Author: Jos Opdeweegh

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The Diversity Dividend

Throughout my career, I’ve worked with many executives who take pride in having an ‘open door’ policy. Their approach is founded on the idea that every employee should feel able – and indeed, be encouraged – to make suggestions on the policy and performance of the organization. It’s an excellent ethic and an important signal from those notionally at the top that the best insights often come from colleagues who are closest to the action. I try to keep my door open every day! 

But the idea that by living this policy, we are open to truly different perspectives can be misleading.  At its most basic, the diversity of opinions we receive rather depends on who comes through the door. If our organization is overwhelming peopled by white middle-class graduates, then it’s likely that the views expressed will converge around that particular cultural outlook. Similarly, as was typically the case early in my career, if the gender bias is predominantly male, then the feedback will have its equivalent limitations.  

The need to embrace difference is rightly higher than ever in our consciousness and increasingly enshrined in legislation and corporate governance.  A growing culture of meritocracy is helping too, driving social mobility not only in companies but in schools, universities, and recruitment processes.  The examples I mentioned above include race, social class, and gender, but diversity definitions also extend to age, sexual orientation, faith, disability, and even cognitive mindset.

This latter point is especially interesting because, from a pure performance perspective, it’s arguable that the key benefit of diversity is to challenge our most comfortable notions with constructive alternatives. A Board made up entirely of extrovert thinkers – regardless of their race, gender, or social class – is less rounded and adaptive than one that includes a compensating balance of more reflective mindsets. We have long understood that the most successful teams are built on a mix of mutually supportive skills, and yet too many organizations are still characterized by homogenous reasoning, even if roles and responsibilities are well-defined.

It seems to me that opening the ‘doors of our mind’ to thinking differently is perhaps the greatest diversity challenge.  Only entrenched bigots would today deny the moral force of, say, ethnic and gender equality; most of us go further and acknowledge the wider definitions and categories I referred to above.  But it is something slightly different – and indeed, especially difficult – to diversify our internal rationality and logic. If you doubt this, think for a moment about your attitude to personal risk and ask what it would take to change your mindset.

Risk is not necessarily the best example, but it serves to illustrate that there are legitimately different methods of reasoning and that true wisdom comes only after listening and considering the full range of relevant perspectives. This is what I call the ultimate diversity dividend. Embracing difference in both its external and internal manifestations will reward us at every level and every day, not only because it is right ‘in and of itself’, but because a flexible mindset – in tandem with a diverse organization – will deliver better and more sustainable decisions. 

Before concluding, eagle-eyed readers will have noticed that I referred above to ‘relevant’ perspectives. It’s a small but often overlooked aspect of diversity that’s worth a moment’s reflection, too. 

If I have a health issue, I would be well advised to consult with a range of medical practitioners, but I’m unlikely to solicit the views of the local mountaineering club. On the other hand, if I were in need of an environmental risk assessment, they might be an interesting group to call upon. The point is that both tangible and cognitive diversity needs to be appropriate to the task; as my children remind me, asking folk over fifty for their views on the latest popular music is not the best focus group.

But even then, there may be exceptions.  So, while the door of my office is not open for anyone on the street, the doors of my mind are never firmly locked. And you know what – and here’s a thought to finish on – there being so is one of the greatest joys in my life. From people to politics, faith to agnosticism, age to youth, ethnicity to orientation… it is surely our variety and difference that makes our lives so worthwhile. That’s a dividend more valuable than gold, and the really beautiful thing is that it’s freely available to us all.

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Defining leadership

How might we define leadership?

This is a question I’m often asked, and especially so since I wrote my book Fair Value – reflections on good business.  Behind the inquiries, there is a sense of a wish to make the process of learning to lead more formulaic and less intuitive. That my book was primarily about values and their adaptability doesn’t satisfy their desire for clarity. It seems that we are comfortable with the idea that values can be subjective, but in the case of leadership we want to pin it down, identify its essential traits, so we can measure and monitor our progress.

Last week, I was listening to a podcast by Ben Morton interviewing the colossus in the world of leadership that is Jim Kouzes. In his book, The Leadership Challenge, co-written with Barry Posner, they define the process of leadership as ‘the art of mobilizing others to want to struggle for shared aspirations.’  That seems about as good as it gets, and I’d encourage you to check out any of their publications, or indeed listen to Ben’s excellent podcast conversation. 

And yet, I’m still uneasy with definitions of this sort.

In fairness to Kouzes and Posner there is much more to their work than a mere definition. As experienced researchers, they recognize the need for flexibility, and it’s surely significant that their headline summary describes leadership as an ‘art’ not a science.  Furthermore, their model identifies five exemplary practices that include role modeling, vision, challenge, enablement, and engaging the heart! In many ways, the practice of these tenets is similar to the principles of virtue theory – the idea that we learn to be good citizens, not so much by following strict doctrine as by demonstrating good behavior in, or daily lives. 

