Detaching From Results

11 years ago, violating every law of dating, I was foolish enough to give a great woman a book as a gift on our first date, and she married me anyway! The book was Deepak Chopra’s Seven Spiritual Laws of Success. The thing that impressed me most about the book was a sequence of two laws: The Law of Intention and Desire, followed immediately by the Law of Detachment from Results. I read that second chapter with some disbelief: This is America! You can’t detach from results! Then I read the chapter again, and over some time, it began to sink in. We can only do that which is aligned with our intentions and desires, then let go, and whatever the results will be, will be.

In my 20’s, I had an ulcer. The MD told me to make a 3 x 5 card with 3 words, and pin it over the light switch on my office door. The three words: WHAT IS, IS.

As a child, I learned the serenity prayer from a small plaque on the wall at our home: Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.

In 2009, I expect to use ALL these pieces of learning! Best wishes to all of you.

Safety Inspection …. Of Your Management Team

Many people “winterize” their car for the cold weather. We may be in for a year-long winter in business. Smart CEOs will ensure that the vehicle (company) they’re driving will be safe during the rough roads ahead.

The big question is: Do you have the “A” players it will take to survive 2009 safely – with no loss in revenue or profitability? Next year’s “pie” is smaller – will your share be big enough?

Here’s a list of five key things to include in a “Safety Inspection” (mini-assessment) of your management team to ensure you can safely get through 2009.

1. Alignment – Are your key managers aligned when it comes to critical goals, and are they moving toward them?
2. Mileage – Do you have SMART goals established for each key leader, to get the most from them?
3. Acceleration – Can your people accelerate your market share, getting a bigger piece of the smaller pie next year?
4. Collision Impact Resistance: When you go head to head with your competitors can you beat them by being unique, special, better, faster, etc.?
5. Resale Value: Can you maintain the value of your company by holding on to EBITDA, positioning, etc.?

LA Schools Chief Leaves – No Performance Objectives?!

David Brewer, Los Angeles Schools Superintendent, will be leaving his $300,000 / year job (plus $45K expenses plus $36K housing allowance) with a $500,000 severance package. Hired as a retired Navy Vice Admiral with virtually no experience in the education sector, Brewer has been under fire for most of his two years in this role, with the School Board and other political leaders largely unhappy with his performance.

Perhaps the most shocking aspect of this story is the statement made by one of Brewer’s advocates on the School Board, Marguerite Poindexter LaMotte, who said it was unfair to fire Brewer without having established clear, specific goals and giving him an opportunity to live up to them.

No goals, after two years on the job? After $700,000 in compensation and expenses were paid, and on the threshold of paying out another $500,000? All when the LA Schools have shown minimal progress?

I advise my clients to set clear, specific goals before the executive is hired. The time to ask this question is NOT two years into the game, when the person is about to leave under fire!

TOP 10 Things Your Managers Aren't Telling You

Here's a list of things that CEO's almost never hear directly from members of their management team, although it would be useful if they could!

• "Here's how to improve your company or product."
  They fear your judgment, or your telling them why it won't work, and they won't take risks with you.
• When the project will really be done.
  Do you give them the room to tell the truth about deadlines?
• Who, how, or why they don't get along with another key manager.
  No one can NOT look like a team player to you.
• That they have made a critical mistake.
  They can't bring you bad news without paying a personal price.
• That a customer is unhappy.
  If you've created a "win" all the time atmosphere and you punish the messenger of bad news.
• That they remember every negative thing you say, and every positive thing.
  It takes 5-10 positives to counter every negative.
• That they can do more for you.
  If you will explore their capabilities thoroughly with them.
• Why they do or don't want to work for you. Resulting in over-paying satisfied people, and losing unsatisfied people.
• That they want more clarity.
  To really want to know what is going on - the good, the bad, and the ugly - because it helps them understand the relevancy of their own work.
• That they are looking for another job.
  We call them the "mentally unemployed".

Why Your Company Value Equals Your People Value

Why are the people of West Point, GA, looking forward to KIA’s new plant, where wages will be $14/hour, when the average UAW employee in Detroit makes double that? What is a dollar of EBITDA worth in value to your company? Let’s see how these questions tie together.

