Kristy J. OHara
When Bernadette Boas was given a pink slip from her very lucrative, global vice president type of role, she was happy.
But she didn’t understand why, so she decided to do some self-reflection.
“I was that bitch with the walls up, and there was no internal dialogue going on at all,” she says.
She recognized that her ruthless attitude had taken a toll on her health, as her body was mocking symptoms of a heart attack because of the stress and angst she was experiencing. She also saw that she had all the luxuries of life, but she didn’t have the things that really mattered — loving relationships and warmth.
“When I realized it was because of that nasty attitude, I was horrified at how many people I had hurt over the years,” she says.
She decided to write her book, “Shedding the Corporate Bitch,” as an apology to all the people she’s hurt over the years and to address how people can shed the ruthless leadership shell.
Smart Business also spoke with her about how business leaders can more effectively handle difficult people in the workplace.
How do you recognize toxic behavior in your team?
Any good, aware manager is going to see that an individual within their team or department or organization is toxic. It’s whether or not they’re willing to address it and not just look at their productivity.
For instance, that attitude for me produced a lot of great results for our customers. Our customers appreciated the fact that I would go at it with my own internal team and fight for them, and therefore I and created a lot of great results. But internally, what I did was create a lot of toxic environment among our organization.
The manager, they know when they have someone who is toxic, so they have to confront it and address it. When somebody is toxic, there’s something underlying that. There’s something underneath that. When someone is productive and good at what they do and is very much a leader but is taking on these attitudes and mindsets, they’re doing it for other reasons. Businesses don’t want to get under the covers and play therapist. When you think about coaching and why coaching and executive counseling is so effective, it’s because they are addressing that underlying motivation and underlying agenda underneath the behavior. Managers just need to pay attention to it, confront it and then just recognize that it could be easily addressed once they do — it’s not a lost cause when you have that individual. It doesn’t automatically mean they have to be fired. It just needs to be addressed.
How do you effectively address it?
Often times the person afflicting on to other people, they don’t really see it. They don’t see they’re being as damaging as possible. Some of them breed off of it. They love the idea that they’re intimidating people or they’re making people uncomfortable or they’re demanding. At the same time, they’re not seeing what it’s doing to themselves personally and professionally. A lot of times it’s confronting that. If someone had confronted me, I’m a smart woman; I would have woken up to it eventually. I would have saved a lot of the personal and professional damage I did to myself.
Unfortunately, a lot of companies don’t do a lot of training and coaching on managing people in difficult conversations in the workplace. They need to arm their HR organization or their managers with the tools to sit someone down effectively and needs to facilitate a dialogue with someone. Depending on that manager’s own personality, some can just call you out on it right away. Some will just sit you down and say, ‘Look, you’re hurting yourself in your career with the attitude you’re bringing to the business.’ Other people aren’t very good at dealing with confrontation. They may need training or have someone in the HR to facilitate and mediate that type of conversation.
Very simply too, performance reviews, [need to be] done more regularly and effectively. They have performance review processes but they’re done reactively — they’re not proactive with a purpose or effective to where it shifts or creates change in that individual. Unfortunately, a lot of companies fall short on being able to leverage those opportunities where they sit down and have a conversation with their employees or managers to address those kinds of issues. That’s the time to do it — whether it’s during the process or a one-off because of an issue because someone is creating havoc within the organization.
How to reach: www.sheddingthecorporatebitch.com
When Eric Affeldt came in to run ClubCorp USA Inc., it was a 50-year-old company that had been operated by one family, and he recognized that change wasn’t going to be easy for the organization.
But change was necessary for the business, which owns and operates private clubs. With an aging population, many of the clubs’ members would soon not need a club or be physically unable to use one, so making them more appealing to younger people needed to happen.
“My biggest challenge is an ongoing challenge, and that’s how do you get people to look at the business differently every day,” he says. “Certainly markets change, consumer spending patterns change, consumer desires change, and you could continue to deliver the same product a consumer liked 20 years ago, but you may find yourself a dinosaur.”
He wanted to send a message that change was going to be a new part of the organization, so on his business card he printed his title as “catalyst and CEO.”
“(That) addresses the biggest challenge, and that is that many people are reluctant to change,” he says. “We’re all creatures of habit, and we all get in ruts, some are good, some are bad.”
Then he dug in. Here’s how he changed ClubCorp from a parochial organization to one that’s keeping with the times.
Paint a vision
To start the change process, Affeldt recognized that change must be intentional and that it started at the top with him, thus the title on his business card.
“It obviously indicates something is going to change,” he says.
Even though you know something is going to change, you have to have a specific idea in mind.
“No. 1, [great leaders] set direction, so they have a dream, they have a vision, and they have some place in their mind they can see going and get other people to go with them,” he says.
He wanted to focus on underserved markets and target more women and younger people to encourage them to become members of the clubs.
But he couldn’t just have an idea in his head of where the company was going to go and not let other people in on the secret — nobody would follow because they wouldn’t understand. So he set out across the country to talk to employees. In his first year in the company, he visited about 130 of 154 locations.
“It was face to face, answering questions, trying to convey a different sense of energy and focus, and frankly, curiosity, and just getting people comfortable that if I’m going to suggest that it’s OK to challenge the way things have been, it probably is OK,” he says.
For the most part, he received positive feedback from employees about the new direction, but he also encountered some resistance.
“There are clearly some that said, ‘This is not what I signed up for, and, frankly, who are you to tell us what to do?’” he says. “We’re the oldest company of our type in the industry. There were a few folks who thought we were too cool for school. … It’s always a challenge because it’s not unlike a new exercise program — it hurts for a little while to do some different things. You might know it’s beneficial, but it hurts for a while until your muscles get used to the new routine.”
He was also met with some opposition from club members. On one business trip, he was dining alone and an older member of the club approached him and asked why he was going to focus on bringing in younger people to the club — the older folks were the ones that paid his dues.
“I said, ‘Thanks, I appreciate your input, but the reality is with an aging demographic and people dropping out of clubs due to people not being able to play golf anymore, or they’ve retired and have no need for a business club anymore, it’s important to bring the next generation of consumers into the club. It doesn’t mean we don’t care about you, and we do want to have programs to serve you, but we need to keep new consumers coming in because the reality is, most people, myself included, won’t belong to a club because they either won’t have the interest nor the time or physical ability to do so,’” he says.
Affeldt says the man intellectually understood, but he really didn’t want to hear it, and that’s the common response most people took. He says the key is to continue to reinforce the plan and why it’s important and let them come around.
“Part of it is just stick-to-itiveness — here’s what we’re going to do, and we appreciate if this is new or different, but we are going to do it, and we are going to help you do it, and we’re going to tell you why we think it’s important,” he says.
Once he had a vision in place and had communicated it to people, he had to provide the means to do so and give people a reason to care.
“No. 2, [great leaders] allocate resources,” he says. “That’s both people, getting the right people in place as well as capital dollars to grow the business.”
For the first part of that, he created an 11-member executive committee, and he said about seven of those members turned over in the first year, so having the right top people was critical. He and his colleagues pulled out their rolodexes and recruited sharp people they had previously worked with who would complement his team.
“It’s important to have people who have different skill sets than you do,” Affeldt says. “I use this analogy all the time that if you grab two batteries and put the pointy ends together in a flashlight, the flashlight is not going to work. It has to be a plus and a minus. You have to have people around you that have different skill sets that complement yours. At the same time, you have to have people around you who like to be challenged.”
When he was bringing those people in, it was important that they know the change the company was going through.