In a different context, I was reflecting on this difference after listening to Malcom Gladwell’s superb Miracle and Wonder: Conversations with Paul Simon. In the academic tradition, the learning of an instrument goes hand in hand with an understanding of musical theory, the relationship of chords and their progressions, harmonies, structure… And yet there are others, like Simon, who play largely by ear, their genius guided by an intuition of what sounds right rather than any set formula.  At the apogee of attainment, there is invariably a fusion of the two. 

And it’s this goal of a synthesis that shapes my personal sense of leadership and values. 

The two aspects, it seems to me, are indivisible —indeed, more than that, they cannot properly exist without each other. For if we were to take Kouzes’ definition above — and strip it of any element of virtue —then we might reasonably conclude that Stalin or Hitler are as equally great in their leadership qualities as, say, George Washington or Mahatma Gandhi. Some dry academics might be comfortable with that assessment, but I’d counter that it’s not how we think and act in everyday life. In practice, we describe the former as despots and the latter as heroes, whose qualities we admire and seek to emulate.

And the key difference is in the values they lived by.

A while ago I took a walk outside the city and on the trees and rocks were many lichens. For centuries, we regarded these humble organisms as a sort of plant, and superficially it’s true that they look a little like moss. But, in fact, we now know that they are a combination of a fungus and an alga — a symbiotic life form that exists only because each plays its part. Interestingly, they are a superb indicator of our air quality, almost indestructible but flourishing most when environmental conditions are right. As an allegory for sustainable leadership, there are few better examples.

That’s a somewhat lyrical note to conclude on. But my point is that perhaps we need to see leadership and values in a more expressive and emotional light. For I believe it is the subjective and yet intuitively right elements that are most critical for our understanding of the terms. In their search for clarity, this answer may not be what my enquirers expected, or indeed hoped, to find. But the truth is the best definitions are not just linguistically tight, rather, they are those that are most deeply felt. 

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6 Core Organizational Values and the Importance of Corporate Culture

Whether you have taken the bold decision to start your own business or have been tasked with running an existing company, the asset you are managing may well have multiple areas that deserve your special attention. For example, your business may be lacking organic growth, its leadership team may need to be recruited or upgraded, and the organization may require a couple of tangible successes to reinvigorate the team.

Transforming a business from its current state to a desired future state demands not only passion but also disciplined planning. This requires: (i) a concise, well-articulated strategic plan, (ii) a description of the benefits of the desired future state to the associates, as well as to the long-term future of the company, (iii) the reassurance that the associates, collectively and individually, are mission critical to the success of the company, and (iv) a clear glide path to the end goal, with key milestones and a rigid project management approach.

In addition, any transformational activity is largely facilitated by a shared corporate culture. According to Jozef Opdeweegh, a Miami businessman with over 17 years of experience as CEO, Chairman and Board Member of private and public companies, “Corporate culture plays a critical role in the success of a company. The value and impact of a set of shared beliefs and behaviors can hardly be overstated when convincing a group of people to meticulously undertake a challenging change initiative.”

Opdeweegh uses a definition of corporate culture based on a commonly shared notion that a company’s culture consists of the sum of beliefs and behaviors that determine how associates and management interact with each other inside and outside the workplace, as well as with other relevant constituencies, such as customers, suppliers, the board of directors, lenders and other outside parties. Notes Opdeweegh, “Corporate culture, however, should ideally also extend to the development of a collective perspective on societal and environmental considerations, for instance, the role of the organization in the broader community, or the efforts to minimize a corporation’s carbon footprint.”

Opdeweegh adds that when suggesting a set of core values to the organization, it is important to come forward with values that are highly relevant to the corporation and its success, yet are universal in nature, and impossible to contest. Says Opdeweegh, “Nobody will object to a core value of ‘fairness.’ Nobody will raise their hand to state that they do not believe in ‘creativity.'” He notes that the process of agreeing on the most relevant core values or behaviors for an organization is an iterative and democratic process, with the ultimate end-result coming from many group sessions with a relevant diagonal slice of the company’s associates.

Opdeweegh cites 6 core behaviors that are very powerful in driving the right strategic initiatives of the organization. He encourages using one or more of these for discussion purposes as you go through the collaborative process of defining your corporate culture.

  1. Creativity: “Think outside the box and share your perspective.”
  2. Customer centricity: “The customer is central to everything we do.”
  3. Empowerment and accountability: “Push decision making down in the organization and hold people accountable.”
  4. Fairness: “Be fair and respectful in everything you do.”
  5. Openness: “Be open and open-minded, listen and allow the best idea to win.”
  6. Speed: “Make quick, analytics-based decisions.”
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Jozef Opdeweegh Cites 6 Organizational Behaviors Essential to Your Corporate Culture

Whether you have taken the bold decision to start your own business or have been tasked with running an existing company, the asset you are managing may well have multiple areas that deserve your special attention. For example, your business may be lacking organic growth, its leadership team may need to be recruited or upgraded, and the organization may require a couple of tangible successes to reinvigorate the team.

