Perpetual motion

Ralph Perez is happy enough with his story to celebrate his success.

He’s not going to brag or anything, but you have to admit it’s a
pretty good story.

Born in Havana, Cuba, Perez came to America with nothing in
1970 and began staking out the American dream. By 2005, he’d
worked his way to a couple of college degrees in pharmaceutics
and enough financial success for an early retirement.

Of course, the reason he doesn’t mind enjoying his triumphs is
he believes you need to take a moment to see where you’ve been,
enjoy it, and then get back to work.

So instead of retiring to the golf course, Perez started Medica
HealthCare Plans Inc., a health plan offering Medicare Advantage
Plans to beneficiaries in South Florida. In 2005, the first year
Medica was open, his employees had plenty to celebrate: Medica
grew to $30 million in revenue almost overnight. With that great
sense of accomplishment, he added the idea that they had much
more to do.

“I highly cater to my employees,” he says. “I can be very
demanding, but I’m extremely flexible with them.”

That attitude pushed the company even further in 2006 —
and it grew to $80 million in revenue.

Again, Perez stopped everyone in their tracks and gave them
the speech: Good work, take time to appreciate it, keep going.

Again the speech worked. Medica’s 150 employees pushed
the company to more than $130 million in revenue in 2007.
The three-year growth of more than $100 million is impressive, but for Perez, Medica’s chairman, president and CEO, it’s
never enough.

“In all honesty, to me, we’re not growing too fast,” he says.
“It’s never good enough.”

Beyond constantly celebrating success and then regaining
daily focus, Perez encourages his team to make quick decisions to keep the company moving and works to keep front-line employees comfortable with speaking their mind.

Here are some of Perez’s best strategies for sparking and
managing successful growth.

Guiding light

Four days after Cory Meyer took over Catalina Lighting Inc. in
2006, he stood before the entire company and told them a grim
truth about the struggling company.

“I shared the gory details, and I don’t think everybody down the
chain understood the details,” he says. “I simplified it. I used a
metaphor that we’re a patient on the operating table, and the doctor hasn’t decided whether we are going to make it or not, and we
have to do some quick surgery. The bottom line is, we’re going to
do some surgery to cut out those issues that are going to take us
down, which may mean that some of you are going to lose your
job, but, for the whole, we’re going to make this work.”

The basic facts had the designer, manufacturer and distributor of lighting products feeling low: Back-to-back years of $20
million losses meant there wasn’t much room for error at an
organization with around $200 million in sales (Catalina does
not release revenue figures; its last publicly reported revenue
was in 2003 with $202 million, while Dun & Bradstreet estimates current sales around $172 million). But while the speech
was sobering, Meyer, Catalina’s president and CEO, didn’t
want the mood to be one of forfeit. Instead, he emphasized that
changes could be made quickly if the company could act on
problems internally. The idea he shared with them was that
being stagnant was a surefire way to end up cold on the operating table.

“I constantly push that the worst thing you could do is nothing,” he says. “If you are going to move a company that is in
trouble like Catalina was, you’ve got to make decisions and
keep moving in a direction.”

To push that change, Meyer had to get to the core of the company’s thought process. He wanted his employees questioning
everything that went on at Catalina because the systems in
place were inefficient. So he started off by giving the diagnosis
and then spent time operating on each individual section of the
company. As the results came in, he emphasized the opportunity for change and made the personnel moves to create a new
way of doing things for the roughly 250 employees at Catalina.

Leading by listening

Forgive Dennis P. Gallon if
you feel like you’re doing all of the talking. It’s not that
Gallon is reluctant to speak his
mind, it’s just that he wants to
hear everything you have to
say first.

To Gallon, president of Palm
Beach Community College,
hearing people out has been at
the core of his mission at
PBCC as he tries to unite the
educational institution’s four campuses. After all, when
Gallon arrived at PBCC, his
nearly 2,500 employees and
four campuses were operating
under one name but about
100 different visions.

Today, united under one
unique vision, the university is
a cohesive entity as a result of
information gathered during
Gallon’s constant listening
tours with everyone involved
with the college.

Smart Business spoke with
Gallon about why you have to
listen to everybody who will
talk.

Let everybody touch the vision. I
don’t think a leader can be
effective by walking out and
proclaiming a vision for the
institution. A vision has to be
developed with input; there has
to be support from all sectors of
the institution.

I firmly believe in touching as
many individuals as possible,
hearing what individuals say.
My formal process is to meet
weekly with the vice presidents of the institution and
monthly with the four campus
provosts.

