Improve Results By Revisiting Your Organizational Structure

Improve results by revisiting your organizational structure

One of a leader’s most important responsibilities is to put the right people in the right spots to advance the short- and long-term causes of the organization. Whether you are running the accounting/finance group, the manufacturing operations, or leading the firm as CEO, there is no more important responsibility.

The organizational structure you have in place today may not always be the most effective. Perhaps instead of a functional structure, as many use, a geographic, product, or customer/market format would be a better choice. They all have strengths and weaknesses.

In this age of technological advances and information sharing, why are most companies’ organizational structures the same as they were years ago? The answer is that change is a daunting task. First you have to determine if an alternative structure is beneficial. Then you need to find the right people to fill the positions. You then have to sell it to the organization’s stakeholders—inside and outside the company.

A worthwhile exercise is to imagine starting over. Think outside the box and ignore any constraints. Starting with a blank sheet of paper, consider what structure you would design if you were creating your business from scratch. Don’t feel limited by those working with you; that’s the next step to fill in the boxes. It is a long term play and not easy.

Today’s new form of organization is much more horizontal than vertical and provides a landscape that promotes creativity and innovation by all. Often the best ideas do not come from managers, but those actually doing the work. Trust your good people—in many cases they have more to offer than you give them credit for. Along the way you might even reduce headcount as the value of some middle managers is questioned.

Give it a try—start over and see what unique thoughts you come up with. The end result could be a more effective and efficient organization and a more engaged workforce.

Stephen W. Christian, CPAStephen W. Christian is managing director of Kreischer Miller. Contact him at or 215.441.4600. 




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Leaders Understand That Being Busy is Not Necessarily Being Productive

Good leaders know that busy is not the same as productive

Does your “to-do” list seem endless? Do you often ask yourself at the end of the day why you did not get to certain items or tasks? We all have limited time to accomplish those things we are charged to do – for some, it’s eight hours and for others it is ten, twelve, or more. Whether they are running a company, a department, or a civic organization, good leaders prioritize their efforts and focus on those tasks that derive the best returns.

It is commonly accepted that if you focus your attention on the top 20 percent of tasks based on importance, you will get an 80 percent return on your time. Think of what this means and how you spend your time on strategic tasks, with customers, and with your employees.

We often default to checking off the easiest tasks and procrastinate on the tougher ones. But as leaders, we should spend most of our efforts addressing the areas we are uniquely qualified to tackle—those that are difficult to delegate. If something can be done 75 percent as well by someone else, let them do it. So what if it is not perfect? The benefits of focusing your attention on bigger, more value-added tasks far outweigh any shortcomings related to the delegation of less critical initiatives. Striving for perfection often gets in the way of productivity and derails the accomplishment of valuable initiatives.

Remind yourself that activity is not accomplishment. Determine the requirements of your position or role. Then, prioritize these requirements based on the importance to their organization or group and your unique qualifications to accomplish the tasks. Delegate everything else. Spend your time judiciously—it is in limited supply! Leaders who follow this fundamental approach are often the most successful.

Stephen W. Christian, CPAStephen W. Christian is managing director of Kreischer Miller. Contact him at or 215.441.4600. 




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Take Time to Review Your Corporate Documents

Take time to review your corporate documents

We all evaluate risk in our businesses—enterprise risk, credit risk, liability risk, etc. Designing and adhering to good governance practices should be part of any organization’s risk management processes.

Your corporate documents, particularly by-laws, shareholder/partner agreements, non-compete and non-solicit agreements, confidentiality agreements, and intellectual property assignment agreements are often overlooked. However, a little effort in this area can protect the company and its owners from unintended consequences that can impact the value of the organization.

What kind of risks might you assume? They include:

  • Transactions such as dividends, bank borrowings, officer elections, and compensation and other corporate actions may be deemed to be unauthorized if your corporate documents are not properly adhered to.
  • Shareholders/partners and businesses put their futures at risk by not anticipating and providing for the smooth navigation through the transfer of ownership within a closely-held business, family business, sales to outsiders, redemption issues, etc.
  • Employees may leave the company and solicit clients and other team members.

Why don’t we spend more time evaluating the effectiveness of corporate documents or requiring employees to execute non-compete, non-solicit, confidentiality, and intellectual property assignments? There are two reasons:

  1. We don’t anticipate the unexpected. We think everything will be fine, we are successful, our team members and owners are all good trustworthy people, and we can work things out as they arise.
  2. We don’t understand and appreciate the full value of these documents.