Taking the second question first: historically, small private businesses can expect a value of 3 -10x EBITDA; larger public companies 10 - 20x. The stock market has tolerated 15 -20x for most of the past 15 years (although now around 12x). For every dollar you fail to earn in profit, you reduce your value by the multiple that applies to your company. In an up market, company shareholders don’t care so much if you grow 8% or 10% - especially if the profitability is high. But in today’s economy, size (of growth or decline) matters. Let’s say a company did $50 mil. in revenue in 2007, with $3 mil. EBITDA. One could argue that if that company continued to grow steadily, it could be worth $25 to $30 mil., or much more if producing a technical product. But suppose that same company only does $45 mil. next year, and profit drops to $500K. And suppose it takes 3 years for that company to bounce back from this recession. What is the value then? Perhaps as little as $10 mil, or even worse.

What is the single biggest factor in a down economy, that can impact, revenue, EBITDA and value? People. In a crisis management mode, some companies become short-sighted, worrying more about current income and expense, and much less about ultimate value. If you aren’t worried, consider this op-ed quote from last week’s New York Times: “The combined equity valuations of Chrysler, Ford and G.M. total less than $6 billion, which is not even a fifth the valuation of Honda and only about a twentieth that of Toyota.” Honda, Toyota and KIA now have 50,000 workers in the US (counting their sub-system vendors), all making half what US automakers pay, and they produce a better product! We’ve all heard of the Toyota Production System (TPS). But did you know that TPS is derived from Toyota’s early studies of the US automakers!? Now, many US companies have copied TPS to great success. Time for the Big 3 to do the same. Employees that are part of this understand their individual roles and buy in to the process. The team atmosphere is palpable. Two of the main principles of the Toyota Way are:

1. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.


2. Develop exceptional people and teams who follow your company's philosophy.

The people in West Point, GA anticipate success. They know that the new KIA factory will help their entire community. Over 40,000 people have applied for 2500 jobs there. If your team is not capable of protecting your value, there probably isn’t a congressional committee (like what the Big 3 faced) waiting to rake them over the coals. You need to do it. Don’t let the value of your company erode due to inadequate but overpaid managers who can’t keep up, don’t get it, aren’t on your side, and can’t generate enough EBITDA. Get some stars who can do the job, and provide them with solid leadership, and you’ll be on your way to protecting and building your value. When your people value your company, your value will increase.

When your “A”s become “B”s and “C”s

A rising tide lifts all boats. When a company is doing well, growing sales, achieving customer satisfaction, etc., it is easy to see all the members of a management team as “A” players. After all, if the company is successful, why would anyone be seen as holding the company back? On the other hand, when a company’s sales or its market share declines, or when customers start canceling or pulling back on orders, etc., it is easy to look around and ask, “who is at fault here?” With the 20/20 vision that comes with a crisis, the CEO begins to see more clearly, and can more readily distinguish between excellence and mediocrity.

The reality is that very few companies have 100% “A” players on their management team, and almost every company is tolerating a “B” or even a “C” player most of the time. Winston Churchill once said, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” Smart CEOs do see the opportunities in the difficulties of today’s economy. The pie is shrinking, so to stay even or grow, and effectively compete in a challenging economy, more companies are aiming at a bigger piece of the pie - increased market share.

To achieve increased market share in a down economy may require painful analysis about what it will take in terms of executive talent, and acting decisively to improve the company’s ability to compete. The winning formula often means strategically replacing the sub-par person with a real leader, an impact player who can increase market share, revenue, performance, etc. Ask yourself if you’ve been tolerating a “B” or a “C” for too long, and if you can achieve your goals for next year with the team you have. If not, make the tough decision now, and upgrade your team.

Big 3 Bailout - I Vote NO

I’m opposed to the big 3 bailout. I think it rewards dinosaur companies for moving too slowly and too stupidly to be able to compete with more nimble companies. I haven’t owned a US car since the early 80s, and when I get rentals, I am unimpressed by US product.

Honda and Toyota turn out higher quality cars, in the US , while paying their people 60% of what GM pays. And, they have anticipated the market by producing higher MPG cars too. What is wrong with this picture?