Transforming a business from its current state to a desired future state demands not only passion but also disciplined planning. This requires: (i) a concise, well-articulated strategic plan, (ii) a description of the benefits of the desired future state to the associates, as well as to the long-term future of the company, (iii) the reassurance that the associates, collectively and individually, are mission critical to the success of the company, and (iv) a clear glide path to the end goal, with key milestones and a rigid project management approach.

In addition, any transformational activity is largely facilitated by a shared corporate culture. According to Jozef Opdeweegh, a Miami businessman with over 17 years of experience as CEO, Chairman, and Board Member of private and public companies, “Corporate culture plays a critical role in the success of a company. The value and impact of a set of shared beliefs and behaviors can hardly be overstated when convincing a group of people to meticulously undertake a challenging change initiative.”

Opdeweegh uses a definition of corporate culture based on a commonly shared notion that a company’s culture consists of the sum of beliefs and behaviors that determine how associates and management interact with each other inside and outside the workplace, as well as with other relevant constituencies, such as customers, suppliers, the board of directors, lenders and other outside parties. Notes Opdeweegh, “Corporate culture, however, should ideally also extend to the development of a collective perspective on societal and environmental considerations, for instance, the role of the organization in the broader community, or the efforts to minimize a corporation’s carbon footprint.”

Opdeweegh adds that when suggesting a set of core values to the organization, it is important to come forward with values that are highly relevant to the corporation and its success, yet are universal in nature, and impossible to contest. Says Opdeweegh, “Nobody will object to a core value of ‘fairness.’ Nobody will raise their hand to state that they do not believe in ‘creativity.'” He notes that the process of agreeing on the most relevant core values or behaviors for an organization is an iterative and democratic process, with the ultimate end-result coming from many group sessions with a relevant diagonal slice of the company’s associates.

Opdeweegh cites 6 core behaviors that are very powerful in driving the right strategic initiatives of the organization. He encourages using one or more of these for discussion purposes as you go through the collaborative process of defining your corporate culture.

  • Creativity: “Think outside the box and share your perspective.”
  • Customer centricity: “The customer is central to everything we do.”
  • Empowerment and accountability: “Push decision making down in the organization and hold people accountable.”
  • Fairness: “Be fair and respectful in everything you do.”
  • Openness: “Be open and open-minded, listen and allow the best idea to win.”
  • Speed: “Make quick, analytics-based decisions.”

About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.

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Jozef Opdeweegh – How to Sell Your Business at the Most Attractive Valuation

Picture this: Your business has enjoyed an excellent run over the past couple of years. Revenue is following an upward trend, and EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) is keeping pace with your growth.

If a private equity fund owns the business you are running, there is a good chance the owners are contemplating a sale. A sale may be based on considerations such as how long the fund has owned the business and the perceived attractiveness to interested buyers.

On the other hand, if you personally own the business, you may be looking at bringing on fresh equity and operational know-how to expand your success.

Whatever the motives driving change may be, a tremendous amount of incremental value may be unlocked through the way you approach the process of selling your business. The most attractive valuation can be achieved by focusing on a number of key factors during preparation and execution of the sale.

Jozef Opdeweegh, a Miami businessman with over 17 years of experience as CEO, Chairman and Board Member of private and public companies discuss how to sell your business at the most attractive valuation.

7 Key factors for valuation

1. Timing

The right time to sell is when: (1) there are many prospective buyers, (2) there is a significant amount of private equity money (that has yet to be deployed and is actively pursuing new deals), (3) the IPO market is hot (if you are contemplating going public) and (4) the general economic climate is attractive (specifically in relation to the industry vertical(s) your company serves).

2. Business Performance Sustainability

Business performance in the years preceding the sale process is a main driver in maximizing enterprise value. Simply put, a buyer will only be willing to pay a certain multiple on your EBITDA if that buyer is sufficiently convinced the run-rate level of cash flow is sustainable in the future. By way of example, not a single buyer will pay a 10 times multiple of cash flow without conviction that the company will be able to generate that cash-flow level for at least 10 years.

3. Investment Bank Expertise

First, it is important to select an investment bank (or a broker) with a proven track record in your industry. When selecting an investment banker, exercise balanced judgment of your valuation expectation – do not simply pick the banker who promises the highest valuation.

Having access to a competitive set of bidders for your business will likely yield a positive impact on the obtainable valuation. Therefore, it is typically advisable to organize an auction with a broad set of participants.

4. Memorandum and Management Presentation Effectiveness

You will command the highest price if you spend a large amount of time on preparation. You simply need to produce the most comprehensive, compelling and best Information Memorandum and Management Presentation. You, along with your fellow presenters, should excel and be confident in front of an audience. Demonstrate knowledge of every detail related to the business, and be agile and quick in your thinking. Eloquently answer all the questions from the buyers’ community. Be enthusiastic, perseverant and energetic. It is a worthy investment to practice presentation skills with your team.