“Another critical word in my vocabulary is communication,” Affeldt says. “Very clearly articulating both to the people who stayed and the new people that our intent was not to milk this company, so to speak, but to transform it into ways that were more appealing to existing members and future members — making sure they were signed up for running faster, jumping higher and pushing the envelope.”
By communicating this goal upfront, he was hoping to get people who embraced change.
“There’s a quote I’ve used from Gen. Casey, who said getting people to embrace change is the toughest job of any leader,” he says. “The key word there is embrace — not tolerate or stand for it, but embrace it. It’s important to find people who have that same sort of passion for change and improvement, however improvement is defined.”
Aside from hiring the right people, Affeldt also allocated resources toward his employees in a way not many companies do — he created a 501(c)(3) for them. As the company celebrated its 50th anniversary, he decided to have a one-day fundraiser at his clubs to raise money for a multitude of charities, including a new one just for his team members. It was designed that when hardships hit his employees, they could receive free help, which they never had to pay back. Since starting it, he’s given away about $1.5 million to people who have lost their homes to flooding or fire, had their cars break down, or reached insurance limits and weren’t able to pay for medical expenses.
“By establishing that foundation, a lot of line-level employees said, ‘Wow, apart from actually paying me, these people are providing a safety net for me if something nasty happens to me,” he says.
Aside from the nontraditional resource allocation in the charity program, he also increased financial incentives for people to outperform their financial targets and invested about $250 million in capital back into the business.
“Our employees see we’re not just talking about improvements and then taking all the money to the bank and running away,” he says. “We’re actually reinvesting in them and their clubs.”
And when you put resources toward your employees to help them, it also creates the buy-in you need from them to do a great job and embrace the change. If you’re unsure of putting more money into your people, let data guide your decision.
He says, “For the skeptical, you can always tiptoe into the pool and try programs to see what kind of reaction you get with your employee partners, but there’s enough data that exists from a lot of organizations that shows what the power of incentives provides for growing companies in a variety of different industries.”
He had to make sure that people were actually working on changing and that it just wasn’t a pretty plan sitting on a shelf.
“No. 3, and most importantly, [great leaders] ensure execution,” Affeldt says. “It’s not enough to have a great idea and to have other smart people working around you. You can’t just put your feet up on the desk at that point and say, ‘I hope it works.’ You’ve got to ensure that it works.”
The financial incentives he created certainly helped ensure that, but he doesn’t go off of his hunches to gauge whether execution is happening.
“We’re a relatively good size company – almost $700 million in revenue,” he says. “Clearly, the change is reflected in our financial performance as well as in some of the metrics we measure our business.”
He uses member numbers, the number of rounds of golf played, the number of meals served and other similar metrics to track ClubCorp’s progress.
“There are all kinds of analytics you can look at to say, ‘Something is happening here and hopefully something good,’” he says. “Then you say, ‘Why did that happen? Hopefully you can trace that back to, ‘Here’s the plan we had, here’s the people we allocated against it, and the performance is better.’”
As he looks around the organization today, the numbers are proving that ClubCorp. is growing and improving and changing each day, and he anticipates that continuing as he looks toward the future. But even more important, his people are now fully bought into the change.
“What they’ve told me is it’s a more egalitarian, collegial atmosphere, and the constant questions that I pose about, ‘What next, what next, what next,’ have sunk in,” Affeldt says. “People are now very comfortable with trying to come up with something that’s radical.”
How to reach: ClubCorp USA Inc., (972) 243-6191 or www.clubcorp.com
The Affeldt File
NAME: Eric Affeldt
TITLE: President and CEO
COMPANY: ClubCorp USA Inc.
Born: Los Angeles, and I grew up in Orange County, Calif.
Education: B.A. in political science and religion from Claremont McKenna College
What was your first job ever as a child, and what did you learn that still applies?
Pulling weeds and clearing out lots for a developer in our little community where I grew up — my first paid job, let me put it that way. I think I was 10.
I vividly remember I was working at a neighbor’s house over the weekend clearing a lot, and the nice neighbor lady wanted to pay me on Saturday night, and the job wasn’t finished yet. I said, ‘No, I can’t do that.’ My dad had taught me that when the job is finished, then you get paid. That was one of the first things I remembered from working.
And frankly, several of the jobs I had, there’s a lot to do with attitude. You go and do a job, trying to do as well as you can and hopefully enjoying it as opposed to saying, ‘Oh, I have to go pull weeds.’ Your attitude is extremely important.
What’s the best advice you’ve ever received?
I have to answer, because my faith is an important part of me, what Jesus said when asked, ‘What do I need to do to be saved?’ — love the Lord your God with all your heart, soul and mind and love your neighbor as yourself. That’s really good advice for everybody.
I don’t know if this was specifically said to me or came to me through parents, but the importance of being kind to other people is important and recognizing that everybody has their own stuff. It’s important to be kind as you go through your life, and people will respond to that.
What’s your favorite board game and why?
I like backgammon, frankly. It’s strategic, it’s fast, it’s quantitative to a degree, and there’s a cautious way to play, and there’s an aggressive way to play, and depending upon who you’re playing and the roll of the dice, you have to make decisions in real time as to how fast and how slow you want to play.
As a child, what did you want to be when you grew up?
A kid, I wanted to play professional baseball. A younger man, I wanted to go into the ministry or play professional baseball or go into politics.
So how’d you get where you are now?
Oh gosh, that’s a really long story. A lot of serendipity, meeting people, friends would call it God-winks — things that just happen and you say, ‘How did that happen?’ — meeting people who encouraged me to go into finance and then to take a risk and to start my own company, then being invited to join another company with a friend. And through all of that, raising my hand too many times and volunteering for new things and just giving things a try.
As the flames engulfed Pitney Bowes Presort Services’ main Grand Prairie location last year, Darryl Cremer couldn’t believe what he was seeing.
“When it was obvious that the building was going down in flames and it was going to be a total disaster, I was like anybody else and was in total shock,” the vice president and general manager says. “Everything was going through my mind like, ‘What’s going to happen here; what are the next steps that we need to do?’”
While it’s most businesses’ nightmare to see their building in flames, Cremer had a disaster-preparedness plan in place. After all the employees were accounted for, he could then get down to business.
They had a second site that had phones and fax machines and copiers, so they were able to set up shop quickly even though the main facility was destroyed. They also were able to route mail to this facility so that business wasn’t completely lost. As part of their disaster plan, they had tested that facility in the past and knew it worked well.
They were also able to use the facility to congregate all of their employees and use it as a central location for communications.
“You need to lead with a positive attitude and even though things look dismal at that moment. You certainly want to keep the employees calm and knowing that you may not know exactly what you’re going to do the next moment, but that it will be all OK, and that you’re all working for the same end results — get back to business as quickly as possible,” he says.
With employees on the same page, he then had to reach out to customers and business partners to make them aware of the situation and inform them of what the company was doing so they didn’t panic if they saw it on the news.
“Another huge benefit that we had was our customer information and contacts and employee information is all online, and we could get the clients’ information,” Cremer says.
As a result, within about six hours, the company had already contacted all of its customers and business partners.
At this point, Cremer knew that the company would be fine because of all the steps they had taken. He said that the other element that allowed them to move so quickly and respond so effectively to the situation was that their corporate office had set up a culture that empowered them to make decisions themselves.
“They empowered all of us to make decisions and not have to have a single source to make every decision,” he says. “We had good marching orders, and then we were able to go and make those things happen — no questions asked. We didn’t have time to review every decision that was being made, so empowerment of your operations team is essential.”