We keep rewarding companies who screw up (like Wall St. bailout) and that sends a message to CEOs to keep doing what they are doing – badly – because they will be rescued! Do I sound angry? I guess I am! I am a real capitalist, and I believe in natural and logical consequences of our actions. People, companies and governments don’t change unless they experience pain that changes their paradigm. Our economy might have to take a few hits in order for US business to learn to act more ethically and responsibly.

Accessing Your Resources - Your Highest and Best Use

In the winter of 1776, Thomas Paine said “These are the times that try men's souls”. He was describing the challenges encountered in the American Revolution. Recently, at my Vistage CEO group, our speaker (a Vistage speaker of the year), Michael Allosso, gave a talk called “You on Your Best Day.” This talk reminded me of the importance of using all of my resources, to find my highest and best use, and be at my best everyday. This is particularly important now, with the state of our economy, and the post-election uncertainties we are facing. Here are the 5 ways I tap into my resources:

1. Remember peak experiences: Thinking of the times when I have excelled, where I produced extraordinary results, and asking myself, what was it about me that enabled me to do that? The innate skills that enable us to do excellent work, in business or in our personal life, are always available as a resource to be reused again. Sometimes we forget these skills are there! Don’t stop at one – keep going until you have a strong list.
2. Ask others: What do people like best about you? We did a survey of our customers a few months back, asking them what aspects of our process and our services they liked best. They mentioned attributes we don’t always remember to discuss. It was very informative in terms of how we can be approaching new customers.
3. Differentiation: What is it that I can do that is unique, special, different or better than the way my competitors approach the same thing? This is an asset with value.
4. Unconditional Giving: I tell everyone I’ve placed in a job to put me on their contact list as a resource (about anything they need) – forever. If you network a lot, you probably can steer anyone to a resource that can solve their problem. Offer to do this, and the payback will be automatic. Be a resource, without a quid pro quo expectation, and people will always want to work with you. Allosso says, “People should be better as a result of having spent time with you.”
5. Focus: I am easily distracted. I’m a possibilities and alternatives thinker, so I’m always wondering about something else. Being fully present helps me concentrate on the task at hand, and apply the particular resource I intend to bring into play that day. This makes me more effective!

Moving Forward

The election is over, and today I’m all about moving forward. I heard from a business friend who was not happy with the result, and I wasn’t sure how to respond. It is a challenge to rise above negative feelings about such an emotionally charged election. Each of us probably has one candidate, national or local, or one initiative or proposition, that we felt strongly about, that didn’t win. It is water under the bridge. Today is the first day of the rest of our lives.

When successful business people get bad news, they ask themselves “What do I need to do next?” They immediately assess the new information, and create a plan for how to deal with the reality. They examine the present situation, evaluate obstacles, decide on a new course of action, and aim at a specific, measurable result.

Ask yourself: What do the election results mean, in terms of what I need to do next, professionally or personally? If we live in the present, stay action oriented, focused on goals, and let go of any negative feelings, the country and each of us personally will be better off.

Obama vs. McCain – A Performance Objective Analysis

Let’s put politics aside for a moment. What if we were to establish performance objectives for the next President, and then assess each candidate’s qualifications for the job on the basis of his ability to achieve the critical results we need? We use performance based evaluation in hiring, and I think it applies here too.

You might have a different list, but here are my suggestions for performance objectives for the next President:

1. Stabilize the economy, including increasing access to credit and restoring global confidence in our financial sector. Following stabilization, stimulate the economy for continued steady growth and ensure that the US can remain the world’s leader in business.


2. Find a solution for the war in Iraq, including helping the Iraqi government to stand on its own.


3. Improve relations with other countries, both friend and foe. Increase the level of respect with which the US is viewed worldwide.


4. Restore ethics and morals to our government.
   
5. Decrease the threat of terrorism.


6. Decrease (or eliminate) the deficit, and implement a plan to systematically decrease the national debt.


7. Improve the quality and access to health care.


8. Improve the national standard of education, and increase the number of students who graduate High School and go on to college.


9. Stabilize social security, Medicare and other entitlement programs to ensure access for future generations.
10. Decrease our reliance on foreign oil and increase alternative energy resources.
    