5. Team Strength and Cohesion

When you are selling your business, you are also selling your management team. It is important the buyers are exposed to the entire senior team at some point during the sale process. The management team should be fully aligned on culture, core behaviors and strategic vision. Any dissonance will be viewed as a weakness, which may negatively impact price. If you are planning on selling your business, avoid making meaningful management changes in the 12-months prior to the sale. A tenured leadership team reflects stability. It also reflects your ability to plan for the long run and to provide the best, most scalable team to a buyer.

6. Strategic Plan Integration

The ability to work well with a new ownership team depends on the business’s strategic plan. The sale process, which typically runs over an extended period, allows for extensive conversation around this topic. Therefore, the level of consensus surrounding the business’s strategic plan (post-ownership change) becomes clear.

If you, as the business owner, are in the position of being able to singlehandedly select the buyer, you can vigorously drive this point home. If you are running a company owned by a PE investor, you typically do not have the luxury of weighing in on the future ownership decision. In the latter scenario, spend sufficient time with the acquirer to demonstrate the merits of your strategic perspective and proposed direction.

7. Cultural Alignment

You and your new shareholders should share the same value set. Disparate perspective on culture and core behaviors will lead to significant future issues with your new shareholders. Often, this is the reason for failed acquisitions. Again, during the sale process, focus on corporate culture to assess alignment to maximize future success.

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Jozef Opdeweegh Outlines 7 Key Fixes to Transform a Floundering Business

All kinds of companies – both publicly and privately listed – fail to reach their full potential for a myriad of reasons. Perhaps the business is family owned, but the ownership group is content with generating an adequate level of recurring cash flow, despite underperforming against peer groups. Or, perhaps the business is publicly owned, but the management and the board are not incentivized to explore new avenues of growth and diversification. Rather, they are compensated to remain risk averse.

In both cases, there is the potential to unlock incremental shareholder value. And in the case of public companies, the board and the leadership team may even have a fiduciary obligation to do just that.

It can be empirically argued that for most businesses, there is a direct correlation between the size and level of diversification on one hand and the enterprise value of that organization on the other hand. Additionally, key drivers of shareholders’ wealth creation are cash-flow resilience and the comparative performance in terms of growth and profit margin versus direct competitors.

Common Business Issues & How to Successfully Address Them

No Well-Defined Strategic Plan

If a company does not have a clearly articulated strategic plan and a shared end goal, it is rudderless and its employees are unable to cooperatively work towards a future state.

An effective strategic plan describes what the company should ideally look like in a defined period (typically 5 years), and it sets key milestones.

The strategic plan needs to be simple, focused on no more than 5 key criteria, and it should be universally understood throughout the organization. It is imperative for the leadership to actively go out to its workforce to explain the strategic plan, its merits for all involved, and the importance of the contribution of each employee to the achievement of the end goal.

Lack of Organic Growth

Companies that fail to grow organically will risk a weakening of their position in the marketplace. For many organizations, mediocre performance essentially becomes institutionalized. The sales force lacks the right sales playbook because these companies fail to sufficiently invest in the training and assessment of their sales force, and they have incentive schemes that do not incent the right behaviors.

Key to turning around the revenue trend of an organization is the continuous comparative assessment of salespeople based on objective criteria, combined with (1) tailored sales force training, (2) a redesigned and simple incentive opportunity, and (3) a clear program of relevant KPIs to assess performance quality. In a situation where the sales force as a whole is underperforming and requires upgrading, forced ranking of talent with predetermined levels of attrition and inflow of new talent may offer an effective tool to enhance the overall quality of the sales effort.

Outgrowing the Leadership Talent

As a company grows and becomes more diversified in terms of its product/service offerings and geography, it is certainly not unusual to have to upgrade the leadership team in tandem. The demands on the executive team of a small and geographically concentrated business are vastly different from those imposed on the leadership of a rapidly growing and geographically expanding organization. It is important to ensure the quality of the leadership team is in sync with the ambitions of the company. The recruiting policy must be such that the talent attracted is scalable to lead the company through the 5-year horizon of its strategic plan.

Lack of Aligned Culture and Core Values

Once a company has clearly defined its mission, its vision, and the supporting behaviors through a process of consultation, it is imperative that the leaders of the organization demonstrate those behaviors in their professional and personal lives. Any form of lack of adherence or dissenting behavior should be addressed in a direct conversation. If the individual continues to openly or otherwise fight the agreed-upon core behaviors, the individual should be let go (in a fair and respectful manner). The biggest threat to the strategic plan is to allow festering passive-aggressive behavior – especially at the leadership level. While cultural alignment is extremely important between the associates, it is equally important that this alignment extends to the board and, in the case of a privately owned corporation, the shareholders of the company. Too often a cultural divide, and not the performance of the team and the company, inspires ownership groups or their representatives to make impulsive management changes.

