. Firm B said, great—we’ll start three weeks after the holidays and begin with three days a week. When employees showed up to the office, they all had a pair of slippers awaiting them under their desks.

The differences between these two firms are plentiful, as you might imagine. Can you imagine how it might have felt for the employees who had ample transition time versus those who had to show up as if the world as they know it hadn’t changed dramatically over the last two years? 

Firm A’s employees were disgruntled and confused—a lack of communication, transparency, and planning led to disengagement, turnover, and whiplash. Firm B, on the other hand, knows how to meet their team where they’re at. The leaders realized that—given what had already been happening—the team could work differently than they did before. There was no point in forcing a bygone paradigm of work. Firm B was and continues to communicate strategically and honestly about the circumstances.

The Solution: Personalize Your Change Management

How can companies be more like Firm B in their change management? Well, when you consider how you might implement remote and/or hybrid work, it’s crucial to think about what is most important to you and your team. Unless you work in an industry that requires employees to be in the office, it’s likely worth it to transition to hybrid or remote work. 

Many companies are giving up their local footprint in favor of renting a coworking space once a week or once a month. Some companies used to have four floors in a building and now only have one. 

There are myriad options that can be cost-saving and therefore allow you to provide other higher-value benefits like new training opportunities or healthcare offsets. You can make moves like this that match the values of your company and people and ultimately, can make you a more competitive company for potential talent.

Lack of Opportunities for Connection 

We know it’s important to be in person sometimes. Imagine being a young person joining a new organization right after graduation. So much learning happens not just by attending meetings and getting feedback from your supervisor on your own work, but also by watching how leaders and those with more experience on the team interact. When you see your boss talk to a client, you learn cultural norms whether they’re good, bad, or indifferent. You learn about professional norms, relationship-building, and about the subtle and oh-so-human parts that make up the work we do. 

There is more to sales, innovation, and business than technical offerings. How do you structure the offering? How do you talk about it in a board meeting? How does strategy get developed in person when everyone is in the room? Frankly, someone who has only three years of remote-only sales experience would have to play some catch-up if they are transitioned to doing sales in person. 

The Solution: Intermittent Co-Location

A lack of connection with coworkers can certainly be a cause for a lack of employee engagement—yet, it’s unimaginative to think this can only happen five days a week in the office while wearing heels or a tie. As it turns out, the Gallup poll reports that engagement has 3.8x as much influence on employee stress as where they work. In other words, employees’ relationships with their team and leaders matter far more than whether they’re remote or in-person. 

Intermittent co-location can be a great solution. Companies can come together in whatever cadence works for them – once a week, three days a month, a once-a-year retreat, the options are endless – to create opportunities for connection, in-person brainstorming, and real-life interactions. Although these contact hours are dramatically fewer than the traditional 40 hours, they can make a huge difference in Zoom interactions and for junior colleagues’ professional development. Getting people together in the same room changes things—we know this intimately in our post-lockdown world. 

How can companies do this? One of our clients does quiz nights that started during the pandemic and continue to happen once a quarter with a great turnout. Another group of engineers has a virtual Dungeons and Dragons group that creates wonderful team bonding and inside jokes. Both of these approaches work because they’re authentic to the culture. 

The caveat here is that the interaction can’t be forced. The way to create effective connections is—shocker—to ask your employees! Send out a survey and ask what people are excited about—your team is as unique as your business. Check your assumptions, and don’t assume everyone will be equally excited by free drinks at a happy hour or tickets to the opera. 

Fractured Communication

Managers often worry that remote work will lead to broken communication channels. Maybe pre-pandemic, your core team heard major updates about company policy, benefits, and events at their weekly in-person round-up. Now some leaders fear there isn’t an adequate replacement—at worst, emails get lost, managers get stuck in the middle, and employees start missing deadlines. This is the worst-case scenario, but it’s not inevitable. 

The Solution: Communicate Through Existing Channels 

In the new world of hybrid and remote work, organizations need to think differently not only about communication, but also about how they equip their people leaders. Being overly reliant on email is not the answer. 

Instead, use what is natural to the organization and use multiple channels to communicate the most important information. Don’t be afraid to mention benefit renewal information at the monthly team meeting, in a few emails, and on the Slack channel. If you have in-person workers, you can put up posters in the break room. Being strategic with how you communicate with your team was crucial before the pandemic, and it’s even more crucial after. 

Burnout 

Need I say more? This is a big one—Forbes recently reported that 43% of middle managers are burned out. Many employers are not aware of the myriad expectations placed on employees both inside and outside of work. The cumulative effects of the economy, the pandemic, as well as related and unrelated personal issues have created another pandemic of burnout. Although I am not an expert on the psychology of burnout, I do advise companies on the people-first policies that can reduce the likelihood of burnout.

The Solution: People-First Policies

People-first work environments prioritize employees as people in policies. This means providing humane amounts of PTO, the ability for employees to communicate about sick time, and allowing flexibility by having discernment about what is urgent and what is not while also having bold goals for your company’s future. 

I’ll be honest: companies that aren’t moving towards more humane leadership will not be the companies of tomorrow. While employee power has waned since the Great Resignation, we know employees will make their own choices and seek other employment if they aren’t happy with their company’s benefits, culture, and policies. 

With remote work on the rise, it will take more than it used to for companies and organizations to retain and hire the best talent. It’s crucial to have a pulse on your employees. Do this by creating channels for them to communicate concerns before they become reasons for massive turnover. Communicating in ways that are authentic to your organization, offering appropriate benefits packages, and treating employees like people can make all the difference for your team.

The New Normal

While all of the above suggestions might be easier said than done, it’s worth repeating that we have entered the new normal. And the new normal is not a one-time thing; it is constantly being created and re-created.

