Dina Dwyer-Owens, chairwoman and CEO, The Dwyer Group

Interviewed by Dustin S. Klein

Dina Dwyer-Owens has led The Dwyer Group Inc. as chairwoman and CEO since 2007 and has guided service brands — including the iconic Rainbow International nameplate— to impressive growth during tough economic times.
The company, founded in 1981 by her father, Don Dwyer Sr., operates six other franchise businesses as well that provide cleaning, plumbing, electrical, HVAC, landscaping, appliance repair, glass repair, and related services through 1,600 franchises in nine countries.
Dwyer-Owens has worked for the Waco, Texas-based company since its inception. She recently talked with Smart Business about how she grew up in the company and how she has propelled The Dwyer Group’s franchises over the past six years to success in a sluggish economy.

Q. What did you do before you came into the company?
A lot of different things. Before The Dwyer Group, my father had his own car wash businesses. So at the age of 13, I was working at his car washes. I pumped gas and sold polish waxes. Then he had restaurants he was thinking of franchising. I worked in the restaurants and did a lot of catering. I worked in a full-service restaurant, and I was the hostess and a waitress. This was all in high school. There are six kids in my family, and we all worked from the time we were 12 or 13.

Q. What made you decide that this was what you were going to do, to rise through the ranks and take over the company?
I wasn’t sure when I first got out of high school. I attended Baylor University. My father wanted me to go to school for networking. He knew education was important. Going to school full-time and working for him full-time, I knew something had to give. It wasn’t fun doing both. I wasn’t getting the best out of either one of them.
I went to him one day and said something has to change. He said why don’t you just take the semester off and come work side by side with me.
I’ll never forget the day a franchisee came up to him at a convention and said, ‘I want to thank you for the opportunity you’ve given me. It has changed my life. Our family is doing things we only dreamt of doing because of this opportunity.’ I listened and thought, wow, I get what he means by his mission statement, which was very clear. Since we were kids, he always told us what his mission was, which was to teach his principles and systems of personal and business success so that all the people he touched could live happy, successful lives.
It’s not just about business success and making a lot of money. It’s what do you want out of your personal life, and how is this business going to help you with that? Working full-time with him for one semester, I learned more than I could have ever learned at school.

Q. What franchise did you work with originally?
It was Rainbow International, our flagship brand. Today it’s a restoration and cleaning company.

Q. How did you decide which opportunity to pursue?
When I worked with my father side-by-side during that semester, I was involved in the real estate division. I was doing stuff with the franchise companies. I was teaching new franchisees how to telemarket. And I traveled the world with my father being an ambassador for the company. He was doing that on purpose. He wanted me to know all of the things he knew.
Then by the mid ’80s, I was running the real estate company. I had a team of 28 people and ran about a million square feet of real estate, and still worked closely with him in the franchising part of the business.
I got involved in franchise sales. I generated a lot of leads. I was the top salesperson in ’83. My father kept me by his side and let me have the freedom to run the real estate division. At the same time, I traveled a lot with him. I loved learning and being part of that. Some of my other siblings weren’t as interested. They preferred to stay home. I spent a lot of time with him.
We went public in ’93. I was on the board of the public company. He started to have me sell off the real estate. He said, “I really need you full-time on the franchise side. Let’s get the real estate sold.” He died of a heart attack at the age of 60 in 1994, a year after taking the company public.

Q. Did you step in right away then?
Well, I was still selling the real estate division off, and we were building properties in the Cayman Islands. Seven Mile Shops was a property we owned there. I was responsible for leasing it. It was a new business we were building. I wasn’t the right person at the time to step into the CEO-president role.
A brother-in-law of mine who had been in the business since he was 16 really knew the franchise business and the development side better than I did, and he stepped into that role with the support of my sister, me, and a handful of professional management team members that my dad had surrounded himself with. He was very entrepreneurial.
After doing that for four years, I was VP of operations. The board knew it was time for a change. The president at the time was great, but he was a real franchise developer, not the best guy to do the day-to-day business.
They did a little shifting and asked if I would be willing to come in as the acting president and CEO. I was 35 at the time, and I knew there was some risk with the shareholders putting me in charge. I accepted the position of acting president, and got some push-back from some top franchisees that I wasn’t the right person for the job. I said, “Look, I get it. I’m not a plumber. But I don’t need to be. I’m the customer. Who better to run this business than the customer who understands what we should be doing for them?”
I said, “Give me six months, and if I don’t prove myself, I’ll be the first one to step aside and say find someone else.” In six months, the one guy who kind of led the bandwagon saying she’s not the best person became my biggest cheerleader.

Q. How many brands did you have?
We had six at the time. Today we have seven brands, and a software company. We have a buying group which is a wholly owned subsidiary. And we have handful of company-owned stores.

Q. How do you look for opportunities for those brands to expand?
First of all, it goes back to our mission. We’re very clear on how we can help our franchisees achieve the things they want in life, and we make the franchise the vehicle to help them do that. We attract team members who care about the franchisee’s personal success as much as their business success. It goes hand in hand. It’s organic.

Q. Can you give us some details about the investments you’ve made in training?
When you think about the business we’re in, the competency to train is a constant. You have to keep training the franchisees to create success for them. It’s such a big part of what we do. For most of our brands, it’s teaching the business side of the business. We have a lot synergies. We have seven different brands, so we can pool the best of all those brands and bring it into one training program.
We have a training facility in Waco where we do all of our core training. I teach the very first class to all the new franchisees. All of my key team members usually teach a class the first couple days of training. We pool the talent we have, and we can do the same classes for all seven brands, and they then break out to specific things.

Q. What matrixes do you use to measure performance?
The most important matrix is the net promoter score. We have a wonderful system that we have automated where we do the follow-up with the end-user customer on behalf of the franchisee. We will make the call to the customer after the service provider has been there to find out how the service was. It’s a 30-second survey. The most important question is “Would you refer us to a friend or family member?”
The scores range from negative 100 to positive 100. Our franchisees on average score a 74. This is home service. It’s kind of like paying someone to fix your car. Our franchisees are doing a great job taking care of the customer. Some companies are higher, but the average is 74.

Q. Do you put rewards or incentives in place for the franchisees?
You bet. We have what we call our Top Gun club. It represents the franchisees that not only do the most in revenue but fit a handful of criteria: profitability, leadership, and helping other franchisees grow their businesses. There are individual awards too. If you’re awesome at net promoter score or a team member, we will highlight them. The recognition from corporate headquarters means a lot to our franchisees.
How to reach: The Dwyer Group Inc., (800) 490-7501, www.dwyergroup.com
Takeaways
Learn all aspects of your business.
Pool talent to cross-train.
Use surveys to gauge performance.
The Dwyer-Owens File

Dina Dwyer-Owens
Chairwoman and CEO
The Dwyer Group Inc.

Education: Baylor University

Dwyer-Owens on communication: I’m taking communicating to a new level now. It’s called connection. It’s one thing to communicate, but it’s another to connect with your franchisees. We have a lot of methods of doing that. The most important method is we have franchise consultants who are really responsible for helping you grow your business and achieve your personal dreams.

Dwyer-Owens on training: We have lots of training events. There’s a lot of best-practice sharing. We have a leadership summit where we go away for four days every year. We bring the top folks from all seven brands. We have the best of the best, who then go back and educate the rest of the franchise family on what we’re doing, why you need to be involved in it, and how it’s going to make a difference in your business.

Dwyer-Owens on change: A couple of years ago, we found our franchise development was slipping. We weren’t keeping pace with new franchise units. We were not hitting the numbers that we were accustomed to hitting. So we totally re-engineered our franchise sales process. We brought people in from the outside who had expertise in managing complex sales, and we totally changed our process. We really had to shake it up, and we shook up the whole franchise development team. And we have already seen great results.

Dwyer-Owens on innovation: I sometimes drive people crazy, I think, because I’m so open to new ideas and innovation that sometimes they have to tell me to wait — aren’t we doing enough already? But I love the whole creative side of the business and doing things differently. It’s really my team that innovates. I may come up with an idea or two, but the team really makes things happen.

Phil Terry, CEO, Monarch Beverage Co. Inc.

If there is one thing that doesn’t change much in good times or bad times, it’s alcohol consumption. Phil Terry knows that fact pretty well.

“Demographically over the years you can see that it’s pretty consistent,” says Terry, CEO of Monarch Beverage Co. Inc. “The economy affects it some, but it’s not like new car sales or home sales where a slight turn in the economy can have a devastating effect on demand. Our demand is pretty consistent; good times don’t spike and bad times don’t depress it that much.”

So why would Monarch, a beverage seller who does $275 million in business a year, step out of the box where its bread and butter lives and develop a non-alcoholic energy drink? Why bother to spend precious time and resources on something so peripheral?

The answers to those questions lie partially in a venture the company started a few years prior to the energy drink experience. A sales manager who was a real fan of exotic beers and the new trend of microbreweries suggested that the company start to focus on those products.

“He said we ought to pay some attention to these people because it is not like our mainstream brands,” Terry says. “There is not a huge demand for it. Maybe this was a way for us to distinguish ourselves from our competitors.”

That was the reason Monarch committed some resources to this, and launched its World Class Beer division.

“It has grown and worked out very well,” Terry says. “We were a little bit ahead of the wave on that. We created a network of other wholesalers that creates sales divisions focused on microbreweries and new and exciting beers.”

Meanwhile, back to the energy drink story.

“One of us had an idea that maybe we should get into the energy drink business,” Terry says. “We developed a product and spent some time and money formulating and getting it produced and putting graphics on it — and we still have a lot of that in the warehouse! It’s not doing too well.

“And the one of us who came up with that idea was me,” Terry says. “I’ve been reminded a few times that that wasn’t our finest move!”

Here is what could have gone better with the energy drink and how Terry keeps listening for whispers of innovation in an industry in which product demand is about as steady as a rock.

Try your best idea — and learn

There just isn’t a crystal ball that gives a clear picture of what’s ahead for a business. So you use your data, your gut feeling, and you try something new. As one investor is fond of saying, if you start with nothing and you fail, you haven’t lost anything. Even looking at the past doesn’t help a whole lot to explain why some things succeed and others flop.

“When I look back over the years at things that worked right or didn’t work right, many times the successes are due to serendipity rather than smart planning,” Terry says. “You try to plan, you try to have a vision for what is going to be the next thing, but the future is so unknown. It’s just a big challenge figuring out what is next and what you have to do to keep the business viable and committed and customers happy. It’s not easy.”

Focus groups and market tests are often prerequisites when a new product is launched because a great product alone isn’t enough. It has to cause excitement. Terry can attest to that about Etomic, his energy drink.

“It’s good stuff; all the blind taste tests that we did show that everybody loves it,” he says about Etomic. It was another aspect of the launch effort that caused serious problems.

“It was just the marketing,” Terry says. “Marketing means so much on how consumer products do. We just weren’t experienced with that, and we are still learning.”

Once Etomic was launched, it didn’t sell well. Nevertheless, Terry didn’t give up on the energy drink.

“We thought it would shoot off the shelf; it’s a good product,” he says. “But energy drinks are just marketed a whole lot different than alcohol is. “That’s an area, which we weren’t accustomed with. Alcohol has so many rules and regulations around it; the law prescribes what you can and can’t do.

“But with energy drinks, going in and buying shelf space is a common practice. We didn’t budget anything to buy shelf space. There are some barriers to launching a new product that we just weren’t aware of. Bigger companies pay for ideal locations.

“We haven’t given up on that drink; there may be something there, but in terms of innovation, that is one that didn’t work. We are learning, and we may get that right.”

You needn’t break the bank

Capitalizing on an innovative idea needn’t be expensive. The research and testing on the Etomic energy drink, let alone the costs of developing it, weren’t free, but when it comes to using social media, the cost is next to nothing and the benefits immeasurable.

When Monarch Beverage launched its World Class Beer division, it was a natural next step to use Twitter to help it gain a following.

“We have a free World Class Beer Craft Beer Locator iPhone app and Twitter accounts that tweet things like, ‘This account has a keg of a microbrewery’s Gumballhead and they’re going to tap it at 7 o’clock tonight,’ Terry says. “So we spread the word through social media, and people show up!”

Another low-cost idea that is bringing results at Monarch Beverage involves beverages — that’s right, alcoholic beverages.

Terry and his team saw a trend with his 650 employees having some increases in driving under the influence charges. Of course, it was off-the-job incidents, but Terry was committed to do something.

“Our creative department came up with an idea for a campaign that we run every major holiday called Have a Plan,” he says. “The campaign is to remind people that you need to plan your celebrations, you need to do it responsibly and in moderation, and as a result of that, we went from six to nine cases a year to two once we instituted this.

“We have a lot of innovations that we are proud of but that is one in which I think we can see a real impact on our fellow employees.”

Get the best rate of return

While you are looking for other innovative ways to control costs, and you plan on spending some money — to make more money — you naturally evaluate the ideas as to which would provide the highest rate of return.

Terry and his team launched a clinic that he estimates for every dollar spent returns $2.

“Our costs to insure the health of our employees were going double-digit every year,” Terry says. “We tried all the things people do to try to contain that: self-insure, use third-party providers, negotiate fees.”

He wasn’t getting the results he wanted.

“So a senior vice president came up with this idea for a health clinic,” he says. “The idea was to get more involved in the health of our employees. I thought it was the craziest thing that I had ever heard. We’re in the beer business, not the hospital business.”

The clinic started small, being staffed by a part-time physician’s assistant a few days a week. It has grown to the point now where there is a full-time doctor, full-time physician’s assistant, part-time physical therapist and a medical technician. It offers annual physicals for all employees, and an annual health plan for each that is designed by medical professionals.

“The health plan each year focuses on three behaviors: smoking, diet and exercise,” Terry says. “It focuses on those because we know that those are the three behaviors that we can affect. We can improve health and lower claims. And it’s been working.”

Employees rank the clinic as the most important benefit they have working for Monarch Beverage.

“We survey our employees every year,” he says. “We ask of them of their benefits, rank them 1 through 50, and the clinic always comes up No. 1. So it is not just that it is doing good things for our bottom line; it’s doing great things for relationships among all of us who work here.”

Even workers’ compensation claims can decrease, thanks to the efforts such as the clinic.

“Those claims have come down significantly over the years because we manage that in-house,” Terry says. “People are healthier, we are having fewer claims than with traditional health insurance and our workers’ comp costs have gone down.

“We are almost to the point of being an evangelist for the stuff. I do wring my hands about what affordable health care is going to do for us long-term, but whether this model is still going to work, but we are committed to it. The government would have to change the economics of all this pretty drastically for us to move out of this.”

How to reach: Monarch Beverage Co. Inc., www.monarch-beverage.com or (800) 382-9851.

Takeaways

Try your best idea — and learn.
You don’t have to spend aggressively.
Get the best rate of return you can.

The Terry File

Phil Terry
CEO
Monarch Beverage Co. Inc.

Born: Indianapolis.

Education: I went to undergraduate at Indiana University. I am a recovering lawyer. … I went to the law school at the IU law school. So I am a Hoosier from start to finish.

What was your first job, and what did you learn from it?

I worked at a gasoline station pumping gas in high school, a discount gasoline station called Payless. I learned the value of an education. It wasn’t physically demanding work, but I could tell it was not something I wanted to do my whole life. And that if I wanted more, I needed to be educated.

Who do you admire most in business?

I would say Steve Jobs, in terms of being an innovator and being able to help people become the most productive, to create an organization that everyone can be proud of.

What was the best business advice you ever received?

I read this in a Jim Collins book, and it was essentially, ‘Don’t bet the farm.’ The way he put it was, ‘Fire bullets before you shoot cannons.’ Don’t bet so much on an innovation or a project that you jeopardize the company. Don’t put yourself in a position where the innovation has to succeed or you create difficulties for you generally. That’s what we’ve been following. We try to be measured on what we do and not get overexuberant about trying to figure out how to find the next big thing.

What is your definition of business success?

Whatever your mission is, serve that mission, and that mission does not include making money. We don’t judge success here by how much money we are making. We believe that if we have correctly identified a valuable social function, and we’ve served that social function well, we will succeed and we will make money. Our definition of success is accomplishing the mission. Monarch Beverage’s reason for being is to sufficiently provide an ever-escalating standard of service to its customers and to responsibly enhance demand for its products. In other words, serve the customer, create demand for your product. That’s why we’re here. And if we do those things well, we will make money. If we don’t do then, well, we won’t.

June Ressler, CEO and president, Cenergy International

June Ressler was looking over the financials of her company a few years ago that had grown past $20 million in revenue, and she was more than a little shocked. The workforce solution company that she founded in 1996, Cenergy International, didn’t have enough money to meet its payroll.

The recession hadn’t hit yet, there was no apparent theft under way, and no one had hacked into her accounts. And frankly, it wasn’t the first time the problem had occurred.
“We would absolutely run out of money,” says Ressler, president and CEO. “Our bread and butter is making our payroll and making sure that we make it every week. If any of our consultants ever thought that their paycheck wasn’t going to be good, they absolutely would go join our competitor.”
It all came down to her bank’s position on her company’s line of credit. The situation was so tight that Ressler had to personally pay for the wages at times.
“There were some days, I would have to take money out of my personal savings account to be able to make payroll,” she says. “I finally was able to figure out that I needed the ability to have a relationship with a banker who you can call on Friday afternoon and say, ‘Hey, I am going to bump up against my line of credit. I’ll come in Monday, and we’ll negotiate a higher limit. And they’ll say, ‘That’s fine, I am going to make sure that we take the cap off and you go for it,’ you know?
“That’s instead of a banker saying, ‘Oh, I’m not going to allow that, and you have to stop growing.’”
Ressler decided that it wasn’t the circumstances that were causing the wrinkles in her bank books but the size of the bank. She was thinking anyway of expanding overseas and that would involve money exchange and other matters. She knew she needed a larger bank — and now.
“I was originally with a regional bank,” she says. “So I found a larger bank. I just happened to find a great team that is really there for me and very supportive.”
Call it a cash flow problem, liquidity drought, temporary problem or whatever, but it has to be reckoned with because it’s just one of many growing pains companies in the energy growth center of Houston may have been experiencing.
“We just continue to grow like crazy and I guess for me, understanding what the next level is when you start to have a little bit of growing pains,” Ressler says.
Incidentally, she paid herself back.
Here’s how Ressler, a self-taught entrepreneur who has law and bachelor of fine arts degrees, handles company growing pains and drives her company beyond $250 million in annual revenue.