Inconsistent Quality in Operations

The long-term future of a business is negatively impacted if it does not provide world-class levels of quality in its products and services. The company should develop a detailed operating system that is prescriptive in nature and that defines how its facilities and back-office functions should operate across each geography or location. Such a system will guarantee a predictable and excellent customer experience. The operating system should focus heavily on concepts of lean manufacturing, six sigma, continuous flow and first-time-through quality.

Lagging IT Infrastructure and Business Analytics

Any business benefits greatly from a thorough and modern ERP solution that covers the entire spectrum of financial accounting, distribution or supply chain management, manufacturing, human resources and CRM. Businesses also benefit from access to relevant business analytics in each of these areas. While boards are often reluctant to implement a new ERP solution (it can be costly and can cause distracting business interruption), the ERP solution is truly the engine of the business. Not only should a business invest in modern ERP solutions, it should also expect to constantly reinvest in modernization and to upgrade every 10 to 15 years.

SG&A Overhang

A company needs to identify how much it is willing to spend on the sum of support functions, based on a comparison to its peer group and its strategic ambitions. It also needs to institutionalize the notion that SG&A is scalable, up and down, and to think of it as a semi-variable expense. When a company hits a rough patch, the impact on its cash flow – and even its survival – is often defined by its ability to scale down SG&A. Conversely, when a company grows, it should take advantage of the scalability of support function. SG&A-costs, expressed as a percentage of sales, should decrease as the company grows.

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Jozef Opdeweegh: 7 Reasons Why Private Equity Acquirers Fail to Mesh With Incumbent Leadership Teams

When a private equity fund sells a successful company, the company’s leadership team would seem to be a valuable asset for the new owner. After all, the team built shareholder wealth and it has intimate knowledge of the business. But in many cases, the executive leadership team does not survive the change in ownership, even if its performance was stellar. According to longtime CEO Jozef ”Jos” Opdeweegh, ”Unless the ownership transition is undertaken with great care, it can undermine the continued success of the company and its value.”

Opdeweegh, a veteran of four private-equity company transitions, notes that when a private equity fund initially invests in a company, it is common for the purchase to be based on an investment thesis. ”Such a thesis may be based on premises like turn-around, M&A, organic growth, SG&A reduction, balance sheet optimization or a combination of these elements. The company leadership team executes to that thesis to build shareholder wealth. When the end of the investment horizon approaches, a private equity fund will sell the business to the highest bidder.”

So, what are the issues that can prevent a new owner from meshing with the incumbent leadership team? Below, Opdeweegh explains why, when, and where things tend to go awry.

1. The inability of the leadership team to participate in choosing the new owner

In an auction, which is the typical process used to sell a company to the highest bidder, the executive team is not typically invited to weigh in on the selection of the new owners. According to Opdeweegh, ”This can lead to a dissonant outcome. Oftentimes, a clash of strategic views and corporate cultures occurs.”

2. The new owner’s failure to recognize the importance of the management team

”Some private equity owners view a management team as an end to a means, rather than as a valuable and continuing asset,” cautions Opdeweegh. ”In determining their future strategy, they quite often they will trust the judgment of a less qualified consultant over that of a seasoned management team with a proven track record.” Additionally, notes Opdeweegh, ”Private equity fund leadership often fails to appreciate how challenging it will be to achieve the post-purchase target return, and consequently, they fail to recognize the importance of the management team.”

3. An unbalanced payout to the owner compared to the management team.

Opdeweegh says, ”There is an institutionalized lack of balance in the economics of private equity deals. It is not uncommon to have deals in which an individual private equity partner earns a larger payout than the entire management group.” He goes on to explain that the inequity in compensation illustrates an apparent lack of appreciation for the complex and demanding work of management teams.

4. A clash of corporate cultures

”It is not atypical,” says Opdeweegh, ”for a clash of cultures to arise between a new shareholder group and an existing executive team.” The acquired executive team typically has worked together for an extensive period and has developed a shared set of core values. This set of values, which constitutes the corporate culture, may be very different from the behaviors the new owners wish to instill into their company vision. Says Opdeweegh, ”If values such as fairness, openness, inclusiveness, the speed of decision-making and respect are not aligned, cultural and business issues will surface.”

5. Preconceived notions and impulsive decision-making by new owners

Opdeweegh says that new owners often jump to conclusions when assessing the talent in their acquired business. For instance, during management presentations, they might conclude the CFO is lackluster or the COO is nontraditional. ”A rush to judgment is not only unfair to management,” he warns, ”it can lead to a crisis for the new owners because a forced executive replacement usually triggers an executive team exodus. Such a migration will significantly impact the business with the loss of much institutional knowledge.” Opdeweegh adds that hasty management churn can easily result in a three to four-year setback in revenue, EBITDA trajectory, and performance.

6. Disagreement over the new strategic plan

Speaking from his experience in the business, Opdeweegh explains how a new owner will develop a strategic plan to form the foundation of their investment decision. ”This strategic plan is based on assumptions relating to organic growth rate, diversification across geographies, customer and industry verticals, M&A activity, balance sheet structure, cost of the back-office functions, and other relevant aspects of value creation. The incumbent executive team may view some important aspects of the plan as unattainable or undesirable for shareholders’ wealth creation.” Disagreement about the strategic direction of the company and the key underlying initiatives is another classic reason for a failed relationship between the acquirer and the acquired executive team.

