Charles Lipman admits that he has limited skill sets when it comes to technical products. And that’s not an easy admission to make, given that his company, DiversiTech Inc., manufactures air conditioning condenser pads and supplies other technical components for the heating, ventilating, air conditioning and refrigeration industry.
But Lipman has found ways to overcome this weakness and has grown DiversiTech to annual revenue of about $150 million by trusting his 350 employees and knowing when they can help him with something he’s not as knowledgeable about.
“It’s, one, confidence in your capabilities and that of your people,” the president says. “Second is being unafraid of risk, and third, it’s understanding that every decision you make can be wrong and [having] a commitment to review and adjust.”
Smart Business spoke with Lipman about how to grow your company by trusting in people and being unafraid to take risks.
Don’t fear risk. It’s confidence in your people. Of course, you have to have the people to be confident in. That’s important. You can’t have confidence and have it be misplaced.
[You know that] by the results. They have to be placed in situations where they have options, and they have to illustrate the right choices.
You can gauge that even in the simplest of actions — someone who spends enormous amounts of time in critical situations and burns the midnight oil, as they say, is a person with energy and passion, and that matters. A person that will come to you and tell you that the situation is bad. That’s the person you want on board because you don’t have to wonder about it.
If you have people who have demonstrated their abilities to get stuff done and deal with difficult areas, then you shouldn’t be afraid of going into another one.
I have confidence in people because they’re here, first. Second, the review process is proportionate to the amount of trust and the amount of risk. If the risk is great and the trust is modest, then one would have to review fairly frequently. On the other hand, if the risk is low, then the review would be a very long period in between.
It’s very important to have metrics on anything you do. Even if it’s wild speculation, it’s important to put that speculation in writing and have a measurement of where you expect to be and when you expect to be there and milestones to that objective.
Involve people in decisions. You ask them the questions leading up to the ultimate question — what are we doing well, what are we not doing so well, do we have the resources we need to achieve the objective, what will we do if the results are no better in a period of time, what are the options, what option would you choose, what’s the reason?
I prefer not asking one question, and that’s, ‘What should we do?’ Then they don’t tell me what else they’re thinking about.
Many times, one of their other options is one that they really prefer but think you will not and therefore don’t present it.
Let people make mistakes; let them lose money from time to time. You can be wrong, and they can have a success with respect to an idea that you consider worthless, and second is the fact that they know they have your confidence that could cause them to come out with other ideas, some of which might be the game-changers, and they won’t do that if you’re going to be hypercritical of their ideas and not give them the freedom to implement them.
But there are exceptions. The two exceptions are it’s ethically inappropriate, and the risk is too great. That’s not a metric decision. It’s more of taking a look at what could go wrong and how much damage that event would cause. If that event would cause a catastrophic problem for the company, it’s unlikely that we should go forward in any circumstances.
Live your values. A leader has to articulate the values, and he has to do it on a consistent basis. Those values rarely should change. They should be constants. Refer to them at a time of decision-making, and make sure you live up to them, as well. If you don’t live up to them, anything else you do won’t matter.
It’s internal — how do you make decisions, how do you do the right things, how do you want people to deal with people and deal with situations. People use words all the time, but unless you think them through, they don’t have the full meaning that they could. Words like integrity. What does that really mean? If you give it some thought, that’s helpful. It can be as simple as working out what’s the right thing to do and then go from there to decide what we should do. Always keep in mind what the high road is — always know that.
Look forward. You have to have the attitude that you’re not too interested in history — you’re more interested in going forward.
No one likes to change. The only people who like to change are people who like to change others. It’s something that we all have a problem with, and very few of us acknowledge it.
Be persistent in terms of demanding it and rewarding those who do. Rewards are almost always monetary. People are paid based upon their results and the results of the company, and we tell them that.
HOW TO REACH: DiversiTech Inc., (678) 542-3600 or www.diversitech.com