Give credit to the credit line
Rapid growth will almost always trigger growing pains. It may well depend on how you look at the bigger picture that influences how much those pains hurt.
Ressler started her staffing company in her own home office in New Orleans with one consultant. Some dramatic growth occurred after a series of circumstances including Hurricane Katrina when she doubled her employees from 50 to 100.
Once Ressler moved to Houston and drilled down into the foundation of standard operating procedures at her company, she understood what was going on.
“The way our business is, we get invoices from our consultants, and we pay them within five days,” she says. “We then invoice our client, and we don’t get paid, in the best terms, for 30 days.”
The longer the time frame stretches the more problems it can cause.
“If there are issues with the invoice, or whatever, sometimes it becomes 45 days, sometimes 60 days — so you can see we need our line of credit,” she says.
“Even in 2009 we grew by 5 percent when everybody else was hurting. Things were hot, so we were growing all the time and when we’ve got these explosive years where we are growing by 30 and 40 percent, we really need that line of credit because we are paying people like crazy.”
Ressler says it is never a cash flow problem as long as your line of credit stays out in front of you. With a satisfactory line of credit from your bank, you can meet your payroll and keep your employees from deserting you.
Cenergy now has grown to 1,400 consultants, and operations are managed by an office staff of 65.

See the forest
Once a new bank starts to plug the hole in the payroll dike, the spotlight will then turn to your staff levels. Do you need more employees? More managers? Where? How many?
“I have to sit back and say, ‘OK, I think I need to hire a manager for this area,’” Ressler says. “It is just kind of sitting back and thinking about what do we need for the next couple of years, you know?”
The scent of midnight oil burning starts you thinking about workforce levels.
“I worry because when I am in my Houston office, and I see some of my staff staying until seven and eight at night, that is not alright with me either. So then I’ll say to myself, ‘OK. We have a lot of people staying late now; I think I need to hire another manager.”
Ressler anticipated a lot of growth for a couple of years and assembled her managers to discuss solutions.
“I said, ‘I need you guys to make sure all of your staff and your teams are all well-oiled machines because, hey, hold on to your hats! I think we are going to have a couple of good years of growth here, and we can’t have holes — we can’t have balls being dropped,’” she says.
Ressler and her team devised an equation that they use to calculate staff levels.
“We do have kind of a rule of thumb, depending on the different areas — if we have grown by so many consultants, then we know we need to add X amount of new invoice people and additional recruiters — it all depends upon the opportunities that we are getting.”
Hovering overhead, however, is the matter of profit margins. You have to take that into account because it differs from industry to industry. Those industries that operate on volume have other concerns than those that don’t when it comes to adding personnel.
“Because we are a provider of personnel to the oil folks, and there are lots of competitors out there, when we are negotiating our global contracts, our profit margin is based on volume,” Ressler says. “It is not a typical profit margin as it would be in other industries. It is a very small profit margin. So as a result, we have to run lean, very lean.”
That means no padding the payroll. Every staff addition has to be justified, even more so in a lean operation.
“What we kind of do here is, ‘Pile on the work until there is enough to hire three more people and then hire one,’” she says.

Be honest and transparent
Every company has its own take on how to hire the best people. Ressler learned early that she couldn’t be involved in the hiring process because it may be tough to deal with and understand people — and that set the pace for the process.
“I learned early on that I am not a great person to hire people because I am the type of person that … I just love everybody I meet,” she says. “I find something great about everyone, and then I’ll hire the first person.”
Ressler delegated the hiring of her office to a lot of others, specifically the HR team and managers.
“We’ve got now a great thing where we have different levels of interviewing to make sure that the person who is being interviewed is touched by different managers on our team,” she says. “We get feedback from all sorts of levels before we actually hire. Because you think that a person is good doesn’t mean they are good.”
Transparency is of immeasurable value if you think your company differs from the average one. Ressler says candidates are told that they should be ready for something of a maverick.
“It’s a very tough thing to get the right people on your team to fit our type of culture,” she says. “Our company culture is very different from a lot of companies because we’ve got to run lean, and we are more like a renegade company where you might be hired to do a certain job, but you’re not going to get a lot of training because nobody really has time to train you.
“You are expected to come in and run with the ball. Also, you might end up having to do things that you didn’t early anticipate because somebody else might have left and that portion of their work might be swinging over to be under you. That’s just how we are.”
Ressler says, nevertheless, working for a maverick company in growth mode is kind of exciting.
“Our office… I love all people who work here,” she says. “We have a close-knit kind of family atmosphere. Sometimes it is hard to make a decision to let somebody go because it is not that we don’t like them as a person but everybody here is so wonderful — but it has got to be business. If they are not performing the job we need them to perform; you can’t keep them just because they are really nice. It is a hard lesson for me and my managers to continue to learn. But the short learning curve can give you a quick look if the person is going to work out or not.”
How to reach: Cenergy International, (713) 965-6200 or www.cenergyintl.com

Takeaways

Find a solution to banking woes.
See the forest, not just the trees.
Be honest and transparent when hiring.

The Ressler File

June Ressler
Founder, CEO and president
Cenergy International

Born: Pittsburgh.
Education: I went to the Hartford Art School at the University of Hartford so I have a bachelor’s degree in fine arts. Then I went to Pitt law school so I have a JD from the University of Pittsburgh School of Law.

What was your first job and what might you have learned from it?
I came out of art school and was lucky enough at the time to get a job as an art teacher in Pittsburgh. I really learned a lot then. I really didn’t know myself at the time. I had no idea that I was a serial entrepreneur. So I started my job as an art teacher and immediately hated it. I would find myself crying on Sunday nights because I was so bad. Then it occurred to me that it was because I was in a box. As a teacher, I knew exactly in five years how much money I was going to make, when I was going to have a lunch, what my schedule is going to be, and that was way too confining for me. But I stuck with it for four years, and learned that I need to be able to do something that allows me to have my freedom and kind of run with it. So after that, I bought a gourmet food store and ran that for a while. That was the beginning of my entrepreneurship, and I realized then that I could never work for somebody again.

What was the best business advice you ever received?
Every bit of business advice that I received has been good. I evaluate it all. I use what I can. It’s pretty crazy. I really never had a mentor. It’s funny because I really haven’t worked for anybody. I never worked in the corporate environment. My father was a dentist. My mother ran his office, and maybe I grew up seeing how they were a well-oiled machine and it worked great for them. Maybe I inherited some of that from my mother but maybe it is being a woman; I am kind of under the radar.

Who do you admire in business?
There are a lot of very good business people out there that I admire but the thing that I get disgusted with is the competitiveness and the cutthroat nature of business. What I really admire are the business people that I run into who are more concerned about their environment and their staff and taking care of their people because I know whenever you take care of your people, the money follows anyway. I enjoy sharing stories about people that are environmentally safe, that encourage staff to be extremely safe and giving perks to staff and treating them the way they want to be treated is essential.

Ressler on what’s ahead for Houston employment:
I think a lot of our clients are getting smart and realizing that there is a lack of expertise. Clients are creating a lot of training grounds now where they are bringing people in that are just graduating and getting them out and training them so that they can learn quicker and become the types of people that they need a job, which is a great thing to see. I know a lot of our clients are just hovering over the engineering schools, waiting for these young engineers to come out and just get them started. To be graduating with an engineering degree right now is an amazing thing to be. You’re in high demand.

Bobby Harris, founder and CEO, BlueGrace Logistics

When Bobby Harris launched an effort to bring management closer to the employees at his company BlueGrace Logistics LLC, he really wanted it to be effective. He felt the executives were getting a bit out of touch with the rank and file. So he started a “cubicle swap.” For a couple of weeks, executives moved their offices to cubicles and the dispossessed workers took over the executives’ offices. 

It worked like a charm. It provided the executive team and employees to learn about each other on a personal level, what they liked and didn’t like, and how efficiently the operations were running.
And in at least in the case of one high-profile executive (Harris) case, it got to be humorous.
“I had the IT maintenance guy take my office,” Harris says. “He loved it! It’s kind of funny because he started playing the role, and he started wearing a shirt that said, ‘I am the CEO. Shut up!’ He got into character.”
While there were some funny moments, Harris was serious about the lesson he wanted to teach.
“I had been in a meeting, and I was listening to a lot of our executives talk about the things going on below them. I just thought it was interesting — the executives really didn’t know what was going on below their level. We were making policy about people who are the life of our company. We needed to make sure that someone, like their direct supervisor, knows what they were doing.”
As the cubicle swap was underway, the employees got to interact more with the executives and hear what was going on. Another thing that occurred was that the productivity level went up.
“It’s kind of like if you’ve ever heard of the Hawthorne Effect: the more visible management is, the better the production from employees,” Harris says. “So that was a real positive. There was a lot of serendipity to whole project, and that is why we continue to do it.”
But most of all, it demonstrates how Harris is a big believer in his employees. Here’s how that concern constantly brings dividends to the $100+ million freight and logistics company with 135 employees. BlueGrace has grown by 7,378 percent in revenue from 2009-2011. And to top it off, it’s recognized as the 20th fastest growing company in the United States by Inc. magazine.

Invest at every level of employees
If you want to bat a thousand in terms of hiring and grooming the best talent, invest in your people at every level, Harris says. And there is no better time to start than at the beginning.
“When we hire people, one of the qualities we look for is if they are very sensitive and empathetic because our motto is we don’t care how much you know until we know how much you care,” Harris says. “If you take care of your people, they will take care of your customers and they will also take care of people in general.”
To help support those ends, Harris and his team has set up a mentoring program for employees during their first six months with the company.
“It’s for every employee, and we believe that if you are going to flatter us enough to choose your career to be here, we are going to invest in you,” he says.
The mentors are hand-picked by Harris and are people who he knows are very social, who understand the policies, are very professional, and are influential people in the company who will act as their proponent.
“It does two things,” he says. “There is serendipity to it for the people coming in. But where I’ve seen a lot of value is with the mentors. They love it; people like helping people. They are very flattered, they take you very seriously.
“Now I have a lot of people signing up saying, ‘Hey, I want to be a mentor.’”
While the role does not include a bonus, there is a benefit for the mentor.
“The mentors are people who want upward mobility so they see this as a way to the next level,” Harris says. “And their aspirations are well taken care of.”

Social media use reaps rewards
The more you can get inside an employee’s head, the more you can understand what motivates them. While Harris’ cubicle swap may have been a little more beneficial for executives than employees, he also uses another method that benefits both, but in a different vein, and it’s a big tool as a foundation for collaboration.
“The single best thing for us has been social media, specifically Twitter,” he says. “We have an open social media policy. For me, it is really important because again, I keep going back to making sure I offer the most for employees. It’s very hard to get a job here. You have to take a lot of tests, you have to be the cream of the crop, but when you get here, I don’t ever want to lose you.”
Harris feels that to keep workers motivated — and give that discretionary effort — social media such as Twitter brings big dividends.
“Once you get past 20 employees, you have the ability to know a little bit about your people in a real quick space of time,” he says. “So I can just open my phone, and in three minutes I can find out that Mary’s son hit a home run last night in baseball.
“And conversely, they can see me: ‘Old Bob is not in; he’s in Chicago.’ I can tell them about that restaurant I went to.”
With the knowledge about some aspects of a fellow worker’s personal life, it builds bridges on likes and dislikes, and improves the playing field for collaboration on business projects. But nevertheless, some people may think that it’s unproductive.
“I would challenge them tooth and nail that the culture that we breathe makes us extremely hard-working,” Harris says. “The employees love the freedom aspect of the autonomy and the trust, and further, as far as a recruiting tool for people who have degrees or real good pedigrees, this is what they want. They love that kind of ability to do that. It has created a lot of bonds here.”
Problems with the use of social media can be avoided to a large extent if you first explain to employees how you hope they use it, Harris says.
“What I can do is let them know that we see what you are doing, and I think that for that reason alone, it really mitigates that kind of exposure to begin with. There’s just so much positive going on and a lot of times, it has nothing to do with business.
“We don’t dictate what they are supposed to tweet, but we do train them; we tell them how it works and how to be effective. Then we endorse and support it.”

Till the fertile ground
Once you support collaboration through a process such as social media, it behooves you to keep the ball rolling — a spinoff could grow in the fertile ground.
That’s what happened at BlueGrace. Its support of social media for employees led to an executive forum, in which employees meet with executives to have an old-fashioned “bull session.” Groups of four employees who have at least six-months’ service meet with executives once a week or every two weeks for 30-45 minutes.
“I have a group of my own and it’s composed of randomly picked employees,” Harris says. “We try to get people who aren’t directly involved with the same department so it’s a mix.
“We just talk about anything,” Harris says. “It could be something really important that’s going on in their life; it could be something like they had a great idea in the business place, it could be positive or negative, anything they want to talk about.
“They connect because it comes across like a little family. They feel very connected in the place. They also get a voice then. That helps us to get a lot of the best ideas that they have.”
It is a time commitment, however, but not one that can’t be worked into your schedule, Harris says.
“It is one thing for people to say it, yeah, you’ve got to listen to the employees, but everybody is busy,” he says. “Everybody is so busy; it is not just in my industry. You have to find an effective process and grind it out, find a way to make sure that you are touching those people.
“No matter how fast they’re going, no matter how fast people are coming on, there are several ways of doing it. Those practices we found very effective, and it makes for a lot of happy people.”
How to reach: BlueGrace Logistics, (800) 697-4477 or www.bluegracelogistics.com
Takeaways
Invest in employees at every level.
Social media utilization reaps rewards.
Till the fertile ground.

The Harris File

Bobby Harris
Founder and CEO
BlueGrace Logistics

Born: I came to Florida in 1982 when I was eight years old, so I am more of a native of Florida. I was a military brat. I was born in England at a military base northwest of London. My father was in the Air Force.

Education: I have a bachelor’s degree in psychology from the University of South Florida, which I just got two years ago. I went back to school. It was a lot of fun. Industrial psychology was one of those things that kind of intrigued me enough.

What was your first job and what did you learn from it?
My first real job was at Chuck E. Cheese’s. Oh yes. I did various things. I worked the cookline I was like a little waiter, I would do maintenance, whatever they needed me to do. If I learned anything, I guess at any level, professionalism reigns supreme. I don’t care if you’re an attorney, and I guess it’s a little bit of my father raising me, I always made sure that my uniform looked a little bit nicer than everybody’s else’s, and I think that is one of the reasons why I was able to … It was Chuck E. Cheese’s, and I was treated well and got more hours than others. That still holds true today, and it just amazes me what a professional image does. And the other thing I would say was I learned to trust people. I’ve always said that from beginning the quicker you trust people, the easier your job will be and the quicker you will excel at it.

Who do you admire in business?
I admire Richard Branson. His genuineness shows through. His philanthropy matches. I think he’s done everything. He has been extremely successful and innovative. He has given back so much and yet he’s had so much fun doing it. This guy has a ball. He’s very easy to gravitate to.

What is the best business advice you ever received?
My mentor was Keith Huggins. He told me a little knowledge is dangerous. As a CEO, you’re not going to understand everything that people do — to make assumptions off a little bit of knowledge is a very, very dangerous thing. If I understand something from soup to nuts and it’s like in my expertise, I will have high level of conviction. But knowing something a little bit is far worse than not knowing it at all sometimes. You have to be really careful if you know little bit. I must use that quote every three days. For myself, my personal life, you never have the whole story if you don’t understand it from inside and out.

What is your definition of business success?
My definition would be wanting to come from work every day in a bad way while making sure that all your success is shared with your team, your vendors and your customers. My biggest thing is I don’t want to be this really successful person alone on top of a mountain. As I get more successful, the people with me should get more successful too. We have such strong friendships. Those are the people who will go to war with you. I’ve never lost anybody in my leadership team, and it’s a pretty big leadership team, 14 or 15 people, so it’s like the Rolling Stones — we never want to break up. We always want to have this crew because it’s effective. And it’s a heck of a lot of fun. Business success starts with happiness. It really does.

Amy Schultz Clubbs, plant president Molina Healthcare of Ohio

Amy Schultz Clubbs pays her employees hourly wages to volunteer at least 16 hours per year as a way of giving back — and doesn’t have to look far to see proof that the volunteering pays big dividends. Actually, positive signs can happen at any time, nearly anywhere.
“We had a couple of individuals who through their volunteering with the Meals on Wheels program recently were able to help save a woman’s life when they went to the home,” she says. “The individual had fallen and couldn’t answer the door; they were able to get help and likely saved her life.”
The victim was afraid help never would arrive as she was lying on the floor after the fall. She later told them she was told she had suffered a mini-stroke. She couldn’t get up, and was frustrated, crying and scared.
Two provider relations representatives with Molina Healthcare who deliver meals in the Zanesville area knew something was wrong when the resident didn’t answer the door and her dog kept barking and tugging at the front window curtains. They called 911.
A firefighter was able to gain entry through a window. The resident was hospitalized but has since recovered. She has expressed her gratitude to the two volunteers and has even invited them into her home regularly, so they all could get to know each other better.
“It’s rewarding because you give back to the community,” one of the Molina employees said.
Clubbs agrees wholeheartedly. In fact, it’s one method that she believes is particularly successful with motivating Molina employees through its rapid growth since it was founded in 2006.
When she signed on with Molina Healthcare in 2007 as its chief financial officer when the corporation was opening an Ohio division, she moved quickly through the ranks to COO and to her current role because of the rapid growth of the provider of managed care services to Ohioans on Medicare and/or Medicaid. Molina Healthcare has become Ohio’s second largest care coordination plan with 240,000 members, and now has 460 employees and more than $1 billion in revenue a year — and expects to hire 225 more next year.
Here’s Clubbs’ prescription to deal with rapid growth and keep employees engaged to the fullest.

