All Steve Shifman is hearing and reading today is how companies aren’t hiring, aren’t investing and aren’t growing. While that has certainly been the trend over the last couple of years with economic uncertainty still looming, Shifman has had the opposite challenge at Michelman Inc., a 250-employee global developer of water-based coatings for flexible film packaging, paperboard and other products.
“We’ve kind of bucked the economic trend during the downturn of the last few years,” says Shifman, president and CEO. “We continue to expand both here in Cincinnati and also around the world, and we’ve continued to hire.”
The company hasn’t been cutting costs or staying conservative to ride out the uncertainty. Instead, Shifman and his employees are embracing the position they are in and are hiring top-level talent and developing strategic plans to allow the company to keep growing for years to come so the organization can capitalize on its opportunities.
“It’s not growth for growth sake,” Shifman says. “Growth is important because we know that by doing that, we can continue to bring in the kinds of capabilities, skills and tools that will help our customers to win.”
Here’s how Shifman developed and led a strategic growth plan to allow Michelman to achieve its mission of helping its customers and continue to grow.
Formulate a direction
A strategic plan helps paint a picture for your organization of where you ultimately want to take the company. It provides a clear direction and strategy to get you there.
“We’ve made some decisions on the kinds of investments we’d like to make and what we’re prepared to do in order to grow the business a little bit more rapidly, particularly because we’re trying to find new solutions to help customers to win,” he says. “We started serving some of these industries and we recognized there’s more growth potential within these industries. There are more needs that need to be filled, let’s go invest around those industries so we can bring in new solutions and hire new people and build new facilities that will help us to serve those industries better.”
Shifman took this focus on customers and industries and made it the top priority for Michelman’s strategic plan.
“It’s very important to start with the customer in mind,” he says. “There are different ways you can organize a business. There are some businesses that organize around their production and they’re primarily manufacturers and some businesses are primarily around technology and those are right for them. In our case, our business begins and ends with our customers and we understand the markets and the industries we serve so well, so we start with those industries and with those customers and then we try and understand the kind of skills we need to serve the customers well — the kind of resources, assets, the kind of depth, the kind of distribution networks, etc.
“You have to understand who you’re serving. Understand what their needs are and help them to understand not only their needs today, but the needs they’re going to be facing over the next five or 10 years. Help them look around the corner to figure out where their businesses are going. Everything starts with the customer, starts with the industries and the markets that we serve and then we work closely with those industries and those customers to figure out where we think the future is going and then come up with our tactical plans to get there.”
In order to understand who you are serving you also need to understand the marketplace.
“We very much take an outside-in view of the marketplace,” Shifman says. “What I mean by that is we’ve organized our businesses around sets of customers in certain industries that have similar problems or similar challenges. That’s important to us, because instead of being a company that simply sells products, we’re a company that really focuses on industries that have needs and then we build solutions for those industries and then we build teams of people around these industries that have expertise. We work to hire people out of the industries that we serve. They understand the industries, they speak the language, they understand the challenges, and they can help us design solutions for those industries in a way we feel many of our competitors can’t.”
While there are many ways to put together a strategic plan and countless reasons for one, all those differences are moot unless you have smart people to help you.
“You have to get really smart people in the room to be part of the process,” Shifman says. “Plans created by one or two people off on high and handed down to the masses and say, ‘Here, go implement,’ tend to be less successful than those that are created by people who are actually going to be involved in executing, particularly in a business like ours where understanding the industries and understanding the customers is so critical. Also, have a grand vision. I believe in setting very large strategic goals for our company that challenge the company. If you really want to improve in something, set big goals. Don’t set them in the abstract. Set them because you know that by achieving these goals, you’ll continue to create a better place for your organization in the marketplace.”
A strategic plan or new direction will only be a success if you can build buy-in around it and gain support for what you hope to achieve. To do this, you must focus on communication.
“I’m a lucky guy, because I get to spend most of my time talking and communicating within the company and then also going out and seeing customers,” Shifman says. “It starts with me because the person in my seat in any organization has to be the one driving the grand vision. So it was incumbent upon me to have a big picture for where I thought we could take the company. We spent a lot of time as a team, first of all, making sure we’re all bought into this grand vision, because if the entire team is not bought in, then it’s probably not going to work. We work very closely together and we work very hard to make sure the team is completely aligned around it. Then it’s an awful lot of time spent with other members of the organization.”
Alignment is critical to the success of any strategic plan. To achieve that alignment you have to have the necessary communication tools.
“We do have some pretty well-tested communication tools that we use,” he says. “I spend a lot of time personally with our business units and business unit leaders visiting our facilities around the world and our people who are out in the field. It’s a lot of regular communication. It’s one-on-one communication. I write a letter to all of our employees every month that I send home, because I want their families to read it. We have lots of company-wide meetings and we have video conferencing systems. It’s just an ongoing communication process. It’s not a one-size-fits all and it’s not a once in a while, it’s constant. Can we do it better? Of course, there’s always a way to improve upon it, but I think it’s something we focus on a lot here and we make sure we are working hard to keep people aligned with what we are trying to accomplish.”
To aid in the communication efforts and provide total understanding of the tasks required by your employees, it helps to be transparent.