Engaging employees requires that leaders acknowledge that things have changed and will continue to change. And it’s not just that businesses have changed—psyches have changed. Since 2020, how we all view opportunities, priorities, and work has changed forever. At the same time, the competitive environment has changed. The rise of remote work means both that employers have more choices in talent than ever before, and that employees also have more choices. 

Being locally, nationally, and globally competitive is going to require smart strategizing that responds to the reality of the times rather than imposing an out-dated paradigm onto your people. People do their best work when they’re engaged, valued, and cared for by their workplace teams, benefits, and culture. 

In our executive advisory and change management work, we’ve seen the transformation that is possible for both teams and leaders. If you want to strategize for the future, we have a team that can help. Don’t hesitate to reach out. 

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CEO transitions

CEO Transitions in 2023: Challenges and Opportunities

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CEO transitions have always presented challenges for companies, but post-pandemic, we’re seeing more turnover than we have in at least five years. Endemic burnout combined with challenging global and macroeconomic circumstances are causing CEO turnover in companies and organizations at every level.

At Audacia Strategies, we help our clients build companies, infrastructure, and culture that can weather even the harshest of circumstances. With this in mind, we’re going to get into the why of this current tide of CEO turnover and share the smartest moves companies can make during an executive transition, particularly at this moment.

Why Now?

We’ve all seen the numbers about employee turnover, and CEO turnover is catching up too, with Fortune reporting that it has reached its highest rate in five years. According to Challenger, Gray, & Christmas, Inc., CEO turnover is up 18% from a year ago (the numbers are from March 2023). But why are we seeing this uptick in CEO turnover happening right now?

First, leaders are dealing with burned-out employees. Mental Health America reports that in a study of 1,500 individuals, three-quarters of workers say they have experienced burnout. We’re all dealing with the same global and economic challenges. We watched the Great Resignation happen over the last few years. Between managing employee experience, customer experience, and their own burnout levels—CEOs have been at the forefront of change.

Second, We’re in a volatile time between market movement, elections, and global conflict. When a stock crashes, a bank closes, or a product fails, leaders have to take responsibility. This might—either by their own choice or not—lead to an executive transition.

Finally, the IPO market is also to blame. We’ve seen fewer IPOs which means that there are private, venture, and equity-backed companies who were planning on an exit in 2022 or 2023 that just won’t happen. The question to the CEO becomes, do we stay the course or bring in a specialist leader to pivot the firm to be more competitive in the 2024 or 2025 IPO market? 

The answer to this question has serious implications for the fate of the CEO and might amount to deciding between keeping a current CEO with public company experience or refocusing investments in their business and hiring a new “specialist CEO” with a depth of expertise in software or distribution, for instance.

The Challenges

So what are the challenges for leaders and board members dealing with CEO transitions in this particular macroeconomic environment?

Everything Changes

CEO and executive transitions are always fraught. Even if it isn’t explicit, a new CEO comes with the potential for significant change. Corporate leaders often feel the desire to say, “Nothing is going to change. Everything is going to be the same. Everyone stay calm.” Why? They understandably want to reassure their employees that things will be okay. But there are truer and better ways to reassure your employees—everything changes, even if you don’t intend it to, and when it does you risk getting blamed for lying to people.

Dealing with Multiple Constituencies

There are always multiple constituencies too. In our work, we focus a lot on employee-executive relationships and helping employees understand how and why change is happening. But beyond employees, companies also need to address business partners, customers, and financial stakeholders. 

Each of these groups has ideas about your company’s executive transition, and it’s essential that they understand the perspective, goals, and background of the incoming executive. Why is she the right person? Why did she take the job? What is the opportunity she sees in the market?

The Opportunities

While executive transitions present ample challenges, they also present excellent opportunities for building trust, strengthening culture, and driving future success. 

The First 100 Days 

As much as possible, let the first 100 days be a time for listening. Listen to (and visit, if possible) your constituencies and ask questions to get a sense of the goals, pain points, and existing strategies for the company. Incoming executives should ask questions like: Where is the friction for this organization? Where are we amazing? What can we do better?

After the first 100 days, come back to your team and reflect on what you heard. Let your employees know where you can be reached and where your priorities will be. While this contradicts the traditional advice to “hit the ground running,” most pain points are multivariate problems. 

Without understanding all of the variables, the CEO risks creating problems rather than solving them. At worst, executives can get dragged into the nitty-gritty early on. Avoiding this requires focusing on the big picture, and especially on the “why” of the organization. What is the purpose, and why do we exist? Spending the first 100 days listening and establishing relationships and expectations is essential for a successful tenure.

Listening Sessions

Create opportunities to listen to your employees through the channels they’re already using. If you’re coming into a remote organization, host listening sessions on Zoom or Slack. If you’re in person, consider hosting a coffee hour or an “Ask Me Anything” session. It can also be helpful to allow anonymous questions to be sensitive to employees’ concerns. 

Particularly during times of transition, employees need to hear your answers to the hard questions: What will this mean for me? How will my manager be affected? Does this CEO really invite questions or not? When conducted with curiosity, empathy, and a bias for transparency, listening sessions can catalyze important discussions.  

Draw the Story Arc

Why are you here? This is the first and most fundamental question of employees, customers, and business partners. An incoming executive should be crisp about why she chose this company and what working at this company means to her. If there can be a formal handoff between the exiting and incoming CEO, even better. Particularly for employees, knowing that the former (hopefully beloved) CEO hand-picked the incoming CEO can make for an especially smooth and amicable transition.

But of course, this is not always available. When it isn’t, having a trusted third party such as a board chair endorse the background, values, and vision of the incoming CEO can make a world of difference.

Manager Dynamics

Managers are the first place most employees will turn for information and to “check the temperature” of a change. Keeping the pulse of your people leaders and employee influencers  is a huge opportunity. Engage and listen to their challenges and frustrations and equip them with the tools and information to support their team. There is nothing worse as a manager than to feel helpless when your team is asking for help. 