We’re looking long range to
a great degree, but I also want
to know what is happening at
ground zero on each of the
four campuses.

Then I have (faculty) meetings on each of the campuses,
and they know that they can
come to that particular meeting
and share their views about the
institution. I also go to each of
the locations and have student
forums, and those students are
able to come and talk about the
kind of things they like, and
that is a great way for me to get
input. Then I have informal visits in an area; I drop in on the
different campuses just to see
how things are going.

To provide leadership for an
institution of this size, you have
to have input — and to the
degree that you are able to continue to reinforce the vision of
the institution, to touch individuals and see what’s going on in
their lives, that is the piece that’s
critical in understanding the
challenges you are facing.

Start with core values. You have
to have a set of core values. You
should have a commitment to
what you aspire to represent —
a litmus test, if you will. Here at
PBCC, for example, we constantly say that student success is our primary objective. That’s
why we’re here.

So as a result of having those
core values, we have some kind
of a litmus test, or self-test, for
individuals when they are making decisions. If an administrator is about to make a budgetary decision, I encourage them
to do a self-check as to whether
this really contributes to the success of our students. I certainly
consider that to be a guiding light
for the decisions that I make.

It is critical for individuals to
understand that this is the core
value of what this institution
should aspire to achieve, and it’s
not one of those ideas that
came about as a result of what
some other institution is doing
or of some book that was read.
It’s a core value that is critical for assuring the mission of the
institution is achieved. And as a
result of having that understood
to be a core value, individuals
understand that it’s not the fad
of the day.

Hire safely, then ease the transition. I’m not sure that there is any
true mechanism that you can
use to ensure that an individual
is what he or she proclaims to
be during the interview process,
but you certainly have to do the
normal things: talking with individuals very carefully about
their beliefs, careful background
checks to do all that you can to
put past with present and then
making the call to follow up.

After that, be willing to provide whatever professional development that you can to be
sure that that individual will
experience success once he or
she is on board. We know that
we can have individuals with
tremendous success in one
environment, and then they
move into another and, for one
reason or another, not experience success.

But you do your best to try to
get individuals going by sharing
the values of the institution and
pushing them in the direction
that you think will cause the
institution to achieve its mission.

Give employees your full attention. The thing that really speaks to
who I am as a professional is
the fact that I listen and try to
do that every time I’m talking to
an individual — whether it’s one on one or in large groups.

Try to find out the feelings of
individuals. The ability to communicate effectively is just key
to leadership, and it’s the leader’s
responsibility. You want to show
the physical tendencies of that.
You want to be sure that you’re
attentive to the individual or
individuals to whom you are
speaking at the time; that is a
good indicator when a person is
listening.

A leader has the responsibility
for assuring that communication is, indeed, as effective as
possible, and when you begin
talking about a large and diverse
institution like PBCC, it makes
it even more critical because
communication is absolutely
essential.

HOW TO REACH: Palm Beach Community College, (866) 576-7222 or www.pbcc.edu

Controlled growth

Bill Beckham absolutely
hates change.

But that doesn’t mean he thinks it’s a bad idea. After
all, HBA Insurance Group Inc.,
where Beckham is president,
was created in 1999 from the
merger of two long-established
agencies. Now, the company
is changing again after opening a Broward County office
and acquiring an agency in
Vero Beach.

And with help from his partner, Chairman Ernesto Freyre,
Beckham is integrating the
changes as painlessly as possible at the insurance provider,
which has annual premium volume of more than $200 million.

“You have to embrace
change,” he says. “I’ll be the
first to tell you it’s not easy. My
general reaction is, I scream a
little bit or get upset about it,
then I think about it and say,
‘Yeah, that’s a good idea, we
ought to do that.’”

Smart Business spoke with
Beckham about how to know
when it’s time to grow and
when to move on from an
opportunity.

Q. As you were looking for
ways to grow — either through
an acquisition or starting
another agency — how did you
know you were ready?

No. 1, we felt like we had a
good model. No. 2, we added a
system called ImageRight, a
document system that scans
all your mail. It also has management tools that allow the
manager to figure out exactly
how many tasks this person is
working on, see where they’re
at with their mail — all these
important things that let the
manager keep up with the folks, even though they are not
in your office.

Two years ago, we would
have absolutely had to have a
strong operations person at
these locations. Now, you still
need strong people, but we
feel comfortable managing
them from our main office and
having them report, even
though it’s long-distance
report, because we have ways
of checking up on them.