“One of the words that I try to live by is transparency,” he says. “I happen to believe that there are very, very few secrets within our business. We try to make our plans and our objectives and our results within our organization transparent, because it’s hard to hit a target you can’t see. If you make it transparent and you make people a part of the process and treat them like adults, they’re going to behave like adults and they’re going to be part of the process.”
It’s not enough to be transparent on one aspect of the plan or be transparent only for a little while. You have to make transparency and communication a big part of the strategic planning and buy-in process.
“It’s about transparency and it’s about rigorous, regular, constant, robust communication and dialogue,” he says. “Nothing is off limits to talk about, to debate, and to discuss within our organization. It may not be right for everybody, but within our organization, that really contributes to the culture of Michelman. It makes everybody feel as though they’re a part of the business, they’ve got a voice, they can assert an opinion. They’re not just told to do something. They understand why they’re being asked to do something. They have a chance to really debate and discuss that so that they know they’re a part of something bigger, they’re not just doing a job on a daily basis. It really is something that’s been baked into the DNA of our organization.”
Measure your plan
While a strategic plan begins with a vision for the company, a clear mission of what you’re trying to accomplish and the support of your organization, none of it will be beneficial if you don’t measure your plan on a regular basis to make sure you hit goals.
“We’ve got a lot of robust systems in-house that allow us to measure our business on a day-to-day basis, but we also have this high-level strategy map and balanced scorecard that tell us that we’re moving in a perfect strategic direction,” Shifman says. “Our strategy map is our high-level map of where we’re going strategically and we use a balanced scorecard. The balanced scorecard is not how we manage the business, but it helps us to know that we’re on our strategic path.”
The steps to measuring your strategic plan are to first, have a plan to measure and second, be sure to collaborate with others on your team.
“Many people just operate on a day-to-day basis and there’s probably no long-term plan of where they’re trying to take the business,” he says. “At Michelman, we have a very solid past and that past has helped to inform who we are today and we also have a very clear picture of where we’re trying to take the business. And that picture isn’t something that I keep to myself. It’s one that I have approved by my board. It’s one that my executive team is actively involved in helping to create. It’s one that we communicate actively and we share transparently.”
Once you have a plan and vision in place and buy-in from the company, you have to make sure you discuss and measure specific areas of the plan.
“Make sure you’re debating and checking that plan so it isn’t just something that you pull out of thin air, but something that you’ve actually imbedded and something that a team can buy in to,” Shifman says. “Measure yourself against the plan and be willing to adjust if things change. We have long-range plans, but it’s like talking about a battle plan — once the bullets start flying sometimes the plan gets tossed out the window. Our plan is not tossed out the window, but sometimes reality on the ground forces us to adjust our plan, so we need to remain flexible.”
Remaining flexible is exactly why you have to constantly measure your performance against your plan, otherwise if things change, your plan won’t be effective.
“Be willing to change that plan slightly if things that are happening dictate some needs to change the plan,” he says. “You have to also surround yourself with extremely good people, because it doesn’t matter how smart the person at the top is, it really comes down to the people on the team who are really helping to build the organization and execute the plans.”
No matter the reason for your strategic plan, always understand what you are trying to achieve.
“We need to continue to grow in order to continue to build the resource capabilities that our customers are demanding from us,” Shifman says. “With growth come the resources to be able to invest in new facilities, invest in new technologies, invest in new skills and new people.”
HOW TO REACH: Michelman Inc., (513) 793-7766 or www.michelman.com
The Shifman File
President and CEO
Born: Springfield, Ohio
Education: Graduated from the University of Colorado and received an MBA from Xavier University
What was your first job and what did you learn from that experience?
I worked on a beer delivery truck in Springfield, Ohio. I was a driver’s assistant. I wasn’t even old enough to buy beer, but I schlepped cases of beer off the truck into bars and restaurants. I realized just how hard people work. I also worked in a warehouse for these guys and there was zero training and one of my first days they tossed me the forklift keys and said, ‘Here, go move this pallet.’ We had guys regularly putting forks through the tops of trucks and you’d see pallets full of beer and wine falling off of the forklift. I realized that’s not the kind of work I wanted to do, and getting an education was going to be really important to me.
What is the best business advice you’ve ever received?
Surround yourself with really smart people. Recognize what your real strengths are and build a complementary team of people who have the skills and experiences that come together to create an organization.
What is your definition of success?
We define success at Michelman, first and foremost, by whether or not we are helping our customers to win. If we help our customers to win, then we have a right to win as an organization. Personally, I think success is adding value and giving back and being a part of something bigger. I’m a lucky guy. I have a chance to run what I think is an outstanding organization and I also have a chance to work actively in the community. I feel like I’m successful because I’ve got a beautiful wife, wonderful kids and a great family.
What are you looking forward to in your industry?
All I hear about and all I read about today is how people aren’t hiring and people aren’t investing and people aren’t growing and everyone is waiting for a signal from the government before they do anything. In our case, I couldn’t disagree more. Over the last number of years during a period of uncertainty, we continue to hire, we continue to invest and we continue to grow. I’m looking forward to the next few years because we plan to do a lot of the same. We’re on a rapid growth path, because we believe very much in the future of our business. I’m excited about our growth opportunities, because we’re not waiting for others to figure this thing out.