Building and Keeping Great Teams

Small Business & Entrepreneurship Council (SBEC) & Grow Fast Grow Right Enterprises, LLC Webcast: May 22, 2007 1:00 p.m. to 2:00 p.m. (EDT) Andrew J. Sherman, Esq.

Dickstein Shapiro 1825 Eye Street, N.W.

Washington, D.C. 20006 (202) 420-5000 [email protected]

Andrew J. Sherman Co-Founder & Legal Educator Grow Fast Grow Right 1-866-GRO-RITE [email protected]

http://www.growfastgrowright.com

© COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Andrew J. Sherman

Mr. Sherman is a senior partner with Dickstein Shapiro LLP (Dickstein Shapiro), an nationwide law firm with over 350 lawyers nationwide. Mr. Sherman is also the founder of Grow Fast Grow Right, an education and training company for executives of middle market companies (www.growfastgrowright.com). He is the author of 17 books on business growth, capital formation and the leveraging of intellectual property. He has appeared as a guest and a commentator on all of the major television networks as well as CNBC’s “Power Lunch,” CNN’s “Day Watch,” CNNfn’s “For Entrepreneurs Only,” USA Network’s “First Business,” and Bloomberg’s “Small Business Weekly.” He has appeared on numerous regional and local television broadcasts as well as national and local radio interviews for National Public Radio (NPR), Business News Network (BNN), Bloomberg Radio, AP Radio Network, Voice of America, Talk America Radio Network and the USA Radio Network, as a resource on capital formation, entrepreneurship and technology development. He has served as a top-rated Adjunct Professor in the Masters of Business Administration (MBA) programs at the University of Maryland for 18 years and at Georgetown University for 12 years where he teaches courses on business growth strategy. He has served as General Counsel to the Young Entrepreneurs’ Organization (YEO) since 1987. In 2003,

Fortune

magazine named him one of the Top Ten Minds in Entrepreneurship and in February of 2006,

Inc.

named him one of the all-time champions and supporters of entrepreneurship.

2 © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Human Capital – Leadership and Governance

 “In every single business failure of a large company in the last few decades, the board was the last to realize that things were going wrong.” The (late) Peter Drucker, 2002  Leadership and governance best practices in 2006 and beyond  What has changed  What has always been  What do stakeholders expect from their leaders  Best practices for today’s boards of directors 3 © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Corporate Governance Structure

Managing Relationship with Non Equity Stakeholders

© COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Shareholders

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Active

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Passive

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Directors

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Chairman

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Committee

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Systems

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Officers

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CEO to avoid “not my job” syndrome

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Titles

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Roles

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Delegation Senior Management Teams

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Human Capital – Recruiting, Retaining, Motivating and Rewarding Teams

      Successful companies are those whose leaders are focused on creating the conditions and the systems to allow their employees to do their best work Sometimes the solution is right under your nose How are your recruitment practices facilitating growth objectives?

Do motivational and reward systems align with growth plans?

   Reinforcing behaviors Creating clear and concise goals If you keep doin’ what you are doin’, then you’ll keep gettin’ what you are gettin’ Do you have customer-driven and customer-focused recruitment and hiring practices? (e.g. do you hire people around opportunities that can be met if/when this person or team is hired?) How will your customers perceive or value the skills of the person or team you are about to hire?

Have you clearly articulated the value proposition from the prospective employee’s perspective?

5 © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Recent Washington Business Journal Survey

In a recent Washington Business Journal survey on the Best Places to Work, employees were asked to evaluate their companies based on the following criteria:           Team Effectiveness Retention Risk and Turnover Record Alignment with Goals Trust with Coworkers Recognition of Individual Contribution Management Effectiveness Trust in Senior Leaders Feeling Valued Fairness of Compensation Systems HR Practices and Policies Key Question: How would your employees rate your company on these variables? © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Commitment to Business Growth Fuels HR Objectives

 Companies committed to an appropriate strategy for growth create career and personal advancement opportunities for their human capital – growth enables companies to recruit the best people and retain them  Employees who perceive personal growth opportunities have more energy, better morale and greater enthusiasm – a deeper commitment to teamwork and enhanced self confidence – which leads to a culture of innovation, productivity and sustainable growth  Companies on a path of flat or negative growth (or founder focused selfish growth) suffer from a negative psychology that permeates the organization. The most talented human capital devotes a significant portion of their time looking for a better opportunity and will usually leave once they find one … those that remain are infected by a slow growing cancer that is manifested in cost-cutting, in-fighting and turfmanship 7 © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Successful Business Growth-Focused Teams Possess These Characteristics

1. Balance of complementary talents, styles (dreamer, schemer, reamer) and ability to wear multiple hats (general utility infielders) 2. Truly shared vision and core values with a genuine sense of loyalty to the team 3. Communication channels that foster open dialogue, room for disagreement and methods for resolving conflicts (without fear of repercussion or a culture of revenge for speaking one’s mind) 4. Accountability and willingness to share in the fruits of success and be responsible for errors in judgment 5. Collaborative and empowered process for establishing (and modifying) goals and objectives © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Successful Teams Possess These Characteristics (cont’d)

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10.

Egos parked at door A track record of success (longer together is better) that builds “tacit” knowledge and confidence in each other (as long as it does not lead to complacency or a lack of long-term creativity) Integrity, trust, fairness, and respect by and among team members Strong, cooperative work ethic (imbalances in commitment lead to jealousy, in-fighting and dysfunctional compensation systems) Compensation and reward system which balances the need to reward the team for teamwork without defeating the need/benefit of recognizing individual accomplishment (Note: The relationship between the “star” of the team and the other players will ultimately define the team’s overall and sustainable success) 9 © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Keeping Workers at Your Growing Company: It’s More Than Just Money

Keeping your team focused on business growth goals means finding the right mix and balance of the following components:

Culture Leadership Innovation and Creativity Empowerment Base Compensation Training Bonuses and Benefits Growth and Momentum Opportunities For Ownership Opportunities For Advancement © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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Recruitment Strategies and Best Practices

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Traditional Channels for Recruitment Use of the Internet Employee and Customer Referral Programs Outsourcing Solutions

Guest Panelist: David Lodato Oasis © COPYRIGHT 2007. ANDREW J. SHERMAN. ALL RIGHTS RESERVED.

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