Sunday, 28th May 2017

Shaza Andersen is the CEO and founder of WashingtonFirst Bank

Posted on 06. Aug, 2015 by in LEADERSHIP

Shaza Andersen is the CEO and founder of WashingtonFirst Bank

A Life in Balance

Shaza Andersen is the CEO and founder of WashingtonFirst Bank, which she started in 2004. Her bank recently opened its 17th branch, located in McLean, Virginia. Andersen has been named one of the Top 25 Women to Watch by American Banker and a Top Banker by SmartCEO. She has made several Washington Business Insider lists, including their Power 100, Women Who Mean Business and Most Admired CEOs. Andersen lives with her husband of almost 24 years, Marc, and their two children, Katie, 18, and Danny, 14.

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NV: YOU STUDIED EUROPEAN AND INTERNATIONAL STUDIES AT GEORGE MASON UNIVERSITY. HOW DID YOU GET INTO BANKING?
SA: I’d always known that I wanted to learn management and be in some sort of management-training program. Companies came to interview students at George Mason and most that had formal management training programs were banks. I applied to four banks, and I got four offers, and I picked one—Crestar Bank. They’re now SunTrust.

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NV: HOW DID YOU WORK YOUR WAY UP?
SA: I decided to learn how to manage branches. I worked my way up the ladder at Crestar. I was with them for about six years and then got recruited to Century National Bank, a one-branch bank in DC. I was there nine years and I became the Chief Operating Officer and Executive Vice President. I helped take them from one branch to eleven branches, and from $80 million in assets to about $420 million in assets. We sold that bank to United Bank. That’s when I started thinking about starting WashingtonFirst.

NV: WHY DID YOU DECIDE TO START YOUR OWN BANK RATHER THAN GO TO WORK FOR SOMEONE ELSE?shaza_andersen3

SA: I had a lot of energy to continue all the great stuff we had started at Century National Bank. It was basically a continuation of the work we had already started. We knew the customers. We knew how to build the new bank. We knew how to service our customers. We opened our doors in April 2004 as WashingtonFirst Bank and really hit the ground running. As the founder and CEO, I’ve taken it from $0 to $1.4 billion in assets.

NV: IS THERE A SECRET TO YOUR SUCCESS?
SA: I’m a big planner. Any idea is a great idea, but without a plan, how do you take it from an idea to implementing it? You have to have a plan of how to get from A to B to C. Without it, you might get there, but it’s going to be a lot harder. So, it’s hiring the right people. It’s getting the right board organized. It’s getting the right advisory board. It’s getting people in the community to be your ambassadors and do business with you.

NV: HOW DID YOUR BANK WEATHER THE RECESSION?
SA: We didn’t do anything very risky. Part of it has also been that we’re in a good market. But from a banking standpoint, we didn’t do the 110% mortgages and the riskier loans. I think that ended up paying off for us, because as the market crashed, our portfolio stayed solid.

NV: TELL US ABOUT THE WASHINGTONFIRST YOUTH FOUNDATION.
SA: We started it in 2010. We’ve been able to raise money and help a lot of children’s organizations like Youth for Tomorrow and Children’s Hospital. We’re getting ready to have an event for the cancer ward at Inova Children’s Hospital. Being part of a community means giving back. I believe that if we can help one child, it’s better than helping none.

NV: YOU HAVE TWO CHILDREN OF YOUR OWN: KATIE, 18, AND DANNY, 14. HOW DO YOU BALANCE WORK AND FAMILY LIFE?
SA: It’s not a balance. My family always comes first. I think that planning and organization is the key to life. Not just in business but in your personal life as well. You end up being able to multitask. My kids grew up with parents who work. And they have learned what it takes to work, achieve, and be able to finish what you start. I think that there are lots of things you can give your kids, and one of them is to be a good role model.

NV: AS THE CEO OF A BANK, DO YOU EVER FEEL LIKE YOU ARE A WOMAN LIVING IN A MAN’S WORLD?
SA: Banking is definitely a man’s world. There are fewer women in senior roles. I think I’m used to it. When I sit in a room and I’m the only woman, I think I can hold my own. Part of it is the experience and part of it is in knowing what I’m talking about. Having been in banking for so long, I can sit down and discuss any subject with knowledge.

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NV: WHAT DO YOU LIKE TO DO OUTSIDE OF WORK?
SA: I like to travel and I like to travel to warm places. We have a place in Palm Beach that we try to get to a lot. And we definitely like to experience new places. I like to read, to shop.