Track the life cycle
Many companies were founded by an individual who was passionate about a particular product or service and who wanted reach as many people as possible to tell them about it and make them a customer. Just as it was with founder Dr. C. David Molina and offering affordable, quality medical care for the needy. Once that was established, it was logical step to also offer a health care plan exclusively for government-sponsored health care programs for low-income families and individuals.
So the mission was clear from the beginning for Dr. Molina and it was just as clear to Clubbs when she became CEO a few years ago. Clubbs and her team took an empirical look at the entire process, to see if Molina Healthcare of Ohio was operating true to the corporate mission.
“We kind of started looking at what is the life cycle of the member,” she says. “Where does it start? We followed that through the entire organization — what does the life cycle through our organization look like?”
By following the life cycle, they were able to make sure that the right process and infrastructure was in place every step of the way to navigate the member through the organization.
At every point in the process, it is necessary to keep the focus on the relationship that is being developed.
“Molina doesn’t spend a large amount of money on commercials and billboard advertising because we really rely on the relationships that we develop with our community partners and with their provider partners as well really to educate potential members about what their health care options are,” Clubbs says.
The examination of the life cycle showed the depth of engagement employees will need to demonstrate — and the importance of how critical it is to maintain that engagement.
“The people who work for us are really passionate about what they are doing and the individuals we are providing services to, and so you need to really look to keep that passion in employees throughout the year,” she says.
“It was just getting the right people in the right seats of the organization, and really developing people from what started out as building infrastructure to moving toward more of an operations life cycle of the company, and really keeping people engaged in the organization as you do that,” Clubbs says.
As the Ohio division of a larger corporation, the entity had a template of sorts to follow when it was first started, but there was also a provision to adapt as needed.
“A lot of it we developed from scratch, and a lot of it we were able to leverage,” Clubbs says. “With building relationships, we were definitely able to leverage best practices from our other states — and the Molina story as well. The company has been around for more than 30 years.”
“We still run clinics today in many of our states, and are able to really leverage that history as we are building that relationship here locally as well,” Clubbs says.

Find the differentiator
Examining the role that employee engagement plays is critical in finding out what separates the winners from the also-rans.
“I believe it is our differentiator, and I really think it is how we have been successful in keeping our employees so engaged and keeping morale up while we have been growing so quickly over these last several years,” Clubbs says. “I definitely think it is a key. We really try to model that engagement at all levels of the organization here.”
Among the methods beyond the minimum that are frequently used by businesses to keep employee engagement high is the support of volunteerism. Molina Healthcare has put it in writing.
“Our volunteer time-off policy says we will pay people for a set number of hours every year when they volunteer in the community,” she says. “And once they do that, even though you are only paying for a set amount of time, people get more engaged and are more likely to go out and do it on their own as well.”
The company also has an employee activity committee that helps coordinate the volunteer opportunities for the associates. At least quarterly, the committee will have an employee appreciation event as well where the members show how much the company appreciates employees.
“We encourage people to not only volunteer their time but to give back through personal donations either monetary or things like having a personal care items drive for the food bank,” Clubbs says.
She also encourages her leadership team to contribute by being board members on community organizations as she herself serves on several boards.
“It’s another way that we kind of demonstrate our commitment to the community, that they are serving as well.”

Find a need and focus on it
If your company examines your flow life cycle, and you find a particular need that can be met that with some attention and focus, it can be a win-win for you and customers.
Clubbs and her team capitalized on what was common knowledge about the population it served: It was more vulnerable than others that may be served by a commercial plan. Members may have significant health problems as well as financial concerns.
Accordingly, if Molina could focus on care coordination, it would be a plus. Communicating with some of its members through outreach builds the relationship to a new level.
“We have community health workers who actually go out into the community,” she says. “They will go visit members in their homes to do health care assessments and things of that nature and to bring services to members in their home or other places of service, where they might not be able to get out and get those services as readily on their own.”
The company activity team and management receive sensitivity training that gives some background about common situations they may find, and it can help to solidify relationships. One of the big things they experience is the Beyond the Freeway Tour.
“They will take a group on the bus and take you around the local community, through a homeless shelter, through a food bank, through other places where the individuals that we are serving or are also receiving services, so that you can have that sensitivity to what a day in the life of one of our members is really like out there.”
Such as experience may heighten an associate to listen more closely and visualize what the member is going through as the member talks about concerns.
“I think a lot of times words are not exactly what the problem is or what the issue is, so really being able to listen and decipher between what someone is saying and what the issue really is and to make sure that you are addressing it and resolving it is really key to any success,” Clubbs says.
How to reach: Molina Healthcare of Ohio, (800) 642-4168 or www.molinahealthcare.com

Takeaways

Track the life cycle of the product or service
Find the differentiator from your competition
Look for a need and focus on it

The Clubbs File

Amy Schultz Clubbs
plant president
Molina Healthcare of Ohio

Born: Lawrence, Kansas.
Education: I went to Ohio University and received a bachelor of arts in business administration, majoring in finance.

What was your first job, and what did you learn from it?
My first job was serving soft ice cream at a Dairy Shed. I think what I learned from it was a lot of patience and customer focus. It was in Circleville, Ohio.

What was the best business advice you ever received?

The best advice I ever received was to ask for forgiveness, not permission. That honestly has helped me over the years of my career. It basically means, ‘Just do it.’ If you think it is the right thing to do, go ahead and do it. Don’t wait and ask somebody if it is OK to do. If it ends up being wrong afterward, then you can ask for forgiveness. But it is better to just go ahead and do it if you think it’s the right thing to do. That came from my regional vice president who preceded me as plant president, Kathie Mancini.
Who do you admire in business?
I mostly admire people who are really following their passion, their heart and what they do in the business world. There are a lot of women who I work with and for right now. Five of my directors are women, and if you look up verticals for whom I report to, the next three layers above me are all women. Every one of them is so passionate about what we’re doing here at Molina. They are smart and strategic thinkers. They are doers and they make things happen. So I love that. And I think that people who do follow their passion are able to have a bigger impact on an organization and still be able to make things happen. That’s what I admire. I’m just surrounded by them here.

What is your definition of business success?
I think in general, business success is really being able to grow a business profitably while achieving some sense of the greater good of the community. With Molina, our ability to improve health outcomes for the individuals to whom we are providing services to is for the greater good of the community. At Molina it is providing high-quality care to improve health outcomes in a manner that is cost-effective.

Mike Rotondo, CEO,
Tropical Smoothie

Mike Rotondo joined Tropical Smoothie Cafe Inc. as vice president of operations in 2008 — and climbed the corporate ladder about every two years. He became COO in 2011 and CEO in July 2012. While at Tropical Smoothie, Rotondo has focused on taking the company from the entrepreneurial enterprise created by its owners, Erich Jenrich and David Walker, to what he calls “the next level” — a more structured and systematically run organization poised for faster growth.

As a result of this transformation, when Rotondo was promoted to CEO last year, the private equity firm BIP Opportunities Fund bought a controlling interest in Tropical Smoothie Cafe. Jenrich and Walker remained on the company’s board, and BIP partner Scott Pressly became the company’s chairman.
Rotondo recently spoke with Smart Business about how he has steered the company through the transition from entrepreneurial company to mature organization with greater resources to grow.

Q. Looking back over the past few years, what do you consider the most important business leadership challenge you’ve faced?
My main challenge has been working with our company’s founders to determine the best course of action to move our brand forward.
Back around 2008, when I started with Tropical Smoothie, we were starting to see some negative signs. Obviously, it was a very tough time for the economy. Our comp sales were down about 6 percent in 2008 and down another 2 percent in 2009. The turnout at our franchisee convention was very low; we only had about 35 percent of our franchisees attend.
Some of our franchisees and area developers were starting to point a finger at us, saying ‘You’re not giving us the support we need.’
So we saw that we had to make some changes. On one hand, we wanted to keep all the good things that the founders of Tropical Smoothie had developed for the brand. But at the same time, we wanted to put systems and processes in place to mature the brand and professionalize it. It was about recognizing and celebrating all the great things the founders had done, but then taking it to the next level.

Q. What were some of the key systems you introduced to turn things around and to mature the Tropical Smoothie brand?
In 2008 and 2009, we were all about creating programs and increasing our visibility. We put out training programs; we put out marketing programs. We went out to the franchisees and met with them. My team and I made ourselves very accessible to the system.
We got rid of some people who were not meeting the culture and the needs of the business.
But the key thing was we started giving our franchisees new opportunities with training and marketing programs. This energized them, and at the same time, it made them more accountable because it put the responsibility on them to execute those programs.

Q. Did you make changes in the area of quality control?
Yes. For example, not long after I started in 2008, I was visiting our cafes with one of our key operations people, and I noticed that at every cafe they made the smoothies a little bit differently. Some put the ice in first. Some put the fruit in first. Sometimes they blended it a little differently or added something a little bit different.
What it really came down to, at that point, was that our procedure for making smoothies was about 80 percent art and 20 percent process. And I said, ‘We’re never going to get consistency if we do it that way. The average Tropical Smoothie sells about 50,000 smoothies a year. How many of those smoothies can we afford to go across the counters that are less than perfect?’ The answer is none.
So we came up with a program called One Perfect Smoothie. It was a full training kit. We broke it down and put processes in place so that you know how to properly prepare the fruit, how to build the smoothie the right way, how much of each ingredient goes in, which blender settings to use. We turned the procedure around so that it’s now 70 to 80 percent process and 20 to 30 percent art.
Our franchise community has embraced this program. They tell us it has improved the consistency of the smoothies, and it has helped them from a productivity and a food cost standpoint: ‘We’re blending our smoothies faster. We have more consistency. We’re going through fewer strawberries than we were before.’

Q. What other systems have you put in place to move the brand forward?
One process we’ve introduced is a brand audit for our cafes. At first it was just a 20-question checklist, but we expanded it into a full-blown audit. We look at the quality of the products, the hospitality level in the cafe, the cleanliness of the cafe and how well the brand is being represented in the cafe. It’s a four-hour audit and inspection.
We went from a very basic to a much more detailed and a much more mature process of evaluating the compliance in our cafes. As a result, we have cleaner, better-running cafes than we’ve had in the past. The customer surveys we do reflect that.
Another key aspect of the audit is that we use it mainly as a training tool for the franchisees. You never want this type of thing to be looked at as a hammer — ‘Uh oh, you’re having your compliance audit today.’ We look at it as a training tool. If one of our team is out there and they’re doing an audit and the franchisee is shorthanded, we’re going to put the audit down and jump in and start helping. We really believe that our main responsibility is to service our franchisees.

Q. Have you made any changes to your product mix?
We’ve streamlined our menu and, at the same time, put greater emphasis on our food offerings with a program we call our Focus On Food. We started this about two years ago. While we felt there was still some market upside with our smoothies, we felt that we had a lot more room to grow with our food offerings.
We had always joked that food is our best-kept secret — unfortunately. So we started focusing on it more. We started spotlighting some of our special menu items like our Chipotle Chicken Club Flatbread, our Chicken Pesto Flatbread and our Jamaican Jerk Chicken Wrap.
This has worked well for us. People have started to look at us as more than just a place to get a smoothie and a snack — they can also come to our cafe and have a terrific lunch. Since we started doing this, our food incidence is up 25 to 30 percent from where it was two years ago. By this, I mean the number of food items that we sell each day — how many wraps, how many sandwiches, etc. Our food transactions are up 25 percent from where they were two years ago.
The other piece that’s measurable for us is our combo incidence — the percentage of our transactions in which the customer is buying both a smoothie and a food item. As a result of our Focus On Food program, that combo figure has increased from 25 percent to 45 percent.

Q. What advice would you offer other CEOs faced with a similar challenge — the need to upgrade and mature their brand to move it forward?
The first thing I would say is protect the brand. Don’t get cute. Don’t try to change what everybody loves about the brand.
The second thing is, as you start to take on some of these challenges, you’ve got to have the right team in place. And sometimes you have to change the makeup of the team. You can’t be afraid to make those changes. You have to surround yourself with smart people, give them their marching orders, and then do the best you can to stay out of their way.
The third thing is communication. To mature and grow the brand, you’ve got to communicate. You’ve got to keep people informed at all the different levels — franchisees, support staff, investors — about what’s going on. You have to keep everybody on the same page: the process of taking an entrepreneurial business, maturing it, then getting acquired by a private equity firm and how to manage through that has been a learning experience.
The private equity firm is allowing us to do our thing, and while ultimately our brand hasn’t really changed that much, we’re much stronger than we were because we now have the processes and structure in place that a private equity firm will hold you to.
That has been huge for the Tropical Smoothie brand in terms of the resources that we have and the ability to bring in the people we need to keep moving forward. That transition has been incredible for this brand.
How to reach: Tropical Smoothie Cafe Inc., (770) 821-1900, www.tropicalsmoothie.com

Takeaways
Introduce systems and structure.
Make processes consistent.
Evaluate compliance through audits.

The Rotondo File
Mike Rotondo
CEO
Tropical Smoothie Cafe Inc.

Born: Chicago
Education: Illinois State University

Looking back over your years in school, what business leadership lessons did you learn that you use in your work today?
My major was criminal justice, so I took a lot of classes in psychology, sociology and counseling. I learned how to communicate with people on many levels, how to have tough conversations, how to listen and how to make sure they know you’re listening.

Tell me about an early job you had and the business lessons you learned from it.
In high school and college, I helped manage a store for a Baskin-Robbins ice cream franchise. This was back in 1982-83. I did payroll. I ordered inventory. I hired. I trained. Working at that Baskin-Robbins really got me going in this industry.

Do you have a main business philosophy that you use to guide you?
As a franchisor, I think the most important things are communication, driving the economics for your franchisees, and showing people that you care. Basically, everything we do is geared toward improving our people, our sales, and our profits.

What trait do you think is most important for an executive to have to be a successful leader?
If you want people to follow you, you have to be willing to get into the trenches. You have to educate yourself. It’s very important to be educated and informed about all the different disciplines your business is involved in.

What’s the best advice anyone ever gave you?
To ask open-ended questions — in other words, questions that have multiple parts and that make people have to think. You can really uncover a lot of important things by doing this. That advice was given to me by Chuck Bengochea. He was vice president of operations when I worked at Honey Baked Ham.

Mark Goldfarb, Bob Littman and Gary Shamis

When Gary Shamis, Bob Littman and Mark Goldfarb created the accounting and business consulting firm SS&G Inc. in 1987, the trio had a vision that defied the traditional accounting world.

Their radical idea: Focus on people.

“It was a real sweatshop kind of mentality for the profession,” Goldfarb says. “You worked 3,000 hours a year [eight hours a day, every day of the year]. We opened it up and created opportunities for people who worked part-time.”

That was the genesis of the partners’ philosophy that today continues to define how SS&G differentiates itself from the competition: Growth, client service and an employee-centric culture.

“All three work together harmoniously,” says Shamis, senior managing director. “If you have them all going and you focus on it, the results can be very positive.”

You’ll notice that absent among the three is the notion of operating with a generous supply of black ink.

“We always felt that partner profitability and things like that were going to be a byproduct of doing all the other things right, so we didn’t focus our business on enhancing the bottom line of the owners,” Shamis says. “We focused our business on cultural aspects that we thought would be good for our people, good for our clients and, in the end, what we thought would be good for us. It has really worked out that way.”

Today, SS&G provides various client service initiatives. Each of them is intended to make an impression.

“We publish stories about client service going above and beyond in terms of, say, driving through a snowstorm to deliver a tax return,” says Goldfarb, senior managing director. “We really try to make that part of the culture, so that when somebody calls, everyone knows here, you had better call that client back; if not immediately, certainly within the next business day.”

This mentality has helped the partners and their teams spark significant growth over the past few decades. From a small firm with about 10 employees, SS&G has grown to more than 500 employees at 12 offices in eight cities in four states, including new offices in Chicago. With annual revenue of $70 million, SS&G ranks among the top 100 independent accounting firms in the U.S., including being named the 41st largest U.S. accounting firm by Accounting Today.

Here’s how Shamis, Goldfarb and Littman grew the firm by emphasizing its differentiation and is taking steps to ensure SS&G continues long into the future.

Get the talent

Some professions attract more men than women; in others, it is the opposite case. Accounting had been a traditionally male-dominated industry until the 1980s, when it reached parity. In recent years, however, women have been rapidly joining the ranks. The U.S. Bureau of Labor Statistics for 2012 reports that 61 percent of all accountants and auditors were females.

So with an eye on whom and where the talent was coming from, SS&G years ago established a plan that fit lifestyle concerns and issues into the firm’s culture.

“Most of our offices are suburban,” Shamis says. “Many other large accounting firms are downtown. Suburban locations make it a lot easier for somebody who is female and raising a family to be more accessible to what she needs access to — school for conferences; and if she has a sick child she can get home sooner rather than if
[her office were] downtown — and it really became a focus on being able to try to hire these professionals who were women in their family-raising years.

“We have been able to get this incredible, top-notch talent, but we had to create an environment that was slightly different,” he says.

And this has opened the door to groom a lot of great female professionals

“We probably have one of the largest percentages of female partners in the accounting profession because of that,” Goldfarb says.

And, Goldfarb says, this has contributed to such a positive work environment at SS&G that it has become genetic.

“We are told all the time from people we hire that this is such a great, warm environment here compared to where they worked in a previous life,” he says. “It’s something that is really part of our DNA.”

With a powerful corporate DNA in place, you can then develop a culture that attracts talent by which you can grow a company.

“It’s important that everybody here understands the culture; it’s important that we follow it, we preach it,” says Littman, SS&G’s CEO. “Our organization is obviously about people. And to attract key people, you have to grow. If you don’t grow, you can’t find the talent and you can’t keep the talent. Growth has been important, and that is why we have been a Weatherhead 100 company more than 10 times.”