7. Second guessing of management team decisions by the new owner

Even if the new owner and the incumbent management team agree on the strategic plan, the new owner can undermine success by continually second-guessing management decisions. Says Opdeweegh, ”Private equity funds recruit from a pool of the best and brightest professionals, but these individuals have spent their careers building experience in the grueling PE environment and therefore tend to lack concrete corporate leadership experience. Undoubtedly with the best of intentions, these hardened professionals will have an opinion about many facets of the day-to-day, tactical and strategic management of their portfolio companies.” Adds Opdeweegh, ”Consequently, the management team spends an inordinate amount of time communicating or justifying the rationale of certain decisions to the shareholders. The resulting drag on time and morale can cripple efforts to reach target returns.”

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Jozef Opdeweegh and Leadership – What Makes a CEO Successful

No two business leaders or executives boast the same leadership style. Because circumstances always vary, there is no correct, one-size-fits-all way to lead. Nevertheless, there are certain traits excellent leaders share. Not only do these traits drive the company forward, they also foster admiration among employees.

Jozef Opdeweegh, known as Jos, has served for over 17 years as CEO of public and private companies in global technology, distribution, and supply chain optimization. Opdeweegh has extensive experience leading different groups of people and teams of varying size in multiple industries.

His long career as a leader has provided him with intimate knowledge of the traits a good executive should display. These traits or attributes are not only crucial for the success of the company but also to assure employees are inspired and empowered by the CEO. Such an environment results in positive growth.

Opdeweegh has outlined 5 traits that make for a successful CEO, and he has included observations from former employees.

1. Makes Decisions Decisively

CEOs, like most leaders, must make numerous daily decisions, both large and small. A great leader can make tough decisions and take accountability for subsequent consequences. According to the Pew Research Center, “Intelligence and decisiveness are considered ‘absolutely essential’ leadership qualities by at least 8-in-10 adults.” The same study goes on to note how men and women both agree that being honest, intelligent, organized, and decisive are also integral qualities. The capacity to make decisions, especially tough ones, is seen by employees as a trait of a strong leader.

2. Engages People

The ability to engage people is an imperative trait for a CEO, and it is one well-recognized by people who have worked with Opdeweegh. Former employee Tim Oglesby says, “One of the key things you need in a leader is the ability to be engaging. Jos is very engaging with people in various roles. It could be the associate driving a forklift in the warehouse, all the way to the top including team leaders, the executive team, shareholders, and potential investors. Jos is able to engage a broad team and get everyone on the same page, moving forward in the same direction.”

Oglesby has worked with Jos in different capacities for over 10 years. He first worked with Jos at Syncreon as CIO, at Americold as CIO, and then at Neovia as CTO. At each company, Jos presided as CEO.

3. Puts Employees First

Typically, when thinking about the hierarchy of an organization, the CEO is at the top, followed by the management team, and then come the rest of the employees. Opdeweegh focuses on flipping that pyramid upside down and putting employees at the top. Doing so puts more emphasis on employees who have direct contact with customers. Putting employees first also makes for a better communication flow. Not only does this leadership style empower employees, but according to former employee Carey Falcone, it can create a completely different environment.

“When you flip that pyramid upside down, it starts to seed a different culture. Jos truly created an environment where people were focused on a common goal but not limited by the traditional way of getting there. He encouraged people to think outside the box and to speak up. Jos fostered an environment where everyone started to think about how they could drive the business forward,” says Falcone.

Carey Falcone was recruited by Jos to come work with him at Americold. He credits Jos’s leadership style and the culture Jos created as key things that attracted him to the role and working relationship. Falcone served as the EVP and Chief Customer Officer at Americold for over two years. When Jos left to become CEO of Neovia, Falcone went with him and worked as the EVP and Chief Commercial Officer for three years.

4. Communicates Clearly

Leaders and CEOs must have excellent communication skills. They have to be able to communicate clearly and effectively, not only to their management team but also to the broader organization. A study by Navalent found that “top executives are consistently transparent and balanced in their communication. They effectively translate their view of business potential and challenges, as well as expectations for action using succinct, direct and readily understandable language in doses that are easily digestible. They devote time to their connections.” Communication is invaluable in the world of business, especially between a CEO and his or her team.

5. Inspires People

Employees will be more committed to the success of the company if they feel inspired by leadership. A successful company generally boasts a roster of employees who enjoy working there. For example, employees consistently rate Google as one of the best places to work. Giving employees a voice, equipping them with the knowledge they need to succeed, and inspiring them to drive the company forward is beneficial to the company at large. Carey Falcone agrees, saying, “The most important people were the people who actually touched our customers. The senior leadership team was truly there to empower, support and enable people who were customer-facing to really do their jobs. Management supported them and showed them they had everything they needed to be successful.”