Don’t hesitate to give them a channel to funnel questions. Be honest about the fact that we are all learning and moving through this transition together. We may not have all the answers but we’re working on it and we’re working together.   

Customer Communication

Just as your employees will wonder what the transition will bring, so will your customers. Am I still going to be a priority? Will you keep investing in what I buy from you? As with your employees and managers, be clear in your communication about what the new CEO will bring to the company or organization from the customer point of view.

Keeping Everyone Invested

One of our clients had five CEOs in four years. At a certain point, employees and customers reach a level of change fatigue. Customers don’t care and just want to make sure they have the same account representative. Employees go into survival mode, annoyed at what they see as change for the sake of change. 

Particularly with this one client, by the end there was almost no faith that someone would stick around: “I’ll believe it when I see it.” The upshot of this attitude is that employees might be unwilling to invest in new initiatives. An incoming CEO can show they are aware of these dynamics by being patient—it will take longer to establish trust and credibility.

In a case like this, it will be especially important to listen and let people vent. Let them air their true pain points and try to do small things in the early days to make their lives better. One of our clients, facing employee burnout, was able to offer every third Friday of the month off. It wasn’t every other Friday off like employees wanted, but it showed employees that the new CEO was listening.

Concluding Thoughts

It’s not easy to be the new CEO, especially if it’s due to less-than-ideal circumstances. Being a CEO puts you in an interesting position—people often tell you what you want to hear, and never tell you that you have a bad idea. But when you start somewhere new, you often have two reactions:

  1. People who aren’t afraid to speak their minds. 
  2. People who are terrified that by speaking up they’ll be fired. 

Being ready for the tough questions—and asking them yourself when no one else will—can help you succeed. As will a healthy dose of curiosity and empathy. Feedback is a gift. By taking time to listen, communicate carefully, and respond, you can ensure that both you and your company are headed in the right direction.

If you want to talk more about an upcoming or ongoing executive transition, don’t hesitate to contact us. Our team of professionals is ready to give you a strategic edge.

Photo credit: katemangostar on Freepik

future of work

What Companies Are Doing That We Love

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We’re living through a unique time right now. What work means to us is changing, and the leaders paying attention to this are making changes accordingly. The future of work is here, and it’s already happening before our eyes. 

We work with a lot of companies in transition, and we wanted to share with you some of the best moves to make sure your investors, employees, and customers stick around for the long run. Here’s a few tactics and techniques that we love.

1. Giving Employees a Voice

I’ll cut to the chase—savvy companies are listening to employees. This means engaging their employees, listening to their input, and integrating it into action. As an example, many of us are still in a return-to-the-office transition. After working on a remote or hybrid model for a year or more, companies are still making tweaks. What are the best means of communication? How do we come together intentionally? Do we have a cafeteria, and if so, what do we serve?

We’ve seen companies engage employees well in employee resource groups. In these groups, employers provide a forum for employees that is open-ended. One of our clients has a weekly coffee talk—it started as a small, organic event that became so successful that it’s now branded and managed by the communications department. 

The concept is simple enough: By offering an open forum where leadership asked employees what was on their minds while also offering a space for folks around the office to share what they were working on, our client created an outlet for honest communication and collaboration. Since these weekly coffee talks began, people have been helping each other across business units and brainstorming ideas about how to work together better.

One of companies’ biggest worries about offering an open forum is that there might be griping. Let’s be real—whether this griping happens at the water cooler in hushed tones or at an open forum, it will happen. If you care about employee retention and the future of your business, you should want to know what’s on your employees’ minds. When you give your employees an outlet, you provide an opportunity to express and address it constructively. And when you allow your team to share concerns about the small things safely, they’re way more likely to raise the alarm about company-threatening issues. 

People care more about something if they have a stake in how it grows and develops. By opening new avenues for feedback, you help your employees to be part of something larger than themselves.

2. Inviting Feedback from Customers

In-person client meetings are back, and it’s changing the dynamic. Especially when you’re dealing with sales, new relationships, and problem-solving, being in person changes the game.

Leaders are soliciting and tuning into the voice of the customer to add richness to their customer relationship strategy. The non-attribution interviews during voice of the customer surveys are invaluable whether you want to check the health of your customer relationship, inquire about your positioning among your peers, or simply understand what makes your client tick. Engaging in a voice of the customer analysis requires considering the information and insight your customers hold. This information can advance your market strategy and add nuance and understanding to face-to-face conversations—even when those conversations bring up uncomfortable feedback. 

3. Having Hard Conversations

We love the companies doing this but wish we saw more of it. The benefits of having hard conversations can mean something as sweeping as revamping your value proposition or talking to investors about major business changes.

The consequences of not having hard conversations can be huge. One of our clients couldn’t give bonuses this year; employees found out in a piecemeal, roundabout, through-the-grapevine way, and it all blew up during an all-employee call. It was rough and highlighted how the hard conversations between leaders and among teams weren’t happening during the year. 

Having hard conversations also means letting employees know when important changes in the company (like layoffs) are coming. The LinkedIn posts coming from former Google employees express a sense of deep betrayal. Layoffs, executive transitions, and other major changes are sometimes inevitable, but forums and clear communication help leaders communicate these issues with humanity and care.

A leader-employee relationship has an undeniable power dynamic, so it’s on the leader to initiate these conversations. Unfortunately, leaders and managers don’t always feel like they have the skills for these conversations. It’s hard to look someone in the eye who has worked overtime and canceled vacations and tell them that you can’t give them a bonus. These conversations are heartbreaking on all sides, but when deciding between a lie that draws a smile and a truth that draws a tear, the truth is always the better option. As Brene Brown says, clear is kind. Unclear is unkind.