Be creative in your growth

Creativity comes in many forms. In business, you can as creative as you want to be when it comes to determining how to differentiate your company from the competition. SS&G looked at the kind of organic growth it had achieved over the years and took the entrepreneurial path.

First, the partners began to develop specialized divisions.

“We formed a wealth management business almost 20 years ago,” Goldfarb says. “Health care consulting, probably 15 years ago, payroll, 30 years ago [and] SS&G Parkland, which is our consulting division, was created last year.”

In an effort to strengthen this differentiation, SS&G opted to mold itself as a one-stop shop for clients and their financial service needs.

“Rather than referring to different service providers, where we had no ability to control the outcome, we created these businesses, which have been very successful and have grown dramatically over the years,” Goldfarb says. “But these businesses share the same culture of being employee-centric. All share the same client service culture and growth for the purpose of creating opportunities for employees.”

“Being entrepreneurial was really part of the vision of our firm for years,” Littman says. “We had an outlook that we could provide these other services that would fit for many of our clients. And it has been very, very successful.”

In addition to creating new divisions, SS&G also played a large part in creating an association of accounting firms. Shamis led the formation of the Leading Edge Alliance, of which SS&G has been a member for 10 years.

Leading Edge firms share best practices. Goldfarb says it has been an invaluable asset – not just to SS&G but to all the organizations and their respective clients.

“We like to think that that gives us a lot of credibility when we sit down across the table from a prospective client,” he says. “We can certainly be a better adviser, given all the things that we have done on our own.”

Develop a succession plan

While your company may have established a name for itself through differentiation, all the years of building that reputation can be lost in a flash if, for example, a new leadership team comes in with different ideas.

Enter the succession plan.

SS&G recently completed a reorganization of the firm’s leadership, and then spent more than a year preparing the company for the transition.

“It was announced some 16 months ago,” Littman says. “We have been planning for this over that time frame, and we will continue to plan and transition even after the target date.”

The plan signaled to SS&G employees that Littman, Shamis and Goldfarb were focused on the long-term future of the firm and intended to protect it from the confusion and disorder that often happens whenever there is a shakeup of any size.

Doing so also allowed the trio to help boost morale, motivation and satisfaction among employees since more than likely there will be other changes, such as promotions and movement across positions.

“This can be a real pivotal place (in time),” Shamis says. “(People wonder), How is this going to work? Is it going to be the same place?”

Also, by establishing a clear succession plan, it helps clients reduce any fears that the team they’re used to working with will still be there for them. Shamis says it preserves their trust and confidence that you will continue to provide the solutions you have promised — without interruption — and that you have your ear to the ground.

“The three of us, although we have executive roles, all have client relationships and all touch clients in one way or another,” Littman says. “So it’s not like we are that disconnected to the practice. We know what is going on.”

Under SS&G’s succession plan, Littman assumes the managing director role. Shamis and Goldfarb take on lesser roles, but remain very involved with the firm.

“I have been the managing partner for close to 30 years, and I’ve had a great run,” Shamis says. “It is a lot to give up, but I am starting to realize that there is a lot to look forward to in terms of Bob running this organization.”

And that optimism extends to how SS&G will continue to differentiate itself from the competition.

“I am really excited to see what this place is going to look like down the road,” Shamis says. “I think it is even going to exceed where it is today.”

How to reach: SS&G Inc., (440) 248-8787 or www.ssandg.com

Takeaways

Getting the talent is a priority.
Be creative in finding growth options.
Draw up a succession plan and live by it.

The file

Mark Goldfarb, senior managing director
Bob Littman, managing director
Gary Shamis, senior managing director
SS&G Inc.

Born: All in Greater Cleveland/Akron

What was your very first job and what did you learn from it?

Gary: My first job was in a place called Mr. Junior’s on Cedar Road in University Heights. I sold boys clothes. I think I learned if you work hard, and make the commitment, then good things will happen.

Mark: A caddy at Fairlawn Country Club. Certainly you learned etiquette and you learned service.

Bob: I was a tennis instructor. What I really learned from that was dealing with people, trying to help people.

What is the best business advice you ever received?

Gary: Try to work on your business instead of in your business. That was a big change for me and for our firm years ago. The firm allowed me to begin working on the business. And in that time frame, I think our firm has grown probably 600 or 700 percent.

Mark: People do business with people they like. Relationships are very important in the business world. That was from my father, Bernard Goldfarb.

Bob: I don’t want to copy off Mark, but relationships are really important to me as is taking time to get to know people and build meaningful relationships.

What is your definition of business success?

Mark: If you do a great job for your clients, and you treat your employees well, success will follow.

Bob: I certainly think similar to what Mark has said and that’s building relationships, creating an opportunity for other people in this organization so they can do the same and also being able to go to work, personally anyways, and have fun and enjoy it. It’s not a job; it’s a career.

Gary: I have a really narrow view of this and people know that. For more than 32 years, I have always felt that if you can be a little bit better next year than you were last year then that is going to drive success. I think constant improvement, the ability to continually try to get better, to not be satisfied with the status quo, has really been a huge driver for me.

Mark on the succession plan: It’s just been a tremendous ride for all of us the last 26 years. I will continue to be responsible for managing the firm’s Akron office, serve on the firm’s executive committee, chair the firm’s finance committee, act as the liaison to SS&G Healthcare and SS&G Parkland, develop larger business opportunities and continue as a client service partner

Bob on the succession plan: Mark and Gary are not retiring. This is part of the succession plan and they still have very, very important roles here with the firm to help execute certain growth strategies and still be involved in the management of the organization. We have viewed the succession as an evolution and not an event from the beginning. Gary will be actively involved in leading the firm’s growth strategy, including geographic and existing office. He will also focus on a restaurant initiative and other large opportunities.

Gary on the succession plan: I really think Bob has the abilities to drive this firm to even more successful and higher levels than we’ve operated at in the past. I just think that this firm happens to be incredibly lucky, blessed, or whatever you want to call it, to have Bob Littman take over the practice.

Jean-Paul Ebanga, President and CEO, CFM International

When Jean-Paul Ebanga looks up at the sky, he thinks about the more than 3 million people who fly every day on airplanes powered by CFM International engines. In fact, every 2.4 seconds an airplane departs under the power of a CFM engine.

“That means our role today is far beyond delivering engines to the industry; it is also making sure people are traveling in a very safe way at a decent price,” says Ebanga, president and CEO of CFM International, a $15 billion aircraft engine manufacturer that is a joint venture between GE here in the U.S. and Snecma in France.

CFM — which gets its name from a combination of the two parent companies’ commercial engine designations, GE’s CF6 and Snecma’s M56 — combines the resources, engineering expertise and product support of these two engine manufacturers to build engines for narrow body aircrafts.

“Today, in the air transport industry, the narrow-body segment is the main segment of the industry,” Ebanga says. “Looking forward for the next 20 years, there will be a need for roughly 30,000 new airplanes; two-thirds of those will be narrow-body airplanes and CFM is currently leading this market segment.”

If being the industry leader in engine manufacturing wasn’t enough of a challenge, Ebanga also has the challenge of leading a joint venture company where compromise and collaboration is the key to success.

“If you are taking two parent companies with two different cultures and you try to blend them, this will generate some difficulties,” Ebanga says. “But the net result, because you have to find compromise, because you have to work between different cultures, will be more sound ideas and a much more efficient organization.”

Here’s how Ebanga utilizes both GE’s and Snecma’s resources to keep CFM the industry leader in narrow-body aircraft engine manufacturing.

Compromise and collaborate

While a majority of companies are focused on streamlining themselves, CFM has to take a different approach to its business. Its joint venture means CFM has to work to find compromise above all else in order to properly function at its best.

“The problem with the JV is because you have two different constituents, you have to make compromise,” Ebanga says. “There is no one voice saying this is the way and the rest of the team just follows without asking questions. In terms of leadership, it requires some things to be a little bit different than normal leadership.”

The existence of this additional challenge makes this kind of partnership too difficult for some leaders and companies. But Ebanga sees the glass as half-full.

“If you are able to find the sweet spot between the two company cultures and then work around these difficulties, you enable a new space of opportunities and strengths,” he says. “This is the essence of joint venture success.”

CFM has been known for a long time by its superb engine family, CFM56. Now the company is looking to release its next generation of engines called LEAP, for which compromise and collaboration will be key to its success.

“This new product will be designed based upon a very detailed and comprehensive market survey,” he says. “We spend more than three years asking the customer what they are looking for in the next 20 years and understanding in a granular way how the dynamics of the market can evolve, and then we define the product, which is the answer and the solution to that.”

When you have two companies, the reading of the market dynamics will be different because each company has a different way of operating and a different culture, so they will analyze all the signals in a different way.

“Maybe the solution has some things shared, but the two won’t be exactly the same,” Ebanga says. “The whole key is how you bridge the two approaches. How can GE or how Snecma can make the necessary compromise to accept that the other guys also have a great idea and how can you work together to bridge ideas that make a great product.”

The trick is being able to step back from what you believe is the ultimate answer and being able to compromise with other ideas from another company that also thinks they have an ultimate answer.

“By bridging the two, you find out that some of what’s behind the idea of the other company you didn’t think about at first and vice versa,” Ebanga says. “At the end, the product you are putting on the market is far better than the one you could have done alone.”

Both GE and Snecma own their own technology. Snecma works on the front and back of the engine, while GE works on the middle of the engine. For LEAP, they both have been developing technologies for their respective parts of the engine, but the companies don’t unilaterally say, ‘Here’s our part of the engine.’ The other company has to accept and agree with the technology based on analysis. There are checks and balances that go into the process.

“Based on the other company’s remarks, you can improve your own part,” he says. “Snecma might make some comments about the core, which is the responsibility of GE and taking into account these remarks GE will improve its own part of the engine and vice versa. It’s a mutual cross-pollination.”

The level of compromise and collaboration that CFM has developed has been built up during more than 30 years and is now a major part of the joint venture’s culture.

“In our case, the different GE and Snecma leaders, over time, understood that CFM’s success is more important than their own success,” Ebanga says. “That is to say that if I’m trying to optimize my own interests rather than CFM’s interests, at the end of the day, I would lose the game.”

CFM and GE have been very successful at carrying out this approach even though the leaders have changed.

“One way to do that is we manage young leaders in the challenges of working in this strategic partnership environment,” he says. “If you are growing leaders in this environment, eventually when they are in the top spot, they will have the framework to deal with what makes up the success of this JV.”

A joint venture takes an investment in both people and process in order to make it work.

“In a strategic partnership, it is like being a couple — you could fall in love day one and it’s great for a couple of weeks, but if you are not investing in the relationship … it won’t be a great love story,” he says.

Plan for the future

One of the main challenges CFM has is that in the ’70s it was just a start-up company. Now it has become the leader of the aircraft engine industry, and in order to remain in that position, Ebanga and the company must be forward-thinking.

CFM has several matters it needs to focus on for the future of the company. No. 1 is executing on current commitments.

“This is a big deal because we are currently developing a new engine family called LEAP, and the start of this new program has been very successful,” Ebanga says. “We are the sole power plant for the next generation of Boeing 737 MAX aircraft, one of the two engine makers of the Airbus A320 aircraft, and we are the sole power plant of the new Chinese COMAC C919 aircraft.”

Beyond making LEAP the next engine of preference, CFM also has to ensure that whatever changes the market goes through in a decade or two from now the company will be able to adapt and reinvent itself to stay in the leading position.

“When you are in this top-dog phase, it’s difficult,” he says. “It’s about working on a short-term basis and, at the same time, articulating a strategy to change the way we are running to make sure we will still have the appropriate fit 10 years from now.”

Planning for what the future has in store is not an easy task. You need to address the situation in a very humble way.

“You are already overwhelmed by the shop-time challenges and to find time and perspective to think about the long-term is rather difficult,” Ebanga says. “Being humble helps you to engage in this journey. Along the way, you will have a lot of reasons to give up for a while and stick with the short-term. I think this is a recipe for failure. You need to stay humble on one end but also stay engaged and not let things go away.”

You also need to understand your market but not in the way you understand your market for your short-term objective.

“When you are looking at the market on a short-term basis, it is to make sure you have the appropriate marketing and value proposition to get yourself up and make your numbers,” he says. “When you are looking at the long-term perspective, it’s really the ability to elaborate scenarios about the change in your industry.” ●

How to reach: CFM International, (513) 563-4180 or www.cfmaeroengines.com

Takeaways:

Drive compromise and collaboration for best results.

Be able to reinvent your business to adapt to your market.

Develop plans for how the future of your market may unfold.

The Ebanga File

Jean-Paul Ebanga

President and CEO

CFM International

Born: Paris, France

Education: Graduated from École Nationale Supérieure d’Électricité et de Mécanique (ENSEM), France with a degree in engineering

What was your very first job, and what did you take away from that experience?

I was the leader of the photo club in high school. A lesson I learned from that time is that you can have some great ideas and be very fast in your head, but you have to have the ability to bring people up to speed. This is a great example of how a real organization works.

What got you into aviation?

It was the beauty and the exceptional achievement that this industry is all about. When I was in high school, I had two dreams—the first one was to be an architect and the second was to be an engineer to design great things. To imagine that I could generate some great things to enable this kind of achievement was absolutely fascinating for me. So I chose the engineering path and it still gives me great satisfaction. An aircraft engine is an absolutely amazing piece of technology, but also a piece of art.

Who is someone that you admire in business?

My first thought was the leaders and initial creators of Intel. Not only was this company able to start from nothing as CFM did and became the leading company in the microchip/microprocessor business. Initially they were the leader in the memory business and then they reached a point where they had to reinvent themselves. The reason Intel is the great company they are today is because they were able to reinvent themselves in the absolutely right way. So I admire this generation of Intel leaders.

Trina Gordon, president and CEO, Boyden World Corp.

Trina Gordon looked at her company’s clients and could see that they wanted more. It wasn’t that Boyden World Corp. had done a bad job of meeting their needs. They just had more needs to be met.

“What we began to notice out of this downturn was challenges in the macroeconomic environment continued to persist globally,” says Gordon, president and CEO at the professional services firm.

“Clients, particularly global clients and emerging global clients all over the worldwide landscape were becoming more demanding about greater consistency and quality of service from their advisers,” she says. “What that meant was we needed to take a really hard look at what was an effective client advisory relationship.”

It can be a tough pill to swallow when you feel like you’re giving maximum effort to help your clients and then you find out that you could be doing it better.

“There’s a little bit of that in your psyche that says, ‘I want to hear the great things I’m doing,’” Gordon says. “I’m not sure I want to hear where I didn’t do as well or where I need to improve. But it’s the only way we’re going to get better at what they want us to do and deepen the relationship.”

Sometimes, you’ve got to set your ego aside, even when you’re a top 10 global executive search firm with 250 associates in more than 70 offices and 40 countries around the world.

“Sometimes partnerships tend to be more process-driven and internally focused and concerned with the practices and processes of how we do our work,” Gordon says. “In this case, we had to turn that perception completely around and push our organization facing outward at potential and existing clients. We had to build a foundation for how everything we did focused on what they told us they needed and how we performed against those needs and requirements.”

Get to the point 

In the simplest terms, clients were looking for more bang for their buck with Boyden.

“Clients were no longer saying we have talent or human capital needs in emerging markets and anybody sitting in an emerging market can help us,” Gordon says. “What they began to say was we want real sector expertise, sometimes even deep functional expertise. You need to understand our business in a unique way. We began to see as a board, as a partnership, a real tipping point in how clients look at the professional services sector.”

Gordon wanted to respond swiftly, but methodically to this change in the marketplace. It needed to be done, but it needed to be done right.

“The challenge for a firm like our’s is how do you respond to those trends in a way that really adds differentiating value to clients,” Gordon says. “How were we going to uniquely stand apart from our competition and ensure that we could meet those client needs at an increasingly and more complicated demand level?”

One of the first things Gordon did was meet with all Boyden’s global partners and her leadership team. It would serve as a foundational meeting to begin developing a strategy to transform the firm.

“The message was we have this opportunistic window in our own retained search business to drive this concept forward and lead it as a premier global search firm, the first to do so,” Gordon says.

One of the next steps was a global conference in Asia where many of the firm’s key leaders sat down and defined the things that they felt the firm needed to represent going forward. These leaders had spoken with clients and gathered feedback. Now it was time to lay it all out there so Boyden could begin to shape its strategy.

“Part of what clients have shared with us is we want to have a singular kind of experience with you,” Gordon says. “That means you need to understand who we are and what our business strengths are. Understand our business. Get under our skin. Be sector specific with us. You have to demonstrate a genuine understanding of who we are, which meant the difference between a robust client relationship and one that isn’t robust.”

Know what you don’t know

There is a word of caution that must be addressed for any firm that is looking to adapt what it does for its clients. You better have a good idea of what you stand for before you begin the transformation.

“When we stray from our core expertise and we stretch out and try to do something we’re not capable of doing, we’re no longer acting with integrity and it ultimately will affect the client relationship,” Gordon says.

“We have to be able to know what our strengths are, be true to them and have the courage to say, ‘This is how we can best help you.’ We also have to be honest with the client and say, ‘This is what we can do and this is what we can’t do well.’ We’re not going to risk our relationship for the sake of saying we can be all things to a client.”

If you don’t know what your core beliefs and expertise are, then how will you know whether the thing you’re being asked to do fits in? You have to be clear about it so that you can give your best effort and performance on the project.

“It’s one thing to stretch in an area where we have done some work and there’s expertise elsewhere in our firm to help us and guide us and draw upon and bring into the client equation,” Gordon says.

“It’s another when it’s completely further afield from the core expertise of the firm. That’s where you can get into trouble with a client. And it’s very hard to recover a relationship that you’ve damaged.”

Be methodical

Boyden is a big firm and so there was a ton of information and data to sort through as this transformation took place. It was incumbent upon Gordon to not let it overwhelm her team.