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Jozef Opdeweegh: Fixing 7 Key Problems of an Underperforming Business

All kinds of companies – both publicly and privately listed – fail to reach their full potential for a myriad of reasons. Perhaps the business is family owned, but the ownership group is content with generating an adequate level of recurring cash flow, despite underperforming against peer groups. Or, perhaps the business is publicly owned, but the management and the board are not incentivized to explore new avenues of growth and diversification. Rather, they are compensated to remain risk averse.

In both cases, there is the potential to unlock incremental shareholder value. And in the case of public companies, the board and the leadership team may even have a fiduciary obligation to do just that.

It can be empirically argued that for most businesses, there is a direct correlation between the size and level of diversification on one hand and the enterprise value of that organization on the other hand. Additionally, key drivers of shareholders’ wealth creation are cash-flow resilience and the comparative performance in terms of growth and profit margin versus direct competitors.

Common Business Issues & How to Successfully Address Them

1. No Well-Defined Strategic Plan

If a company does not have a clearly articulated strategic plan and a shared end goal, it is rudderless and its employees are unable to cooperatively work towards a future state.

An effective strategic plan describes what the company should ideally look like in a defined period (typically 5 years), and it sets key milestones.

The strategic plan needs to be simple, focused on no more than 5 key criteria, and it should be universally understood throughout the organization. It is imperative for the leadership to actively go out to its workforce to explain the strategic plan, its merits for all involved, and the importance of the contribution of each employee to the achievement of the end goal.

2. Lack of Organic Growth

Companies that fail to grow organically will risk a weakening of their position in the marketplace. For many organizations, mediocre performance essentially becomes institutionalized. The sales force lacks the right sales playbook because these companies fail to sufficiently invest in the training and assessment of their sales force, and they have incentive schemes that do not incent the right behaviors.

Key to turning around the revenue trend of an organization is the continuous comparative assessment of salespeople based on objective criteria, combined with (1) tailored sales force training, (2) a redesigned and simple incentive opportunity, and (3) a clear program of relevant KPIs to assess performance quality. In a situation where the sales force as a whole is underperforming and requires upgrading, forced ranking of talent with predetermined levels of attrition and inflow of new talent may offer an effective tool to enhance the overall quality of the sales effort.

3. Outgrowing the Leadership Talent

As a company grows and becomes more diversified in terms of its product/service offerings and geography, it is certainly not unusual to have to upgrade the leadership team in tandem. The demands on the executive team of a small and geographically concentrated business are vastly different from those imposed on the leadership of a rapidly growing and geographically expanding organization. It is important to ensure the quality of the leadership team is in sync with the ambitions of the company. The recruiting policy must be such that the talent attracted is scalable to lead the company through the 5-year horizon of its strategic plan.

4. Lack of Aligned Culture and Core Values

Once a company has clearly defined its mission, its vision, and the supporting behaviors through a process of consultation, it is imperative that the leaders of the organization demonstrate those behaviors in their professional and personal lives. Any form of lack of adherence or dissenting behavior should be addressed in a direct conversation. If the individual continues to openly or otherwise fight the agreed-upon core behaviors, the individual should be let go (in a fair and respectful manner). The biggest threat to the strategic plan is to allow festering passive-aggressive behavior – especially at the leadership level. While cultural alignment is extremely important between the associates, it is equally important that this alignment extends to the board and, in the case of a privately owned corporation, the shareholders of the company. Too often a cultural divide, and not the performance of the team and the company, inspires ownership groups or their representatives to make impulsive management changes.

5. Inconsistent Quality in Operations

The long-term future of a business is negatively impacted if it does not provide world-class levels of quality in its products and services. The company should develop a detailed operating system that is prescriptive in nature and that defines how its facilities and back-office functions should operate across each geography or location. Such a system will guarantee a predictable and excellent customer experience. The operating system should focus heavily on concepts of lean manufacturing, six sigma, continuous flow and first-time-through quality.

6. Lagging IT Infrastructure and Business Analytics

Any business benefits greatly from a thorough and modern ERP solution that covers the entire spectrum of financial accounting, distribution or supply chain management, manufacturing, human resources and CRM. Businesses also benefit from access to relevant business analytics in each of these areas. While boards are often reluctant to implement a new ERP solution (it can be costly and can cause distracting business interruption), the ERP solution is truly the engine of the business. Not only should a business invest in modern ERP solutions, it should also expect to constantly reinvest in modernization and to upgrade every 10 to 15 years.

7. SG&A Overhang

A company needs to identify how much it is willing to spend on the sum of support functions, based on a comparison to its peer group and its strategic ambitions. It also needs to institutionalize the notion that SG&A is scalable, up and down, and to think of it as a semi-variable expense. When a company hits a rough patch, the impact on its cash flow – and even its survival – is often defined by its ability to scale down SG&A. Conversely, when a company grows, it should take advantage of the scalability of support function. SG&A-costs, expressed as a percentage of sales, should decrease as the company grows.