I could go on, but frankly, if our next President were able to get most of the above list done in the next four years, I’d be a happy camper. See if your objectives for the next President differ, and make your own list. By the way, I'd advocate including the VP candidates in this assessment, because they have to be prepared to achieve these goals as well.

Now, create a score sheet for yourself and grade each objective to see which candidate you think is more likely to achieve the objectives. Candidates can be evaluated on their ability to achieve objectives based on experience, knowledge, attitude, commitment and intention. Score your candidate, then vote!

Bullseye Communication

I call my concept of getting close to people quickly the “Bullseye Theory of Communication.” Picture a bullseye type of target.

We are all trained from childhood to be polite, to not be nosy, not pry, not push people too far out of their comfort zone. In my bullseye analogy, we are tiptoeing around the outer edges of communication. I have noticed in over 30 years of acquiring new business, that most people really enjoy very close, even intimate communication – peeling the onion, and penetrating to a deeper level. We’re so used to the more distant, guarded communication, that when someone makes it comfortable and safe to feel closer, we welcome that.

We’ve all heard the expression, used to describe a new but especially enjoyable acquaintance, “I feel like I’ve known him for 5 years!” This results from finding that special way to connect with someone, looking for the opening that facilitates a conversation that gets closer than you would have expected, more quickly than you would have expected.

We have two ears and one mouth, and using them proportionally helps to achieve bull’s-eye communication. Listen carefully, and think before responding, and you will find common ground that can enable you to connect deeply with people you’ve just met. I have found this makes for a meaningful relationship, and brings rewards I couldn’t have obtained with usual polite business conversation.

Make Me Care About You

Many very senior level candidates call Executive Search firms to get acquainted, and to ask for direct help in securing a new position. Many of these execs don’t seem to understand how executive search works. We work for the employer. We’re paid by the employer. If we are in retained search, we really prefer to hear from candidates who are directly relevant to a current search, and often, we can’t spare much time to chat with people not a fit for a current search.

How do you get my attention? How do you differentiate yourself? Most people begin reciting their background, without knowing what I and/or my clients might need. WRONG! Tell me about your value to the employer, hopefully an employer you know I’m working with. If you can construct an “elevator pitch” and give me (inside of a minute) the reasons I should feel compelled to work with you, you’ve got me almost at “hello” (remember Jerry Maguire?).

I really do want to hear from candidates that fit what I’m working on, and when they can portray that fit concisely and quickly, they will move to the top of the stack and get my time and attention.

Don’t Let The Economy Kill You

In today’s news, there was a sad report on an unemployed financial advisor from Porter Ranch, who, facing his own economic struggles, killed his family, then himself. How incredibly tragic! This reminded me of the often repeated quote from Victor Frankl, a holocaust survivor, and renowned psychotherapist, who said, “Everything can be taken from a man but one thing; the last of the human freedoms—to choose one's attitude in any given set of circumstances, to choose one's own way.”

Clearly this is a daily challenge we all face, especially when the economy regularly flings bad news at us. It really is up to each of us as individuals to “choose our own attitude.” We must try to be positive; to see “opportunity in every difficulty” (Churchill), and to do what we can to continue to make the world (the small part we influence), a better place to live and work.

From time to time, business may get each of us down. One thing I’ve learned is that I can limit the “down” parts by choosing to respond proactively. Thomas Paine said, “Lead, follow, or get out of the way.”

Let’s not be like the poor guy in Porter Ranch who chose to get out of the way. My friends in the blogosphere, I invite you to lead; lead yourself and others through the current crisis and let’s make our own prosperity something of our own choosing.

2009 Growth Will Be All About Market Share

Some of my clients and colleagues are naturally reporting that the fear in the economy is getting them down. Smart companies know that in a flat or declining market, the only way to grow is to steal business from the competition. Many of my clients are practically salivating at the prospect of leaping into a volatile market and expanding their business by increasing market share. The first step to taking advantage of this market is making sure you have a strong executive team that can not only weather this storm but capitalize on it. By evaluating the strengths and weaknesses of your key players you may find that some new blood is needed.

Einstein said that insanity is doing the same thing over and over again and expecting different results. I think it is obvious that sometimes you need better people to get better results.