“It’s important to take a step back, center yourself and think through what’s really important,” Gordon says. “Prioritize and move in steps. You’ll overwhelm the organization if you try to do much too soon without a coherent message, without responsible buy-in and without a very clear approach to staying true to who you are. “We’re still evolving as an organization because change is not always an easy thing. What I’ve learned is to take a deep breath and make sure you’re confident in the people around you and confident in what your clients are telling you.”

You want to please your clients and that’s obviously the most important thing. But don’t let it affect your work and force you into a pace that will result in a substandard final product.

You also need to make sure you’re cognizant of your personnel resources. What skills can your people jump right in and take on and which ones will require some level of training?

“You can’t just assume you have a completely homogenous organization that all can move forward at the same time toward this enhanced approach with clients,” Gordon says. “One of the things I tried to do very early with our leadership team was reach out to those key voices inside our firm who embody this work already and who are our greatest client advocates.”

You undoubtedly have some people in your company who can be trainers and who can help their peers grow. Tap into that resource and put it to use. And for other people who need to learn some new skills, do what you can to help them.

“There’s a lot going on inside a complex organization,” Gordon says. “Not everybody can drink from a fire hose at the same time. So you need to be able to call upon your leadership, those individuals that people respect and know that already embody this expertise with clients and utilize their knowledge base and their talent to train, teach and enrich younger partners or partners that are new to the profession. That is a continual process.”

It’s a process that will likely never be completely wrapped up. There’s always more to learn and more to figure out and Gordon says they’ll just keep on trying to do the best they can for their clients. But this process has already put the firm in a better position to serve those clients.

“Our dashboard is built, our metrics are built, so all of it is now launched,” Gordon says. “We’re at this exciting period where you’re diving off the board hand in hand with your client into this brave new milieu. I see it as a continual evolution that our own firm and each and every one of our partners will sort of continuously travel together.”

How to reach: Boyden World Corp., (312) 565-1300 or www.boyden.com

The Gordon File

Trina Gordon, president and CEO, Boyden World Corp.

Born: Alliance, Ohio

Education: Bachelor’s degree, political science; master’s degree, public administration, Auburn University

What did you want to be growing up?

From the time I was little, I always wanted to be an equine veterinarian. So my interest in Auburn, at least prior to going there, was they have one of the finest equine veterinary schools in the country. When I went there, I fell in love with the philosophy of the university, the campus and the people. But I found that the pre-veterinary program, I didn’t have the constitution for invasive medicine. So my dream of becoming an equine vet versus the leader of a professional search firm is quite different. So I switched majors, I stayed and I loved it.

What was your very first job?

In the summer, my brother and I ran a custom car detailing business part of the day out of my parents’ garage. Then in the afternoons, I ran a daycare nursery school for kids in our area. I had about 10 to 12 kids at a time and they were ages six to 10.

Who would you like to meet and why?

I love history, so if I had the opportunity to sit down with anyone, it would be Elizabeth I. I would like to know how a woman who was the first leader of a powerful, yet fledgling nation was able to bring a divided country together and bring them to global prominence. How she was able to unify them behind an individual who heretofore in their history, had never been a woman and reign long and lasting over a very respectful populace. She was able to gain the credibility of all the men around her and win respect around medieval Europe.

Takeaways:

Be clear about your goals.

Understand your limitations.

Don’t rush just to get it done.

Flemming Bjøernslev, President and CEO, Lanxess Corp.

When Flemming Bjøernslev took over as president and CEO of Lanxess Corp. and head of the North American region, he gave himself 100 days to get to know the company and the people. This January, the time was up — and by then, Bjøernslev had visited all 14 major sites in the United States and Canada.

“In my first couple days, I went out and took the pulse of the company to assess where we stood in order for me to prepare myself and the employees to take the company to the next level,” Bjøernslev says. “As an international corporation, we have global targets and the board at headquarters expects us to contribute to that target.”

He felt strongly about getting to rub elbows with the 1,500 employees of Lanxess Corp., the North American division of Lanxess, an $11 billion leading manufacturer of more than 3,000 products in the areas of rubber, plastics, intermediates (such as alcohols, acids and higher olefins) and specialty chemicals.

Bjøernslev came to Pittsburgh after serving as CEO of Lanxess Central Eastern Europe in Slovakia and now has the task of taking the learnings from his prior CEO role and transferring them to Lanxess’ North American business to continue to push the company forward.

Bjøernslev is optimistic about the current opportunities in the U.S. and how that will contribute to Lanxess’ business domestically.

“We are seeing a lot of manufacturing returning to the U.S.,” Bjøernslev says. “That gives me great comfort that the U.S. industries are moving forward to a better, brighter future, especially in the areas of mobility, urbanization, agriculture and water.”

Lanxess caters to all those areas and the current outlook has Bjøernslev excited that the business in North America will pick up rapidly, helping get Lanxess on the path to the next level.

Here is how Bjøernslev has come into a new role and put himself and Lanxess in a better position to succeed.

Take first steps

While Bjøernslev isn’t new to the CEO role by any means, he was still entering a new geography and new division of Lanxess when he came to Pittsburgh in October 2012. In his initial three-plus months, he had to familiarize himself with the business.

“In those first 100 days, I had to get to know the company and the people here in North America, which is Pittsburgh and our other sites,” Bjøernslev says.

He started with a couple of town-hall meetings and round-table discussions held department by department to interact on a more individual level with employees.

“I consider that extremely valuable to get to know the individuals and for them to get to know me and listen to what my vision is as we move forward,” he says. “I also visited all the major sites we have in North America. Again, we did a mix of town-hall meetings and round table discussions.”

Bjøernslev had a two-fold approach to his new CEO role, both internally and externally.

“The internal approach best practice for me has always been to sit down with the people and have them present their roles and responsibilities within the company in order for me to assess where we stand from a corporate point of view,” he says.

“The external part is presenting Lanxess to the outside world — customers, business partners and other relevant organizations we interact with.”

It is crucial that a new CEO put himself or herself out in front of the company’s stakeholders and offer the chance to get to know and understand one another.

“The key is to just take the hurdle of getting out there, getting to know the people, introducing yourself, introducing the company, introducing the target and tell a little bit about yourself,” Bjøernslev says. “That has been the focal point, and it is the best practice based on my experiences in previous jobs.”

Bjøernslev has learned that listening to the people who help drive the business every day is vital to understanding what direction to go in next.

“You have to listen to the people you are going to work with in the new position,” he says. “You have to watch the environment very closely and most importantly, listen to your gut feeling and be daring as you move along and make decisions.”

The worst thing a new CEO can do is hesitate in making those crucial decisions.

“We are all human beings and when you make a decision, you normally base it on experiences,” he says. “If you’re somewhat uncertain, human beings have a tendency to avoid making a decision. If you want to move forward in a new position, you have to make a decision, because avoiding a decision is not going to get the job done.”

Get to the next level

Lanxess is driven by innovation and technology paired with people excellence, both globally and locally. What Bjøernslev has found is that the company’s production and product base is extremely quick with regards to innovation, technology and the right ideas to make new products that will propel the company.

“At the end of the day if you take the people excellence, the topic of safety and blend that with the innovation and technology driven culture we have here at Lanxess, those are the keystones in order to create success that will take Lanxess North America to the next level,” Bjøernslev says.

When looking at what opportunities existed in North America, Bjøernslev saw the automobile market as a crucial player in Lanxess’ future with the ability to offer new products in rubber and plastics.

“The U.S. market is still the biggest market in the world for miles per person driven,” he says. “What I have realized over here is that Americans love cars. With our product portfolio within plastics and the fact that we are the leading manufacturer of synthetic rubber in the world, more than 50 percent of our turnover is generated in the automotive and tire manufacturing industry.”

Lanxess currently has an initiative it calls Green Mobility. Green Mobility relates to two major areas — lightweight construction of automobiles and green tires — which Lanxess hopes will drive the growth of the business and improve the auto industry at the same time.

“Car manufacturers are continuously focusing and forced to focus on reducing CO2 emission, reducing fuel consumption and that’s why they have to reduce the weight of the cars,” Bjøernslev says. “By using our high-performance plastics, you can reduce the weight of a car up to 30 percent. That is something that the Motor City is very interested in.”

The second area of interest for Lanxess is what it calls the green tire. The company has been supporting an initiative within the European Union, Brazil and Korea surrounding tire labeling.

“There is a requirement to label your tire as a producer based on three factors: rolling resistance, noise reduction, and wet-grip capabilities,” Bjøernslev says. “We are convinced that Americans who love to have a choice will be embarking on this tire labeling issue because so far in the U.S. you have never had the chance to decide what kind of tire you would like under your Cadillac, Ford or Chevy.

“We’re convinced this will be a topic for the U.S. industry in the future and we will support that.”

Bjøernslev hasn’t wasted any time in making decisions about where to focus the company moving forward. That decisiveness has been a result of listening to what is happening around Lanxess globally.

“First and foremost, you have to listen to your customers,” he says. “Secondly, make sure that you assess the entire value chain. You want to make sure that you reach out and listen to the customers of your customers. You want to make sure that you’re integrated in the right manner in order to cost-effectively and profit-effectively cater your products to the market.

“You have to make sure that you read the signs of your time, meaning the trends in the marketplace. You have to live in a global world. Today, it would be very risky to only focus on the U.S. or North American market.

“You have to take into consideration what the drivers are internationally, in Asia and in Europe, because although we sell a lot of products here in the U.S., we export to other parts of the world and vice versa.”

Bjøernslev says as time goes on, he plans to continue to focus on having the right set up in the company to get Lanxess to that next level of growth.

“We are cautiously optimistic as to future development,” he says. “What we have to do now is make sure we have the right organizational set up in order to cater our products to the market.

“What I found here was an excellent foundation. What we want to do is capitalize on that and make sure that we participate in the new market dynamics within the North American chemical industry and beyond … with the advancement of our products.”

How to reach: Lanxess Corp., (800) 526-9377 or www.lanxess.us

Takeaways

Get to know your employees and understand your company.

Listen to key stakeholders and the business environment.

Take your learnings and make decisions about direction.

The Bjøernslev File

Flemming Bjøernslev

President and CEO

Lanxess Corp.

Born: Denmark

Education: Bachelor’s degree in international management, FOM University of Applied Sciences, Essen, Germany

What was your very first job, and what did you learn from that experience?

I was a shop assistant at a green grocer. It taught me that hard work and dedication pays off.

What is the best advice you’ve ever received?

Never tell yourself that the target has been reached, because there is a big risk that you turn complacent.

You mentioned you are a car guy, what is your favorite car?

I am the proud owner of a 1969 Porsche coupe. I’m a Porsche guy but old Porsches.

Who is someone in business that you look up to?

I’m a great admirer of a man named Ferdinand Piëch. He is the head of the supervisory board of Volkswagen. Volkswagen is currently No. 3 in the world and the target is to be the No. 1 car producer. First with Porsche, then Audi, then Volkswagen, Piëch has continuously been building Volkswagen to be one of the leading car producers in the world and that’s been done with innovation and technology. I find it fascinating the consistency he has had in achieving the position Volkswagen is in today.

What has been your favorite country you have spent time in?

I have a bunch of favorite countries, but my takeaway lesson from traveling the world has been that the key is the language. I speak four languages fluently: Danish, German, English and Spanish. I speak half Slovak because my fiancé is from Slovakia. I have a couple of favorite cities: Vienna, Austria; Buenos Aires, Argentina; and I’m increasingly starting to like Pittsburgh, because it’s not a major city like New York, but it’s also not a village. It’s the right size and it has a lot of culture.

Loren Shook, chairman, president and CEO, Silverado Senior Living Inc.

A lot of people gave money to help Silverado Senior Living Inc. become a national leader in providing care to people with memory impairments. Fourteen years later, Loren B. Shook felt like it was time to give them a return on their investment.

“We made stock options to many staff members through those years,” says Shook, the company’s co-founder, chairman, president and CEO. “No one got paid anything. All of the money we made went back into expanding the company. At some point, we needed to monetize peoples’ investment.”

In addition to Shook, his co-founders, James P. Smith and Steve Winner, and those staff members, investments were also made by the private equity firm Riordan, Lewis & Haden. This funding was instrumental in building a company that has 2,800 employees and provides invaluable care to senior citizens who need it across eight states.

“A lot of people think it’s just about the money, getting the equity and the debt partners,” Shook says. “But money is just part of it. The bigger part is what kind of partner are they going forward with you?

“All of them understood the vision of the company, which was to give life to our residents in our assisted living communities, our clients in home care and our patients in hospice. The vision is to give life to their families and give life to each other as associates and colleagues in the company.”

Shook knows all too well that without money, none of it would be possible and that Silverado Senior Living would have never gotten off the ground. But the financials have never been his focus and he strongly believes that is a key reason why the company is so successful today.

And so it was through that prism that Shook and his team set out to find a way to provide a return on past financial investment while simultaneously strengthening Silverado for many more years of meaningful patient care.

Find your soul mate

One of the best options that the Silverado team initially came up with was to take the company public. But as they began to look at what that involved, they quickly soured on the idea.

“Every year, you’re spending $1.5 million to $2 million for accounting and legal fees just being a public company,” Shook says. “You’re taking up a lot of time for the CFO and CEO that could otherwise be providing service more directly to our customer base.”

Soon, their thoughts turned to Health Care REIT, a real estate investment trust that had been working side by side with Silverado since its inception.

“REDIEA is an acronym that stands for Real Estate Development Investment Empowerment Act,” Shook says. “It was very new. Health Care REIT had done one REDIEA with an LLC corporate structure. We’re a C-corp. It was a very detailed process. It took a lot of action to overcome a lot of hurdles that had never been addressed before.”

One of the biggest hurdles in any business deal is the relationship between your company and the financier you want to partner with. Shook flashes back to 1996, when he and Smith were looking for financial support to start Silverado.

“Whenever I started a meeting with a potential financial partner where there was equity or debt, I always started the meeting by telling them what the vision of the company was,” Shook says. “If they didn’t have an interest in the vision and the purpose, the meeting was over because we were not in alignment.

“A lot of experts in raising money would say, ‘Don’t do that. Go down the path of return on investment, the capital you need and the numbers.’ I never believed that was the right way to start a meeting because it’s more than just about the numbers. No one I met with was upset that I started the meeting that way.”

The fact that Silverado had built an established relationship with Health Care REIT over the years made it a lot easier to move the process along with the REDIEA. But that relationship only developed because Shook and his team took the time in the beginning to find partners who shared their vision.

One of the most important things you can do to help you find that kind of partner is to talk to people who have done business with the investor in the past and ask what happened when trouble arose.

“Tell me the hard times you went through and what it was like,” Shook says. “I want to know that I have a partner that has the experience and has been through the ups and downs and is going to be by my side when we’re going through difficult times.”

As Shook looked to finalize the REDIEA deal, he wanted to make sure there was alignment and a shared vision, just as there had been 14 years earlier.

Lean on your culture

As the REDIEA deal was being consummated, Shook was also very aware of his staff and the responsibility he felt to keep them appraised of what was happening. But he also felt confident he had established a track record of trustworthy leadership.

“The culture has to be there before big decisions come about,” Shook says. “You don’t create the culture at the time you have a big decision where you need people to be confidential and you need people to come to you and say, ‘I heard what you said in the conference call. But here’s what I’m worried about, Loren.’ You have to have that kind of open trust in the company. That has to be there before those issues come up.”

Shook shared what was happening with his senior leadership team and asked them to keep it from going public since the deal was still being finalized. He shared the good parts of the deal being discussed with Health Care REIT and the cons.

“There’s always a negative side to everything we do,” Shook says. “Here are the pros, here are the cons and here are other alternatives of what we could do to capitalize.”

Shook reiterated that there was no pressure being made to enter into this kind of deal from anyone.

“Riordan, Lewis & Haden wasn’t saying that you have to recapitalize the company,” Shook says. “They were very patient. It was just the right time and the right thing to do.”

Shook says finding employees who can thrive in your culture and have trust in the way you do things requires a similar approach as when you’re doing your due diligence on possible lenders.

“Our vision is to change peoples’ lives,” Shook says. “So people who work within a company like our’s, in order for the culture to exist, would have to have an alignment or purpose in life with that. Their individual purpose in life doesn’t have to be the same purpose, but it needs to be something that is compatible with the major purpose of the company.”

In order to stay healthy, a culture needs to be such that it can allow people to leave without creating a big problem. Even the strongest culture has people who sometimes lose their connection to the organization.

“Lives will change,” Shook says. “Where it was the right place to be before, maybe it’s not anymore. We want people who get more than they give out of working at Silverado. We want the company to get more than it gives out of having that person work with us. If both are positives, it’s a tremendous source of energy coming together. If one is negative, there is a drain on that energy and a drain on that company.”

Believe in what you do

With a strong relationship with Health Care REIT and a strong culture that trusted in its leadership, Silverado was ready to make a deal. The $298 million partnership closed in January 2011.

“Technically, we did sell the company,” Shook says. “But all of us investors, including Riordan, Lewis & Haden reinvested a great deal of money back into the company. I personally reinvested 50 percent of my proceeds back into the company.”

Silverado is poised to continue growing with seven new communities under construction, joining the 23 communities, eight hospice offices and five home care offices already up and running. Another hospice office and home care office are also in the process of opening.

“Before we started in this industry, people said the model we pursued would not work,” Shook says. “They said we would be bankrupt right away because they couldn’t connect the things we do. They would say it’s either a medical model or a social model and they couldn’t understand how both could happen.”

Shook is confident the results have proven those critics wrong.

“People who invest in business want to make a difference too,” Shook says. “If you get a good return on your investment and make a difference in peoples’ lives as well, then you will win attracting that capital to your company compared to somebody else who is just giving them a return.”

How to reach: Silverado Senior Living Inc., (888) 328-5400 or www.silveradosenior.com

The Shook File

Loren Shook

Co-founder, chairman, president and CEO

Silverado Senior Living Inc.