I feel really blessed and lucky to have a job that I love, a team that’s really been great here at the bank and to have a great and supportive husband and great kids.

PHOTOGRAPHY BY TRACI BROOKS

Don’t Let the Lawyers Run Your Company

Posted on 13. Nov, 2012 by in Blogs

Don’t Let the Lawyers Run Your Company

I once knew a Fortune 500 CEO who completed hundred-million-dollar deals without signing a contract, because, he told me, “If trust breaks down to the point where we have to rely on the fine print to enforce the agreement, then it’s a losing deal anyway.  I’d rather count on the goodwill of my partner and me to work things out than try to write and enforce an agreement that anticipates all possibilities.”

Some companies create burdensome regimes of rules and contracts to control every possible risk and contingency.  They leave their employees no discretion, create a culture of inflexibility and bureaucracy, and slow the whole organization down.  Unfortunately for them, business is a realm where superior judgment and personal relationships, and not faux-deterministic legalities, are what create winning companies.

Sign fewer contracts.  Create fewer inflexible rules.  Dismantle bureaucracy.  Empower and encourage your people to use their judgment to build profitable relationships that grow and improve your company.  Do so, and you’ll make far more money than you ever will by kowtowing to your lawyers.

Raising Capital for your Startup

Posted on 23. Aug, 2012 by in FINANCE

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Over the last few weeks, I have mentored fellow graduates of Harvard Business School, local DC based entrepreneurs, and a group of very smart high school students at Thomas Jefferson on the nuts and bolts of how to raise capital for their startup. As I talked to my friends and fellow entrepreneurs, I came to realize how little many entrepreneurs know about early stage financing. Over the last ten months, I’ve raised 3.5M for my own startup, TroopSwap, an ecommerce platform focused on veteran and military discounts. We raised the first million via convertible debt, while the additional 2.5M was raised through equity.

My experience with fundraising has exposed me to the advantages and disadvantages of different types of financial instruments. I’ve also learned about the psychology of raising a round and how to effectively structure a round in order to sustain forward momentum and to ensure that commitments to invest actually materialize in the form of deposits in your company’s checking account. While nothing I’m writing in here is a secret and no one method is more right than another, there are certain norms and best practices that should be followed in order to keep as much of your time free to focus on your business as possible. I certainly wish that there had been a blog post that covered everything I needed to know in detail when I was putting together my own round.

In addition, this is my first time building a company, and I certainly did not have experience raising capital before this venture, which brings me to my first point…

Find a Mentor
In order to raise capital, you need a mentor who has been successful in the vertical you are entering. Your mentor should have three vital characteristics:

1. An impeccable reputation among both investors and business contacts.
2. A passion for both your idea and for you.
3. They should have held executive level positions in the space you are entering.

Your mentor plays an invaluable role when dealing with investors. Beyond giving a first time entrepreneur an invaluable dose of legitimacy (and reassuring investors that a first time entrepreneur won’t blow up his or her startup), your mentor can handle questions regarding the round that will help you avoid awkward or heated conversations with your investors. If the mentor and the entrepreneur divide their responsibilities with respect to financing and business questions, then you will have an optimal relationship to raise capital. There are only two rules:

1. The mentor demurs on questions of vision and strategy when dealing with investors except to note that you are a rockstar and the only reason he is spending time with you is because he loves you and the idea.

2. The founder demurs on questions regarding deal terms and the financing and allows the mentor to serve as the single point of contact for all investor questions.

The final thing you need is an investment from your mentor. Inevitably, investors will ask your mentor whether he or she is investing in the round as well. If the answer is no, then that will raise a ton of red flags. It’s also an issue of integrity and aligned incentives. As much as your mentor might claim to love you and the business, cash is truth and the smart money will walk if your mentor isn’t investing in the round.

Convertible Debt vs. Equity
An equity raise is relatively straightforward. The entrepreneur sells a percentage of his or her company, typically around 20–30%, for a particular amount of capital. A typical round might look something like this:

Pre-Money Valuation of the Company: $8M
Size of the Round: $2M
Post Money Valuation: $10M
Investors Stake in Company: 20%

The trick to putting together a round like the one described above hinges on arriving at an acceptable valuation for your startup. For a startup that may not have revenue, this is no easy task. In that scenario, the entrepreneur and investor might choose to finance the business through convertible debt.