With the help of technology
and with the management
staff we have, we felt things
were in place to move
forward. But that does-n’t mean we’re going to
go hog wild. For us, it’s
going to be slow-paced;
as each one comes, you
make sure you’ve got it
assimilated before you
move on to the next
one.

Q. Was it difficult
to wait for the right
opportunity?

We certainly were
banging our heads up
against the wall trying to
find the right deals to
come along, and for
whatever reason, it wasn’t as easy as we hoped
it would be.

But we knew we were ready,
so it was just an issue of finding the right one because
you’re not going to do a deal
just for the sake of doing a
deal. Some people will, but it’s
still got to make business
sense, and part of the business
sense is the price.

Q. What were you looking for
in pricing an acquisition?

We looked at what industry
standards were for acquisitions. Our board helped us.
They said, ‘Hey, if it gets too
high, go and start your own
[agency] and compete.’

You try to put it in perspective. Yes, it’s better to acquire
than to just start up, but if the
cost is so high to get in, then
you just try it a different way.
It’s a little slower growth, but
at least you can get your foot
in that door.

So we used industry standards to measure against, and
we used a little discipline in
saying, ‘You can only pay X, and if it doesn’t happen, it
doesn’t happen,’ and you go on
to the next one.

Q. When you make an
acquisition, how do you
integrate new employees
into your company?

We didn’t try to come in
and take over everything. We
tried to look at what they
were doing right and continue that.

We realize that Vero Beach is
a different market than Miami,
so when it came to internal
operations, we tried to model
our office procedures for internal management.

Now, when it came to
external — dealing with the
customers and sales — we
absolutely looked at what
they do and replicated what
they did. We didn’t adopt our
model on doing business
with the client; we adopted
what they were doing.

One example of that for
Vero is they’re big in PR —
it’s a smaller town, and you
do need to advertise more
there and be part of the community — so we continued
those trends, even though
they were over and above
what we would have traditionally done. Saleswise, we
immediately hired local talent. They don’t want to do
business with a firm out of
Miami; they want to do business with a local firm.

We didn’t try to come in
and say, ‘We’re HBA; we’re
the greatest thing since
sliced bread,’ we just said,
‘We’re a division of HBA, and
we want to keep your business. What do we have to
do?’

HOW TO REACH: HBA Insurance Group Inc., (305) 714-4400 or www.hbains.com

Leading the recovery

Things are always life and death for Bill Duquette at Homestead
Hospital.

It’s not just that the patients coming in and out are dealing with
serious conditions, but the hospital itself is coming off more than
a decade of stumbling performances.

Since taking over as CEO for Homestead, which is part of
Baptist Health South Florida, in late 2006, Duquette has been
dealing with an organization that has been consistently suffering
financial losses since the catastrophe of Hurricane Andrew in
1992. And, as part of a not-for-profit system, it has suffered from
uninsured patient costs, which are unavoidable.

Simply put, Homestead had spent some time feeling more than
a little under the weather.

But Duquette and his leadership team didn’t want any sympathy
as they tried to put the hospital and its $227 million budget back
on track. Instead, he continued to emphasize that the hospital is in
a growing market where more and more insured families are moving to every day. With that, he knew that focusing his attention on
the internal problems of the hospital would help in the long run by
increasing patient care quality, and with a new facility getting
ready to open in mid-2007, he knew that better care would mean
more insured patients would choose Homestead over other hospitals for basic admission procedures.

“I just have to lay it on the line and let people understand what
our economic situation is, kind of where we are, and then engage
them,” he says. “We can collectively do things to make it better, so
we just have to be upfront and say this is the environment that
we’re in.”

To get that message across to his 900 employees, Duquette had to
create a delicate balance. He had to address the problems of the
hospital and tie accountability to fixing those, but he needed to do
so in a way that sparked the staff. That process involved releasing
the ugly news to employees at every level and then circling back
with them to figure out how to rebuild. Finally, the vision of the
future had to be all about accountability and celebrating the steps
toward success.

Stick it out

George Fussell has both failed
and succeeded, and he’s happy about both outcomes.

From those experiences, he
has compiled great stories
about times that he’s promoted
people from within and they’ve
gone on to make him proud —
and he has almost as many stories about times that the exact
opposite has happened at
Southern Auto Finance Co., the
subprime automotive financing
company of which he is owner
and president.

In both circumstances,
Fussell preaches perseverance
and willingness to learn to his
157 employees at SAFCo, noting that you can survive anything if you use what you’ve
already been through as motivation. With that mindset, Fussell
is energized by the right hires
he’s made, and he uses the
times he was burned as both a
learning tool and as an example
of times he’s hung tough when
people let him down.