4. Celebrating

We would love to see more celebrations at work. One of our clients was recently acquired, and we love how they continue to find ways to maintain their spirit and culture via service anniversaries, birthdays, and client wins. It’s not all sunshine and roses through an acquisition;  celebrating helps employees see the positive things happening around the organization. Making time to celebrate sends the message that we celebrate together because we’re a team. 

Here at Audacia, we got together in person last year to celebrate a fantastic year. When we can’t meet in person, we celebrate at the “water cooler” (AKA on Slack). Because we try to practice what we preach, we hope to get even better at celebrating the small and big wins this year.

The Future of Work: Choosing Courage Over Comfort

The future of work is upon us. The demands on employees are higher than ever, and in turn, employees have higher expectations of their employers. This isn’t bad; in the best-case scenario, it makes us all better. Being willing to listen to the voices of customers and employees, having hard conversations, and celebrating is a willingness to be aware of the many seasons that happen at a company. We love companies that do these because it shows their leaders know how to weather all seasons of the company lifecycle.

I love the Brene Brown quote, “Integrity is choosing courage over comfort.” Having integrity is not just about balancing your finances and answering your emails—it’s showing up for the highs and lows of running a business with presence and strategy.

If you’re looking for more guidance on driving meaningful conversations, integrating feedback into your business strategy, and building a consistent voice of the customer/employee program, Audacia Strategies has your back. Reach out to us, and someone on our experienced team will be in touch.

Photo credit: https://www.freepik.com/free-photo/people-taking-part-business-event_24483071.htm

executive transition

Smart Planning for Executive Transitions: When Time Is Not On Your Side (Part 2)

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This is the second part of our two-part series on executive transitions. If you missed the first one, you can read some tips for handling a planned executive transition here.

Transitions are high stakes for both companies and investors. It’s emotional, especially if an organization has seen a lot of executive turnover in a short time. In fact, 70% of CEOs and managers—i.e., people leaders—are considering quitting. Experts suggest that emotional burnout, the stress of the pandemic, and the shifting labor market and economy are all likely contributing to this trend. 

Executive turnover brings up a variety of reactions. While some employees get very anxious about having to manage or “break in” the new leader, others—like those who were “quiet quitting” before it was a thing–check out entirely. Neither extreme is healthy for individuals or companies.

In Part 2 of our Executive Transition Series, we’ll consider a situation that’s a bit different than the planned exit of a long-term CEO. 

Imagine it’s three years into the pandemic, and your current leader, who has been with the company for two years, has admirably faced the challenges the pandemic brought to all organizations. Although she has managed quite well, another opportunity comes up and she submits her two weeks’ notice.

Without a transition plan in place, the company could be thrown into chaos. Some employees may have come to the company only to work with her, and others might be suspicious of how leaders are going to handle the change, or whether the company has a future at all. Executive  transitions are emotional and complex, and the fact is that there isn’t always time to prepare.

In a case like this, context will drive a strategic communications plan. What’s the context around the exiting CEO? What is the plan for the interim leader? Are we looking internally or externally? Most importantly, how do we set up a new leader for success and demonstrate stability to our employees?

4 Tips for Unplanned Transitions

 1. Storytelling

 This tops our list again because storytelling is how humans best connect and communicate. That doesn’t mean telling fairytales—employees can tell when a communication is bullsh*t or hiding the truth. It is important, as much as is professionally appropriate, to be honest about why change is coming. 

Tell the truth and allow room for employees to both have and share their thoughts and feelings about what’s happening. You’d be surprised at how much it helps to have leadership acknowledge that a particular situation is really challenging. Otherwise, you risk making employees feel as if they’re being gaslighted. Transitions are inherently challenging, and employees need to know they’re not alone in feeling it.

2. Due diligence

You’ve made space for the feelings, and now it’s time to do your due diligence. This has two parts: finding your next leader, and continuing to achieve your goals.

Finding a new leader will be your utmost priority. Most likely, your Board of Directors will take the lead to determine an interim leader and initiate a search for the next leader. You’ll need to announce and introduce the interim leader while also giving employees, customers, and partners a sense for the plan to find your new executive.

Finally, you want to help your team keep their eyes on the prize, whether that’s increasing sales or another goal for this quarter. Transition can be a major distraction. While it’s okay to acknowledge feelings of uncertainty, it’s also important to support your team in moving forward. 

As the saying goes, companies are bigger than one person; success is shared vision and collective action. By providing the right support, you can empower your team to keep pursuing the strategy. This will not only help maintain a sense of stability and continuity, but it also ensures you avoid larger business problems if performance falls off.  

 3. Fact finding

This is related to storytelling, but it’s different because this is not just about providing employees with a narrative that they can understand. It’s also about addressing any unanswered questions that may surround the circumstances of the exiting CEO and the changes that are coming.

People should be able to ask questions and feel they’re being heard. They should be able to say, “you’re the third CEO in three years, why should we trust that you’ll stay?” The sooner you get it all out there, the sooner you can move on. 

If you don’t answer the questions your employees have, they will fill in the blanks. It is better to be transparent and to provide honest answers to the difficult questions. Sometimes the honest answer is, “we don’t know yet” or “we’re still looking into it.” That’s okay. Better to be honest and give a sense for what you expect to be a timeline to an answer. This will build trust and, if done well, help with employee retention. 

4. Introducing New Leadership

As with planned transitions, employees want to know who the new leader is. In an unplanned transition, and especially a fast one, there might be more skepticism and suspicion. Being as transparent as possible about the new leader’s background and vision are crucial. What’s her background? Does she prefer to hire from specific universities? What’s her vision for the next five or ten years? 

