Milestones China Conference | Building a World-Class Team

+8* Event reportsPublished October 31, 2007 at 11:39 am Comments Off

“The most important factor is people.”

Workshop 7: Building a Winning World Class Team and Board of Directors – Why is it Important to Build the Right Team from Day One? What is the Right Mix of Management? Best Practices in Recruiting and Retaining the Best Team Members and the Right Board Members.

Moderator
Lu Sheng | Partner, Heidrick & Struggles

Panelists
TH | Terence Ho, Partner, China IPO Leader, Ernst & Young China
XX | Etan corporation, diversified manufacturing company based in Cleveland, 100y.o. company
JW | Jack Wen, President, GE Energy China
LB | Lun Baoma, Partner, Capital Today? – PE/VC, 280M USD, invested in 11 transactions (Internet to traditional logistics…)
[Pharmaceutical... agricultural business] Minimum 10M USD investment.
Roy Hua | Co-Founder of RHEI Pharmaceuticals, founded in New Heaven, Connecticut

• Q | Introducing panelists

JW | 30% of my time is working on people-related issues

RH | Biotech did not have marketing and sales, so some companies appeared to market discoveries – ‘specialty pharmas’.

Q | What are the key factors for building a successful team?
- Leadership
- Vision
- Culture
- Strategy
- Structure
- Talents
- HR infrastructure e.g. reward system, employee training program, compensation package, welfare policy, etc.

TH | For startup companies, you need a very strong leadership to pull all the resources, talent and people together. At the beginning you don’t have the resources to pay them a very good package so you don’t have to set the right missions and corporate culture.

XX | How do you measure the goal, how do you measure success? Otherwise, people just do day-to-day work. Leader is important to set up the organization’s priorities, and allocate limited resources. Also, develop contingency plans to have alternative ways to address the issues. Need to track and monitor progress, put metrics together for that.

JW | Two things: one is leadership, second is culture. How you can turn talent into performing talent is the challenge. Strategy always sounds right, but only 30-40% of M&A turn right, so execution is key. Culture is top stuff, it takes a lot of time, especially we have a case acquiring a startup with a top guy now having to integrate.

RH | Some people with entrepreneurial spirit want to join us, such as a CFO from Pepsi. Key is leadership and have people with an aligned vision and willing to make some sacrifices at times. We did not have any systems at start, but strong men joined and helped build the systems and take charge. It comes back to the CEO, and his ability to convince. In our company, we always wanted to learn from build companies like GE, we build our own culture and are better in that we don’t have anything to change because everything is new. People come from excitement of solving issues and expressing themselves.

+8* Comment | After this round, questions were directed one per panelist due to time constraints.

• Q | Nobody wants to talk about money, whether from valuation of paying packages, but you need to give people upsides: compensate their commitment.

LB | Normally we persuade people joining startups to take a pay cut in exchange of options. We found that the maximum cut is about 30% regardless of the future benefits.

• Q | People joining are looking for (1) intangible: have control on their fate (1) the big bang: cash out in 2-3 years. You think about how you compensate people tangibly and intangibly.

• Q | What are the steps to building a successful team?

- Measure the current effectiveness of your team
- Create your vision of a highly successful team
- Communicate effectively
- Develop a plan to turn your team vision into reality
- Take a stand for your team

TH | You have first to define what is a successful team. One way is benchmarking and analysis

• Q | Why is it important to build the right team from day one?

- What is the definition of a right team?
- What could be brought to an organization by a right team?
- What are the approaches to build a right team?
- Why is it crucial for an organization to build the right team from day one?

Victor XX | Consistency and improvement of the output and the team is very important. To build a team you have to know what you need.

• Q | What is the right mix of a management team?

- Why is it important to have the right mix of a management team?
- What skills would be a must to create a competitive management team?
- What are the best approaches to have the right combination?
- What are the solutions to enhance the communication between the management level and ground floor employees?
- What are the other issues that could be taken into consideration? (e.g. difference among members: nationality, gender, ethnicity, educational/family background…)

LB | CEO from the sales side has a higher probability of success than from a technical side, as he will care about what customers want.

• Q | What are the best practices in recruiting and training the best team members?

- Design talent strategies
- Create succession planning programs
- Provide and array of developmental activities such as coaching, leadership development, and team effectiveness
- Get involved outside search firms to the recruiting or retaining process

JW | IF you control your lifestyle, people will have enough money. Nowadays, people are not interested in a new job just for doubling their salary – they want a good environment. You can always find talent in the organization. When you are a small team leader, you want them to like you and be similar. When it becomes bigger, you cannot read everybody’s face but still need to get things done. When you grow more, you have to look at what you are good at and bring people to support you. With a bigger size, the challenge is to have people to voice their opinions. Book: “team of rivals” – they will remind you of things different than what you think, and help avoid mistakes.

• Q | Many times you need to fight for your team, and stand for them. People feel more comfortable and secure. One of the key reasons for changing jobs, you need to evaluate how effective you are going to be in the new organization: who trusts you, who you trust, etc.

• Q | What are the best practices in building the best board?

- Representation
- Governance
- Guidance
- Committees
- Expertise

RH | We are one of the few companies who is recruiting a board. The recruiting comes back to leadership. Most people stay because they like the leader, enjoy the vision and feel they can express their capabilities. When hearing “sales CEO are better” I thought “oops”. Our leader is a woman, she is a scientist, but very strong. She has this leaderships skills that were able to attract strong men to the company. Leader attracts the team, the team attracts the board members. Good people attract good people, talents attract talents, and leadership is key. In our company, one-man-show would not work because everyone is very talented and would not listen in their area, but their visions are aligned. Also, they work very well with a woman leader.

TH | At the very beginning, a successful team is one that is very effective in terms of execution. A ‘strong’ CEO is someone who can GET THINGS DONE. When it comes to a certain size, the company becomes big enough to have good infrastructure and good people in different positions, then you have to think about the board. The board is a group making strategic decisions for the company. If you take 6 months holidays and come back, the company will still be in good shape. Usually a good board comprises people from different backgrounds, some independent and not involved in the day-to-day operations of the company.

What are your criteria for your team?