Smart Business spoke with
Fussell about why you shouldn’t
hire someone just because it’s
convenient and how a little volunteer work can help Bill and
Betty get along.

Learn as you hire. I tend to give
people opportunities that no
one else would give them, and
I’ve been rewarded by doing
that to unbelievable levels. I’ve
also been hurt by that. You
have to hire the right people,
the people that know what
they’re doing, and my default
is still set on giving the person
I know the opportunity.

But you learn you have to
subtract timing from it. Just
because somebody might be
standing there and might be
convenient for you, that’s not
the good thing to do. But the
person that’s proved themselves — that they want to
grow and they’ve put the effort
in — that person deserves the
opportunity.

Too often, I’ve tapped somebody on the shoulder who has
been in the right place at the
right time, and that’s where
you get burned.

Stick out the tough times. You
have to clearly identify what
you want to do, and then you
have to persevere to an unbelievable level to get to what
you want. I don’t think it
comes easy — there are many
bumps along the road, and it
can reduce you to tears — but
perseverance is the most
important thing to being successful in business.

Sometimes your vision of how
it’s going to work in the end is
different, but perseverance is
the key to being successful.

There are continuous challenges, and that’s what perseverance and belief in yourself
is all about, because challenges don’t stop. It’s not easy
to manage when times are
bad, but that is where persistence really comes in.

If you have belief in what
you are doing and have the perseverance to carry on, that
will demonstrate itself to other
people. And people will put
their heads down and work
hard and get through it.

You are never going to sell
anything or win anything with a
negative approach; your positive
mindset has got to be the most
critical thing. But you can’t have
a positive mindset if you don’t
have the belief that you will persevere to see it through.

Encourage employees to bond
through local charity work.
Every
company says team and they
bleed team, but are they actually a team, or is Betty fighting
with Bill? Yes, you are a team
as a company, but often there
can be a lot of division there,
and things like our volunteer
events help that.

It gives a great feeling of
reward, it’s fun, it’s outside the
office, employees can enjoy
themselves while doing it, they
feel worthy, they can get their
family involved, and it becomes
more of a notion of team.

It’s a step closer to the community. Your neighbors and
communities around you need
your help. Charities that are not
national are investments in the
community, and the community
is the vital part of our living, so I
think that’s something the
employee appreciates, too.

Fellowship is such an
important part of life. There’s
a commonness and fellowship between employees, and
we all feel good about one
another, and that’s where the
team is.

Match the diversity of your company. Our customer base and our
employee base need to be the
same — they need to understand the same and come from
the same walks of life.

We can’t be a bunch of
arrogant people that pretend
to know everything when we
don’t know anything, and the
way you bring that knowledge here is by having people who are like the people
we are serving.

Stick to what you know. You can’t
be all things to all people in
any way, shape or form.

I started out in the used car
business selling cars under
$5,000, and I saw wonderful
people coming in, and I saw
lenders just beating them up,
so we formed a finance company that addressed those
people, and we got a lot of
business by it. Now, that didn’t
deviate from what I knew.

Then I became a new car
dealer for a little bit. Well, I
didn’t know new cars. I
thought I did, but I didn’t
know them at all. I realized
that if you are going to be a
new car dealer, be a new car
dealer. If you’re going to be a
finance company, be a
finance company.

And I had to make a choice,
so I sold the dealership and
went back to what I know and
we haven’t looked back.

Sticking to something you
know is something someone
once told me, and when you
start to deviate, you realize it’s
a pretty good idea.

HOW TO REACH: Southern Auto Finance Co., (800) 215-9406 or www.gosafco.com

Keeping score

When Troy Templeton took over at Trivest Partners L.P. five
years ago, he could have left well enough alone.

The investment firm, which provides equity for middle-market
corporate acquisitions, recapitalizations and growth capital
financings, had nearly 25 years of success with an attitude of
entrepreneurial spirit that allowed the firm’s lead deal makers to
work on their own to create deals.

But forgive Templeton, the firm’s managing partner, if he wanted a little more. Though he could see the company was doing
well, he also knew that if he could bring those people together as
a team, giving people a chance to look over the few deals being
made that may hurt the company, it would give Trivest and its
employees a big boost. So Templeton went to work at creating a
teamwork culture that still let people be creative.