What’s the best business lesson you ever learned?

One of them is to understand my own strengths and bring in people who have strengths that I do not have. In other words, I don’t want to spend my energy trying to do things that are not my strengths. I’m good at seeing things that can happen that are disparate or ideations, or seeing things that people don’t see and then connecting them.

I can put together the big picture deals like a REDIEA, but I’m not good at the details. Tom Croal, my CFO, he’s good with the big picture. But he’s also terrific with the details. There are enormous numbers of them and he’s very good at that. So I have a CFO who is excellent at that and I’m not.

Shook on value: People will pay for what they value, and I should not impose my financial limitations on them. I don’t know their means and I don’t know what they value. I couldn’t afford to have a person living at home 24/7 taking care of a loved one. So one would think, ‘Who can afford that and why provide that as a service?’

Well, nonsense. We have a number of people we take care of at home 24/7 and there are plenty of people who can afford that. It’s expensive, but it’s not a problem for them. If they can afford it, they should be able to have access to that service.

We’ve taken someone’s mother with Alzheimer’s on a cruise to Mexico. We staff it 24/7 and make that cruise possible and she has a great time. Don’t put your limitations on what other people want.

Takeaways:

Vet your financing partners.

Stick to your culture.

Don’t give in to doubt.

Beth Mooney, Chairman and CEO, KeyCorp

The view from Beth Mooney’s office on the 56th floor of Key Tower in downtown Cleveland overlooks Cleveland Browns Stadium, the Rock and Roll Hall of Fame and Museum, Jacobs Pavilion and the Lake Erie shore — attractions that are part of what makes Cleveland special and reasons why Mooney loves this city and is proud that KeyCorp can call it home.

Mooney, chairman and CEO of KeyCorp, one of the nation’s largest bank-based financial services companies, with assets of approximately $87 billion and more than 15,000 employees, came to Cleveland in 2006 to lead the bank’s more than 1,000 branches. Her appointment to the CEO role in 2010 was a historic one since the move made her the first woman CEO of a top-20 U.S. bank. The announcement received national attention.

“I knew it was significant, and it wasn’t lost on me particularly from when I started in banking in 1978,” Mooney says. “It wasn’t lost on me that within a generation how transformational that was for our industry and within Key how significant it was, but it came with a degree of notoriety that I don’t think I saw coming. The world kind of took pause and noticed that banking, an industry that has long been heavily dominated by men at the top, promoted its first woman.”

While the move created big buzz, Mooney had to quickly focus on the job at hand since KeyCorp had been struggling to make a profit the previous few quarters coming out of the recession. One of the reasons she won the CEO role was her knack for developing and driving a strategy and her ability to get people to follow her. The company needed a new approach, and Mooney was ready to answer the call.

“Part of the process with the board when they selected me was to challenge me with what would be our strategy,” Mooney says. “How would Key differentiate itself? How will you make a competitive advantage? How will you know you’re winning with clients? There was a lot of dialogue around strategic vision. We just really need to stay the course, be rigorous, execute the strategy with focus and discipline and I needed to position us for that journey, reaffirm our strategic message to our employees, to our investors and find a way to capture that and bring people with us.”

Here’s how Mooney is focusing on building better relationships, providing great customer service and making sure her legacy as the first woman CEO of a top-20 U.S. bank leaves a positive and memorable mark.

Believe in your abilities

When Mooney started her career in banking, she didn’t think she would one day become a bank CEO. However, as she developed her skills and grew in the industry, she began realizing that the top spot could be within her grasp. She consciously sought opportunities in her career that would keep pushing her further.

“I was in it because I didn’t know that I would ever truly be a CEO, but that I wanted to go as far as my ambitions would take me,” she says. “I’ve made a lot of choices in my career and taken jobs, challenges and moves and very diverse opportunities in order to build what I call the best tool kit I could personally have and try to balance that with how far my abilities would take me.”

Throughout Mooney’s career, she has identified working well in a team environment, bringing out the best in others and accepting constructive criticism as some of the most important skills to have.

“One of the most critical skill sets is the ability to be effective in a team and work within environments where it’s groups of people solving problems, creating opportunities and driving business success that you have to think of yourself as a successful participant in a team and be able to exert pure leadership,” she says.

“As you get the opportunity to lead and get increasing responsibility, don’t lead with your differences; lead in a way where you bring out the best in others. You’re known for being a problem solver. You’re known to be somebody who is encouraging, coaching, mentoring, yet disciplined and delivers results.”

In Mooney’s career, there have been many role models and people who have mentored, coached and helped her get to this level.

“I have had a lot of bosses, both men and women, over the years who have invested in giving me opportunities — the stretch assignment, the difficult assignment because they believed I had a lot of capability,” Mooney says. “I tell people to take a tough job or take an assignment that’s outside your comfort zone so people can see you in a different light and realize that you’re scalable, nimble and can adapt to new situations. Never stop investing in your own abilities and your own learning.

“One of the things I’ve always said in interviews in my life whenever I was being considered for another opportunity … is I will always take the chance on my own abilities. If you give me this opportunity, I won’t disappoint you. Then work really hard to make good on that.”

Mooney says she is in her dream job, and as the company’s first female CEO she wants to make KeyCorp the best company she can.

“I want to do this well because I would like my legacy to be that this was a successful time for Key, for its clients, its communities, its employees, its shareholders — that it was transformational to our industry at a point in time and that it was a headline,” she says. “Hopefully by the time I’m done, it’s a footnote because there will be others who have risen to this level. Whenever you get that recognition and the spotlight is turned on you, I think it needs to bring out the best in you and that’s how I’ve internalized it as an extra obligation to do what’s already an important job well.”

Build better relationships

Mooney’s first steps to get KeyCorp back on track were to understand what would return the bank to profitability. She started with a focus on the company’s clients and consumers and sought to understand what they wanted from their bank.

“From a challenge point of view, what we were doing is still unique within the industry, which is a real firm focus on being very targeted about your clients and being disciplined about doing business with people that you had relationships with,” Mooney says.

“So staying very focused on our value propositions we’re going to build relationships, we’re going to do it in very targeted ways with clients who we know and appreciate our capabilities. We’re going to be clear about giving advice and solutions and not be product-pushers, and at the end of the day we have to give great service. So it was a little of back-to-basics, but with a whole new level of accountability and rigor.”

The best example of how Key showed its loyalty to its customers was when the Durbin Amendment was put in place in 2011. The legislation, which was part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, limited what banks could charge for debit card activity.

“It took a huge stream of revenue out of the banking industry,” she says. “In our case, it was $60 million in revenue that went away. The last time I checked that was real money. The different banks started talking about no longer being able to offer rewards programs along with your debit card and were probably going to have to charge a fee. So you had to make your plans for what you were going to do because it was a significant revenue difference.”

The company stepped back and ultimately came to the conclusion that it should ask its customers how they felt.

“We have been building this notion of listening to our clients, being insight driven, i.e. what do they want and need?” Mooney says. “What do they value and what will they pay for? When we [asked our clients] what we heard was don’t nickel and dime us. They feel that adding a fee was nickel and diming. What they wanted was for people to recognize and value that they have a relationship with us, and if we have a relationship that should be meaningful to the bank.”

Key decided to reorient its products around the notion of relationship building. The bank not only didn’t pull its rewards program, but expanded it, which was the opposite of what other banks ended up doing. It even landed KeyBank on the “ABC Nightly News.”

“When [ABC] listed the banks that weren’t charging their customers’ fees, Key was prominently displayed, and I got a sound bite where I said, ‘We asked our clients. They didn’t want to be nickeled and dimed. They wanted to be valued, and we went for reinforcing ‘Bring us your relationship and we will reward you’ versus going the fee route.’” Mooney says.

“That is value-spaced, relationship-based and that is a commitment to an extraordinary service. That is trying to find solutions that fit the needs of your clients and positioning yourself to be different in the market. I look at that as one of those examples that you can point to that says something is different at Key.”

In order to differentiate your business from others in your industry you have to be able to use your relationships to your advantage.

“I would start with the basic premise that the more you can understand about what your client wants, needs, values or what will differentiate you is an incredibly powerful strategy,” she says.

“The power of unleashing the ability to take that which you provide and build it, package it and deliver it in a way that really resonates with what your client wants, to me, is probably the only truly valid growth strategy over time.

“To the extent that you believe that you can build something — if you build it they will buy it — is a lost strategy these days because we’ve come to an age where choice and knowledge about choices, the rapidity of change and the ability to switch has probably never been higher.

“Retaining loyalty and building relationships takes a different value proposition and takes different work. It has to be rooted in what your clients want and need and finding proactive, robust ways where you find those outlets to listen and understand is a linchpin of a successful strategy.”

Form a strategy

The strategy of relationship building and customer service initiatives at KeyCorp go back to before the recession hit. However, as the recession increased pressure on the banking industry, those strategies gained importance.

“Even before the downturn we stepped back and said, ‘What are the things we want to be known for?’” Mooney says. “This goes back to 2007 and we said, ‘We better get really, really good at customer service because at the end of the day nobody truly stays loyal to a product, nobody really stays loyal to a location, a brand; they stay loyal to people and they stay loyal to how you make them feel.’”

KeyCorp looked outside the industry at how others were delivering service in order to better grasp how the company should move forward.

“We looked to Lexus and Ritz-Carlton and really calibrated how we trained our people, what we asked them to do and how we measured them,” she says. “We put in customer satisfaction surveys and all sorts of things to ask what sort of experience you received. You need to teach your people this is what service looks like, and this is how it feels to the client and then you call the client and ask them did they indeed experience you that way.”

Through that kind of training and initiative, KeyCorp got its customer satisfaction levels up to what most community banks experience.

“In the last two years, the slope of that line has accelerated to the point where the Holy Grail in service has always been the local community bank,” she says. “We’re right at the level of the service that community banks have give,n and we’ve really gapped out from our competitors.”

“You’ve got to decide what it is people want. Learn from the best in the industry, not just your business. Create a way to train people to it. Test that it’s happening and then recognize and reward so it becomes a virtuous cycle within your company to make giving great service part of how people get up.”

For any strategy to be effective, there are a few critical factors that you need to make sure you do.

“For a good strategy to be great, there is only one way and that has to be the consistency of execution of the strategy,” Mooney says. “First, you have to start with clarity of the strategy to the people who have to implement it. Your employees have to understand clearly what your strategy is. What’s your strategy and how are you going to differentiate? How are you going to compete and what does winning look like?

“Secondarily, it’s the consistency with which you execute that strategy over time and that your ability to focus on execution is done with rigor and accountability. Then make appropriate course adjustments, but do so with consistency.

“I don’t think there has ever been a great strategy that wasn’t executed over time with rigor, with accountability, with clarity, with buy-in, with recognition, with reward that is meaningful to the client. This whole notion of ‘It’s a journey, not a destination’ that you have to stay with it over time and people need to understand it and believe that it’s real and get up and know what’s expected of them and do it over and over and over again, to me, it’s that clarity and consistency and the disciplined, focused execution that makes a difference.”

The course of implementing a strategy takes a lot of hard work by everyone involved, but the CEO has to play the most crucial role.

“The trajectory, the pace, the rapidity and the tone and feel of [a strategy] is uniquely a CEOs role to help shape that, to help give it a face and something that your employees can follow, your clients can understand and your communities can appreciate,” she says. “Then ultimately create the shareholder value from those strategies that will make it rewarding for them to invest in your company. It’s kind of unique being the bearer of it as well as the driver of the strategy.”

Gain buy-in

No matter how good a strategy sounds or how good it looks on paper, it will not succeed unless you get buy-in from your employees who have to ultimately be the ones who do the work.

“The first cornerstone for how do you get followership in a strategy has to be the simplicity of the message, the consistency of the message and you can’t communicate enough,” Mooney says. “Every chance I get it’s here’s who we are, here’s how we compete, here’s how we’re going to be different in the marketplace, here’s how you help us win. It’s consistency of messaging. Then what I hope I do effectively is, ‘I hope I’m very authentic. I’m very genuine. I’m very down-to-earth, and I put things in terms people can understand and can see themselves as part of.’

“So there is this constant, clear messaging and consistency of communication that you have to get protocols and rigor around where the content is compelling and understandable and you see yourself in that strategy.”

Another way to get people to follow you is to truly show your company how much you care about its well-being and success.

“I think the other thing that is unique to my style is that people know I’m passionate and I believe in what we’re doing,” she says. “I value our employees. I believe in our clients and our community. I’m committed to our shareholders, and I think there’s a bit of a rising tide in the messaging that people want to go with that.

“It becomes something that they can rally around. The rigor around making sure those messages are done continuously and reinforced doesn’t happen by chance. There is a whole protocol and operationalizing of that messaging to make sure that it is not just ad hoc, that it is indeed consistent, clear and inspiring.”

Today, KeyCorp is continuing to leverage its relationships and devotion to customer service. Since the downturn, the company has reported eight straight quarters of profitability, and it has further plans to keep growing.

“The cover of our annual report captures it well; it says, ‘Strong, Focused and Building Momentum,’” Mooney says. “I feel like with eight straight quarters of profitability Key is solidly back to profitability and that what we need to do as a company from here is to build on our momentum and the sources of where we’ve been able to grow our business and return to profitability – and just be relentless around doing so.”

To ensure the continued success of your business, you need to not only focus on relationships and service, but on new opportunities as well.

“You need to do both grow your core and do the things you do well as well as seek to always do new things that are additive to your business model, but with a keen sense of prioritization,” Mooney says.

“If you try to do everything, you do nothing well. You have to be disciplined in what you prioritize, ‘planful’ in what you choose to execute, and then rigorous in how you measure and hold people accountable for what you’re doing. Those three stages of attributes need to be part of a constant vigilance making sure you answer those three questions and then it becomes a virtuous loop.”

How to reach: KeyCorp, (216) 689-5580 or www.key.com

Takeaways

-          Never stop investing in yourself.

-          Build relationships and leverage them to succeed.

-          Use strategy to deliver a consistent, clear message.

Brennan Mulcahy, co-founder, chairman and CEO, American Solar Direct

Brennan Mulcahy likes to keep it both simple and smart when he thinks about his growth strategy at American Solar Direct.

“It’s about providing high-quality, photovoltaic rooftop solar systems for residential customers in California,” says Mulcahy, the company’s co-founder, chairman and CEO.

“That’s it. So we’re focused clearly on that. There is a lot of opportunity for our business in other states and other jurisdictions, but we’re very focused on getting that part of our business right. I’ve seen too many companies try to be everything to everybody.”

The measured approach that Mulcahy takes toward growth at his 170-employee company is an effort to get it right the first time and prevent unnecessary mistakes.

He wants to get the right people in place, build a strong culture of empowerment and have an operational process that everyone understands. That way, when the business does take off, there will be far less uncertainty about what needs to happen.

“You’ve got to grow in a prudent manner,” Mulcahy says. “Companies that try to do too much, too fast risk destabilizing the business. So it’s finding a balance between high growth and controlled growth. We strive for high growth, but we also want to achieve controlled growth so that we’re managing the business and our resources responsibly.”

Develop your team

As you seek to prepare your company for a higher volume of business, you need to take a good, hard look at the team you’ve got in place and see how it matches up with your vision and company goals.

“You need to take a formulated approach so you understand not only where your weaknesses are in the organization, but also your opportunities,” Mulcahy says. “Identify those high-performers who are likely going to advance in their career.”

Mulcahy holds a weekly executive committee meeting where his department heads talk about the strengths and weaknesses of the organization from many points of view, including personnel.

“We look at how we’re performing across the organization on a regular basis,” Mulcahy says. “You have to identify, as you’re growing, the key positions you are going to want to fill six months, 12 months, even two years down the road. You can’t just go out and hire everybody you want on day one. So we work together to create that prioritization based on what we need in order to hit the goals and objectives of the organization.”

You need to keep your team engaged in this discussion so that everybody is moving forward with the same information and the same goals in mind.

“You work together to set those goals and everybody on your executive team has bought in to them,” Mulcahy says. “You want to create an environment that allows them to contribute and feel that they really can contribute meaningfully.”

One of Mulcahy’s priorities with regard to personnel decisions is to see if a need can be filled internally. Just as you want your leadership team to feel part of the high-level decisions, you want your employees to feel connected to the growth plan at their level.

“I’m a big believer in growing organically and offering opportunity for advancement in the organization to the extent that you can,” Mulcahy says.

Keep the makeup of your company’s work force in mind on a regular basis and think about how the players could be moved as your company grows.

“Identify who your superstars are, those folks who are going to advance in their career in the short term,” Mulcahy says. “Understand each department and who you have coming up in that department. The way I look at it is very formulated. I look at each department and who the critical senior positions are and then I look at who in the organization is below that could fill it at some point. Who may need additional training or support to continue to advance? Where do you have gaps in the organization?”

When you have a clear understanding of what you’ve got, you’ll be able to make smarter decisions when you have to reach outside your own walls to make new hires.

Be a good listener

As you build your talent level or do a better job of maximizing the talent you already have, you have to make sure you keep your ears open to the ideas your people bring to the table.

“You have to listen to people,” Mulcahy says. “That is something that is hard for a lot of leaders who have their idea and just do it. If you bring high-performing people onto your team, you have to listen to their ideas. You may not always agree with them, but you have to listen and weigh and consider their perspective. Engage as a team and allow people to feel comfortable challenging and debating ideas.”

This kind of engagement makes people feel like they are part of the plan to make the business grow. It also gives them comfort that there is a plan and that the work they are doing is building toward bigger goals.

“If you respect peoples’ perspective and you respect their point of view, you make them feel valued,” Mulcahy says. “Then as a team, you come together and draw conclusions. At the end of the day, once you’ve had the discussion and the debate, it’s important that everybody gets on the same page to execute a decision. But again, you have to allow for that opportunity to be heard.”

It starts with you. If you openly demonstrate that you value the perspective of the people on your leadership team, they will be more likely to do the same with their direct reports. The result is a group of people that don’t just view your business as the place where they come to work and collect a paycheck.