Offer employees a variety of opportunities to talk with and about the incoming leader, and keep in mind that everyone has different levels of comfort with asking questions. Consider holding “Donut Wednesdays,” fireside chats, and other informal channels where leadership and teams can connect. You might also offer webinars where more introverted employees can submit questions virtually. As much as you can, provide ample time and spaces for teams to have conversations with transitioning executives as well.

The Need for Strategy

 Executive transitions—whether planned or unplanned—require strategy and careful planning. Storytelling, transparency, and diligence can help ease the growing pains of your company. However, it’s important to note that there are important and subtle differences in strategy for planned and unplanned transitions. 

For instance, employees are far more likely to feel insecure about their job and the future of the company amidst an unplanned transition. And without careful communication, rumors are more likely to distract from workplace goals. Honesty, diligence, and insight into company culture and employee needs are key for maintaining normalcy and retaining your valued employees.

 In all cases, I recommend you use a variety of channels and venues to soothe your most anxious employee and to engage your most checked out employee. Hold fireside chats, host Q&A sessions, send email updates from the hiring team, and create spaces for leadership to connect with their teams.

 Transitions can be chaotic, but they can also be opportunities to engage employees, customers and partners. A smart executive transition can open up a gold mine of insight into how these stakeholder sets are feeling about the company more generally. With the right support, you can use the transition as an opportunity to zero in on your systems and communications. If you’re willing to be present with the process, the results can be better than you ever imagined.

Want an experienced set of eyes to help guide your executive transition plan, or don’t know where to begin? Audacia can help. Reach out to us for a consultation here.

Photo credit: Young Businesswoman Receiving Praise From Her Colleagues During A Meeting In A Modern Office by Jacob Lund Photography from NounProject.com

executive transition

Smart Planning for Executive Transitions: When You See It Coming (Part 1)

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Transitions, including executive transitions, are high stakes for companies for obvious reasons. They bring about logistical, bureaucratic, professional, and emotional challenges for everyone involved. That’s why we’ve created a two-part Executive Transition Series to help you out during seasons of change in your company. 

Executives can be a powerful retention mechanism, or the reason people leave. Consider the old adage, people quit bosses, not jobs. Alternatively, sometimes employees come to a company to work with a particular leader. What happens when that leader leaves? And what about when veteran employees have worked with the same leader for multiple years, and a new leader radically changes the culture? These are tough questions, and not ones you can sweep under the rug.

The key for dealing with executive transitions is communication. It’s important to tailor your strategy to the kind of transition you’re facing. On the one hand, you might be facing a planned transition—one that’s been on the horizon for months or years. On the other hand, you might have a leader—maybe one who hasn’t even been around very long—give two weeks notice. These are two very different situations, and having a strategic communications plan can help you make it through either one.

In this two-part series, we’ll consider both situations. First, we’ll consider some tips for handling a planned transition.

4 Tips for Planned Transitions

Executive transition is a specialty of ours here at Audacia Strategies. Let me share one of my favorite engagements and biggest client wins when supporting a client through a planned transition. Recently, Audacia was brought on board to help with an executive transition in a software company. The outgoing senior executive was the founder of the company and also an avid, talented guitarist. A low key rockstar, if you will. The company culture was centered around music: leadership documents were full of music analogies, guitars were given as gifts, leaders put their favorite song in their website bio–you get the picture.

The leader planned his exit and helped to identify a new CEO. The new CEO was brilliant—he had run billion-dollar organizations and grew up playing chess blind-folded! While this new CEO was a great fit to guide the company to its next phase of growth, he was different from the founder-CEO. An executive transition is one thing, but the reality is that the company was also about to undergo a cultural transition.

How do you manage the exit in a case like this? Here’s the playbook we advised.

1. Storytelling

As long as people have been around, they have connected over stories. We made space for the outgoing CEO to share his story, and time to celebrate his work with the company. Just like a graduation or retirement party, this allows for closure and creates appropriate professional space for processing the (big) feelings that come with transitions.

 2. Getting to know the new leader

 In addition to telling the story of the outgoing CEO’s time, we worked with the incoming CEO to help him identify and share his story. This humanized an ultra-smart leader and gave employees a chance to get to know him and understand his priorities and what makes him tick. 

We also advised on creating plenty of opportunities and multiple channels to engage with the CEO and ask questions. Unanswered questions can leave employees feeling ungrounded and many may be too intimidated to ask the hard (or even simple!) questions. 

We always advise to be as open as possible and provide opportunities for interaction in multiple formats (in-person, online, large group, small group, 1-to-1). Transparency and accessibility are key for maintaining and building trust.

3. Working with the team

The logistics and bureaucracy involved in a transition are not to be underestimated; however, it’s also important to work closely with the team. Share the transition plan, let your executive team know what is coming and let them weigh in on what they and their teams need. And, practically speaking, set expectations about which responsibilities will be redistributed, who will be responsible for training whom, and so on. Executives have questions too–give them time to process the transition and bring their questions to the new executives or trusted confidants. 

4. Mind your communications

We trade a lot in written word, scripts, and talking points. Emails and other written messages are important artifacts that preserve institutional memory long after the transition. Because everyone can look back and see where leaders followed through and where they didn’t, it’s important to be consistent across multiple mediums (video intros of a new CEO, webcast town hall, in-person meet and greets, welcome letter, and so on). 

Perhaps even more importantly, organizations should make sure messaging is consistent across informal communications as well. During times of transition, employees will first bring their worries and questions to direct supervisors and peers. The executive team and their team needs to be on the same page so they’re ready to help their teams navigate organizational changes. During times change most employees and customers will turn to their line manager or customer success contact for reassurance, make sure these critical team members have the information, resources, and support they need to succeed.  

Concluding Thoughts

 Planned transitions are admittedly easier than unplanned transitions; however, planned transitions can still be destabilizing to company culture. At worst, transitions can result in employee turnover, loss of trust, lost business momentum, and a decline in workplace climate if you don’t go in with a strategy. It’s important to keep in mind both the emotional and logistical challenges of executive transitions.