“You have to build a culture for a firm where people want to
work for and be part of,” Templeton says. “It’s many long
hours, it’s not a 9-to-5 job, and in order to find people that
enjoy that kind of work life you have to have a culture that promotes a feeling of being part of the team, of being part of something where one can learn from, develop and grow. We focus
very much on our culture and building one that’s sustainable
and provides an environment to do what it takes to be successful.”

That teamwork culture was a building process for Trivest
that started at the top with Templeton and his senior leaders
setting the stage by helping midlevel leaders take over projects. Once the idea of teamwork was created, Trivest worked
on strategies to hire team players and create a framework for
the company’s entrepreneurial goals to be reached through
team practices.

The resulting culture Trivest created has helped the company
continue to grow. Not only does the company’s portfolio manage companies with $1.5 billion in revenue with more than
5,000 employees but returns on investment, which had traditionally been around 30 percent at the company, have increased to more than 40 percent during Templeton’s five years
at the head of the firm.

Make teamwork your priority

There’s a trick to creating a culture of teamwork while still
letting employees develop, and Templeton says it’s fairly
abstract.

“You have to know when to manage and when to leave people alone, and it’s critical,” he says. “We all try to hire stars,
and stars want to have the opportunity to manage a project or
whatever the task is at hand, so the key is to give them the
autonomy to do that. On the other hand, you have to realize
when they need help and when they’ve hit a sticking point
and need leadership from management.”

Templeton says you create that process by letting employees
jump in the pool while acting as more of a lifeguard than a
floating device.

“It starts with trust, and you have to give people the opportu-

nity to succeed or fail, but the key is not letting them fail.
That’s more of an art than a science, but it’s just like watching
somebody swim — you know if somebody is swimming and
getting across to the other side, and you know those that are
struggling. It’s hard to describe, but it’s easy to see.

“The key is to jump in and help the person that’s struggling
and not pull them to the other side but hopefully give them a
little bit of a breather so they can get there on their own. My
job is to let them go as far as they can and then jump in and
provide a little creative input to help them get over that
obstacle.”

Templeton fleshes out the idea of helping someone stay
afloat by giving examples of small ways you can aid someone
while letting them still swim their own course.

“It can be as simple as somebody making a deal, and they
believe it’s a good company, but maybe they’re missing one
thing, so it’s providing the years of experience and saying,
‘Why don’t you look at this before you come back with a decision,’” he says. “Hurdles are an everyday part of life, and what
you don’t want to do is let them try to struggle with it on their
own when they are not able to get around that hurdle.”

The main focus is helping an employee along without taking
over a project. By giving some insight but allowing them to
swim on their own, lessons are learned, and the employee
remains empowered.

“Growing up in the industry, the way I learned the most was
doing it on my own,” Templeton says. “But you can never do
everything on your own, and it was great always having help
involved in a transaction that helped guide you through whatever challenges you faced, so that’s what we try to provide.”

Though the swim lessons have to come from the top,
Templeton doesn’t have to spend all his time coaching. He populates most business deals with one midlevel manager — the
aspiring swimmer — and has two senior-level associates helping the process along whenever there is some trouble. The
result not only removes pressure from the person handling the
deals, but it removes the stigma around asking for help. Since
each employee has the opportunity to get help, they are also
willing to give a hand on any project.

“It’s our job to guide them through the transaction but allow
them the freedom to execute and get things done,” he says.
“People want to participate in that, and we try to get that message across through a team environment where you are not on
your own, you’re not the only person responsible for a deal or
an acquisition.

“On the other side, if there’s a problem or a fire to be put out,
we want people that don’t mind jumping in and getting their
hands dirty. That’s critical to a great culture because if you
build that environment, people know there’s somebody watching their back, they know that they’re not going to be measured
solely on their own performance but how they interact as part
of a team environment, and that creates a desire for everyone
to work together.”

Hire a team player

While Templeton’s theories on building a team culture start at
the top, part of the process comes from the bottom. That
means that if you want teamwork as a core of your culture,
your new hires better be team players.

There are plenty of checks and balances to the hiring system at
Trivest, but the one thing that Templeton really wants to know
about potential employees is if they’d be welcome at a company
lunch on a Friday afternoon. It’s not that Templeton is looking for
another buddy, he just knows that when it comes to company
culture, a new employee has to fit in or risk being left out. So
whenever Trivest is hiring a new professional — one of the 25
people that work inside the company on its acquisition and asset
management projects — Templeton takes them out for a meal
with others from the firm.