Most of the people looking for jobs right now are people who were just laid off by declining companies. These are not necessarily the “A” players you want to add to your team. It is usually better to find the happy, productive people who are still working hard for their current employers. These people are more likely to produce the critical results you need, based on their strong track record.

As you plan to increase your market share next year, ask yourself this question: Do I need access to the “A” players; those who aren’t looking for a job, that could help me grow my business? If the answer is yes, take the following steps:

1. Take a look at your current team, and determine who is achieving your objectives, who is not, and why not.
2. Be objective about the capabilities of your people. Get outside advice if needed to assess the team.
3. Move quickly to position yourself with a solid team that can increase market share – before your competitors act on the same idea.

Your Intuition – Don’t Let It Be a Hiring OBSTACLE

Many CEOs claim to have exceptional intuition about hiring for their executive team. “I know in my gut if someone will be a fit,” they say. Much like the stories of gamblers, who will brag about their winnings (but not tell you about their losses), you only hear about the successful hires.

Too many executive candidates today are good salespeople. They know how to create a good first impression, and hit the CEO directly in the gut with their personality, and win the job offer. A smart CEO will suspend intuition for most of the first interview, and use objective criteria to evaluate if a candidate is a fit for the position. The best way to do this is to establish several SMART (specific, measurable, achievable, relevant, and time-bound) goals, which will also constitute a business plan for the new hire. It is important to do this systematically, because it is easy to think you’re doing it, and make mistakes.

For example, a CEO might write down “Grow the business by 10%”, and then ask the prospect, “Tell me how much you grew sales.” This question and the answer may be an oversimplification. It is important to have context. One company might need to grow sales through distribution, another through e-commerce, yet another by direct OEM sales. You need to know how the goal was achieved to know for sure if the candidate will achieve critical results for you.

So don’t trust your gut, or you may end up in the gutter, along with those non-winning betting slips the gambler tossed away!

Boyle Ogata Bregman builds Performance-Based Position Profiles for all our executive search projects.

TOP TEN HIRING MISTAKES

• Failing to define job objectives - Create a Performance-Based Position Profile.
• Basing hire on failings of previous person - Create a new basis for a new hire.
• Inadequate pool of qualified candidates - Cast a wide net with multiple sources.
• Unstructured or poorly executed interviews - Prepare well, use performance based questions, assign different roles to different interviewers.
• Evaluating personality instead of capability - You CAN be objective for just one hour!
• Failing to incorporate “recruiting” in process - Candidate is evaluating you and your firm too.
• Hiring people just like yourself - Balance your traits with complimentary skills.
• Failing to thoroughly check references - No news is good news? Not in hiring!
• Hiring too fast or too slow - Average replacement hire takes 18 months to have an impact. Many start-ups bust the budget with hiring too early.
• Hiring someone without related company experience - Hire someone with contextual experience.

Baby Boomer Butts – Kiss Them Now?

Experts disagree about whether the aging of the workforce will produce a severe labor shortage. Gray2K hasn’t happened. Even the Bureau of Labor Statistics has changed its originally dire projections, although they now say there still will be a shortage in the US (2.4 million people by 2014).

One thing that most experts do agree on is the fact that the number of baby boomers in the workforce will double (as a percent of all workers) over the next 5-10 years. If we are lucky! If they start retiring too soon, the shortage will increase. As Ken Dychtwald described in his book Workforce Crisis, US employers need to really appreciate and better accommodate mature workers. Clearly there will not be enough Gen-X and Gen-Y’ers to replace the boomers who will retire.

Baby boomers are uniformly regarded as healthier, more active, more experienced, and more mature than their younger counterparts. They are often more loyal and more committed, and they make better mentors and teachers. They often possess the “tribal knowledge” of the organization.

Now is the time for employers to shift gears and be more open to exploring what it takes to recruit, retain and motivate these valuable resources. It’s not necessarily about money. Boomer employees are not necessarily more expensive. They do want time – more vacation, paid time off, etc., but surprisingly, they are often OK with taking such time unpaid. They want to know they’ll be considered for promotion, be able to mentor others, increase their skills through training – in other words, be treated like younger employees.