The company opened a new location last year and is in full swing again. While they don’t think a fire could strike twice, Cremer isn’t taking any chances. There’s more communication from the top down about the plan, the company is backing up information more frequently and having more regular fire drills for employees.
“We’re actually going through, step-by-step, our disaster recovery plan again and making fine-tuned adjustments to it and taking it much more seriously,” he says. “We are testing it. … We’re actually putting more emphasis on our disaster recovery plan and making sure people are aware of it.”
How to reach: Pitney Bowes Presort Services, (972) 352-5187 or (972) 623-3700 or www.pb.com
Create a disaster plan
When Darryl Cremer watched his Pitney Bowes Presort Services building going up in flames, he was in shock and never really thought it would happen to him. But just because he didn’t think it would ever happen didn’t mean he didn’t plan for it. Because he planned, they were up and running in a different location in a matter of hours.
“You need to plan in advance and always remember that even though you might not think it, it can always happen to you,” he says.
He says that every business needs to have a disaster recovery plan, but you have to think really hard on the logistics of how that would work.
“You may think you have a good recovery plan that would work for a short-term – maybe a week or two weeks — but take a look at if you had a total disaster, how would it affect your business if you were out for months and months?”
He says you also have to make sure your records are correct and accessible.
“Ensure you have very good, up-to-date client information and your employees and vendors and anyone else that supports you in your business,” he says. “And have it stored remotely because if it burns up, it doesn’t do you any good.”
Ryan Gunnigle’s company Kids II Inc. has grown at almost 25 percent a year for the last four years.
“Just really keeping up with that growth is probably mine and the executive staff’s biggest challenge,” says the president and CEO.
With 400 employees spread out over 12 different offices, it’s quite the challenge for Gunnigle and his staff, but he manages to not let the growth eat him up.
Smart Business spoke with him about how to not let rapid growth consume your organization.
What’s the key to staying ahead of rapid growth?
There’s a lot of components to that but I think it’s strategic planning and trying to do a better job of that every year so you can lay down the plan — not a big, formalized process but really try to lay it down so it’s well thought out and you have everybody’s buy-in and everybody in the organization moving in the same direction. Continually try to do that while your organization is growing fast and changing and becoming more and more dynamic every year.
Really try to innovate and do things you haven’t done before. As you get bigger, some of that effort gets diffused sometimes, so it’s keeping in front of that.
How do you do that?
Your job as the leader is really to visualize where we want to go and a lot of components go into coming up with that overarching vision. The biggest thing is within your organization to come up with a way you can get everybody’s buy-in, and as you grow, it’s harder to put together an environment that fuels that thought process that helps you get to where you’re visualizing.
What I try to do is come up with a very simplistic way to show everybody the very basic way that helps communicate where we’re going as an organization and try to simplify that as best you can so everybody has a clear understanding of what they can do or what they need to do to be able to help the organization get there. As you grow as an organization, your top leaders’ time is consumed with everything but business-driving activity sometimes.
Honestly, it’s the infrastructure we have in place that really fuels the great people that fuel us and help us get to long-term goals. They’re the ones that really develop a lot of it. We work with them and what is their wish list and what is their paradigm-shifting activity that can propel the organization to what our top-line goals are. They’re the ones that come up with the really strategic, outside-the-box [ideas] that makes us more competitive and really fuel the team and have the environment that the teams can prosper in that way and really contribute.
Culture really starts at the top. The bottom line is you really have to give. You have to really care about your team. I think that shows to what you do in your organization.
How do you show you care?
We really strive to not have a real roll-up-your-sleeve mentality. Those kinds of things set the pace. Every year we try to improve the employees’ experience, whether it’s benefits or work atmosphere or it’s activities at the office. Keep it fun, keep it fresh. Get an environment where people really enjoy coming to work, and they’re excited about coming into the office and working for somebody who inspires them. As soon as you stop trying to get to that point, you’ve failed. That really sets the pace for the organization. I fully expect from the Kids II team as much as I expect from myself.
In evaluating employees and people, one of the quickest things that comes up to me, let’s say you have an A-player, but they just don’t fit corporately, that type of person will not succeed at Kids II. I’d rather have a B-player that cares about the business as much as or more than I do than having an incredibly smart person who’s distracted in certain areas.
How to reach: Kids II Inc., (770) 751-0442 or www.kidsii.com
It completely baffled Julie Overholt when her daughter graduated from college, got an amazing job offer, but turned it down because it wasn’t in a place where she wanted to live. But as she started to look into it more, she saw this was a new trait emerging with the generation entering the work force.
“It is very millennial that this age group really takes into consideration their personal value and their personal vision of what they want their life to look like,” she says.
As a result, she was inspired to co-write “Exiting OZ,” a book that compares different workplace personalities to those of the classic story, “The Wizard of Oz.”
Smart Business spoke to Overholt about the important principles the book can offer leaders.
What’s the basic idea of your book that leaders should look at?
OZ stands for organizational zeal. That describes those companies that believe that the rules and profits are more important than the people who work there. This book is directed to those leaders that are in the boomer segment. The wizard of Oz was that all-knowing, all-powerful, angry spirit that nobody really knew who he was or where he was. He just had this booming presence.
Taken off of that, we started to identify leadership models inside organizations that were taking place when Oz looked the other way. We immediately started to identify the tin-man leader, which is the leader that is disengaged from his heart. The scarecrow leader is disengaged from his brain, and the cowardly lion is disengaged from his courage. If you go through the book, it continues to relate back and forth to the story of ‘The Wizard of Oz’ and how that’s showing up today.
How is that showing up today?
Munchkins are the little employees coming out to do things they’re told. The flying monkeys are the individuals that are just at the beck and call of leadership and just want to be told what to do. The most interesting demise in all of Oz is how Dorothy, who represents the millennials, actually surprises the witch by taking her down very simply. How does she do that? Throwing water on her, which is like a fresh drink of water — ‘Here’s the reality, lady — bam!’
Why is it so important for leaders to recognize these different personalities and characters?
There’s so much chaos in the world right now, and there’s so much information. People are overwhelmed by it — they’re not managing it. We’re in the information age. You could be confused and think observations are really ideas, but they’re not. We’re not generating a lot of ideas — we’re generating a lot of information. People in leadership roles need to be aware that while they may be in an OZ organization right now, they can transform their organizations and departments simply by realizing they have a disconnect that has served them up to this point in time, but is no longer going to serve them.
How do they change to adapt to this new work force?
One of the things we need to do is assess our talent pool and start creating environments that are a match to what our talent says is important to them. We have to strategically look at our global enterprise and start anticipating the economies that continue to do well and find creative ways to leverage new opportunities in economies that are not doing as well.
What will happen to companies that don’t adapt to each of these changes?
I think they’re going to go away. I really do. Many of them have been treading water for the last five to 10 years thinking that this is just temporary. The truth is the opportunities for them to continue to do business the way they’ve always done it are just diminishing every single day.
How to reach: www.julieoverholt.com/exitingOZ.htm
About a month after Jim Nixon bought Varel International Inc. in 1998, he stood before his employees and put a slide up saying that in three years, the company would be making a $100 million a year in revenue. His employees thought he was a comedian.
“Several of them actually laughed,” the president and CEO says. “They thought it was hilarious. That was the starting point.”
It was a rough place to begin, but the laughing wasn’t unwarranted. When he bought Varel, he realized that he had to completely overhaul the entire business to the point where people questioned why he bought a company instead of just starting one from scratch.