We often think about corporations as faceless entities, but in moments of transition, we are reminded that corporations are made up of people who have hearts and minds. The more you share your story honestly, transparently, and thoughtfully, the more you can weather this season of transition while building long-term trust and continuing to achieve your company goals.

If you don’t have the luxury of a planned transition and are facing an imminent unplanned transition, read the next part of our two-part series where we’ll discuss tips for handling an unplanned executive transition.

If you’re facing a transition—planned or unplanned—and you’re trying to find the right strategy, Audacia has you covered. Reach out to us here to schedule a consultation.

Photo Credit: Black Male And White Female Business Associates Shaking Hands In Hallway by Flamingo Images from NounProject.com

IPO Roadmap

The IPO Market Won’t be Frozen Forever. Prepare for Your IPO with Audacia’s Roadmap

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After two HOT years for Initial Public Offerings (IPOs), the IPO market was due for a cooling period – and cool it has. “There’s an inverse correlation between market volatility and IPO activity,” said John Tuttle, vice chairman of Intercontinental Exchange’s ICE NYSE Group. The combination of rising interest rates, geopolitics, and shifting investor expectations have had a chilling effect on new listings. 

And while the IPO market is quiet – for now – it’s unlikely to remain that way for too long. In fact, many companies are taking this time to assess their readiness to enter the public markets. A great move, if you ask us. The Initial Public Offering (IPO) process is one of the most complicated and demanding events a growing company can go through. You need an IPO roadmap to be ready to deal with investors, auditors, lawyers, investment bankers, and accountants, among others. And then there’s the paperwork…

If you’ve never taken a company public before, you’re probably wondering what lies ahead of you. Never fear, with our IPO Roadmap you’ll be thinking three steps ahead. 

Audacia Strategies’ IPO Roadmap

We’ve talked about this before:  in a 3-part series, I broke down the process into three parts: developing your IPO story, building an IR team, and living with your IPO. Taken together, these three stages make up Audacia Strategies’ IPO Roadmap. Here are the highlights from each part.

1. Developing your IPO story.

Your IPO will include multiple filings that describe your business, your risks, and your opportunities. While you’ll speak with several different financial audiences (e.g., institutional investors, credit rating agencies, sell-side analysts, etc.), it’s important to develop a coherent story. We call this your investment thesis. Learn it, live it, love it. It is the core of your discussions with financial stakeholders and especially investors. Consistency is key.

After you have agreed on the  investment thesis for your business, it’s time to develop a narrative arc that answers the question: “Why buy this stock?” Make sure that you tell your story – not your competitor’s story – and that it goes beyond the numbers. Remember, investors are human. They respond to a real story like anyone else.

If you’re going public, that means you’ve spent some time honing your value proposition. Now is the time to expand upon and refine this message. Explain what makes your company unique? What’s your “why?” Think about where you can connect with investors in an authentic way and lean into that story.

Ideally, your story establishes your credibility and proof points and sets reasonable expectations. Keep the following in mind: your first few earnings announcements following the IPO will be closely watched to see how the company’s performance matches expectations set during the pre-IPO roadshow and how the management team characterized the firm’s performance in its S-1 (i.e., your initial registration statement with the SEC).

2. Building an IR team.

Once you have your investment thesis and narrative, it’s time to get operational. Put together your dream IPO team and make sure your team includes people with investor relations (IR) experience. 

Having a solid investor relations plan will guide your IPO discussions and ease your transition to life as a public company. The most important job? Establishing and building corporate credibility with your stakeholders through transparent and consistent communication.

And yes, there are some tools of the trade you’ll need to run an effective IR program:

  • An IR website: A place for investors, analysts, and the public to see your investment story. This should be easily accessible from your company’s primary website. 
  • An IR platform: A tool to track consensus estimates, trading patterns, analyze your shareholder base, research and target new investors, review ownership trends, etc.
  • Stock surveillance (optional): While not a requirement – it can be pricey – this type of information can be incredibly helpful to understand the ebbs and flows within your shareholder base. It can also be a lifesaver when your CEO sticks their head in your office and says, “what the heck is going on with our stock today?!”

Your IR team will ensure that you don’t stumble out of the blocks and set you on the road to building long-term trust with shareholders.

3. Living with your IPO.

Yes, Virginia, there is life after an IPO. I know it may not seem like it now because you’re so focused on preparing for the IPO that it’s hard to think past next week. But trust me, your future self will be glad you thought about this third and final stage ahead of time.

Don’t get me wrong, going public is an achievement in itself. By all means, take your victory lap. But also realize that having an IPO opens you up to a whole new level of public scrutiny. This is good news, but it means you need to follow through on your public commitments, keep telling your story (even after a 15-hour day of investor discussions), and continue to educate and build your shareholder base.

The key to a successful life after the IPO can be broken down into four simple steps:

  1. Set reasonable expectations.
  2. Tell stakeholders about them.
  3. Execute on those expectations.
  4. Tell stakeholders about that.

When your company goes public, you step into the spotlight. Yes, the stakes are higher during life after the IPO. But it’s nothing you can’t handle. You’ve got this!

Nervous about prepping for your IPO? Audacia Strategies has your back! Contact us to schedule your consultation.

Photo credit: Close Up Of Multi-ethnic Group Working Together Around A Laptop by Flamingo Images from NounProject.com

CEO communications

3 Questions Every CEO Needs to Understand to Communicate with Investors

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Communicating with investors is one of the most important tasks CEOs need to master. But strong CEO communications might not be beneficial only for the reasons you expect.