The employers who embrace the concept of boomers as an asset will have an edge if the shortage does happen, and will be modeling better behavior overall toward their workforce – something even younger workers will notice.

Mark Bregman – CEO, Boyle Ogata Bregman

"A" Players - Essential for your Success as a CEO

Do You Have "A" Players in Key Positions?

Achievement of aggressive company objectives depends on the solid performance of key leaders who are uniquely capable of producing essential results.

Recent studies have shown that employers are developing new executive profiles as they select people to lead their company into the millennium, especially in early stage and rapid growth organizations.

These critical factors will differentiate fair-to-mediocre prospects from "A" Players - top performers who always contribute to bottom line:

• Initiative: Can the individual go above and beyond standard job expectations? As organizations do more with less, they depend on managers to add value, and seek opportunities for improvement. The more an individual can do on his/her own, the greater the value to the employer.

• Drive: The desire to excel. Top performers do a good job on their own because they want to, not because someone is watching or forcing their behavior. In today's self-directed workplace, this skill is crucial.

• Leadership: People who can empower, inspire, coach and teach are in demand. Employers seek leaders who motivate people to improve job performance, challenge people to solve their own problems, and communicate clearly about company and individual goals.

• Flexibility: Professionals must be able to switch gears, in order to adapt to rapid change within the company, while performing a wider array of tasks.

• Problem-Solving: Quickly, creatively and decisively driving toward solutions on critical issues equates to making and/or saving money.

• Teamwork: Interpersonal skills have a great impact on job success. The ability to support and work with others is critical. A true team player facilitates even better performance from his/her peers.

• Job-Fit: Providing challenging assignments appropriate to an individuals skills and abilities helps ensure success. Assess the candidate's past performance to predict future performance, and determine if character and personality fit the company culture and needs of the job. Don't put square pegs in round holes. Don't believe everything you hear. Verify!

• Motivation: Why does this person want this particular job? Make sure individual beliefs, needs and wants are aligned with what the position has to offer. Highly motivated people will outperform bored or unhappy people every time.

BOYLE OGATA BREGMAN'S Performance-Based Search System finds "A" players every time! Call for information. Contact Mark at 949-440-6855 / mark@bobsearch.com

The Dead Meat Theory - Why Counteroffers Don't Pay Off

John Q. Executive walks nervously into his boss’ office to announce, “Mr. Employer, I’m really sorry to have to tell you this, but I’ve decided to accept another position. The XYZ Company made me an offer I couldn’t refuse.”


Mr. Employer doesn’t miss a beat. “Wait a minute, John. We can’t afford to lose you. Tell me about this other offer.”


Almost every executive will play this scene in his or her career. When the counteroffer is put on the table, what happens next is critical. Not only for a particular situation. but also as an overall career strategy. Before even considering a counteroffer, John Q. needs to look at these questions.


1. Why is the boss so afraid to lose me?
2. What will my future be here if I stay?
3. What will others think of my decision?
4. What brought me to submit my resignation in the first place?
5. If I accept the counteroffer, am I a winner or “dead meat?”

I have seen many people caught in this scenario, and have come to a definitive conclusion. It almost never pays to accept the counteroffer. Let’s look at some possible answers to John Q’s questions:


1. The Motivation of the Boss:

If John Q. is good enough to get that super offer form XYZ Co., then Mr. Employer almost certainly values his work. He may even like John. But, for most employers the first thoughts that come to mind upon receiving a resignation are: How is this going to inconvenience me? How long might it take to find a replacement? Who will run the department in the interim? Who will train John Q’s replacement?

In many cases, the first answer that comes to mind is, “Let me buy some time to sort this out.”

If John Q. can be persuaded to stay, the employer can, at his leisure evaluate the impact of John’s departure, Mr. Employer might put out a confidential search with a recruiter for John’s replacement (we’ve done several of these). He can examine John’s subordinates to see if any can be groomed to succeed him. Mr. Employer can even bring in John’s potential replacement as a “consultant”, and let John train his successor. So what if these steps cause the employer to shell out $20,000 to $40,000 more in annualized salary. The three to six months it takes to sort things out will be inexpensive compared to the potential cost of sudden loss of a key manager.
And, odds are, the boss isn’t going to gamble on John Q’s continued loyalty much longer. Despite the counteroffer flattery, Mr. Employer may decide that his most logical long range solution is to get the replacement on board as soon as possible.


