Build a big career by thinking small. Part 2

Ok, Jim.  I get it; there are a lot of opportunities to be derived from employment in small, emerging companies.  So just what are these companies looking for as an ideal candidate?   That is a very good question!  The job-seeker must understand that the small company environment is very different from the majors and not necessarily the right place for some.  In a small company, people have fewer resources to tap and a broader range of responsibility.  You will be required to ‘wear more hats,’ so to speak.    It is a ‘roll-up-your-shirtsleeves,’ ‘player-coach,’ environment.  Decisions are made on a shorter cycle, but their consequences may be far greater.   You will be required to work outside your comfort zone on a regular basis.  Success in a small company environment does not come naturally to most people.  For those of you still employed by a major company, you may be thinking; “this does not sound very different from my current situation and work-load.”  The fact is that major companies still have an infrastructure that serves to minimize risk and keep the business on track.  In the small company, you become that infrastructure.  It is only reasonable to expect hiring managers to seek out candidates who have already made the transition from the major company to the small company environment.


Speaking from personal experience, my clients prefer prior small company experience, backed up by a solid foundation in the Fortune 500.  The ideal candidate should have at least three to five years of small company experience under their belt.  With that transition experience the candidate knows for certain that she is a fit with the requirements of a small company.  The client is assured that the candidate understands their needs at a visceral level.    If the small-company is owned by a Private Equity Group (PEG) more than likely they will prefer candidates who have worked in a PEG-owned situation.   Specific to CFO searches, Public Accounting experience with a Big Four Firm, including the CPA designation is very desirable.  A CPA earned while working in the private sector is also useful as is an MBA.   I have also found that the small, emerging company is more receptive to the mature executive.  They seem to appreciate the experience, particularly the battle scars that come from time in the arena.  This is another solid reason to consider the small, emerging company as a viable career option.  

Well, how does one get small-company experience to begin with?  Another good question.  How does one get the experience, if prior experience is required?  There are exceptions to every rule of course, but like any other job search one's network usually leads to the opportunity.  Prior relationships are the gateways to new opportunities.  Since most of my clients are franchisers, senior managers usually know a lot of franchisees who may need their services.  This is the most natural progression pathway to a small company.  Visibility within trade and professional organizations is another time-tested way to build a network which may lead to small company employment opportunities.  People who know you and know of your work history are more likely to give you that first opportunity than someone who doesn't know you.  These network contacts can be helpful presenting your credentials to other small company hiring managers outside your network.  In some cases, experiences in a small division of a major company or work in a joint venture between major companies may be the pathway to a smaller company.  It is not impossible to transition from a major company to a small company directly.  As with all job openings, it ultimately depends on the requirements of the job, the objectives management expects to be accomplished by the particular hire, and the profile they have established for the ideal candidate.

The small-company environment can be every bit as volatile as that of a major company.  Family owned companies can be even more problematic.   I am excluding family-owned and managed companies from consideration in this post.  I am certain that there are a number of books that have been written on that subject.  Volatility risk must be acknowledged and understood when making the transition to a small, emerging brand.  It is not uncommon in the best of times for small companies to fail or to be sold as a result of the owner’s personal issues.  The past five years have been particularly troublesome for small and large companies.  The volatility has been greater than normal.  It has been a difficult time for small-company CFOs as demonstrated by their resumes.  Short tenures may be a real turn-off for hiring managers making the next employment opportunity more difficult to obtain, increasing the financial risk to the candidate.  It is important to help mitigate this risk by negotiating a severance package in the event that the candidate loses his job for reasons beyond his control.

Compensation packages may be lower in a small company, but they will be competitive with the particular market and region of the country.  If it is a PEG-owned company the compensation package may include a modest equity component, usually reserved for key, C-level executives.    In many of these situations, a CFO for example can expect an equity stake as a part of the total compensation package.  1% at a change of ownership event is typical when a CFO candidate joins the company.  Over time, it may be possible to earn a greater equity position if you are a solid performer who management wants to retain.  A successful small-company experience can propel one to a very comfortable lifestyle, providing the credibility and confidence to repeat that success in another situation.  The opportunity to build significant wealth from the association with a growing business can be very attractive.