“I had an inkling when we bought the company in 1998 that there was a lot to do,” Nixon says. “Being forever the optimist, there was a lot more to do than I actually thought.”
The beginning of his problems was that Varel, which manufactures high-performance drill bits, had major quality issues.
“The company had an attitude that quality wasn’t terribly important, and if there was a problem with the product, you would just give them a new one,” he says.
As a result, the business had a really bad reputation in the industry. Additionally, the organization was very local in nature instead of being a global competitor, as it had nearly no international business.
“That was a very significant challenge, but we came in with our eyes open and we knew there was a lot to do, but there’s always more than you expect, and that was true of this also,” he says.
Despite the laughs, he was determined to change the business into a top-notch organization.
To start, Nixon was looking at the company’s numbers and saw a line item called “performance credits” of about $300,000 a month, which was significant for a company doing about $2.5 million a month in revenue.
He inquired as to what performance credits actually were and was astonished to discover that when a distributor’s customer didn’t like the performance he got, Varel was simply giving them a new product to replace it.
“There was no investigation into what was wrong, so you never learned from it,” he says.
He realized that if they wanted to save money, they had to create better products, but without knowing what was wrong with the products, he didn’t know where to start. He began by looking at Varel’s processes. What he found was astonishing. The company claimed to be ISO 9000 certified but what he discovered was the only part of the business that was actually certified was the engineering design group — about five people. So he had about 1,100 people in Mexico manufacturing products with no quality systems in place.
“So our first thing was get a recognized quality system in place at our primary manufacturing facility,” he says.
It took about nine months to get them certified, and by the time that process was finished, the performance credits had dwindled to nearly nothing. The tradeoff, though, was that the scrap in the manufacturing plant was about $250,000 a month now.
“At least then we knew where we had to attack it,” Nixon says.
He started working with the unions in Mexico to change the philosophy of the plant. Workers were operating in an old-fashioned batch-and-queue manufacturing environment where a machinist would machine all the pieces he was given and then move them to the next operation, and so on. He changed it to implement Toyota’s lean model of manufacturing and production, which calls for people to be their own inspectors. Operators began working two or three machines, and they became responsible for the quality that came off of their machines. The only time an inspector was looking at parts now was during the set-up process of getting a machine up and running.
Not only did quality improve, but scrap levels dropped from about 7 percent initially to less than 1 percent. On top of that, the business had been making products primarily for the mining industry, but by improving, they started doing more for the oil and gas field market.
“The most important aspect of that is understanding what your issues are and drilling down deep enough to understand what the true underlying issues of the product actually are,” Nixon says. …“The first stage of any product-based business has got to be really understand the quality issues you have within the product, stabilize them, and from there, move forward with improved technology, with improving designs and improving the product for your customers.”
Get better people
With processes in place that were improving the company, Nixon next needed to ramp up the quality of people he was bringing into the organization.
In the past, Varel had traditionally hired people locally who had some understanding of the industry, but there was no expertise. He decided to change the approach by bringing in experienced veterans from the industry and build the organization out through recommendations from potential customers as to who they thought had the best technologies and who were the best sales people.
“We went from being a somewhat parochial, ‘Let’s hire locally in Dallas,’ to ‘Let’s hire all over the world,’” Nixon says.
But doing that wasn’t exactly easy.
“Initially, our ability to hire the best quality people was somewhat low because that was linked to the old quality image,” he says, “Until we really started building momentum in the company and changing the image and reputation in the industry, it was difficult to hire the very best people.”
He overcame that by targeting what he calls renegades — people who were with major competitors and were unhappy and felt as though they were being held back. He put in place a lucrative pay and incentive system to attract these talented individuals.
As a result, he started hiring people from Australia, Malaysia, Indonesia, the Middle East and all over Europe.
“As we’ve gone through changing the image and improving the quality and expanding our business, it’s become easier and easier to hire some of the best people in the industry to come and join us,” he says.
As he brings them in, he’s kept them there by giving them the ability to achieve results without being micromanaged.
“You put in place the measures for accountability, and then you review those measures on a regular basis,” he says.
He has monthly reports that define how each region and reviews those and asks questions around them, so people understand that they’re responsible for it.
“You can’t say, ‘You’re accountable to this, but you can’t do anything unless I approve it,’” he says. “You have to give them both. The way to do that is push that authority down and let them know that they have that authority and not to second-guess them and not to micromanage them but really to lead them to it. Have regular reviews but other than that, let them run their business.”
By about 2005, the business had grown to approximately $90 million in revenue, and for the first time, the company’s oil and gas business was larger than its mining business. Additionally, Varel was having success with some major companies around the world.
“Through 2005, we had gotten to the stage where we could compete with them, our products were as good as them, and we were making progress in most of the markets we were in, but we still didn’t have a clear identity as to who we were and what the differentiators were,” he says.
The next step then was to focus on differentiating Varel from its major competitors.
“We felt as though we had enough foundation laid that we could actually start to tell the story about who we were and what we can do and start to market ourselves really well,” Nixon says. “We didn’t want to go out and make a big hoo-hah about who we were and what we could do until we had in place all the building blocks for doing it.”
Many of his competitors are huge companies with tens of billions of dollars in revenue, and the way they approach business is to have central engineering and manufacturing capabilities. Seeing this, Nixon saw an opportunity to provide a more agile and flexible company to the marketplace. He set up small manufacturing facilities close to the customer base and built the technology around those to make them stand-alone facilities. While much of the competition is building product and saying, “This is what we offer,” now Varel is saying, “Here’s what we’re capable of, what can we build for you?”
Nixon says that it’s also very difficult to get a first sale from a customer, so they went about building relationships with potential customers so that when an opportunity finally presented itself, they already had an established relationship.
For example, one company needed a drill bit in the middle of the night but couldn’t get a hold of its usual bit provider. The man at that company finally remembered that he had met with a Varel guy and found his business card and called to see if a $600 bit could be delivered to him. The Varel guy made it happen.
“When he gets there, not only is he delivering the bit, but he’s delivering breakfast for the rig crew,” Nixon says. “He now has a customer for life. That foreman spent five hours trying to get a guy on the phone, he calls the Varel guy because he finds his business card, and a guy is up and in his truck delivering a $600 bit. Our major competitors won’t get out of bed for a $600 bit, but that’s what builds the relationship, and that’s what builds the breakthroughs.”
He also works to differentiate Varel by being completely honest with customers, even if it costs them a sale because he doesn’t want to just sell a bit — he wants to sell service and value, as well.
“The first time you say to the customer, ‘We have a bit that can do that, but it’s probably not the best bit for that, why don’t you let me get you one of these from someone else,’ all of a sudden, that guy is going to believe everything you tell them in the future because you’ve just taken a sale away from yourself and given it someone else in order to get him the best product,” he says. “It’s all about building the customer relationship and building the customer’s confidence and your reputation that you won’t let them down.”
By 2006, Nixon’s efforts were paying off and his people’s attitudes had changed. That year, he had a revenue goal of $120 million. Initially, they thought it was too aggressive, but by year’s end, they had hit $140 million, and they were pumped up and believing they could do anything.
“It was a cultural change — the first time we blew away our plan and targets was when the momentum was building,” he says. “It’s very exciting to see people start to have a great deal of pride and enthusiasm about what they’re doing, and that feeds into the customer service model.”