2. John’s Future in His Current Company:

John is still John. His company is stilling the same. If the match were really so wonderful, John wouldn’t have been vulnerable to XYZ Company’s offer. Will an elevated title or a few dollars really improve the essence of the relationship? Maybe, but only for the short term.

If the boss hasn’t already done so, soon after giving the counteroffer, he will begin to second-guess John’s contribution to the firm. Mr. Employer may feel betrayed, blackmailed. He may worry that other employees will use job offers to leverage their positions sometime in the future. When the next scheduled salary review comes up, the boss has a chance to “get even.” Without another outside offer in hand, John Q will have to accept the boss’ excuse: “Don’t you remember, John, I just gave you that big raise when XYZ tried to steal you away.”

When a real promotion comes up, will the company choose to advance the person who had been looking and had to be induced into staying? Or will they reward a loyal, dedicated coworker who has demonstrated a genuine commitment? Or even worse, might they hire from the outside, over John Q’s head?


3. What People Will Think:

If John Q accepts the counteroffer, certainly some people won’t be happy. Clearly, the XYZ Co., which is already anticipating his arrival, will be disappointed. If a recruiter was involved, John’s credibility will be strained by the reversal.

What about his references? What if they see his actions as a career leveraging maneuver? What if they feel used, or worry that they may be “manipulated” in the future?

How about John’s coworkers? Regardless of how discrete he’s been, someone, if not everyone, is sure to know he had planned to leave. The office grapevine rarely deals kindly with these matters. Maybe subordinates may have started jockeying for his job. May they are relieved he is leaving! Or, maybe he was so well liked; his fellow employees are planning his farewell testimonial luncheon. As rumors circulate and escalate and demand denial, John Q. will get the short end with his peers.

John’s sudden reversal may be perceived as fearful, a sign of weakness. Respect for him may drop. His relationships may never be the same.


4. Why John Had the New Offer:

A candidate for a job change is either dissatisfied with his current position, or tempted by the positive aspects of the new opportunity. Or, more usually, it s a combination of both factors.
As a search consultant, I will admit that I can’t get an executive to see a potential new employer unless he is motivated (nor would I want to force such a meeting).

It is that motivation that led John Q to see the XYZ Company, listen to their pitch, and interview well enough to elicit an offer. We must assume that John Q Executive was smart enough to carefully analyze the offer, listing and evaluating all the plusses and minuses before accepting.
A clearly convinced John Q marched into the boss’s office to resign, only to be confronted by the counteroffer in the face of such an emotional encounter, many people would be hard pressed to remain cool and logical and focused or, the original intent, to resign and move on.

But all the factors that preceded that moment remain unchanged. John needs to remember that he has decided that XYZ represents the better long term opportunity.


5. A Winner or Dead Meat?

I trust that the reader will not be offended by the purposely outrageous phrase that I use to characterize the result of accepting a counteroffer. I certainly don’t regard people with so callous an attitude. I have found, though, that many executives in the emotional throes of a decision about whether to accept a counteroffer need to be shocked into recognition of the downside risk.
Let me emphasize that these observations are not the casual opinion of the author. In meetings and interviews with many hundreds of executives, our consultants have spoken to dozens who have been involved in counteroffer situations. In less than 20 percent of the cases has the acceptance of such an offer worked out satisfactorily. The overwhelming majority of the executives we have talked to have expressed regret; based on the negative results I have talked about above. They have admitted that it is difficult to see the pitfalls while their current firm is “courting” them to stay. The situation is just too emotional.

Remember, the new employer considers you a winner. They are the ones willing to pay a premium for our services and start you out in a higher position. The reasons for making the job change are rarely strictly financial and those reasons will still be there.

The best advice is to make the change you have agreed to, and don’t look back. Keep relationships with important people in your old organization intact, but politely deliver the firm message that you have decided to move on. If it is made clear that you are not open to renegotiation. you may be able to prevent the counteroffer attempt, and save embarrassment for all concerned. You decide which way you will end up a winner.