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Showing posts from March, 2009

Do's and Dont's for your Board - By Sanjay Anandaram

You’re delighted to have successfully raised capital. You can now execute the plan and grow the business. One of the first things you do is hire senior sales and marketing people. You negotiate their compensation with them and are about to issue an employment contract. Then you remember that you’re supposed to get the approval of the board before hiring certain categories of people. The board does not approve the hiring. You feel humiliated, dejected and angry. The board is upset that you didn’t consult them before taking the decision to hire. Soon, the relationship sours.

You get irritated and annoyed with some board members because of the enormous micro-managing that they do. It seems that every little decision needs to be run past the board leading to frustratingly long decision making. In addition, you feel upset that you are no longer the driver of the company but just enacting someone else’s decisions. Not a conducive environment for a company to blossom in.

First and foremost, i…

Keeping Commitments in a Downturn - By Sanjay Anandaram

The current economic environment is naturally forcing companies to watch every paisa of their cash-flows and pounce on any and every opportunity to either save money, defer payments and/or increase inflows. Often times, such hawkish behaviour can lead to a situation where commitments are reneged. For example sample this question from the CEO of a young company “Should we trim or stop the variable payments to our employees during the current downturn?”

At the time of joining the company, employees had been promised variable payouts based on their performance. Accordingly, all of them were expecting some payouts as no one believed they weren’t deserving of any performance payout! Now, the company was struggling to make ends meet and wanting to make the cash in the bank extend many more months. The employees clearly were aware of the situation not just in the company but outside as well. What should employees do in such circumstances?

In addition, given the environment all around, performa…