Convertible debt is an instrument particularly suited for pre-revenue startups where an initial valuation would be a number pulled out of thin air. In this scenario, an entrepreneur might decide to offer a convertible note in order to defer the valuation of the company to the next round of financing when a sophisticated investor will be able to place a reasonable valuation on the company. In exchange, the entrepreneur will offer investors interest on the invested capital as well as the right to convert their capital into equity at a discount when the company raises a round at a specific valuation. For instance, a typical convertible note might have these terms:

Size of the Round: $1M
Interest Rate: 10%
Conversion Discount: 20%
Conversion to Equity Trigger: Series A
Round of $2M or greater
If an entrepreneur raised a round of equity twelve months later at a Share Price of $25, then the note would convert as follows:
Principal + Interest: $31.1M
Share Price: ($25)
Conversion Discount (.8): $20 Share Price to Convertible Noteholders
Convertible Noteholders Shares: 55,000
Series A Investor @ $1M: 40,000

THE TRICK TO PUTTING TOGETHER A ROUND HINGES ON ARRIVING AT AN ACCEPTABLE VALUATION FOR YOUR STARTUP.

I didn’t note how many shares were outstanding in this hypothetical scenario which would enable you to calculate the percentage of ownership. For example, if there are one million shares issued and outstanding then the convertible noteholders have 5.5% of the company. If there are 300,000 shares issued and outstanding, then they have 18.3% of the company. The large differential between 5.5% and 18.3% illustrates a deeper debate on the incentives associated with a convertible debt raise.

The large differential in percentage ownership noted above is related to execution. Linking the valuation to a later round of financing allows the entrepreneur to avoid dilution through superior execution; it also allows the convertible noteholders to capture a greater share of the company if the entrepreneur fails to execute well and raises equity at a lower valuation. In theory, the incentives inherent in a note should spur the entrepreneur to work harder to execute and to ensure the company succeeds, which creates a winning scenario for everyone, but investors also have an incentive to wait to help the entrepreneur until their convertible note becomes equity.

Depending on market conditions, an entrepreneur might choose to put a cap on the valuation at which the note converts into equity, say $8M, although some rounds go uncapped because the market supports more favorable terms for the entrepreneur or investors wanting an option to invest more money in the company during follow-on financings (Yuri Milner and SV Angel’s convertible note investments in Y Combinator companies is a good example of this strategy). The most important thing, however, is that your mentor and your board members are investing alongside your investors so that they share the same risk and accept the same terms.

No matter how you choose to raise your capital, through equity or through convertible debt, you will have to negotiate—and that leads to the next question…

When and with Whom Do You Negotiate?
First, you should remember that you aren’t supposed to handle this conversation, your mentor is the single point of contact. Not all investors are created equal and you shouldn’t treat them as if they are equal. If you are raising one million with a minimum investment of 25k, then you should resist the temptation to negotiate with investors who are only putting in 25k–50k. If you begin to make concessions to small investors, then you create a horrible precedent that will encourage your investor to keep asking for more stuff down the line and you open up every piece of the deal to negotiation with all of your other investors. Your mentor will never make this mistake if they are competent.

When dealing with an investor coming in at 25–50k who wants to negotiate, simply reply that you are open to changing the terms if they want to put in an investment of 500k or more, otherwise the terms are what they are. This position is a fair one and it will help you avoid needy investors who don’t have much skin in the game but try to armchair quarterback your company from the sidelines. It’s much better for you to hold firm and to only deal with investors who take your company seriously enough to put in a large amount of capital.

IF YOU BEGIN TO MAKE CONCESSIONS TO SMALL INVESTORS, THEN YOU CREATE A HORRIBLE PRECEDENT…


How Much Should I Raise?

You should figure out the number you think you need to hit your targets and then roughly double it. Entrepreneurs are overly optimistic—it’s in our DNA. If you think you need 500k then you should try to raise between 750k and one million. When the cash burn is higher than expected (and it will be), the extra capital can make all the difference because it allows the entrepreneur to keep operating the business rather than going out and wasting time raising capital. Your time is better spent on the business than with investors and you will be happier.

For the legal documents, you should instruct your lawyer to leave the round open up to double what you raised. That way, if you need to take on an extra 100–200k down the line you will have the flexibility to ask your investors to simply wire it over rather than to re-create an entirely new round. You get to save a lot of time and money because the documents are already on file and the terms of the deal are clear to your investors. Your investors get a bit of a sweetheart deal investing capital on the same terms after a significant amount of time has elapsed and you have (hopefully) increased the value of the company. Ultimately, it’s a win-win. How Should You Structure Your Round?