Revenue has continued to climb and Varel did nearly $300 million last year — a far cry from the approximately $30 million in business it had when Nixon first bought it. And everywhere else you look inside the company shows how much Varel has changed. The company previously had three patents, two of which had expired, and now has about 70 patents to its name. Productivity drastically increased; Nixon says that he had about 1,100 people manufacturing about 2,600 units a month when he bought the company, and today, he has about 750 people manufacturing 5,500 units a month. He’s even rolling out lean practices to all the other areas of the company beyond just manufacturing and seeing nice results, as well.
While mining made up most of Varel’s business initially, now it accounts for only about 20 percent of the company’s business, and the oil and gas field represents about 80 percent. And on top of that, its customers are now top-tier organizations from all over the world.
Varel’s competition has also taken note. A third party does an annual survey of the largest players to gauge market share. In the past, there have always been four major companies and then an “all others” category. As Varel has improved, the third-party now has Varel as its own category — creating five majors and “all others” now.
“That tells us we’ve changed significantly,” he says. “The other thing is they’ve come to us three years in a row now and asked us to join their market consortium. Of course we’re saying, ‘Nah.’ We keep saying no, and they keep coming back to us and asking us to join. Clearly they understand that we’ve become a significant part of the market.”
How to reach: Varel International Inc., (800) 827-3526 or www.varelintl.com
THE NIXON FILE
Jim Nixon, President and CEO, Varel International Inc.
Born: I was born in Glasgow, Scotland. I’m the youngest of eight children. I’ve got five older sisters, so effectively I had 6 mothers. I had a very charmed childhood.
Education: Degree in mechanical and production engineering, Stow College of Engineering in Glasgow, Scotland
As a child, what did you want to be when you grew up?
An engineer. My first memories were of getting a lot of grief from my parents for dismantling things around the house, whether it be an electric kettle, or an electric plug. I remember I managed to disassemble a tricycle when I was just over four years old.
What was your first job ever as a child, and what did you learn from it that still applies?
I had a paper round. I delivered papers when I was 11 years old. At 6 a.m., I had to start, so I would pick up papers and sell them at the bus stop for the public transport service and then go to school. Then after school I actually had a delivery round and picked up four or five dozen papers and delivered them to private homes around the area.
That taught me a lot about cash flow. The guy who you bought the papers from was always looking for his money on a Saturday, so if you didn’t collect your money from your customers on a Friday night, you couldn’t pay him. It was a very simple cash-flow model.
What’s the best advice you’ve ever received?
My father ran a butcher shop, and he worked extremely hard to provide for the eight children he had. He told me, ‘Son, your role in life is to find the gold in everyone and polish it up.’ Basically what he was saying was find the good in people and don’t waste your time trying to make them perfect -- just make them as good as they can be at what they’re good at.
What brought you to the U.S.?
I moved to the U.S. with Dresser Industries to run the global operations for one of their divisions. Shortly after I moved, Dresser was acquired by Halliburton. … I moved over here to become president of one of those divisions, and Halliburton doesn’t have division presidents, so that was really the catalyst for me to buy this company -- to take control of my own destiny, having moved my wife and my family over to the United States and then find the opportunity I had moved for had closed on me.
As a leadership coach, Randy Goruk sees how many managers aren’t as effective as they could be. But he, on the other hand, never personally experienced that, so he saw an opportunity to identify areas where managers could improve to increase their overall effectiveness. He did it through writing “Sparks: A Business Fable.”
Smart Business spoke with him about the six principles in his book that leaders can embrace to be more effective.
He says, “If you can develop these competencies to a point of mastering them, then I believe you will have success in fully engaging your team and success in having your team deliver results for you and your organization.”
Have unwavering character. If you’re able to demonstrate unwavering character, you earn trust and respect from your organization. Be consistent in your words, your actions, your behaviors. If you’re sincere, authentic, truthful, fair and you can be respectful of others — not be hypocritical and give credit where credit is due — those are ways to demonstrate unwavering character.
Sometimes you watch the news, you see there are business leaders that slip a great deal. They have good character, but they didn’t have unwavering character because there were cases where they wavered, and they lost respect.
Genuinely care. If you can demonstrate to your people how much you care about their performance and professional growth and their advancement in their careers and that you can help them achieve their goals, they’ll do anything for you. They will care about you, and if they care about you, they’ll deliver results for you, and that’s what you’re accountable to.
Have stellar communication skills. When you have communication breakdowns in your organization, you end up with an organization that isn’t engaged. (Employees) feel like there’s a piece missing, so why should they care, and they feel like they’re not in the loop, so they don’t know how to contribute to the organization’s success.
There are so many ways in which a leader can improve their communication. It’s everything from the art of asking great questions, creating focal points, learning how to leverage technology and being good at presentations to one that I think of as a personal favorite of mine — the genuineness of writing personal, handwritten notes of appreciation and congratulations to those on your team that have done a great job for you.
Be a great thinker. People say, ‘No, you have to be visionary, but to be visionary, you have to be a great thinker.’ There are too many leaders busy doing things and not spending enough time thinking. Thinking requires work. You need to concentrate on your calendar and set time aside for yourself and just sit there and think about your future and think about the lessons you’ve learned in the past and what is it you need to do in your organization. Things they’re spending time on today need to be what happen three to six, nine months out — not what’s happening this week.
Be mentally tough. When you’re in a leadership position, you’re challenged with all kinds of different situations that can be stressful. You have to remain mentally strong to do the right thing for your business. There’s a balancing act in there between doing the right thing for your business and doing the right thing for your people. It’s stressful. They need to appreciate and recognize the importance of their own personal work-life balance. It can be extremely challenging to balance your family and work, but you have to be respectful of that and find a way to make that happen. You also have to pay attention to the work-life balance of those that work underneath you because if things aren’t good at home, they’re not going to be good at work.
Embrace accountability. We see many places today where business leaders are reckless in their decisions, their behaviors and their actions. If they’re not held accountable, why would anyone else working with them think they should be accountable? A leader has to embrace accountability or others won’t embrace accountability. Leaders also have to learn how to hold others accountable for their results, their behaviors, their performance, because a leader needs to deliver results. Although you can delegate responsibility, you can’t delegate accountability, and you are accountable for the results, so holding others accountable for their behaviors and performance is crucial to your success and your credibility.
How to reach: www.SparksTheBook.com
When Bob Puccini was appointed president of Mizuno USA Inc. in late 1996, the company typically had the lowest average selling price in the markets in which the sporting goods manufacturer competed.
“We were chasing revenue but weren’t building a brand,” he says.
He recognized that he needed to build the brand and find a way to differentiate it from the competition so people would choose Mizuno.
“We realized that product alone wasn’t enough,” says Puccini, who also serves as chairman for Mizuno Canada Ltd. “We really pride ourselves on superior product, but there are a lot of competitors out there that have great product stories.”
Within his company, he saw how his team really understood the biomechanical needs of athletes, and they could translate that technology and know-how into a brand experience.
“We made different products for different types of runners and golfers,” he says. “Why not bring that experience to the consumer and really bring a specific individual prescription for each runner or golfer that could be unique? We felt that personalization capability brought a specialty brands expertise to the respective consumer.”
So Puccini and his team created a “Run with us” campaign that had vans go to different locations. Each van had precision fit terminals where a person’s biomechanical skeletal structure and running needs could be identified by observing their cycle as they ran. Then a specific shoe could be prescribed based on that outcome.
They also launched a performance-fitting system for golf clubs. A golfer could come in and the Mizuno team had a device called a shaft optimizer that they would place on the club shaft. Then the golfer would take three swings, and based on five specific swing dynamics, information gathered would indicate which three head and shaft options would be best for the golfer.