“I want to have a culture at American Solar Direct where people feel like they helped build it, not just that they work there,” Mulcahy says.

This willingness to listen and consider other opinions is another opportunity for you to show that you want the company to be successful, but you want it to be done the right way.

“It’s a culture you have to embed in the organization,” Mulcahy says. “It’s not a process, not a policy you put up where you say we’re going to listen to our employees. It’s something you actually do and you start by doing it.”

Build customer relationships

Relationships are a key component of any organization, whether it’s between fellow employees, employees and management or a company and its customers.

“For our business, it’s not a one-stop sale,” Mulcahy says. “You can’t walk in, drop off the product and take a check. When we enter into a relationship with a customer, it’s a 20-year relationship because we lease them the solar equipment for 20 years.”

Customers make monthly payments for the equipment that allows solar energy to power their homes. In return, they expect responsive service if anything goes wrong.

“So when they visit for the first time and give them that presentation, it’s not just a quick in and out, see ya later,” Mulcahy says. “We have to come back and inspect the roof. We’re going to send installation teams in and put that system up on the roof. We’re going to have a long-term relationship so the salesperson has to do a good job in order to be successful.”

Whether you’re in the solar business or a different industry, you need to promote the philosophy that happy customers lead to confident salespeople.

“Salespeople who have a happy customer, they feel good about what they have done,” Mulcahy says. “That gives them a lot of confidence and helps them get more business because they feel proud of the job that they are doing. The second thing that happens is if you do a good job for a customer, you get referral business.”

Referrals have been especially strong in the past couple months and Mulcahy says that bodes well for the future.

“It makes their job easier,” Mulcahy says. “Anybody in sales loves a referral because you don’t have to go out and work as hard to get that customer. It indicates to them that we’re doing a good job with our frontline customers.”

Mulcahy wants American Solar to be viewed as a company that is reliable and committed to great customer service.

“It’s easier to get staff excited about doing a good job than it is going and doing a low-cost job or a mediocre job,” Mulcahy says. “We’re not setting out to be a high-volume, low-quality, low-cost provider. We’re setting out to be a high-quality, superior customer service product with a personal touch. We think that is something that makes everybody excited to be part of the team.”

American Solar Direct is expected to hit $60 million in sales this year and Mulcahy is confident that his team is in a strong position to satisfy the demand.

“We can educate the customer, provide the personal touch and make them feel comfortable with what they are getting,” Mulcahy says.

How to reach: American Solar Direct, (855) 765-2755 or www.americansolardirect.com

The Mulcahy File

Brennan Mulcahy

co-founder, chairman and CEO

American Solar Direct

What’s the best business lesson you’ve learned?

Communicate openly and honestly.

Why is that an important lesson?

It just saves so much time and energy. So often people spend hours or days beating around the bush and not getting down to the most important issue. I think you’ve got to really drill down to the nitty-gritty of what is important. Just be open and honest.

There is never anything to be gained by beating around the bush because you just confuse other people around you. Be very clear in what you think about something and what you want to do and just really get to the point in a respectful way if you don’t agree with somebody.

What traits are essential for leadership?

No. 1 has got to be the ability to listen. That’s critical. You often hear communicate, communicate, communicate. I agree with that. But I think the first pillar of communication is listening. People often get that backwards. They think communicating means you have to be doing all the talking. To be a good leader, you have to listen to people.

You need to be able to make decisions as well. I’ve often seen people who aren’t good at making decisions; they often spin their wheels around in circles. At a certain point, you have to make a choice and forge ahead. That doesn’t mean you always make the right decision. But you do have to make a choice sometimes and hopefully get it right more often than not.

Who has been a big influence on your life?

My brother, Tim Mulcahy. He got me started in sales when I was very young, and we started many companies together.

Takeaways:

Know what your team can do.

Engage others in decisions.

Get to know customers.

Kevin Duffy, president, Tozour Energy Systems

Doug Tozour, founder and CEO, Tozour Energy Systems

Doug Tozour firmly believes that if you’re not really good at something, you shouldn’t futilely bang your head against the wall trying to do it out of sheer pride or a refusal to accept defeat.

It’s a lesson he learned after 10 years of unsuccessfully trying to build a new business unit at Tozour Energy Systems.

“I got into the residential air conditioning distribution business and tried all kinds of things to build that business,” says Tozour, the company’s founder and CEO. “By distribution, I mean you buy product from a supplier and you inventory it and then resell it. For 10 years, I bled trying to make it work. And in the end, I realized I’m not a distribution guy.”

Tozour Energy Systems was launched in 1979 and is now a leader in the heating and air conditioning industry for customers who have large buildings to maintain. The 190-employee company has done work for such clients as Comcast Center in Philadelphia, Ocean County College in Toms River, N.J., and Petway Elementary School in Vineland, N.J.

Tozour Energy has built a strong reputation by understanding its strengths and routinely devising innovative solutions to help customers solve their heating and cooling needs. Tozour’s past experience helped him understand the value of finding something that you’re really good at and then focusing on providing the best experience you can to every customer in that realm.

“When we leave a job and call the client or anybody asks the client how we did, if they say anything other than I want Tozour Energy Systems on my next job, we failed,” Tozour says. “That’s the ultimate measure of the job we did.”

Here’s a look at how Tozour built a culture that empowers employees to do great work and provides the motivation to continue reaching higher.

Get involved in hiring

You need to take a lead role in identifying and hiring the right employees to represent your company and provide exemplary service to your customers.

“You don’t delegate to your B and C players,” Tozour says. “You really make sure your A players are in the search, doing the search, talking to people. The minute you delegate hiring down below the top performers, you really do risk hiring more of what the interviewee is. The key is to get your best people involved in the process.”

Tozour works very closely with Kevin Duffy, the company’s president, to find those employees.

“We spend a lot of time trying to figure out what people are really good at and trying to get them to do more of that and then building teams around that,” Duffy says. “That helps us a lot organizationally.”

Testing is an important of the hiring process along with interviewing and feedback from references and referrals.

“If we’re hiring for a sales role, they go through the Sandler sales aptitude testing,” Duffy says. “We do testing of personalities to see how they will work in a team environment. We work hard to understand what their core personality is like. Do they have a tendency to make excuses? Do they step up and take ownership? It gives us perspective on what kinds of questions we should ask so that when they do come on board, we have a sense of what they are all about.”

Tozour says hiring the right people is about a lot more than just finding someone who can do a particular skill.

“People come in many stripes,” Tozour says. “The people we want are the people who in their heart, really want to be exceptional. Those folks live on challenge. They want change. You hear the cliché, ‘Don’t change. Leave it the way it is.’ That’s not who we hire.

“We tell them day one when they come into the orientation that we promise two things: Challenge and change. The day we don’t deliver on that challenge, you come see me because either we’re screwing up or you’re in the wrong place.”

In order to stay on top of your hiring, you need a strong HR department that can help you by understanding the kind of people you want to hire.

“We have a full-time human resources person whose main role in life is sourcing, finding, interviewing and developing great people,” Tozour says. “We want people who are creative, inquisitive and always questioning how we can do it better.”

You can also use your PR or marketing team to help make your hiring efforts more fruitful.

“One of the great things we’ve done in the last few years is get our PR engine working to get the word out about some of the great things we’re doing in our community and some of the great innovations we’ve got in the marketplace,” Duffy says. “We’ve got people knocking on our door constantly and the best compliment is we’ve got our employees inside that are constantly recommending and referring really smart people because they know we set the bar high.”

Be a leader

There is a big difference between management and leadership and those who fail to understand the difference will find it tough to grow their business.

“Management is the cold, hard facts,” Tozour says. “Here’s how many visits we made, how many proposals we made, how many orders we sold and how many solutions we provided.

“Leadership is the ability to inspire people to do stuff they might not do if left alone. Management is important because it’s all about measuring, quantifying and evaluating the results. But if you’re going to be a great company, it’s all about leadership.”

Effective leaders are proactively searching for both the good and the bad about how their organization works. Duffy says Tozour Energy spent time last year developing a dashboard system to help people understand how certain activities led to certain outcomes.

“Each of the business units developed a set of about five dashboard activities that we then meet about and discuss every Monday morning,” Duffy says. “We meet for a half hour to review how what we are doing will lead to results. Those activities on average resulted in close to 15 to 20 percent business growth in each of the business units for those who implemented it and followed it.”

One thing a dashboard does is provide tangible proof that people are responding to your leadership.

“Doug always says to me, ‘Look over your shoulder to make sure somebody is actually following you when you start these innovations,’” Duffy says. “It’s something we challenge all our leaders to do. Make sure it’s not just you, but that your team is following.

“This dashboarding activity was transformational for the organization. It takes everybody at every level to actually be implementing and doing it and utilizing the process to drive the results.”

There is another difference between leadership and management that effective presidents and CEOs need to keep in mind.

“I paint the picture,” Tozour says. “I paint it as clearly as I can about where we want to go, where we’re headed and a little bit about how we’re going to get there. Then I try to get out of the way. Kevin’s job is to get us there. Unlike a lot of companies, I’m trying not to reach down through the organization too much.

“I’m going to tell you where we want to be. Then I’m going to expect you to staff it properly and to be the one responsible for motivating and inspiring people to do the day-to-day things that need to be done if we’re going to get to this vision.”

Broaden your view

Tozour and Duffy value what their employees do on the job, but they encourage those employees to pursue opportunities outside the business that bolster their skills.

“About four years ago, we started reimbursing for MBAs and encouraging everyone on our senior leadership team to go back to school and start on an MBA,” Duffy says. “We put our money where our mouth is. What we started to see are people who were focused perhaps in a sales role then understood how they fit into marketing and all the business functions and the financial side.”

Tozour wants people who have the tenacity to pursue further education and training and the desire to get involved in leadership opportunities outside of the company.

“We’ve got guys who are coaching semi-pro teams and we’ve got people who are working in all kinds of nonprofits,” Tozour says. “It’s really exciting to see the involvement that you would never know about if you just met the person. You’d say, ‘Yeah, he is a salesman or a service guy.’ They are coaching teams and making stuff happen. Life is much broader than where you work.”

The lesson is that in order to get people to really give their all for your business, you have to be willing to do the same for them.

“If our individuals don’t have an opportunity to grow and develop, the company is going to be stymied,” Tozour says. “That’s going to go all the way through the company.”

How to reach: Tozour Energy Systems, (855) 486-9687 or www.tozourenergy.com

The Tozour and Duffy Files

Doug Tozour, founder and CEO

Kevin Duffy, president

Tozour Energy Systems

What has been your biggest leadership challenge?

Tozour: The biggest challenge, and it’s always the challenge, is finding really good people who can carry out the vision or can lead the charge. Everybody wants to claim that they have got expertise and what not. But finding expertise with leadership capabilities, that’s always a challenge.

What is your definition of success?

Duffy: There’s a quote that I live by: What we do for ourselves dies with us. What we do for others remains immortal. That’s a real focus. When we can deliver financial success, it gives us the flexibility to do great things for other people.

Tozour: What is success to me? First of all, it’s being able to look back and see the results of our labor. To have the financial wherewithal to do whatever I choose to do going forward. To absolutely improve the life of others by giving back. And to have grown enough that I have wisdom that I never thought I’d be answering the questions you’re asking me.

How do you help your leaders grow?

Duffy: It’s common for companies to develop their vision for five years out. But we took it a step further. We analyzed what does that organization look like? What are the gaps? What are the leadership elements we’re going to need in 2015 to be that company? We went to about five different people in the organization and said we see you as a future leader here. We’re going to start challenging you with specific assignments to broaden your development.

As we grow, we have organizational leaders we’ve brought up and trained and developed so that they are ready to assume a leadership role.

Takeaways:

Don’t delegate hiring.

Inspire people to do more.

Encourage continuous development.

Jim Weddle, Managing Partner, Edward Jones

Since January 2006, when Jim Weddle first took over the managing partner position at Edward Jones, he has kept a keen focus on growing the investment firm to new heights. In 2007 he and his team laid out a five-year plan that they updated in 2010, but that was a mere steppingstone to the vision the firm rolled out last year.

In January 2012, Weddle unleashed what Edward Jones is calling its Vision for 2020. Focusing on growing the firm in three key areas — financial advisers, assets under care and households deeply served — Weddle’s vision won’t just have Edward Jones reaching new heights, it might just be soaring.

“Today, in a lot of markets, we are not the top-of-mind choice,” Weddle says. “We don’t have the presence that we need. It’s going to take us several years to get there, but we think we’ve got the way to do so.”

Edward Jones is a leader in the financial services industry that serves nearly 7 million clients with the help of 12,500 financial advisers and more than 34,000 total employees. The firm reported 2012 revenue of $4.96 billion, a mere fraction of what is planned for the years ahead.

“There is a huge demographic opportunity, and we need to better position ourselves,” Weddle says. “We’ve put a lot of tools in place. We’ve put additional products and services in place to enhance the client’s experience and to enable us and position us to do an even better job for them.”

Here is how Weddle formulated Edward Jones’ long-term vision and is beginning to make it a reality.

Create your strategy

In January 2012, Weddle made a big deal of explaining the long-term vision to the team at Edward Jones, not just what the vision was but why it was needed.

“Laying out a long-term vision provides the opportunity and the potential to get everybody aligned,” Weddle says.

The early success Edward Jones has seen with its plan is due to a thorough self-analysis the company performed when it first decided to create this vision.

“When we worked on our five-year plan we did so with the guidance and assistance of two gentlemen, one being Jim Collins who wrote, ‘From Good to Great,’” Weddle says. “One of the things that he suggests is that you ask yourself three questions.

“The first one is, ‘What do you do better than anybody else?’ The second is, ‘What are you most passionate about?, And third is, ‘What’s your economic driver?’”

Weddle says that Edward Jones’ business model makes the firm the better than anybody else in the investment process.

The firm is most passionate about helping its current and potential individual investors live a better life.

And lastly, its economic driver is its financial advisers.

“It’s not easy to get your arms around the answers to those questions,” Weddle says. “We had a lot of answers before we got it right.”

The second adviser that Edward Jones used in its planning process is Michael Porter, a world renowned expert on strategy, who preaches that strategy is all about a sustainable difference.

“It’s about doing things differently or doing different things than your competition and making trade-offs,” Weddle says. “It’s about making decisions as to what you’re going to offer and what you’re not. Who you’re going to serve and who you’re not. How you run your business comes down to the choices that you make.”

Those two things, the three questions and the tradeoffs, are the core of Edward Jones’ long-term plan.

“If you haven’t gone through the process of thinking those things through, good luck,” he says. “I don’t think you understand who you are or what business you’re in, which means it’s going to be very hard to optimize your results. That’s the value of the planning process for us. Yes, it does bring alignment, but it also brings focus.”

Identify your objectives

In order to better serve existing clients as well as to land many more clients by the year 2020, Weddle needed to set reachable goals for the staff.

“We have identified three peaks, three objectives related to that vision,” Weddle says. “First is growth of financial advisers, the number and our presence in the marketplace.”

Edward Jones currently has more than 7 million client accounts and 4 million households. However, the firm has identified about 40 million U.S. and Canada households that look like Edward Jones’ best clients.

“There’s no way that we can possibly serve even a fraction of that number of folks without increasing our presence in the market,” he says. “You might think, ‘Holy cow, how can you possibly to do that?’ Well, by growing 5-6 percent a year gets you there.”

Edward Jones has grown by more than that rate in the past, and Weddle believes the firm can reach this goal with the help of a new talent acquisition organization that was put in place, revamped FA compensation and significantly updated training and support programs.

“We anticipate supporting a good number of new folks that will be joining us each year,” Weddle says. “We’ve got amazingly strong pipelines right now. We think we’ll grow this year by 700 financial advisers in the U.S. and 80 in Canada and that will be a good start on that 2020 vision.”

The second objective of the 2020 vision is the firm’s assets under care. When the vision was first laid out, the firm had about $600 billion. In 2012 it had about $660 billion-$670 billion.

“By the end of 2020 we’d like to see those assets under care be $1 trillion,” he says. “You get there by growing 10 percent a year. We added about $34 billion of net new assets last year, which exceeded our objective of $30 billion.”

The third objective for the firm surrounds its deeply served households. Of those 4 million households Edward Jones currently serves, it identified 1 million households that the firm has a current deep relationship with. The firm wants to increase this number.

“We want to drive our deeply served households from the 1 million we had a year ago when we rolled out our vision to 4 million deeply served households in 2020. That’s a 15 percent compound annual increase and we’re ahead of where we need to be on that. I know 15 percent sounds high when we’re growing our FA’s by 5 percent and our assets by 10 percent.

“The reason we have set it at that level is because so many of our existing households can be moved to what we have defined as deeply served. It’s not just new households, but it’s going deeper with the folks that we already have a relationship with.”

Drive your plan forward

Now that Edward Jones had gone through the self-analysis and identified its objectives, the next step was to begin to roll out the vision and communicate how the business’ various departments and segments are going to have to contribute to meet those goals.

“One of the outcomes of the roll out of the long-term vision was to then say to every division of the firm, ‘We need you to look at the work you do and bring a critical eye to it and identify those things that need to be increased or put in place that will help us to achieve the 2020 vision. We also need you to identify the legacy work that we’re real comfortable with and we do really well, but maybe doesn’t add the value that it used to,’” Weddle says.

“You outgrow some things. You can’t just add on and add on and add on. You’ve got to also abandon things that no longer deliver value to your chosen client.

Every division of the company has got to come up with its business plan for reaching goals of the vision.

“We challenge each other, but it also allows me, if I’m in operations, to understand what the service side is doing,” he says. “It creates alignment and synergies and often times opportunities for working in a highly coordinated way that eliminates some cost and enhances productivity all driven by the vision.”

The No. 1 key to making a strategy implementation successful is having the right people driving results.

“Your results will be no better than the quality of the individuals who make up your organization,” he says. “You have to be brutally honest. At times you will outgrow some individuals.”