“No. 1 on my list is culture first,” he says. “Before any new
professional is hired, they meet everybody in the firm, each
person in the firm has a different aspect to gauge that person’s personality, and everybody goes through a gauntlet of
meeting people in the firm before they’re hired. And what I
ask everybody, because we all meet together after the interview sessions and discuss each candidate, is a simple question, ‘Would you like to go to lunch with this individual?’”

It seems banal, but at the core of the question is a basic premise: Assuming skill competencies are met among the candidates,
is this person the right fit for the team?

“We’ve all worked in an organization, and if at lunch time you
walk by that individual’s office, and you don’t want to have
lunch with him or her, that’s not a person that fits in with the
team,” Templeton says. “So the going to lunch factor is first and
foremost, if you don’t particularly want to have lunch with that
guy or gal, they’re probably not going to fit in with the team. It’s
kind of simple but important.”

Give employees team-oriented
goals

Beyond Templeton setting the stage for his company’s team-work initiative and his simple test for making sure qualified candidates will fit in with the team, Templeton had to help create
team-oriented goals so people felt involved.

When Trivest was operating as several independent people or
groups doing deals, there was no real framework to include others and work within a company-oriented goal. To get the people
thinking in terms of Trivest’s overall goals, Templeton set an
agenda for what he expected from the entire company and set
the bar higher across the board to encourage people to think
outside of their own deals to help others get across the finish
line.

“The thing I try to do is set the big goals,” Templeton says. “If
you don’t aim high, you’re not going to shoot high, so you may
not attain all your goals all the time, but you are certainly going
to attain a higher level of performance if you are going after the
big goals rather than saying, ‘I want to beat last year by 5 to 10
percent.’”

Beyond setting the bigger goals, Templeton also wanted
Trivest to have a system that encouraged the new team-oriented objective he’d laid out. To do so, he kept some of the entrepreneurial attitude of the firm intact by allowing people to still
design portions of their own deals, while creating a scorecard
system for the firm’s most successful deals. The scorecard
showed what deals were most profitable for Trivest traditionally, so if a new deal didn’t match up well with that card, it
couldn’t move forward. The system gave a boundary in which
creativity was still necessary, and it also acted as a great training process for younger people.

“That had a huge impact because it very quickly taught our
younger folks the culture of the firm,” he says. “If you came to
work for Trivest, and you filled out 10 of these scorecards in a
five-week period, you would know exactly what works and
what doesn’t work for our investment philosophy.”

Overall, the idea was to allow people to be creative while
working within the goals of the company. Templeton gave a
destination, and then let his professionals design their path.

“It doesn’t allow for deals to get outside the box to get any
traction at Trivest,” he says. “It pretty much limits the ability
for that outside deal to get rationalized, and that’s the biggest
risk is rationalizing an opportunity that you think is an opportunity but really isn’t within your core set of experience.”

Not every company has the employee structure that Trivest
does, but Templeton says that the idea of putting together a destination with team-oriented goals is universal if you want people to be successful.

“You can’t get to your destination unless you know where you
are going, and this tells them where they’re going — the destination,” he says. “They may have to figure out their tasks to get
there, but they know the goal, so it eliminates that uncertainty
of not knowing what might be the right opportunity for Trivest.
It takes a lot of the stress and uncertainty away because you
can say, ‘I know I’m doing this.’”

HOW TO REACH: Trivest Partners L.P., (305) 858-2200 or www.trivest.com

Culture builder

Sue Romanos has 27 valuable commodities at her
company, and she’s holding on to them very tightly. Romanos, president and
CEO of independent staffing
firm CAREERXCHANGE,
has an office littered with
company culture awards, and
she continues to do everything in her power to fulfill
her 27 internal employees.
With her business in the
hands of those employees
handling the complexities of
the 2,000 field temporary
workers at the $18 million
firm, she wants them all
happy.

“People leave companies
not because of money,” she
says. “They leave because
they feel like they are not in
the loop, they feel like they
are not part of things, or
they feel like they are not
appreciated.”

Smart Business spoke
with Romanos about how
building a better business
comes from building a better
culture.

Q. How do you create a
culture of ownership?

One of the things that is
truly my belief as an owner is
that the best asset that I have
is human capital. You have to
understand that you can take
the people you have working
for you in your organization
and what happens to them
can make or break your company — that’s true in every
industry, but in the service
industry in particular. In
order for the employees to
put the most into their job
and get the most out of their
job, which is the feeling of satisfaction, they have to feel
like they are a stakeholder in
the outcome.