On top of these direct reaches to customers, they built a structure to partner with retailers, such as Dick’s Sporting Goods, instead of competing with them. When an order would come in online, they would give the retail partner a set period of time to fill the order themselves so they got the business. If they didn’t fill it, then Mizuno would fill it.
“It’s tough to speak outside of both sides of your mouth,” Puccini says. “It’s hard to say, ‘You’re important to us,’ and then we go compete with them. That was a great unique solution for us.”
As a result of these and other efforts, in fiscal 2010, the Americas division of Mizuno Corp. brought in well over $200 million in revenue and had record profits.
“Now we are among the highest average selling price in the market, which is clearly an indication that we are a brand that is perceived as premium quality and people are willing to pay premium dollar for that product and service,” Puccini says. … “Obviously, if you don’t deliver the quality and the value, people aren’t going to pay for that.”
The transformation wasn’t easy, but here are the business keys Puccini used to turn Mizuno USA into a champion.
Be honest with yourself
Growing up in New York, Puccini had to develop street sense to get by.
“Sometimes you just have to be a smart guy growing up in New York to survive,” he says. “That means knowing which alleys not to walk down. It doesn’t mean you walk down every alley and pick a fight and win them all. It means also being savvy enough to know I’m not going to walk down that alley — that doesn’t look right, that doesn’t feel right. It’s knowing where to play and where not to play, and again playing to your strengths. If you don’t have them, you better acquire or develop them.”
That ability to be completely honest with himself was critical as a kid, and it’s just as needed as a leader looking at your abilities and your business.
“Sometimes it hurts, but that’s part of being successful,” he says. “You’ve got to be honest with your limitations.”
When Puccini looked at what Mizuno was good at, he knew he had to play to what the organization’s strengths were instead of focusing too much on improving its weaknesses.
“When you build a business, you have to recognize your weaknesses as well as your strengths,” he says. “You have to play to your strengths to win. You can’t try to be somebody else. You can’t try to play somebody else’s game and beat them at their game. You have to win at your game and where you’re strong.”
It ultimately comes down to being honest with yourself as you go through these processes. Puccini says he’s able to do that because one of the values that has driven Mizuno USA all these years is a spirit of humility.
“Humility allows us to step back,” he says. “If you’re going to get things done, you have to be honest with yourself and check your ego at the door and say, ‘OK, let’s take an objective view.’
“The truth of the matter is life isn’t really overly complicated if you can be honest with yourself.”
But often being honest is easier said than done.
“Recognize the value in what the honesty can deliver for you,” he says. “Create an environment where truth and bad news is accepted and used as a learning opportunity, which means you also have to check egos at the door. You have to build trust with your constituency — your employees — where it becomes safe to have those open discussions.”
He says the key is to also create solutions instead of just listing problems.
“The bottom line is you have to be honest with your weaknesses, but bring solutions so there’s an accountability to that openness as well,” he says. “I don’t like to deliver problems to my board. I don’t like my team to deliver problems to me. I don’t mind them bringing bad news, but I want them to bring alternative solutions, as well, and I expect them to bring business cases that support their recommendation, as well.”
Bring in the right people
The people at Mizuno USA have an adaptive culture, and having people who buy in to that approach has been key to the company’s success.
“For us, bringing the right people on board that have that innate style and value system, including humility, it keeps us driven,” Puccini says.
As the company has grown, he’s been proactive about bringing in people from reputable consumer products companies. For example, his new vice president of brand marketing and a new social media manager are both from Newell Rubbermaid. A new consumer insights manager is from General Motors and a new digital marketing manager is from Disney.
He expects their perspectives, talents and skill sets from these leading companies will help Mizuno move forward, as well.
When you’re looking to bring people into your organization, compare them against your plan rather than against another person.
“If you have a business vision and a business goal and say, ‘Here’s where we’re going and here’s how you have to play,’ those kinds of things allow you to recognize the kinds of skills you need to do that. You have to have a clear vision — where you’re going, where you’re going to play, where you think you can win, and how you’re going to play in order to win. Then you step back and say, ‘Wow, what kind of skills do we need in order to do that?’ Then you do a gap analysis. Here’s where we are, here’s where we need to be from a competency perspective, and what’s the plan to either acquire or develop those competencies?”
When you know what the core competencies are that you need in someone, then you can move forward.
“Then in the interviewing and selection process, it’s using those competencies as a basis for selection criteria,” he says. “We’re able to drill down on past experiences and see if those competencies are true there.”
That’s the objective side, but then there’s also the other side of the coin with the subjective side, which is fit. For Puccini, he wants someone that fits with the size of the organization and the matrix style of management present due to crossover and shared service.
One other specific element he looks for is someone who’s got experience at a larger organization because they’ll help bring people along as the company grows. But that’s a challenge in and of itself.
“Sometimes in larger companies, you have a larger staff and resources, whereas here, you may have to have that thoughtfulness, but do it yourself and roll up your sleeves,” he says. “That’s the challenger mentality. Sometimes you get one without the other. Sometimes you get the right spirit without the competencies or sometimes the competencies without the spirit, and you have to get both.”
That’s not always easy, which is why a strong dialogue in the interview process is critical. Dialogue is also good for the candidate to learn, as well.
“It’s a two-way street,” he says. “We have to sell our story to prospective employees and see how that feels for them. This isn’t right for everybody. That’s OK. It doesn’t make anybody a good person or a bad person — it’s a matter of fit.”
Improve your processes
About 10 years ago, Puccini implemented new ERP platforms and the technology was a great catalyst for Mizuno’s growth, but he says it goes beyond the specific technology.
“It’s not the technology that makes a difference,” he says. “Technology is an enabler, but it’s the business processes that needed re-engineering that allowed us to be effective. Technology enabled us to execute these things quicker, but without really understanding what our business processes were and how they affected each other cross-functionally, we wouldn’t have been successful.”
The key is really understanding your processes.
“There are many ways you can attack that, but I suppose if you have a clear understanding of who you’re trying to be, where you’re trying to play and how you want to do it, you have to work backwards then and say, ‘What are the drivers that will allow us to do that?’” he says. “Reverse engineering is one way you can do that — here’s the vision, here’s where we want to go, what are the good things we need to do in order to get there, what does that look like, what are the processes?”
He says that examining your processes is critical to creating efficiencies, which will ultimately help your business improve.
“If you can have the process discipline and you get things done efficiently, you have more time to think rather than chasing errors and corrections and things like that,” Puccini says. “Sometimes people think, ‘Process, oh that’s going to be a bureaucratic organization.’ No, sometimes process can set you free.”
But it’s a balance that you have to effectively find.
“You have to have quantitative, objective measurements of your business results,” he says. “That’s certainly an indication. You have to have a clear indication of (key performance indicators) — what are you trying to measure? What’s important to you? Therefore, if those things are important to you relative to achieving your business goals, these are the KPIs you ought to be looking on a regular basis. If we’re succeeding or not based on certain benchmarks, that’s one indication.”
That’s just the objective set. There’s also a subjective side to that balance.
“You have to listen to the pulse of your organization — you have to listen to your organization, to your people,” he says. “It’s not the guy in the corner office that gets it done. It’s the people on the floor, the packers, the supervisory people, the middle managers. Those are the people that are making it happen day in and day out, so really listening to their feedback and being willing to [listen] — again back to that openness and objectivity about yourself and humility — and sometimes it’s not easy to hear.”