All companies want to hire charismatic leaders with strong communication skills. What you might not realize, though, is that a CEO’s communication style and presence can actually impact corporate value. According to a 2020 study, companies led by a CEO who communicates effectively, better withstood the initial negative share price impacts of the COVID-19 pandemic.

Of course, communicating with investors takes a special touch. Investors are a tough audience. The most successful investors approach new investment opportunities with healthy skepticism. And how CEOs respond to skeptical investors is key. Investors look for authenticity, authority, and credibility.

In our article for the Harvard Business Review, Audacia Strategies Partner and CEO of Green Room Speakers, Sarah Gershman and I distilled our advice from 20 years of experience working with executives and investors to three core questions. Here, let’s look at strategies CEOs can implement to better connect with investors.

1. Is the CEO confident, without being overconfident?

Investors want to see a CEO who has confidence in their company without being blind to the real challenges they are facing. We like to call this “reasoned confidence.” An overly optimistic presentation runs the risk of losing credibility. As one investor put it, “Don’t be a LEGO-movie leader telling us that ‘everything is awesome.’”

Reasoned confidence is especially critical during specific types of CEO communications, especially crisis communications. Feeling overconfident during a crisis can lead to over-promising or what I like to call the Top Gun Problem: “Your ego is writing checks your body (or in this case, your business) can’t cash” (and with the release of the new Top Gun: Maverick, this reference is more relevant than ever).

To avoid over-promising during a crisis do the following:

  • Triage: You can’t put out all of the fires simultaneously. Instead, you need to prioritize carefully and make hard decisions about where to distribute your attention. An investor relations professional can help you with this.
  • Be transparent: It’s important to set expectations with investors – and other stakeholders! – during a crisis. But if you try to do this in a way that could be perceived as a cover up, you’re digging yourself deeper. Be honest and up-front about issues and what you don’t know.
  • Continue to monitor the situation carefully: Your initial statement is only the beginning. You next need to implement the crisis plan and follow through on your commitments. The absolute worst outcome after a crisis is for a new crisis to develop as a result of mishandling the original crisis.
  • Keep internal communications open: It’s critical to maintain an open dialog within your company, especially during a credibility crisis. In addition to stabilizing the team when they can feel in freefall, employees are your frontline communicators to customers and business partners. 

2. Is the CEO a straight talker?

In addition to being overconfident, CEOs may overcompensate by trying to gloss over the truth or talking in circles. Say it with me: More words does not equate to better outcomes. We often work with CEOs to ensure that they use plain language and give the news to their investors straight. 

Further, while strong preparation is crucial for investor presentations, it is possible to over-rehearse, over-polish, and completely forget about connecting with your audience. An overly polished presentation can leave the audience wondering whether you’re simply telling them what they want to hear.

Investors want to feel seen and heard in a way that sounds authentic and credible. It’s time to get human. Here’s how:

  • Think like a reporter: Journalists are trained to give the who, what, where, when, and how of a story in the first sentence or two when reporting on a story. Replicate this tactic by getting your communications teams together (or go outside of these departments for a different perspective) to brainstorm.
  • Dump the buzzwords: Buzzwords do more than whitewash the stuff we don’t want to talk about. They also obscure your message and make your organization seem less authentic. If you confuse investors with jargon or industry terminology, they will ignore you.
  • Get vulnerable: If you’ve faced a genuine struggle that has made you rethink your company, now may be the time to pull it out and share what you learned. Don’t be afraid to step back from the spreadsheets and share your bigger vision with investors.
  • Step away from the webinars: The formality of webinars can result in investors feeling totally disconnected. Consider how you can incorporate less formal discussions, roundtables, open mic Q&As, etc. While it may make sense to give a short written statement or update to kick off an investor meeting, listening to written remarks being read for any longer than 10-minute intervals is probably too much to ask from those on the other side of the camera.

3. Do they know how to listen? 

Sure, as a CEO, you likely know how to talk. It’s tough to become a successful leader without having the ability to communicate your vision with others. But, how good are you at listening?

Listening is one of the most undervalued skills of CEO communications and a CEO who lacks the ability to listen happens to be one of the biggest red flags for an investor. For CEOs who master the art of listening, however, answering questions from investors can be a great way to boost your credibility. Every question expresses a need, and your answer should show that you hear what’s behind the question. 

A question about your research and development investment strategy, for instance, may actually also be about whether an investor can trust you with their money. If you can’t suss out the deeper need, then you may need to ask for clarification before attempting an answer.

One way to make sure to prioritize listening is to run a murder board before the presentation. To make sure you’re prepared for investors, you’ll want to call in your toughest internal financial analysts and encourage them to live out their wildest inner Shark Tank dreams. Assemble your investor relations murder board and have them begin coming up with “tricky” questions regarding different angles on your message and the numbers.

For example, suppose your firm calls for 10% year-over-year growth. That sounds amazing to your team, unless your biggest competitor comes out with an expected 15% growth rate. Now you’re behind in an investor’s eyes. What does it mean for your business and key competitive differentiators?

This type of preparation can remind you to listen closely to the question and its intent, focus on the facts and not speculation, and practice answering in a way that connects with the audience.

There’s no doubt investors are a tough audience. We have found that the best investor presentations happen when CEOs stop focusing on their own performance and instead speak to investors using reasoned confidence, straight talking, and masterful listening.

For more tips about how CEOs can prepare to answer these three core questions, read the original article in the Harvard Business Review. And if you’d like to learn more about how Audacia Strategies can help you prepare for your next investor meeting, schedule an initial consultation.

Photo credit: Professional Woman Standing In Boardroom Giving Speech To Team by Jacob Lund Photography from NounProject.com

transformative change

“Are We There Yet?” — Change, Communications, and Culture

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If there’s anything that’s more difficult than transformative change, it’s communicating about transformative change. And let’s face it, the past two years have been defined by change.