In my experiences serving middle market companies, I have seen too many unfortunate situations related to the lack of respect for corporate documents. Most could have been mitigated with a little bit of attention.

Do you know what is in your by-laws and shareholder agreements? Are they relevant today? Do you comply with them?

If you would like to hear more, please contact me. If you have a story, please share.

Stephen W. Christian, CPAStephen W. Christian is managing director of Kreischer Miller. Contact him at or 215.441.4600. 




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Think Boldly About Talent Development to Accelerate Your Company’s Growth

Think boldly about talent development to accelerate your companys growth

We often think of growth in a tactical way. How can we sell ten more widgets? How can we tweak our pricing, quality, service, etc.? We all get caught up in this type of short-term thinking from time to time. But would you rather grow your business one unit at a time or grow the top line in leaps and bounds? I think we would all opt for the latter, but to get there, the path requires thinking outside the box, courage, and investment.

The most successful companies—the ones with solid growth patterns and increasing bottom lines—are generally led by people who do a good job of taking courageous positions. To grow exponentially we need to invest in talent, technology, and equipment. Of those three, adding and developing talent is perhaps the most important. A leader needs to develop and lead leaders, not lead followers. Followers can execute strategies but they cannot add the value necessary for significant growth.

Have you stretched your comfort zone financially and otherwise to attract and develop the best engineers/production people, sales managers, and IT and human resource professionals for your company? When all of these functions work together it creates an environment in which your business has the best chance to flourish. Developing a world class team is an investment in the future growth of the business, not a cost.

To add maximum value to the organization and to promote a growth culture, all of your key employees must look in the mirror and ask themselves if every activity they are involved with is the best use of their time and talents. We often fall into the trap of working on the easiest and most time sensitive tasks. But if your organization is populated with employees who take this approach on a regular basis, it is time for some changes. Get the right people in the right spots and have the confidence that growth will follow.

Exponential growth is attainable, but only as a result of leaders believing that the actions they take today will result in tomorrow’s successes. Don’t believe it? Contact me and I will share examples of situations where we have seen it happen.

Stephen W. Christian, CPAStephen W. Christian is managing director of Kreischer Miller. Contact him at or 215.441.4600. 




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4 Important To-Dos Before You Contact a Retained Executive Recruiter

4 important to dos before you contact a retained executive recruiterThe past year has been very exciting in my world of retained executive search, especially when working with privately held companies. My conversations with business owners and CEOs have been relatively consistent. They have weathered the storm, built solid cash reserves, and now want to determine how best to deploy that cash.

In these discussions, owners generally identify the following options for their available cash:

  1. Acquire a company
  2. Launch a new product
  3. Give additional compensation to key talent, which I like to define as those executives whom you cannot live without (or, more plainly speaking, those who will leave your business harmed if you arrive at work tomorrow and learn they are leaving)
  4. Upgrade executive talent
  5. Do nothing and keep the cash

Option three is interesting, and one I will address in a future blog post. For now, let’s discuss what happens if you choose option four: upgrading your existing talent.

Before you contact a retained search firm, here are a few important items to consider:

  1. Give serious thought to what exactly is frustrating you with the executive you plan to replace. For instance, you may be frustrated that your CFO does not effectively partner with sales and operations or cannot articulate financial terms to non-financial people.
  2. Identify the executives, board advisors, or outside service providers you can trust with your decision to replace an executive. Their input can be very valuable, since they know and understand your business.
  3. Ask these advisors which defects they have observed in the executive you plan to replace, and what skills you should look for in the search process. Ensure you are on the same page regarding the qualities that will be essential in the right candidate.
  4. Make sure you understand compensation parameters. Discuss the current state of the market with outside professionals to confirm that what you are trying to locate exists.

Going through these steps will put you in a good position to conduct a successful search. At this point, you will be ready to contact your trusted retained recruiter and begin the recruitment process!


Tyler A. RidgewayTyler A. Ridgeway is a director with Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at   


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Whose Job is it to Manage Risk?

Whose job is it to manage riskEveryone in an organization needs to strive to minimize risk at all levels. As a leader, though, you are ultimately charged with identifying risk factors, assessing their likelihood, and putting into place a plan to mitigate any impact on the business. The organization, your team members, and your family depend on you to carry out this important responsibility.