How to reach: Mizuno USA Inc., (800) 966-1211 or www.mizunousa.com
THE PUCCINI FILE
Bob Puccini, president, Mizuno USA Inc.; chairman, Mizuno Canada Ltd.
Born: White Plains, N.Y.; grew up in Eastchester, N.Y.
Education: I have a bachelor’s degree in marketing from Fordham University — that’s in the Bronx, home of the New York Yankees. I went on a baseball scholarship. I was fortunate to be selected to work for the Gillette Co. out of school. I started in sales and worked my way up into brand management. I went to school at night and received my MBA from Pace University. I didn’t come up the classical route — I didn’t go to Harvard or Wharton or one of the pedigree schools, but I went up the street side and blended it with my MBA.
Puccini on strategic planning: What we’re finding is planning is fluid. Market conditions change dramatically in a blink of an eye today, especially with the Internet and communication and things like that. ... You can’t say, ‘Here’s the plan, put it on a shelf, and we’ll get to it next year. Historically, you might look at the landscape and take a competitive assessment and look at what you are to your competitors. Consider strengths and weaknesses, do a SWOT analysis and decide what your strategic initiatives should be to reach your overall goals. … I don’t think you should change strategy regularly unless conditions warrant that, but you have to be flexible and adaptable enough to change your tactics and approaches on a regular basis.
Rob Prinzo had been involved in implementing technology projects for 15 years. In 2008, he started to look back and ask why projects failed and why some were successful. He started writing out his methodology for quality assurance checks.
“As I went through that process, I created the methodology to make sure a project is on track,” he says.
But as he wrote it up, it also became apparent that it wasn’t a very interesting read.
“It was very technical, so I rewrote the methodology into the story to take some mystery out of it and give something easier to read,” he says.
The result was his book: “No Wishing Required: The Business Case for Project Assurance.”
Smart Business spoke with Prinzo, founder and CEO of The Prinzo Group, about his book.
What is one of the major principles you hit on in your book?
The principle behind it is really to identify the real issue that you’re facing. If you look at the reason why projects fail — they fail early in the life cycle or not having top management commitment — they lead to buying the wrong software or buying services that don’t fit your needs.
Take the time to do things upfront in terms of requirements, analysis and planning and validate that with other organizations in your industry research before you plunge into a project. That way you make sure you’re heading off on the right track. Assess how you’re doing against that baseline. As the project goes on, more gaps can occur if someone isn’t monitoring.
How often do you suggest people monitor those projects?
I’ve identified six places across the project life cycle where it makes sense to do an assessment. Each is after you’ve gathered and before you’ve made a formal decision to validate.
[It takes] as long as it takes to make sure you’ve thought everything through. If you have a significant project that may be a 12-month initiative, you may see people spending one to two months planning and the next 10 on implementing, 8 to 12 weeks of strategy and then verifying if your timeframe allows for that. But definitely more time needs to be spent up front. The more you do up front, the less correction you have to do later. It’s better to pay up front.
So the bigger issue is people are rushing those projects?
They may not have thought they rushed into it — a lot of times people look for a technical solution. We need to go out and procure a system, but really what an organization may need is to improve its processes around how it manages its customers. A lot of time people go out and look for a point technology solution instead of looking at everything that’s needed in that process. It may be functionality — they go looking to buy a solution to a problem but they didn’t really look at all their requirements across the board.
What can executives do to be better at project management?
Executives have to be engaged in the project on a periodic basis beyond someone reporting status. They need to be asking questions about the project status today but also what’s coming up in the days ahead. Everything is on track. That’s great, but you need to be looking beyond those indicators to see what’s coming.
It’s being able to hold your people accountable. You don’t want that person in the details, but they also shouldn’t assume that everything is being taken care of. Ask the questions that give them a comfort level that everything is on track.
What I’ve tried to do is write a very simple-to-read, educational book that everyone can have a takeaway from. From the feedback I’ve gotten, that’s the direction I’ve achieved.
How to reach: The Prinzo Group, (770) 777-8316 or www.prinzogroup.com
When Jim Bolch took over as president and CEO of Exide Technologies last year, the 122-year-old battery company was doing well.
It had fallen on tough times in the first part of the last decade, but the previous CEO had remedied that and gotten the organization back on track.
“He did a lot of tough love, if you would, to put the company back on track and did a very good job of it,” Bolch says. “But what came away from that environment is the company became very risk-adverse. The people were very reluctant to take accountability for decisions and sort of step out.”
His initial gut-feel told him he was going to need to change the mindset of the organization in order for it to continue improving.
“My challenge is, as I’ve sort of coined it, moving the company from a ‘don’t lose’ mindset to ‘play to win,’” he says. “People were scared of making a mistake. With 10,000 people, [we had] to change their mind and say, ‘It’s OK; it’s time to grow this company and time to win the market,’ and we’ve spent a lot of time over the last year doing just that.”
Build your case
While Bolch initially suspected that the company needed to change its mindset, he wanted to test that theory before he moved on it.
“Early on, you develop some hypothesis, but you want to go out and test them, so a little bit of it was collecting data to test, but also it’s starting to build some consensus as you go along,” he says.
He spent only two weeks of his first three months on the job actually in the office. The rest of the time, he was out traveling to more than 20 countries, touring his factories and talking to different employees, customers and investors.
As he met with each of these different constituents, it was important for him to ask a lot of questions to make sure he was gathering as much information as possible.
“The questions vary depending on where you are and who you’re talking to,” Bolch says. “Typically, if I’m talking to employees, one of the first set of questions I start to ask is, ‘Who are your customers? How does what you do add value to your customers?’ … If people don’t really understand how they’re going to add value, then we have a problem.”
He also asks a lot of questions around how do they do their job, how do they know that’s the most efficient way to do their job, and if they had an idea on how to do that better, how do they implement it.
With customers, the questions are different and more focused on asking them how Exide can do better — what do they like about doing business with the company, what don’t they like, are they responsive, and are they innovative?
“Especially with a customer, asking more open-ended questions, you can learn a lot,” he says.
Then with investors, it’s yet another set of questions.
“With investors, it’s all about expectations — what would cause them to want to invest in our company, what would they expect to see back from that,” he says. “With them, a lot is results, a lot is transparency and understanding of the direction of the company and what we’re trying to do to improve.”
As he traveled and talked to people, he started to see evidence that supported his theory that the mindset had to change. For instance, he went to visit a plant in Kansas City, Kan., that made the company’s industrial products. One of the things he asked them about was how often they went to another plant two hours away in Salina, Kan., which is where he was headed next, to share best practices.
“The room was just silent,” Bolch says. “The simple fact was they had never been there. It wasn’t part of the culture to operate as a global company. It was just small local entities.”
Turn hunches into plans
As a result of his travels and conversations, Bolch thought he knew what needed to happen to start changing the company’s mindset, but he needed the right people in place. He made some changes to his team, and about three months after he started, he took the new senior management offsite for a week to put together a new plan and get their buy-in for it.
“It’s about getting them engaged in the process,” he says. … “We did a lot of prework of understanding where the business was and where it could go. A lot of that is really externally based. You have to look outside the company. You get too internally focused, and that’s a problem. Look outside the company. Look at how you deliver to your customers.”
They brought in both customers and investors to talk about plans.
“I don’t think they had had that as much in the past,” Bolch says. “We weighted the pros and cons. It wasn’t necessarily a smooth process. There was some disagreement along the way, but in that, you build understanding. At the end, we came out as one team that was committed to the plan.”