If you are raising capital via a VC, then you don’t have to worry as much about the mechanics of taking on capital and organizing a round. On aggregate, VCs are moving away from pre-revenue startups, however, and investing capital in growth businesses. Happily, the cost of starting a tech company has fallen dramatically (thanks to cloud computing) and angel investors have largely stepped in to fill the gap. When you are raising capital via angels, your investors will ask what your “first takedown” or “first close” is for the round and you should be ready with an answer.

The first investor to give you 25k takes a much greater risk than the last investor who puts in 25k to move your round from 975k to one million when the risk is shared and you already have plenty of capital. So why would that first investor take more risk and write a check? Without some sort of protection for that first investor, you could go out and spend the capital they invest without raising from anyone else. Most investors don’t want to hear, “I’m sorry. I bought ten MacBook Pros, your 25k is gone. No one else invested.” Since most investors only want to invest if other people think your idea is viable and will open up their network to help you, that scenario is unacceptable. The “first close” solves this problem.

When structuring the round, the entrepreneur must decide the minimum amount of capital needed to achieve key milestones that would enable the company to achieve organic profitability or to achieve traction that would enable the company to raise more capital at a higher valuation. For a one million raise, the first close might be 500k. That number will be written into the legal documents for the round.

The first close binds the entrepreneur to raise 500k before the company is allowed to access the capital or “take down the round.” If the entrepreneur raises 475k but no more than that, then tough luck—the money must be returned to the investors. This legal protection ensures that your first investor who writes you a check is only committed to you insofar as you can convince other investors to invest as well until you have cleared your first close target.

Okay, investors agreed to my terms and “are in.” now what?

You should anticipate that 20–30% of the money that investors have verbally committed to you will not end up in your company’s bank account. Additionally, investors have an incentive to wait and watch your company perform. The more time that elapses before they actually write a check, the more time they have to observe you execute and to see if the company risk is going down or up. The way to force the issue and to get a hard yes or no from people is to set a deadline for your first close. (Give yourself plenty of time! You’ll need at least 2–3 months to hit your target.)

Once you’ve set your deadline for your first close, you should set a deadline one week in advance of that date and tell your investors to wire or mail their funds in by COB that day. Even after you and your mentors follow up with your investors, I can guarantee that at least a third of your investors will not wire funds over by the soft deadline. The excuses will cover the spectrum: unexpected business trip, family emergency, time needed to free up investments for liquidity, etc.

Even with your mentor helping you to herd your investors, you will find that the remainder of your investors will only wire funds over at the very last minute when you inform them they are about to miss the deal. Some investors will fade away altogether, so prepare for a first close that is lower than you had anticipated. No round is secure until you have the cash in hand, regardless of the great things you hear from prospective investors at your meetings. Plan accordingly.

Should I always go for the highest valuation?
Simply put, no. There are many different reasons that could influence you to choose an investor offering less money (not all investors are created equally), but just as important are the implications that your valuation will have for future financings. If you raise five million at a 40 million valuation, you might feel like a hero, but, if you miss your targets, the market softens and you have to raise again—at a lower valuation—you will lose the majority of your company. Beware Pyrrhic victories.

Anything else?
The first investors you pitch will have a lot of questions. Write them all down and you will find that they are themed around weak points in your pitch and business plan. Those questions will keep your investors from writing checks. For example, they could be related to the size of the market, your team, the business model, or distribution. Once you figure out what is holding investors back from writing a check, you need to get out on the street and talk to customers and recruit talent. Be tenacious and never take no for an answer. You are only as strong as your will.

Navigating the Future

Posted on 19. Jun, 2012 by in Blogs

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An admiring biographer once claimed that proof of how far-sighted Russian revolutionary Leon Trotsky was could be found in the fact that none of his predictions had yet come true.

An aptitude for seeing well into the future is essential for CEOs and for the long-term success of the companies they lead.  However, there is a fine line between vision and dreaming, and reality is the final arbiter of where that line lies.  I’ve known too many CEOs who stray well beyond that line and stay there way too long.  For some, that mistake is an innocent miscalculation driven by passion and emotion.  For others, it’s a willful or semi-conscious escape (and abdication) from the problems of the present.  Either way, these CEOs squander years of real-world progress and untold money before belatedly stumbling their way back to a more realistic view of the future.

It’s impossible to know exactly where the line between far-sighted vision and dreamland lies, but if you never forget that there is a line and never stop looking for it, you’re more likely to get close.  And he or she who comes closest to it, wins.