Risk comes in many forms—financial, customer, supplier, employee, regulatory, environmental, litigation, leadership, technology, and on and on. It permeates everything you do within your company. By properly managing risks, you will reduce the impact on your organization if a risk factor comes to fruition.

Here is a basic road map to fulfill your responsibility:

  • Understand that as a leader, you are ultimately responsible but you do not have to do the heavy lifting. Your managers should be assessing risk factors within their functional areas.
  • Have strategy sessions with your team to discuss areas of risk—what can go wrong, how it might impact your business, and what actions you need to take to minimize the impact. A leader’s job is to ask probing, thought provoking questions that advance the discussions to an effective conclusion.
  • Meet with external confidants —board members, industry executives, your accountant, insurance broker, attorney, friends, etc. — to discuss their perspectives on risk.
  • Develop and implement a plan that encompasses your conclusions.

Don’t ignore difficult decisions hoping something won’t happen! Be forward thinking. Reducing risk is important to not only help your business succeed, but also to maximize its value. A buyer will evaluate risk—you need to do it too.

Too few leaders spend time on the topic of risk management. What are your thoughts? Share in the comments.

Stephen W. Christian, CPAStephen W. Christian is managing director of Kreischer Miller. Contact him at or 215.441.4600. 



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Tips for Finding an Outside Director for Your Private Company Board

Tips for finding an outside director for your private company boardSo, you have made two important decisions: first, to utilize a board of directors and second, to have an outside director who is not associated with the day-to-day operations of your company. Now, how do you find a capable candidate?

The first step is to develop a job description outlining expectations and anticipated time commitments, as well as a skill set inventory for the right candidates. What is important to you at this stage of your company—industry expertise, business acumen, functional background, growth experience, access to strategic contacts, etc.?

Next, identify candidates that fit your criteria. The best places to prospect for candidates are to talk to your professional advisors (accountant, lawyer, banker, insurance broker, etc.), contact applicable industry associations, review annual reports for local public companies, engage an executive recruiter, contact the National Association of Corporate Directors, and talk to other business owners you know.

After you have identified prospects, make sure you personally contact them to explore the opportunity and start the interview process. They will want to hear your vision, passion, and desires, which will help them determine whether the opportunity is a good fit for them.

One warning—try to stay away from friends and relatives. You are looking for someone to hold you accountable, provide strategic, objective strategies, and challenge you and other members of management. Often this is difficult, if not impossible, for friends and family to do effectively.

Adding an outside director can provide a significant benefit to your organization. These are a few helpful hints to navigate the process but I would be interested to hear your success stories in identifying the right candidates for your organization.


Stephen W. Christian, CPAStephen W. Christian is managing director of Kreischer Miller. Contact him at or 215.441.4600. 



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The Most-Read Center for Private Company Excellence Blog Post of 2013

Top Center for Private Company Excellence blog post of 2013Of all the blog posts we published in 2013, this one from April 22 took the prize for the most-read post of the year. Since it clearly struck a chord with our readers, we decided to republish it for anyone who may have missed it the first time around.



Why issuing stock to employees isn’t always such a good idea

Business owners will often offer their employees—key or otherwise—shares of stock in the company. This is typically done in lieu of additional cash compensation, to motivate behavior changes, to reward employees for their part in creating value, or for retention purposes. Employees often desire stock ownership to feel part of the organization and to be rewarded both short- and long-term for their efforts.

Although issuing stock to employees can sometimes accomplish everyone’s goals, the process is full of pitfalls and unintended consequences. From an owner’s perspective, some of the negative aspects include:

  • A potentially much more expensive way to reward employees.
  • A possible requirement to make pro-rata distributions to minority stockholders.
  • Minority stockholders can interfere in the ultimate sale of the company by claiming the deal is not fair.
  • Desired behavior changes often never materialize.
  • The way you lead your life within the company is more closely scrutinized, as a minority owner may be desirous of the same benefits you enjoy. This may ultimately result in a strained relationship.

From an employee’s perspective, owning stock does not always result in benefits they desire. The employee is a minority stockholder and often has little or no say in running the business. Plus, the perceived value of the employee’s interest may not increase over time and the employee may have been better off with cash today, rather than a chance at a bigger payout later. Finally, in some circumstances, there could be elevated legal liability for the employee.

An employee often views stock ownership as a path toward more current compensation, a reward for long-term value they helped create, and a chance for a spot in the inner circle where decisions are made. However, these goals can all be accomplished without the expense and potential pitfalls of issuing stock to employees.