Sharing the business plans, challenging each other and making sure that everyone is working on the same priorities and holding people accountable is crucial to success.

“One area is dependent upon progress being made in another,” Weddle says. “We just need to make sure that we’re doing an absolutely terrific job for each one of those individual investors that we help to reach their financial goals. If we can stay focused on that we’re going to have a lot of success.”

How to reach: Edward Jones, (314) 515-2000 or www.edwardjones.com

Takeaways:

Answer important questions about your business and its future.

Develop objectives to reach in a long-term plan.

Implement your plan with the right people and measures.

The Weddle File

Jim Weddle

Managing partner

Edward Jones

Born: Elgin, Ill. He grew up in Naperville, Ill.

Education: Attended DePauw University and received a double major in psychology and business. He also got a MBA with a major in finance from Washington University in St. Louis.

What was your very first job, and what did you learn from it?

I had a summer job in 7th grade where I worked Monday through Friday from 8 a.m. until noon for a gentleman who was a retired banker. He had a large property and I drove a tractor, cut the grass, pulled the weeds, painted the house and the barn and worked every day doing that. I learned that you make your own luck if you aspire to do or to have, there’s a way that you can go about making that a reality.

What is the best business advice someone has given you?

I had interned here at Edward Jones, and I went out to Indiana where I established a new office and built it up. I had a mentor who was a very senior individual in our firm at the time named Jack. I remember confiding in Jack and he said, ‘What is your concern?’ And I said, ‘Jack, my concern is I’m 23 years old, and I look even younger. I’m afraid people won’t take me seriously.’ He said, ‘People will treat you the way that you act. If you act like a professional, they will treat you like a professional. If you act like you’re 23, they will treat you like you’re 23.’ He also said, ‘Prepare for every day, but do it the day before.’

Who is someone that you’ve admired?

One was an accounting professor who had a huge impact on me. For his class he said, ‘You need to show up to class prepared or I suggest you don’t show up at all.’ He was teaching us how to be ready for the rest of our lives.

The second guy was a business adviser named Peter Drucker. We worked with Peter for 20 years. He helped us to understand very clearly who our customer was, what our value is, and the purpose of our work.

Mike Thompson, President and CEO, Groupware Technology Inc.

Staying relevant. It’s why companies close old divisions and start new ones, why they introduce new products, make acquisitions, diversify their portfolios and invest in R&D. And for IT companies like Groupware Technology Inc., it’s the reason to complete one transformation, only to pause, and do it all over again.

The need to change was something that IT industry veterans — owners Mike Thompson, Scott Sutter and Anthony Miley — understood well when they acquired Groupware, an IT solutions provider that was on the verge of going belly-up in 2005. They recognized from day one that the company’s survival was dependent upon Groupware’s ability to transition outside its roots of

“systems and storage” and make a name in for itself in IT’s fastest-growing segments: big data, cloud computing, virtualization and data security. It’s a process that’s taken involved two restructurings in seven years.

“It’s a brand-new organization from the company that we acquired,” says Thompson, the company’s president and CEO. “We took a company that was doing at the time of the acquisition $1.7 million, and we turned it into almost $150 million with our company. We injected life into the organization by creating relevancy within the marketplace … and within the customer base.”

Here’s how Thompson and his co-owners have taken Groupware from struggling IT reseller into a leading systems integrator.

Look for an opening

Groupware’s broad customer base includes SMBs all the way to Fortune 500 companies. This means the company’s IT solutions must meet a wide range of technology needs. Delivering solutions that are on the leading edge of today’s systems and storage technology is the only way to stay relevant for customers.

“At the rate that technology is changing — it’s pretty amazing the acceleration that it’s going through — we need to stay in the forefront in regard to what technology is out there,” Thompson says. “It’s having business conversations with our customers to understand what pain points they’re trying to solve for and where they’re trying to take their business.”

Nobody knows the needs of the market better than your customer base. So one of Thompson’s first steps as CEO was to ask customers, “What’s going on in the marketplace?” and “Where do you want to take your business?” to see where Groupware should be investing.

“Understanding what’s going on around cloud computing, big data, next generation data centers and having the expertise to be able to deep dive into those types of opportunities and conversations with customers has allowed us to remain in the forefront,” Thompson says.

“It’s having conversations with our end users in regard to what business issues they are trying to solve and then understanding how we can help them solve those issues, and not just for today.”

What Thompson and his partners realized quickly is that businesses buying IT products also wanted in-depth knowledge and advice from their providers. They began working on a strategy to transform Groupware into a services-led business, which could provide both products and support for its customer’s technical capabilities.

As it turned out, the challenges in the down economy — more companies began seeking IT workarounds to help them manage with more limited resources —gave the company an “in” to present its new solutions and services to the marketplace.

“Customers looked to us to offset some of the reductions that they had in place because business has to go on,” Thompson says. “You still have to solve these business issues. You’ve just got to find new ways to address the business models out there.”

While competitors scaled back, Groupware doubled down on IT investments, including its service segment, which Thompson and his partners believed would propel demand moving forward. The company also invested heavily investments in its labs and engineering capabilities — especially engineering talent.

“Where there is change and uncertainty, there is opportunity,” Thompson says.

“As we went through it, we saw that people were going to pull back. Our opportunity was to go invest heavily to have resources available to [businesses] and to create value out in the marketplace that our customers could leverage from us to continue to be successful in their operation.”

Start tough conversations

By the time the recession began bottoming out in 2010, Groupware had nearly doubled its business, a sign that new investments were paying off. Still, the business transformation also forced Thompson and his executive team to restructure certain areas of the company to make room for those investments.

It was important to engage people in “adult conversations” about why the changes were happening and what they meant.

“I think too often we let niceness get in the way of the truth. You need to have those conversations and not delay the hard conversations, acting decisively based on that and moving forward. I’ve been in situations where the executive team has been slow to make changes and it became irrelevant really quickly by not acting and not executing. It’s critical to have those conversations and then act on them appropriately.”

Groupware has now gone through two restructurings since 2005, a transformation process that’s involved rearranging certain departments, eliminating remote offices and consolidating operations. These strategic moves have helped drive the company’s investment in “rack and roll” solutions — complete technology solutions designed to be rolled into the data center and quickly put into production, generating higher returns for Groupware.

For Thompson, the ability to have honest conversations with team members has helped him keep the company accountable to progress, but also to earn employee respect. People prefer to do business with people that they like, but they’ll also follow a leader who they respect, he says.

“We need to have those hard conversations and get everybody on board with the investments that we want to make as an organization,” Thompson says.

“You can move too quickly, but if you set the goals and hold accountability level, you can make minor changes to that if you need to, or you can pull back.”

That said, building a dialogue with employees is also important in helping you monitor your investments. Strong internal communication gives you a continuous feedback loop to know where your investments stand and what kind of returns they are generating so that you can know when to pull back.

“It goes back to where you place your bets, making bets and then understanding the return, setting expectations associated with those bets and managing toward that,” Thompson says. “If you don’t see the return or you don’t see the return coming, you need to be able to take those resources back and double down where you do see return on those investments coming from or where you believe you can get a greater return.”

Share in excellence

Today, Thompson continues to invest heavily in the company’s core competencies — networking, security and storage — as well as its services practice, its fastest-growing division. Smart investments combined with open and honest communication are two building blocks in a foundation that helps Groupware stay relevant with customers, and the marketplace.

The third is collective ambition, or a shared commitment by employees to the company’s success.

“I’m a firm believer in building winning teams, having the right people in the right positions at the right time,” Thompson says. “Then you’ve got to empower them to go out and execute.

One way Thompson drives collective ambition at Groupware is by creating an environment where employees want to come to work.

“I’ve always felt that it’s our job from a leadership perspective to put our employees in a position to be successful,” Thompson says. “When they drive home that night, we need to give them a reason to come back in the office the next morning.”

What makes a great work environment? At Groupware, it comes down to living the company’s three core values every day.

“The great thing about this transition is that we’ve remained true to our core values of customer service, excellence and fun,” Thompson says. “My belief is that you keep those core values intact and you create an environment where employees can be successful and understand the consistency of the model that you’re bringing to the marketplace.”

An example is the fact that Groupware invites every employee in the company to its national kickoff — an event that many businesses limit to their sales teams.

“It’s customer service,” he says. “It’s the pursuit of excellence and it’s having fun. Those three complement each other.”

Getting employees together for the kickoff is about showcasing the company’s values and vision; but it’s also about “getting everybody to fill part of the success of the company,” Thompson says.

Driving this culture is also why Groupware expanded its focus on collective ambition in 2010, when it rolled out a corporate program around the concept. The goal of the program is to help employees understand their role in serving the purpose of Groupware and better explain to employees how all departments participate and work in harmony to help the company succeed.

“Once you have buy-in and you have collective ambition by multiple individuals in the organization, you can propel the business in the direction that you want to take it,” Thompson says.
How to reach: Groupware Technology Inc., (408) 540-0090 or www.groupwaretechnology.com

The Thompson File

Mike Thompson

President and CEO

Groupware Technology Inc.

Born: Mountain View, Calif.

Education: USC undergrad; MBA Regis University

Leadership philosophy: I don’t shy away from the fear of failure. That actually makes me work harder, and I take those challenges and adversity head-on. I’m a classic example of ‘productive paranoia.’ I’m always looking over my shoulder, always working hard and always trying to better myself to make sure that I can keep moving in the right direction.

What would you do if you weren’t doing your current job? 

In some capacity, creating an environment and opportunities for others to grow. Leadership and mentoring have always been important to me.

What is one part of your daily routine that you wouldn’t change?

When I’m not traveling, taking my kids to school in the morning. Discussing ESPN Radio with my son while my daughter tries to sing over the conversation and dance free of her car seat always starts my day off in perspective.

If you could have dinner with one person you’ve never met, who would it be? 

Cassius Clay. I’m a huge boxing fan. The man who became Mohammed Ali was a personal branding genius and his endless confidence and brashness are endlessly fascinating to me. 

What do you do to regroup on a tough day? 

If I can, go do something with my son, shoot hoops, play catch and so on. It gives me a half hour or so away from my phone. Practice, form and fundamentals messages, repeated to him over and over, are great reminders for me as well.

What do you do for fun?

Get out on the water: wake surfing, boating, being out on the water with friends and family. 

Alan Jay Kaufman, chairman, president and CEO, Burns & Wilcox

Nobody in Alan Jay Kaufman’s field is looking for the insurance industry to develop the same professional glamour appeal as a movie star, professional athlete or international spy — but they are looking to get on the same recruitment footing with banking, finance and just about any other area of business.

The insurance industry is fighting that kind of an uphill battle. It’s primarily because college students, in many cases, don’t view insurance as an appealing career choice, which hinders the recruiting efforts of firms such as Burns & Wilcox, a 1,000-employee insurance brokerage, which Kaufman leads as chairman, president and CEO.

“The effort from our industry to go to universities looking for the best and brightest isn’t there,” Kaufman says. “It’s also not a profession that universities are encouraging people to go into. They think about banking, finance, marketing but not insurance. It’s not emphasized as a great opportunity or a great career.”

But without attracting, training and retaining great talent, a business in any field can’t hope to flourish. So Kaufman and his staff must swim against the recruiting current, challenge the preconceived notions about life in the insurance business and give bright, talented people reasons to want to come to work at Burns & Wilcox.

“That’s my biggest challenge,” Kaufman says. “We need to acquire the best and brightest talent that can take the company from one good level to the next higher level. And after you’ve acquired them, after you’ve trained them, you face the issue of retention. How do you retain the best talent you have so that you can continue to improve your team?”

It has required Kaufman to help spearhead recruitment efforts and formalize training programs, all with an eye toward making Burns & Wilcox not just an attractive place to work but an ideal place to build a career.

Find your selling points

To understand how your company can best appeal to potential employees, you have to understand what sets your company apart from the competition. You have to know what you can uniquely offer to the people you recruit.

If you are aiming to hire young talent, as is the case at Burns & Wilcox, you have to develop programs and facilitate opportunities that appeal to recent college graduates who are mobile, both in a geographic sense and corporate-ladder sense. Young employees value career advancement, and many of them also value the opportunity to live in different areas of the country and world before settling down.

It’s something Kaufman and his HR staff have carefully considered as they have built their company’s recruitment and training programs.

“The recruits we’ve brought in have been impressed with our training, that we have a course that helps them get their careers off the ground,” Kaufman says. “We can move them around to different regions. They can spend some time here in our corporate headquarters in Michigan, and we can move them to different offices where we have training programs operating. They can understand how the office in Atlanta works versus the office in Dallas or Los Angeles.”

Not every office in the Burns & Wilcox system is set up for training but enough are equipped with training staff and capabilities so that a newly recruited employee has an opportunity to experience living in different cities and learn about the work environment in various company offices.

Kaufman and his team have developed the company’s recruitment and training platform, in part, by observing the competition and analyzing the holes that competitors weren’t filling in the recruitment game.

“We don’t necessarily react to what the competition is doing, but we do certainly pay attention to it,” Kaufman says. “We’ve realized, for example, that our competition has been more focused on compensation, as opposed to training and career advancement.

“I believe that the right leaders are going to realize that compensation is important, but training and providing promotion opportunities is more important to career advancement. We do meet the competition as far as compensation is concerned, so I’m not trying to undermine the fact that compensation is important, but the education and training aspect is critical.

“I’d like to see more of our competitors in the industry implement some programs for advanced training. It would be better for us and better for the industry. I consider it a weapon in our arsenal, but it’s not a secret weapon.”

Build a training program

To sell recruits on your company’s ability to advance their careers, you must develop a comprehensive and formalized training program that lays out a process for how your company can help its employees achieve their career goals.

At Burns & Wilcox, the company formalized its training program under the acronym KELP — the Kaufman Emerging Leadership Program, which is administered by Burns & Wilcox’s parent company, Kaufman Financial Group.

“We formalized the program to a greater degree by actually hiring a recruiter internally, just for university graduates, just for the program,” Kaufman says. “We have one person on staff who is devoted to that. That’s all she does. We’re constantly trying to improve our formal approach through the KELP program and other programs that we have. That’s one way we have of searching for the best talent — and I emphasize ‘best,’ because it’s not just a matter of hiring people. We need people who fit the insurance culture, who will embody the best aspects of our company.”

Employees in the KELP program have usually graduated college within the previous five years. The three-year program is selective, with approximately 30 people gaining admission each year.

“We hire many people with the hope that they’ll get into the program, because it’s not guaranteed that they’ll get entrance into the program,” Kaufman says. “We first hire them, then after a period of time — maybe six months to a year working for us — they can potentially get entry into the program.”

But the size of a training program is less important than its quality, measured in the success rate of its graduates. A successful training program is usually successful because the leadership of the company committed resources to it and made it an organizationwide priority.

To build great leaders, they need to be taught by great teachers who understand the principles of effective leadership and how those principles fit into your company’s culture.

“It certainly has to start off with the right leadership in the training program, and the company has to put that on the list of priorities,” Kaufman says. “You can’t have an internal program without the support of the senior executives and management, which is why we always try to involve the best leaders in our company in the implementation of the training program.

“For two weeks, we bring our best leaders into the program, people who work in various disciplines throughout the company — whether it be underwriting, brokerage, property, professional liability or any other area. Without the support of those people, the program wouldn’t be successful, and the company wouldn’t be as successful.

“If you look at the people in our company, the people who have historically been the most successful are the people we have trained.”

And that training has to be open to all areas of the company. You might have certain departments that you view as more essential to your company’s success than others, but the next great leader could emerge from a department that’s on the edge of your radar screen.

“Open your training to people in every area,” Kaufman says. “Our training program also includes assistant underwriters and other people through all levels of the company. It’s across the board because you can’t just train certain individuals. You need to have a macro approach. And that goes back to having someone on staff who is entirely devoted to training on an ongoing basis.”

Consider other factors

Your recruiting efforts can get talented employees in the door, and your training programs and compensation packages can get them to accept the job. But once you have them, how do you keep them? That is a question with a multipart answer that involves additional factors, including the work environment, networking opportunities and the way in which the job contributes to — or detracts from — quality of life.

“There is not a magic formula, but those items are all part of the formula,” Kaufman says. “How you balance it and mix it is an ongoing process. It’s never perfectly right, so you just have to keep looking at the ingredients.”

It’s why Kaufman makes it a point to personally keep his finger on the recruiting pulse of Burns & Wilcox. He empowers his HR staff to do their jobs but remains in tune with the company’s ongoing recruiting efforts.

“I participate in recruitment and the interviewing process,” he says. “I interview hundreds of people a year and certainly anyone on the management level. And I expect that standard of other people in our regional offices. You need to maintain a strong leadership team that works together and comes to a consensus on what to do. You want a consistent approach.”

How to reach: Burns & Wilcox, (248) 932-9000 or www.burnsandwilcox.com

The Kaufman file

Alan Jay Kaufman

chairman, president and CEO

Burns & Wilcox

What is the best business lesson you’ve learned? The lesson I learned from my father (Kaufman Financial Group founder Herbert W. Kaufman) about his door being open to anybody. You didn’t have to go through different layers to get to him. That is the way I am, and I encourage my executives to be the same way. If you want to know something, you have to go right to the source, and with our management style, you can talk to anyone in the company — and our employees do that. Regardless of your size, you want your company to keep that part of the culture, keep that feeling that people can talk to anyone.

What traits or skills are essential for a leader? Humility, honesty and hard work. That, and you have to lead by example. I can’t expect someone else to work hard if I’m not working hard. I set the pace for everyone, and I expect, from my level on down, to keep that pace. As an example, I expect everybody — clients, insurance brokers, agents — to understand our history and what we’re selling.

What is your definition of success? The quality of the team around you. The better the team you have, the more it will be able to carry you through thick and thin. A company isn’t one or two people; it’s the total team. A great team leads to success — it’s true in business, it’s true in government, just as it is in athletics.

Takeaways

Sell recruits on your company.

Build a strong recruitment strategy.

Formalize your training program.