Leadership teams that are on track to reach their potential to perform and growhave:
A written, board-approved financial plan that shows revenue, direct costs, gross margin, indirect costs by function (e.g., marketing, sales, HR, R&D, etc.), and operating profit (i.e., EBITDA), by month and quarter for the year. Approved financial plans tend to have the following characteristics:
Smooth (or otherwise rational) ramp-up (or down) of revenue and costs from the prior year closing month and quarter.
Generally upward-trending scale (i.e., ever bigger and better).
A 75% chance of being achieved by the in-place team with roughly 2/3 of planned revenue either booked or highly-probable (B&HP) and a highly-qualified pipeline of prospective, current year, revenue equal to three times the gap between B&HP and Plan (and not all in the last quarter or two!).
Identified upside-downside potential with mitigation strategies on the downside and what will be done to take full advantage of any upside.
Assumptions and triggers that explain what has to happen for planned results to occur and for planned expenses to be made.
At an as yet unspecified time in the near future, the revered leader of a high-functioning team must exit, due to age, health, opportunity, or some other compelling reason.
The way the team sees it, the exiting leader must bring in a new leader or anoint someone from within, though no team member is clearly the one to take the reins in the eyes of the others. The team is anxious and wants to know what steps will be taken when to secure a new leader. Continue reading Leader Exit→