To do that, we give them
that opportunity with
improvement programs, and
employees are always
encouraged to make suggestions for continuous improvement and any type of processes within the company. Most
decisions that occur bubble
up from the employees’
input. We hold contests
where we invite them to
come up with better ways of
doing things, better
ways to service clients
and better ways to
touch our candidates.

We are also very family friendly. We encourage our employees to
participate in family-friendly activities. We
have a number of single
moms, and if a child is
sick or unable to go to
school for some reason,
we encourage them to
bring them in. We have
an area in the company
where a sick child can
be occupied during the
day.

Q. How important is
creating that work-life
balance?

You have to have balance. I
am on the board of The
Work-Life Balance Institute,
and that is extremely important, especially today when
there is the need for a two-income family. Most women
are working, and it’s extremely important not only for
them to be satisfied in their
career but also to be satisfied
in their work-life balance.

I don’t believe in burning
employees out; we encourage them that their family is their
first priority. Our employees
appreciate that about us, and
that is one of the reasons
that we have very low turnover with employees. We
have an average tenure of
eight-plus years here, and
we’re doing that in an industry that typically has a turnover rate of more than 140 percent.

Not only is it important for
them to have the balance
between their position and
their family, but they also need personal development.
We stress personal development, and we encourage it.
We will allow employees to
take programs or additional training that would be a personal development item.

That makes them a better
employee. They are more
well-rounded, they are happier, they have less stress, they
feel like they are accomplishing something, and they are
growing. It’s so important for
the human psyche to continue to grow.

Q. How does helping
employees find that work-life
balance benefit your company?

That has a dual role. First,
if employees are happy here,
they are more productive
because if you have an
employee who comes in and
is brand new, their value to
the company is not as great
as someone who has been
with the company for five or
10 or 20 years. So we encourage retention from that
point of view because we
feel that we are getting better productivity from someone who is trained, who
knows the way we do things
and who knows how to best
be productive.

The other side of that
translates into customer satisfaction because I think one
of the things our clients
would say about us is our
people have the experience,
education and knowledge,
which we put a great deal of
value on. Our clients appreciate it because they are
dealing with the same person
year in and year out. Then,
that person understands
their culture, understands
who they are dealing with,
what fits best with those
individuals and how to make
the best matches.

HOW TO REACH: CAREERXCHANGE, (305) 595-3800 or www.careerxchange.com

Growing up

Matt Wanderer has
implemented a successful business model for Alterra Capital Group to
continue to expand. Now, he’d
like for someone else to do the
grunt work.

That’s not Wanderer, Alterra’s
principal, being lazy. He and
his partners, Mathew Papunen
and Adam Singer, still love to
make all the business deals.
But Wanderer knows it’s their
ability to lead deals — and not
do some of the other work —
that has the real estate investment company growing from
$2 million in assets at the end
of 2003 to $135 million by the
end of 2007.

Smart Business spoke with
Wanderer about how to build
a staff for growth and why hiring someone else to take on
the headaches can be the
smartest move you make.

Q. As your company grows,
what staffing changes do you
need to make to keep up?

We’ve never done a random
hire; everyone that’s ever
come to our group has been
recommended through an
associate or friend, and that’s
something I will do differently
going forward. We need to
branch out more and accept
the fact that we’re not going to
have a personal relationship
with everyone that comes into
our company.

Our focus right now is also
adding more years of experience to our board and our top
end. We’re looking for people
now that are going to need
less training and that are going
to bring value the day they
arrive, and we’re willing to pay
for it at this point.

We all appreciate when
someone comes to the team
that adds immediate value,
and while it’s great to have the
energy of a young, green guy
who is fired up on 12-hour
days and seven days a week,
at this point, it’s more helpful
to have some gray hair in
there and have someone who
has got 10, 20 years in the
industry and can really bring
the contacts and the past
experience to the table.

Q. Along with adding experience, what other
staffing changes are you
making to keep your
growth moving forward?

We’re always trying to
find ways to streamline
our procedures, and
we’re always looking for
intelligent third-party
partners to help us
move faster. Recently,
we’ve been finding people that we can out-source some tasks to.
We’re finding professionals who fill those
niche requirements at a
cost savings to us.

Q. Many leaders have
a problem letting go and
outsourcing duties. How do
you learn to trust a third party
to take over those duties?

I have no problem with that,
I like that. I’m trying to work
smart, not hard. I don’t need
minutia in my life if I can get
rid of it. I want it gone because
I want to focus on deal points;
I think that’s where our money
is, and that’s where our attention should be.