Another primary reason my candidates are interested in the small-company situation is to become a greater part of crafting strategy.  To become a part of the inner circle, helping guide the direction of the company is very appealing, especially for a company with upside potential.  So, beyond the financial benefits of joining a small company, the intrinsic benefit derived from becoming a key decision maker is very attractive to many professionals.

To summarize, the small, emerging company market must be a consideration when one plots their career path.  The small company environment is different than the majors and may not be the right path for everyone but will be viable for many.  It can be especially attractive for the mature professional and the more entrepreneurial job seeker.  The risk/reward equation is not unlike that found in a major company but the issues are somewhat different.  If you are currently employed in a major company you should begin building a network into the smaller company segment to move your career in that direction.  If you are between situations and do not have prior small company experience try to work your network in that direction.  This segment is where the growth is and must be a serious consideration for someone interested in building their career.

Build a big career by thinking small. Part 1

This past week a friend and former colleague called to seek my help on his current project.  He told me that he was the acting COO for a $40 million company composed of franchised restaurants, hotels, and real estate.  The company is profitable and growing rapidly.  My friend went on to say that he is tasked with the responsibility to determine how best to organize this company for rapid growth.  The goal is to make it capable of  growing past $100 million in revenue.  His client's situation is very familiar to me.  It is virtually identical to that faced by the client base I have cultivated during the past five years.  I know exactly where this is headed.  These small but growing companies are emerging through-out the country and represent some very promising career opportunities for entrepreneurial-minded professionals.  These companies are keeping me and a lot of other professionals very busy.

Before the recession of 2008-2009 many major brands in the restaurant franchising segment had begun adjusting their asset allocation strategy.  The goal was to become better positioned to benefit from the overseas potential, particularly in China.  These brands began packaging groups of company-owned restaurants to license new franchisees.  This strategy displaced a lot of corporate marketing and operations professionals who ultimately became a part of those new organizations.  There are a host of new franchised brands that are growing as well, many of which are selling the rights for dozens of outlets to franchisees.  In fact, last year I placed a CFO and a Director of Training and Human Resources for one such company.  With a 20-store development agreement as its nucleus and a couple of independent casual dining concepts, their plan is to become a $100 million company in five to seven years.  At that point the owners will likely cash out and find a quiet beach community to enjoy life.

Unlike their counterparts of an earlier generation, these new small companies can be more nimble with fewer resource requirements.  Many overhead components like accounting and human resources functions can be effectively outsourced.  "Focus on what you do best and let someone else do the rest" is current mantra.  They still need their Generals to craft strategy and their front line soldiers to serve their customers, but administrative staff or middle managers, not so much.  Technology has played a major role in supporting this dynamic.  Government policy has provided additional incentive to keep staffs small.

The current administration has not been kind to small business, however well-poised this sector is for growth.  Major companies are not too excited about adding to their employment base.  College grads are finding it difficult to find entry-level employment.  Private Equity Groups are very active in all sectors of the economy as they help the U.S. in its continued transformation from a post-industrial economy to a high-tech, information-age, knowledge-based economy. Emerging markets overseas will continue to create opportunities.  The revitalization of the U.S. Energy Sector is for real.  These factors and others will continue to define business in the early part of the 21^st century and will benefit small businesses.   There is a lot of pent-up energy that must find an outlet and that energy will likely go into the small, emerging companies.  I am of the firm belief that once it is fully untethered the small business sector will lead the U.S. in economic growth, as it usually has.

This is where the action is.  The savvy professional looking to build a career and personal wealth must consider the entrepreneurial sector.  This sector has been my bread and butter since before the crash.  Most of the searches I have been hired to conduct during this time have been for CFOs, with the occasional CMO, and a CEO or two.  As I said earlier in this post, these companies still need their Chiefs.  The next few post will build on this opportunity, which I suggest you give serious consideration.

He talked and talked but didn’t really tell me anything!