As leaders of organizations living through a profound period of global change, we’ve learned some powerful lessons:

  • The future will not be more stable or more certain.
  • Black swans feel much different when we live through them (sometimes multiple times), than when we read about them in economics textbooks.
  • Disruption or large scale change cannot be contained to one aspect of life.

In short, societal shifts spill over into personal and business life, business upheaval impacts personal and societal security, and uncertainty about personal health throws a wrench into every aspect of life. No matter how hard we try to avoid it, transformative change comes for all of us.

With the hindsight of the last few years, now is the time to review our approach to change and ask ourselves how we can better prepare for and communicate about the next wave of transformative change. Let’s take a closer look at the core aspects of strong communication here.

The Pulse of the Organization

Exhausted organizations do not handle change, let alone transformation, well. Think about how well you operate after a series of all-nighters. Even the thought of having to eat — to survive! — feels like a monumental task. Similarly, exhausted organizations can barely perform key functions, which doesn’t bode well for facing changes with grace.

When leaders continually keep their fingers on the pulse of their organizations, however, they are less likely to lead exhausted organizations and much better positioned to handle transformation. Keeping your finger on the pulse means recognizing when your people are being pushed to their breaking point and making the necessary adjustments needed.

How do you take the pulse of your organization?

  • Get to know your employees and customers: Use pulse surveys (Voice of the Employee (VoE), Voice of the Customer (VoC) surveys), “ask me anything” sessions (AMAs), virtual and IRL coffee chats, town halls, skip level meetings, “walking the halls” (for those back in the office).
  • Get to know your leaders: Keep tabs on your people leaders and customer leaders too. Managers can often be the linchpins of culture and influencers of others.
  • Ban the “just deal with it” mentality: Of course, decisions need to be made and transformative change must go on, but if your strategy is to tell your people to “just deal with it,” then you have a failed strategy on your hands. Instead, build a plan with the tools, support, resources, and aircover they need…and be ready to adjust. 

Transformative Change and Culture

Taking the pulse of your organization is only the beginning of figuring out how to communicate about transformative change. To really pull this off, you also need to consider the culture on a deeper level.

Having a change playbook is important, to a point (and lord knows you can find a consultant who will sell you one), but remember that a guide is just that — a guide. There may be times when what your team really needs is for you to set that playbook on fire (maybe even literally).

Here are some areas to consider when it comes to culture: 

  • Consider what is authentic to your organization. What is the general tone of communication? And if there was ever a time to be more transparent, more honest, more plain spoken…transformative change is that time.
  • Consider who is trusted in your organization. Perhaps the Board of Directors is more trusted than management (I’ve worked there). Or perhaps long-tenured middle management is trusted more than the new or newer executives? Understanding these relationships and building that into your strategy is crucial.
  • Consider why you’re doing what you’re doing and have a good answer. Just because “all the other $1B organizations” use top-down communications for layoffs, doesn’t mean that you have to. Keep in mind, “because I said so” is not a successful strategy for successful change.
  • Consider what you are asking of your team and customers. Transformative change, or any change (hello, Atomic Habits), requires commitment. It’s about the larger purpose and that’s generally an emotional ask. You are asking your team and your customers not just to help you make a business change, but to take a journey with you toward achieving your organizational purpose — which will solve more customer problems, make the world a better place, make the organization a better place to work, or any combination thereof.

A Few More Do’s and Don’ts

Once you have thought through the lay of the land and have the big picture in front of you, here are a few more do’s and don’ts to keep in mind.

1. Don’t sand down the edges on the executive team. 

Whether it’s a layoff, a major acquisition, or an IPO, your people are your biggest asset — yes, even in the metaverse. And employees, customers, and the media are all looking for leaders to lead and exhibit humanity.

In a recent interview, Brian Chesky, the CEO of AirBnB, said it well, 

“I think CEOs and leaders are more human than they come across. I mean most of these people are real people. They do have feelings. I think the problem with corporations is the lawyers and the HR people and the others, ‘sand the edges’ off the person in an effort to protect the person. And, that is a major disservice because they just reduce them to something that’s not even a human being anymore, they’re just this very cold person.” 

Of course, you need to work with your executives to communicate in a way that complies with the law and represents the organization appropriately, but this is very different from turning them into robots who are afraid to show any glimmer of vulnerability.

2. Do acknowledge the suckiness, if it sucks.

You may be surprised at how much resistance to transformative change can be relieved with a simple acknowledgment of how difficult it is. When it feels like you’re the only one feeling the pain, change can be a really lonely place. Often your people just need you to see them doing their best through an objectively sucky situation. And if it sucks for you too, talk about it.

3. Do acknowledge the excitement of the future, as appropriate.

As hard as it can be, change also usually comes with a lot of excitement. Don’t be afraid to embrace the excitement and display appreciation for the teams that will make the change happen.

4. Don’t promise a return to the status quo.

Never offer to “stop the change.” It may be tempting to try to relieve the pain of transformative change by promising a return to the status quo on a particular date, for example. This falls into the category of promises you can’t keep, though. Sure, there may be a light at the end of the tunnel, a product launch, a closing date on the merger, but even those flashpoint events aren’t likely to spell the end of change. 

We’re all changing, all the time. Our environment is changing, the market is changing, society is changing. All we can do is remain in a ready stance — flexible, fluid, optimistic, and ready to roll with the next pivot or “tweak.”

Finally, I want to leave you with some more words of wisdom from Brian Chesky because these two sentences are really all you need to know when it comes to communicating about transformative change: “Just do whatever you think is the right thing at that moment. Take care of people and then they’ll root for you.”

And you know Audacia Strategies is here for you. We’re ready to help you better prepare for and communicate about the next wave of transformative change. Let’s talk!

Photo credit: Businessman Applauding With His Colleagues During A Presentation by Flamingo Images from NounProject.com