Don’t Sell Your People Short

Posted on 29. May, 2012 by in Blogs

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“I have to balance how much change my company needs against how much change my people can absorb.”

I’ve heard that a lot from CEOs.  And of course it’s a truism.  But too often it’s applied unwisely and used as an excuse.

Your people can absorb much more change than you’re willing to admit.  And they can do so faster than you realize.  More importantly, your company needs to change faster to keep up with the evolution of your market and advances by your competitors.  Change intelligently conceived is a synonym for progress, so try substituting the word “progress” for “change” in the opening sentence of this post, and maybe you’ll see things differently.

And by the way, privately and candidly most of your people (including all of your stronger performers) wish you would lead change faster than you’re leading it, and are frustrated that you’re not doing so.  Change faster and they’ll respect you more as a leader.

The most critical requirement for successful change is insightful, willful and skilled leadership.  When you ask “how much change can my organization absorb?” what you’re really asking is “how fast can I grow as a leader?”:  “How willing am I to look inside myself, understand the ways I’m sabotaging my own and my organization’s success, and take myself to the next level?”  Great CEOs drive change (progress) much faster than good ones, and good ones do so much faster than average ones.  Upgrade your own capacity for change and the organization will be right by your side every step of the way.  Your company needs it, your people want it, and you should want it too.

Loyalty Builds Community

Posted on 25. May, 2012 by in Blogs

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I was mortified to read that “many companies have grown to look at their employees as “short-term disposable assets” in yesterday’s CEO Briefing. If true, this statement says that corporate “leaders” have completely lost their way. We cannot hope to build and grow successful companies with an attitude that undermines the very nature of what establishes healthy organizations.

Trust, loyalty, and respect are bi-directional emotions that create a sense of belonging we all need. The strength of these feelings among people in the workplace impact the quality of work performed—especially when it comes to creating the customer experience. So, if you’ve gotten to thinking that being loyal no longer has a place in your leadership style, think again. Your people reflect the very qualities you demonstrate. Employee loyalty and customer loyalty lead to the same place.

The Parallel Worlds of the CEO

Posted on 22. May, 2012 by in Blogs

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My parents are mathematicians, and taught me as a child to learn all the formulas, run all the numbers, and find the right answer. That was my mindset through high school, where I was captain of the math team. Then freshman year of college I studied psychology under a brilliant professor who opened up a whole new world for me — one where there is no single right answer, and where people’s perceptions rather than some absolute truth are, as a practical matter, paramount.

The challenge and joy of being a business leader is the merger of these dual perspectives: Unless you’re skilled at both you’re in trouble, or at best your success will be relatively short-lived.

As CEO you need to excite customers, instill passion and ambition in your team, and sensitively resolve conflicts — endeavors at which you can’t succeed without skillfully probing the needs, dreams and anxieties of others; in other words, without being an excellent psychologist.

Yet everywhere in business there are disciplines where more deterministic rules of the road must be learned: In finance and strategy, technology and operations, and even sales and marketing. These laws are not quite as clear-cut as those of math – there are wider ranges of acceptable answers, allowing for more creativity – but if you fail to learn and live by them you do so at your company’s peril.

Business is roughly equal parts art and science, and great leaders master both. If you choose to focus on one and downplay the other you’ll succeed only up to a point, and not for as long as you’d like.

Is This You?

Posted on 16. May, 2012 by in Blogs

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When much to the relief of our European allies the United States finally entered World War II, Winston Churchill famously said that Americans can always be counted on to do the right thing, after we’ve exhausted all the other possibilities.

I’ve known too many CEOs who act this way.  They agonize interminably about getting rid of the executive who is making it harder for others to do their jobs, or repeatedly put off exiting an unprofitable business which has no real hope of a turnaround.  When presented with an opportunity to invest in a new business or technology, they equivocate for too long, lowering the probability of success when they finally decide to move ahead.

Time really is money, and delay is not free.  You not only degrade the result of the decision through delay, you squander management attention and money by working out “all the other possibilities.”  The motivation of your team and your credibility as CEO are compromised as well.

Try the following technique.  When you’re faced with a decision and can’t make up your mind, give yourself two seconds to decide.  Not later, right now.  Then go do all the data-gathering, analysis and possibility-exploring you’d like, and decide again.  You’ll be surprised how often (more than nine times in ten) your initial instinct is verified, because even the first time you decided (in two seconds) your brain had already been processing the decision and the data for a long time.

Part of being a superb leader is learning to move on less information and therefore to move faster.  By doing so, you multiply what your company can achieve and how far it can go.