“He talked and talked but didn’t really tell me anything.”  That was the feedback I received from a client about a phone interview he conducted with one of my candidates.  The candidate had not performed well. This client is good at asking questions which require the candidate to explain how he achieved the accomplishments listed on his resume.  I understood immediately what he was telling me; the candidate gave vague answers that were not clear and concise.  Talking in generalities as to how one achieved specific accomplishments casts doubt on the candidate and diminishes his credibility.  That is not to say that the candidate was lying about his work history.  What it does say is that the candidate’s communication skills are not up to par, or that he did not adequately prepare for the interview.  In either case, it was an opportunity lost.

It continues to surprise to me, when one of my C-level Executives fails to interview well. One would think these people have mastered the communication skills required in the interview.  My candidates are adept at selling Senior Management and Boards on multi-million dollar initiatives.  You could reasonably expect them to ace an interview.  I am fairly competent in my own interview skills, so no one gets past me who cannot do the job.  It just goes to show that the interview is an art form that eludes even the most senior executives.

Telephone interviews are often underestimated.  They pose a particular set of challenges.  The interpersonal dynamics of a face-to-face meeting are virtually eliminated.  Personality traits cannot be easily observed and assessed.  Still, the candidate must be able to convey energy and personality while presenting his capabilities in a credible way.  In many respects it is the most difficult, interview format.  Regrettably, some employers place too much emphasis on the telephone screen.  A good telephone persona does not necessarily translate to a good hire.  Personally, I believe that the phone screen should be focused on confirming factual data to determine if hard skills and accomplishments meet the job requirements.  The intangible, soft skills are better evaluated in a face to face interview.  Notwithstanding, you must recognize the situation for what it is and take it seriously.

To ensure an optimal result, begin with the basics.  Make sure you have your resume in front of you so that you and the interviewer are literally on the same page. A strong, clear telephone signal and a place without background noise is a must.  Pick a setting that is free of distractions and provides a high-quality telephone connection.  The choice of a cell phone over a land line can be problematic.  Taking the call in a popular Starbucks is a disaster in the making.  Taking the call in your car during your commute can be suicide, literally.  If taking a call at home, remember that children and barking dogs can derail a call.

It is also useful to help the interviewer help you.  Give him the tools to make your interview easier.  Additional printed materials provided to the interviewer can be very useful.  A summary of key career accomplishments will provide the interviewer with interesting questions.  Keep it to one page.  The tried and true, two-column, side by side comparison of job requirement vs the candidate’s background and accomplishments is always a plus.  These materials give the interviewer a road map to guide the interview. The very process of assembling these documents will aid your interview prep.  This is also an effective technique for the face-to-face interview.

My clients want to know how the candidate deals with problems.  How did she analyze the situation?  What alternatives were considered? What resources were required?  Why did she make the decision she made?  How did she approach the implementation of the solution?  If it involved other team members, as one would expect, how did she marshal those resources?  What problems were encountered in the implementation of the solution?  What was the final outcome?  Did it work?  How well?  This could either be a very long-winded story which would put the interviewer to sleep, or it could be focused, concise and energetic.  The interviewee should be able to answer effectively in three minutes or less.  If the interviewer needs more detail or clarification he will ask for it.  

So how does one prepare and practice an effective answer?  I tell my candidates to think in terms of a one-page, landscaped, bullet-point presentation to explain each and every significant accomplishment.  This is a good exercise to focus one’s thoughts and to prepare for the phone screen.  I recommend that you prepare a page for each accomplishment you think appropriate, especially those that dovetail with the requirements of the job spec.  It might even make sense to have a blank template to help you focus your answer for unexpected, or unplanned questions.  Remember to label the bullet points: Situation, Alternatives, Solution Chosen, Plan, and Outcome or Result.  At its most fundamental level these points are the problem solving/planning loop.  It might take a little practice, but the result will prove to be well worth the effort.

Finally, I did close the loop with the candidate in question.  He had not been in a job search for a while and was genuinely interested in constructive feedback.  I am confident that his next interview will be better.  Come to think of it, it might be useful to share this post with all of my candidates in advance of their telephone interview.