What are the mission critical issues for a startup? Short sales cycles, cash flow, and adaptable employees are on my short list of key issues that startups must address. Not solving these problems can snuff out a new enterprise. When an executive team manages these issues, can magic still occur in a team?

Below is my journal entry from a key time when I was a VP of Sale Operations and Marketing.

June 16, 2006

My job heats up as I tackle Sales Operations. I’m also in charge of Channel Management. Our lead investor wants better performance from our three channels. I’ve been busy trying to solve channel conflict, working with my CEO to implement the Sales team changes in order to accommodate our channel.

This week we had our lead investor/board chair meeting that put us into full gear in determining our funding requirements, exit strategy, and lower than expected performance by our Sales/Channel efforts.

The Highest Level Discussion Start-up Executives Have

In preparation for our investor, we’ve had the highest level of talks an executive team could have:

• What’s our exit strategy?
• Do we sell off existing company with existing product, only so we can build our really big idea in a new company with our executive team and key workers?
• Will the investor want to invest in the big idea?

There are so many questions to answer at the Executive level. During our weekly meeting, we were discussing our exit strategy. I looked at my CEO and said,

“I think you sell your company, get your money out of it. Your company has too much baggage and it’s the not the right fit for the new thing you want to do. Create a new company for that big idea. And yes, I would love to be a player in it. As a founder myself, I can’t stress how this decision is about you and what you want.”

After I floated this idea, my peers and CEO all voted this way.

Staying the Course

After the investor meeting, we were fortunate to have our investor clear the path for us during our big meeting with him. He said,

“Stay the course, you guys are doing great. I’m disappointed in the channels, because I thought your primary channel would perform better. Let’s be the best in our product class. Target and secure three more channels, so we can integrate into their products. The big idea is not a priority. It’s possibly for a spin-off company, after we sell your product off. You guys are the perfect development house in creating and taking new product to market and don’t have to sell the company, just the product. Stay the course and before you know it, we’ll have buyers.”

I loved hearing our investor tell us this with his utmost confidence. As a team, we were relieved and ecstatic, but my CEO and I still have that other pressing matter of getting the Sales team on board with the department changes.

Adapting to Limited Resources

My CEO and I have are working with the Sales team. We corrected the compensation plan, identified performance standards, and now have to get the team on board.

We’re at a burn rate and will run out of money by the end of fall.  He understands their concerns, but they’ll have to understand that his company runs out of money in the fall. Our investor has to put more money into us and he’s not happy with our inconsistent sales performance. He’s worried about keeping the doors open.

Food for Thought

Employees in startups or companies having budget problems must try to look beyond their job to understand why sacrifices or changes are being asked of them. They must realize there are larger issues facing the company than just the day-to-day of their job or even the nature of their compensation.

While some of sacrifices may not make sense, they most likely make perfect sense at the executive level. Patience, buy-in, and support go a long way with your superiors, when an executive team sees this commitment from its employees.

For would-be executives? Managing a challenging cash flow position forces you to focus, be candid, and be supportive of your peers and CEO during times of uncertainty.

You must be prepared with the best data and presentation for your board or investors. Hold yourself accountable for your area of responsibility. Investors and board members don’t want excuses and don’t care if the problem isn’t your department. All they care about is that there’s a problem with the team and the company.

A united executive team is magical, even during times of uncertainty. It may sound silly, but when each executive team member loves working with each other and as a team, it’s the most special milestone that occurs in your career. Find and create a team where magic thrives. It changes work into play.

The Smart Lemming Diary is a series that chronicles a journey of laid-off worker, who becomes a Vice President of Sales Operations & Marketing for a small entrepreneurial healthcare technology company. For previous entries in this series, click here.  For the first diary entry, click here. For the highlighted Smart Lemming Diary entries, click here.

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