How might this be done? Here are some options for each type of employee objective:

  • Additional compensation. Implement a bonus-based/variable compensation plan through which an employee can earn more money by achieving certain tangible results.
  • Participation in the creation of long-term value. Develop a form of phantom stock or stock appreciation right plan to reward the employee for the value created under their watch.
  • Being part of the inner circle. Create a management committee that meets regularly to discuss various strategic and tactical issues and include the employee on the committee.

The moral of this story: Don’t issue stock to employees unless there is a compelling reason to do so that cannot be accomplished with an alternative strategy. 


Stephen W. Christian, CPAStephen W. Christian is the managing director of Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at   



Have you awarded stock to your employees? What has been your experience? Share in the comments.

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How to Approach Mentoring and Coaching in a Small Business

How to approach mentoring and coaching in a small businessMentoring and coaching are two of the most common contemporary business buzz words. When you Google these terms, hundreds of search results come up; each professing the value and benefits of mentoring and coaching efforts in terms of producing results for organizations. Some proponents recommend highly formalized programs while others suggest informal approaches. Regardless of the methodology you embrace, the fundamental premise of mentoring and coaching efforts is based on the notion that employee development and performance will be enhanced by concerted efforts in these areas.

For the purposes of this blog post, we will use the following definition of each of these terms:

Mentoring is a relationship-based process predicated on trust, whereby one party endeavors to act as an advisor/guide to another person. Mentoring typically is long-term and development-focused.

Coaching is a task-oriented process, whereby one party provides targeted direction to another party related to specific skill-based performance areas.  Coaching is typically short-term and performance-focused.

While there is a place for both mentoring and coaching efforts in small businesses, there are two very important factors to keep in mind when contemplating implementing such efforts in your organization.

1. Who should play the role of a mentor and/or a coach?

A mentor is normally not the individual’s direct manager. It is most effective to have the mentor role be held by someone other than the employee’s direct manager. In a small business, it may be a wise alternative to consider a mentor from outside your organization. A coach is typically the person’s immediate manager. This is an effective choice because the direct manager has first-hand knowledge regarding the employee’s performance-related improvement opportunities.

2. What are you trying to accomplish?

If you are trying to develop future leaders for your organization, then mentoring is the ideal route. However, if you are attempting to develop specific competencies, and/or help employees improve subpar performance, then coaching is the recommended approach.

Mentoring and coaching are useful tools for small businesses that when planned and implemented properly can have a constructive impact on your organization.

What has been your experience with mentoring and coaching programs in your business? Share in the comments.

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Review Your Corporate Documents to Minimize Disruption to Your Business

Review your corporate documents to minimize disruption to your businessToo often, shareholder agreements, employment agreements, bylaws, and other corporate documents sit in a drawer where they are not periodically reviewed and adjusted for changes in circumstances. In some cases, such agreements do not even exist or they were ill-conceived or documented and do not provide for adequate protection for the company or its owners.

Effectively drafted shareholder agreements protect both the shareholder and ultimately the company as it provides for a smooth transition in the wake of a triggering event. In the event of the untimely death or disability of a shareholder, do you want their spouse or children to be your partner? Do you care to whom your partner sells stock? When and for how much can shares be redeemed? You’d better make sure you have language in your agreements that will accomplish your desires. Times change; make sure your agreements are relevant to today’s landscape.

Privately-held businesses often fail to acknowledge the differences between a shareholder’s role as an owner and as an employee. There is a big difference—shareholders have an investment in an asset and, as such, get to reap the benefits of that investment. There are no guarantees of employment, compensation, or job activities. A shareholder’s involvement as an employee, however, should be governed by an employment agreement. The agreement should include such things as compensation terms, length of employment, and responsibilities. Do your shareholders have a right to be employed for or receive benefits life? Make sure your employment agreements properly reflect your desired terms.

While you are reviewing the shareholder and employment agreements, take some time to also familiarize yourself with the company’s bylaws. So often they are outdated or contain terms with which owners are unfamiliar. For instance, the bylaws might provide for quarterly Board meetings for a minimum of three directors. Unfortunately, you may never have known this and have been operating with less than three directors and no formal board meetings to ratify corporate resolutions.

We have seen too many businesses fail or become severely distracted because of weak or absent corporate documents. Please take some time to review your company’s agreements.


Stephen W. Christian, CPAStephen W. Christian is the managing director of Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at   



Do you have a process to review and update your corporate documents on a regular basis? Share in the comments.

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