That formalized plan — no longer just a hunch — had three main components: one Exide, driving competitive operations and global growth through innovation.
The first part was necessary because the company was divided up in a lot of different ways both geographically and businesswise. It wasn’t just in the Midwest that people had very little knowledge of what happened in other areas — it was everywhere — so he wanted to knock down the walls. Going forward, a plant could make multiple products instead of just one and a salesperson could sell multiple products instead of just one. It also meant doing some restructuring. Senior leaders were supportive of this, even though it left their jobs in jeopardy.
“What tells you a lot about the people is the way they go about it — if they really engage and say, ‘Yep, we think this is the right thing for the company. I’m not sure what it ultimately means for me, but I want to be a part of it,’” he says.
The second big part about driving competitive operations centered on making the plants and processes more efficient and cost-effective as well as being a leader in the environmental field. They used objective measures to identify the five most important activities to work on — continuous improvement, environmental health and safety, preventative maintenance, energy efficiency, and equipment standardization and cost reduction. Bolch says he looked at the operating metrics for all the plants to make these determinations.
“You can look at who has the best quality measures in terms of defect rates or who has the most productive work force in dollars per part, those kinds of things,” he says. “Then there’s also the subjective version — when you go to visit a plant, you can say, ‘This is a well-run plant.’ Typically it’s the more objective measures to say if you’re getting good results. Chances are, all the other stuff is going to be good too, at least on a consistent basis. Random is never good when it comes to things like that.”
Then the third part about driving innovation was key to developing new technology based on what customers were telling them — they had to play to win.
“It’s time to grow this business, and it’s time to establish ourselves as what I like to refer to as a company of choice — first choice for suppliers and people who want to work here for employment, first choice for investors,” he says.
Communicate your plan
As he began to move forward, the next step was to communicate the company’s new plan to each different constituent group. He did this through various venues, such as an all-company webcast, internal newsletters, in-person and starting an annual meeting.
“Although you have to craft the format differently, I believe you have to be very consistent with the communications, whether it’s your employees or customers or suppliers or investors,” Bolch says. “You can’t have different messages. You have to have a consistent strategy and talk to them and adopt it to their viewpoint a little bit. You can’t create different ones for different people — it doesn’t work.”
He says you have to start with a simple message.
“Making it a simple message is very hard,” he says. … “You have to be able to communicate not only to your senior people but also be able to reach somebody who is working on a factory floor who may not speak English, and translate it and be ruthless and streamline the message down.
“When you do that, it means you have to be very clear about what you have to do. If you use a lot of words, you don’t have to be so clear. If you use very few words, you have to be much more clear.”
That’s why he ultimately came back to just those three big ideas of one Exide, competitive operations and global growth through innovation.
“That seems to translate well and people understand it,” he says.
But he couldn’t simply leave it at just those three things. He also had to explain what those three things really meant to each constituency, and that meant tailoring that consistent message in different ways.
“It depends on their ability to understand, and what’s important to them,” Bolch says of how you do that. “If you’re talking to senior leaders in the company, you can be very explicit, and you can back it up with a lot of details.”
Then it’s different if you’re talking to a lower-level person in the company.
“They can be very intelligent, but they may not have all the knowledge to absorb it,” he says. “You tend to want to state it in more basic terms so they can appreciate it, and give them examples of how they can contribute because I believe that everybody at the beginning of the day, wants to come in and make the company a better place — I’m just optimistic that way.”
Then it’s a completely different approach when you go outside your company and talk to your customers.
“They don’t care as much how you pay your people,” he says. “What they want to know is how you’re going to run the company in a way that benefits them and how they run their business. Take those same messages and how that’s going to translate into better products or lower costs or higher quality.”
Then, lastly, Bolch had to take that same message and tailor it to his investors.
“If it’s a successful business and making customers happy and we’re engaged with employees, ultimately, there’s going to be better financial results for the company, which is what’s really of interest to them,” he says.
After he had effectively communicated the new plan to all the different stakeholders, he then went about moving the business forward. As he worked with people, he continued to reinforce the new plan.
For instance, Exide used to have one large sales force that went out and sold to car manufacturers, such as BMW and Toyota but then had a completely different sales force that sold batteries that go into forklifts. Once when he was out with a salesman in one of the car factories, he took the opportunity to further the plan.
“I would say, ‘It’s great that we’re selling them car batteries, but what kind of batteries are in those lift trucks running around?”
The salesman didn’t know, and when Bolch would ask why not and wouldn’t it be great if they were Exide, the salesman would respond that it would be nice but it wasn’t his job to know.
“It’s the classic, ‘Not my job,” so now we make it their job,” Bolch says. “As you start to unearth these opportunities, one is you change the incentives and objectives, but the other one is you really communicate where we had victories.”
After that conversation and several others like it, now Exide is seeing victories in cross-selling opportunities across the businesses.
He’s also starting to see the fruits of his labor in other areas. For instance, in the past, you could only build an industrial battery in an industrial plant or a transportation battery in a transportation plant.
“Now we’re breaking through that paradigm saying, ‘If we have the skills, and we have the capacity to build in this plant, why can’t we do that there?’” he says. “We’re doing that and generating a lot of productivity that way.”
And the numbers prove that things are changing, as net sales for fiscal 2011 improved to $2.8 billion from $2.6 billion in fiscal 2010.
He’s also seeing more engagement with employees when he communicates with them, which is a sign of success.
“The first time you do a webcast globally, it’s absolute silence because people aren’t sure what to make of the new guy,” he says. “But as time has gone on, you get more and more questions about, ‘Well, can you tell me about this? I’m really interested in this. Or I had this idea — what do you think about that?’”
He’s now getting more e-mails form employees, which is really exciting for him.
“It says to me that people are now starting to engage more and are starting to understand the business,” Bolch says. “When I go into a plant, people interact differently. It’s not just me. Our whole leadership team is reaching out like that. When you see them engage back, you know you’re making a change.”
How to reach: Exide Technologies, (678) 566-9000 or www.exide.com
The Bolch File
Born: Jackson, Miss., but I didn’t live there very long. I moved to Shreveport when I was about kindergarten age.
Education: Bachelor’s degree in mechanical engineering, Tulane University; Master’s degree in mechanical engineering, University of Florida
What was your first job and what did you learn that still applies?
Mowing lawns. I was probably 10. One [thing I learned] is you probably don’t want to mow lawns for a living. I think it’s just you have to take pride in what you do. If you’re going to commit to do a job, you do what you said you’re doing to do.
As a child, what did you want to be when you grew up?
I wanted to be an astronaut. I was born in 1957, so when President Kennedy wanted to go to the moon, I was like 5 years old so it was an impressionable age I suppose. I used to write letters to the people at NASA when I was a kid, and they would write me back. I had two problems. Once I was 12 years old, I was already over 6 feet tall. And at that time, you couldn’t be an astronaut if you were over 5 feet 10 inches, and also I didn’t have perfect vision. I was written out of the program early on. I had to go be an engineer instead.
What’s the best advice you’ve received?
‘Trust, but verify.’ I think I it is critically important to empower your team, but periodically you need to drill down to ensure that you are getting the whole story and you are comfortable with the direction.
What’s the best book you’ve read lately?
‘Unbroken.’ It’s a story of a WWII army aviator. It was a young man who went into the army at a young age, but he was ultimately shot down and stranded in the Pacific and was a prisoner of war, and it was an incredible story of someone’s personal story and how they survived and how they conquered incredible things. It was pretty inspirational.