Jozef Opdeweegh

About Jozef:

Jozef Opdeweegh, also known as Jos, has served as CEO for over 17 years of global technology, distribution, and supply chain optimization companies with 5,000 to 20,000 employees, public or privately held. Opdeweegh has extensive board membership experience on 4 continents with related and unrelated companies.

Website – http://jozef-j-opdeweegh.com/
LinkedIn – https://www.linkedin.com/in/jos-jozef-j-opdeweegh-13986b70/
Related Articles: Jozef Opdeweegh- 6 Core Organizational Values and the Importance of Corporate Culture
Jozef Opdeweegh – 9 Key Characteristics of a Successful Distribution Business


Jozef Opdeweegh

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Jozef Opdeweegh – Six Factors for a Top-Notch Sales Team

No matter the industry, there seems to be one consistent impetus of enterprise value: growing revenue and cash flow faster than competitors drives a positive impact on the fair market value of the business. However, achieving a superior rate of growth requires putting in place the right talent, culture, and tools for your sales and marketing department.

Tapping into his nearly two decades of business leadership experience, Jozef Opdeweegh shared his view on the key factors that create a top-notch sales and marketing team.

Jozef Opdeweegh

1. Recruitment

As is always the case, human talent is paramount to success. It is hard to overstate the importance of recruiting the right professionals – perseverant and energetic, smart and independent, and most importantly, naturally aligned with the corporate culture and core behaviors. A company’s most valuable asset is its human talent. Talent recruitment and development should, therefore, be at the forefront of its strategic initiatives.

Regrettably, most companies do not spend enough quality time with prospective candidates before offering them a position. The assessment of cultural fit especially requires repeated interaction with a number of team members, placed in different situations and settings.

2. Compensation

Great sales people have unwavering confidence in their ability to sell. They appreciate the opportunity to earn outsized compensation in exchange for truly stellar sales numbers, and consequently, should not require steep base levels of compensation. A compensation structure with a large success-based component will allow you to attract the right sales team, always hungry for the next customer win.

The success of the sales team should not only be measured in terms of new revenue but should also hinge on the profitability of the sale, the overall customer retention levels and the Net Promoter Score. Furthermore, the variable salary component should be easy to calculate, measure and track. For a new member of the sales team, it may be appropriate and fair to guarantee a floor in terms of variable compensation for the initial stages of his or her employment until he or she has been able to build a book of business.

3. Everybody is a sales person

There is an important cultural component to creating a company that excels in sales and marketing. It is the notion that every single associate is a representative and a sales person for the company. As we are all keenly aware, when a prospective customer interacts with the company, every facet of that interaction can make or break the deal. All associates should live and breathe the concept of customer centricity and embrace the notion that the customer is at the heart of the company’s right to existence.

4. Support

In order for a sales team to excel, it requires quality support on a number of levels, including:

  • Effective marketing strategies;
  • A competitive value proposition;
  • Innovative product or service design;
  • Recurring sales training;
  • Accurate daily reporting tools on the most relevant KPIs (key performance indicators).

Additionally, executives play an important supporting role in customer acquisition and retention. In most sales driven organizations, executives regularly accompany the sales force on its visits to prospective and existing customers. These executives participate to assist in closing the sale or to listen firsthand to the concerns and requirements of the customers with a hard commitment to address these issues expeditiously.

It is a proven best practice to assign a number of key accounts to each executive, even if they are not directly related to sales. In this model, the IT leader, the Chief Legal Officer and any other executive would be a lead account manager for a number of key accounts – creating greater connection and line of sight between the executive and sales teams. And naturally the most important business development role is reserved for the CEO, who should spend a significant part of his or her time on sales and account management.

5. Sales playbook

The sales playbook is the translation of the overall sales and marketing strategy, tailored for the individual sales person. It is a prescriptive set of processes and procedures that guide the sales person in his or her daily task of convincing new customers and retaining existing ones, all while preserving or enhancing the contribution margin of the sale. The sales playbook describes the relevant KPIs, the performance against those KPIs, the required numbers of interactions per unit of time with prospective customers, the proportionate time to be spent on customer retention, how to protect gross margin, what the return requirements are on a sale, and many other factors and processes. The sales playbook is an accountability tool that guarantees a consistent approach to business development across the organization and that rolls up to the strategic business development plan of the enterprise.

6. Pipeline measurement

The key to any mature business is forward visibility into revenue and cash flow. A crucial component of that forward visibility is a reliable perspective on new sales, customer churn and gross margin differences. To that effect, it is recommended that the sales and marketing group, assisted by the financial planning and analysis team, devote the right amount of time and resources on developing a probability-weighted new business pipeline, that analytically maps the quantum and probability of future sales. The process of arriving at a high-quality pipeline is likely an iterative process, where the post-factum determination of the accuracy of prior predictions continually feeds into further optimizing the quality of the new business pipeline.