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How to Stage a Coup

Asking the boss to step down. Plus: Sharing the wealth
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I am the vice president of sales and marketing at an information technology start-up. I have a very close relationship with the CEO. Unfortunately, I don't think she is the right person to lead us. How can I suggest that she find another CEO without crushing her ego?

Name withheld

William Shakespeare knew a thing or two about the dilemma of confronting dangerous leaders. "Crown him?.../And then, I grant, we put a sting in him," Brutus fretted over Caesar, and we all know how that turned out. In your situation, assassination isn't a concern. But firing -- your firing -- is.

The best way to save your neck, of course, is to never stick it out. Try sending an anonymous letter outlining the CEO's shortcomings to your company's chairperson, advises Neil Lebovits, president and COO of Ajilon, a staffing firm in Saddlebrook, N.J. Encourage disgruntled colleagues to follow suit. The more wheels the chairperson hears squeaking, the more likely he or she is to apply investigatory grease.

If your boss has no boss, confrontation is unavoidable, says Michael Berman, a business consultant with Rogen International in New York City. Berman, who once asked a client to resign, suggests meeting one-on-one. Bring a list of reasons why the company would benefit from a new CEO. Be frank: Softening criticisms will weaken your case. And keep in mind that if your boss is an equity holder, she's probably not going anywhere. Which means you, like Brutus, could be history.

Put Me on the Page

I own a company that designs and manufactures exercise equipment. We are having problems getting our products into catalogs. Are there consultants that can help?

Craig Day
2Days Body & Fitness, Willoughby, Ohio

Muscle matters, as an exercise maven like you should know. And well-connected distributors are the Schwarze-neggers of catalog sales. Distributors buy products from manufacturers at discounted bulk rates and sell them to catalogs for more. How big a discount they'll demand varies, but most expect a 35% return on each order.

Industry events and local trade directories are the best sources of distributors. Most will have several clients, so your products may not get all the love they deserve. To prevent that from happening, consider hiring a salesperson to help drum up business with catalogs. Then have your distributor close the deals. Or follow the lead of Lise and Jeff King, who made their distributor a co-owner of Kittywalk, their pet-stroller maker in Marshfield, Mass. Now that they have a strong -- and highly motivated -- man to do the heavy lifting, their products have been in 15 catalogs, including Hammacher Schlemmer and Skymall.

Sharing the Wealth

My company, which arranges study abroad trips, is very profitable, and I want to share the wealth. How can I give my employees a piece of the action without giving them equity?

Brian J. Boubek
Cultural Experiences Abroad, Tempe, Ariz.

There are ways to offer sizzle without giving up too much stake. And as with most things, being really successful helps.

The easiest way to spread wealth is to dole out a percentage of profits at year's end. But that's not likely to change the way your employees act or think, warns Suzanne Lemen, CEO of Dynamic Corporate Solutions, a human resources consulting firm in Orange Park, Fla. Lemen recommends creating a bonus program based on a specific goal that drives profit: At your firm, for example, the goal might be booking a certain number of trips. The target should be ambitious but within human reach. Chart progress at weekly meetings and adjust your game plan accordingly.

Issuing "phantom stock" is another way to share without the shares. At the end of the year, determine your company's valuation and pay out to employees the cash equivalent of actual stock. Explain to them how the valuation was reached and outline goals for boosting that number each year. Vest the shares for three or four years. And, if you can include your whole staff in the program, so much the better. Motivation, like cake batter, is best spread evenly.

Stumped by a thorny business problem? Let Inc. help. Send your questions to AskInc@inc.com. We'll consult with experienced entrepreneurs and savvy advisers, folks who've been where you are and figured out what works and what doesn't. If you don't like what we have to say -- well, you can tell us that, too.

Last updated: Mar 1, 2005




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