MindShare: Class of 2012

Posted on 01. May, 2012 by in Entrepreneur, LEADERSHIP

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MindShare is D.C.’s premier invitation only program for CEOs of the most promising companies in the region. Founded in 1997, the program provides CEOs unparalleled access to well established and respected mentors and unrivaled business opportunities. To date there have been more than 550 CEOs who have graduated from MindShare, who have in turn gone on to create a unique and valuable alumni network. Past alums include Tim O’Shaughnessy of LivingSocial; Rick Rudman of Vocus; Hemant Kanakia of Torrent Networking Technologies; and Philip Merrick of webMethods.

MindShare Class of 2012

The MindShare Organizing Board provides a forum exclusively for CEOs to share success stories, as well as some of the biggest challenges that they have faced during their rise to the top. Each session focuses on a differing aspect of nurturing and growing an emerging business.

Two rising stars from this year’s graduating class are Blake Hall of TroopSwap and Hulya Aksu of CriticMania.

HULYA AKSU OF CRITICMANIA
What is CriticMania?
CriticMania is a few things to few groups. CriticMania Expert is a platform where small businesses must qualify and meet criteria set forth by the experts on our staff to have their business information published in a narrative. Most small business owners need support, education and online partners to improve and expand their online identity. That is what we do. CriticMania is a strong ally to the small business community, not another extortionist made to look like a social media platform such as Yelp and the others. This year we will also launch CriticMania Social where users will be able to use a mobile app to check in and post their own reviews with people that matter to them.

Where do you envision CriticMania in five years?
I can’t speculate as technology is constantly shifting and I don’t have a crystal ball. I can only tell you that we will be quick to adapt, adopt the necessary advancements, and improve as quickly as the marketplace demands us to.

From where do you draw your inspiration?

Ive been publishing in print successfully for the last six years. We have won national acclaim, plenty of awards and have met some of the country’s most talented people. Although it’s flattering to be where we are in the community, nothing inspired me the way the small business owners have. Their needs, their passions and their problems have driven me to come up with solutions that are effective and affordable. Our success is measured in the success stories of every single one of my customers.

BLAKE HALL OF TROOPSWAP
What is TroopSwap?
TroopSwap is the first e-commerce platform exclusively for the military and veteran community. Over 23 million living Americans have served in uniform, yet, prior to TroopSwap, there was no efficient way for brands to reach this demographic online because the government doesn’t provide a digital ID for service members and veterans. We are solving this problem by building a fully integrated marketplace where merchants can retail to verified military users via fl ash sales, permanent military discounts and virtual stores. We also plan to give our military members the ability to create their own stores so they can interact with one another inside of a trusted environment. If you can imagine a military marketplace along the lines of an “eBay meets Amazon” then you can see where we are headed.

Where do you envision TroopSwap in five years?
The best brands build an ecosystem that creates value for everyone who interacts with that brand. I love the story of how Vans became a national brand by organizing a world championship for skateboarders. They had no idea that by crowning a champion they were creating an aspirational brand that would position Tony Hawk at the top of the pyramid and young teenagers who wanted to be like him at the bottom. They just decided that the community needed a world championship and that it was the right thing to do. The coolest part of being an entrepreneur is that I have no idea what TroopSwap will be in five years. We simply want to focus on building great products and services that will create tangible value for our community – if those products and services happen to spur massive externalities then so much the better. Ultimately, Matt and I want to create a vibrant community and a platform that will enable the free market to serve the military in ways that the government simply cannot.

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The CEO and Key Customers

Posted on 17. Apr, 2012 by in Blogs

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A recent issue of The Economist described how the head of Sales for Boeing once woke up CEO Alan Mulally in the middle of the night to speak with a customer who was backing off a purchase.  Knowing Mulally, I’m sure the sales head was praised (and not fired) for doing so.

Yet I’m often surprised by the things that CEOs don’t do for their company’s top customers.  Why isn’t it the rule at all companies that whenever a key existing or prospective customer is at stake, the CEO spends as much time and attention as needed to secure a winning outcome?  Can there possibly be enough things on the CEO’s schedule, all of which have a greater impact, to not leave time to win or keep a key account?

Of course, you don’t want to undermine the authority or skill of your account executives or division leaders.  Sometimes the smart move for you as CEO is to keep your distance.  But for each of your biggest customers or potential customers, you should rigorously ask and answer the following question:  What are all the smart ways you could help win or keep the customer?  Then it’s your job to make the time for it.