AFC/Tellabs: One of My Learnings

I thought I would start with one thing that sticks out from my time at AFC and Tellabs. This learning is around what Executives are actually supposed to do and how that translates into what leadership actually is.

Most people look at Executives and are curious to what their job is. They think they know what they want the Executive is supposed to do. But the Executive Team is truly responsible to the Board of Directors most directly. The Board of Directors represents the Shareholders. So simply, the job of the Executive Team is to run the business in a way that satisfies the shareholders. Pretty simple right?

I want to point out that doing this is not always actually in the best interest of the Executive. I want to use Sycamore Networks as an example. Sycamore went public during the Optical Bubble and ended up with about $1B in cash on its Balance Sheet. The bubble popped, the market for the product collapsed, and a huge percentage of people were laid off. There was a stump of a company with less than 100 employees that generated around $20M of revenue a year.

The business could continue to operate like that for a really long time. Dozens of years. And all the employees would still be getting paid, even those Executives. The jobs would likely be boring and their would not be growth, but if you just wanted a steady paycheck there is nothing wrong with it. I want you to now take the perspective of a shareholder. What is the plan to grow the share price? Well, there was none. So why be a Sycamore shareholder? I have no idea unless you wanted to roll the dice on someone paying a premium for Sycamore.

That leads to the job of the Executive Team. This is the Creation, Communication and Execution of plans. These plans need to deliver results first to the shareholders. Customers, Vendors and Employees are also people that are interested. But Employees work for the shareholders, not the other way around. So as an Executive or a Small Business Owner, Do you have a plan? Have you told others about your plan? How are you tracking against your plan?

One last part of the problem is that many people can create close in Executable Plans. Many people have a challenge with is creating an overarching strategy that links all these plans to get somewhere useful. If you are having problems with this then call me.  I want to know your goals and set up a plan to help you get to them!

Jim Sackman
FocalPoint Business Coaching
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