I don’t have any problem
with the idea of letting someone else take over in what they specialize in. We should
be focused on making deals,
not on little things. I have
always felt real good about
that as long as I feel like the
party is trustworthy and
strong.

Q. How do you know that
those third parties fit your
company values?

The standard procedure is
any major decision we make,
we always look for three of
the top recommendations. So we call everyone we know in a
town, and we know a lot of
people in every town we’re
working in now, and I’ll call
three people I respect and ask each one of them for their top
picks for that particular job.

Say we’re looking for a new
property manager, I’ll say, ‘OK,
who’s the best guy for this
neighborhood?’ and they’ll
each give me a name and I’ll
meet each of those people the
next time I’m in town.

You pick up on company culture and who’s right for you
from there pretty easily. I can
tell you we’ve never had a tie;
it’s always clearly one person
who stands out as the right
one for us.

Q. How has that helped your
company grow?

We love it, we look forward
to it because it’s less headaches for us, and we find
when we use a specialist in
any capacity, they are just better at it than we are, they do a
better job, it costs us less, and
we don’t have the headaches.

It’s really the ideal scenario. I don’t know why people fight that so hard. I see
people just clinging to this
control, and I don’t know
that that’s really control. I
feel like that’s brain damage,
and it really is going to get in
the way of growth. We
shouldn’t be caught up in
details that we can hire out
to solid third-party partners.

The goal is to do deals if
you’re trying to make money.
If you own real estate, you
can’t own very much if
you’re going to run it yourself; you can own one building if you run it yourself. If
you want to do more business, you better learn how to
hire people, and if you want
to do a lot, you have no
choice. <<

HOW TO REACH: Alterra Capital Group, (305) 350-9489 or www.alterracapitalgroup.com

Vision plan

It may sound like a textbook example, but John E. Matuska
doesn’t care. He wants you to think about Tylenol.

That’s because Matuska, the president and CEO of Mercy
Hospital, knows that even though the 1982 mass recall of
cyanide-tainted Tylenol capsules by Johnson & Johnson leader
Jim Burke is an oft-used example of strong leadership that doesn’t mean you can’t continue to learn from it.

“That has become a classic case on how you act during a crisis
and how you put your missions and your values above profitability,” Matuska says. “When he made the decision to recall every
Tylenol bottle, it cost them hundreds of millions of dollars. But if
you look at their credo, their first priority is customer safety.”

Integrity like that is something Matuska says will get employees on
board with your vision. And when you head up a nonprofit Catholic
hospital like Mercy, part of the multi-institutional health system
Catholic Health East, Matuska will be the first to tell you it can be
tough getting people to fall in line.

“This is a very difficult market,” Matuska says of being the only
Catholic hospital in Miami-Dade County. “We are a solo hospital,
and in this market, we do not have the leverage that the bigger systems have.”

With that in mind, Matuska has to go through a very refined
process when it comes time to roll out his new vision because there
is little room for error at the $300 million hospital. And it all starts
with opening the lines of communication with his 2,000 employees,
holding them accountable for their portion of the plan and then
leading with integrity.

Get help with your story

If you want people to work for your vision, Matuska says you better communicate with them as you’re building it.

“You have to have open communication with the staff to include
them in all of your key processes like strategic planning, for example, and budgeting and development of programs,” he says.

His reasoning is simple; if you aren’t communicating with your
staff members, they are going to come up with their own ideas of
what’s going on in a new plan — and it’s not going to be pretty.

“You cannot communicate enough,” Matuska says. “The more
you communicate, the better off you are in dispelling rumors.
Rumors fly around all the time, and they take on a life of their own.

“One of the most important objectives is communicating
effectively with people in the organization because people
can’t follow you if they don’t understand what your vision is
and if they don’t understand what’s going on. The more effective you are in communicating, the better you are at coalescing
people to have this common vision.”

That communication process needs to start with a short, core
idea that they can understand.

“You really have to keep your vision statement 25 words or less,”
says Matuska. “Otherwise people don’t read it, or they don’t understand, and you have to keep it as simple as possible.”

With that short vision in hand, you communicate where you want
to go and let them fill in the gaps. From there, you do the other big
step in communicating: You listen. Matuska and his senior leaders hold leadership retreats on strategic planning each year, and
they invite physicians from the hospital to get the view from
the front lines. They also invite each program director to see
what their needs are. With the retreat focused solely on fitting
those needs into the strategic plan, Matuska comes out with a
plan for Mercy that reflects the greatest needs of those on the
team.

“In other words, we try to get a better understanding of what
their needs are, and we incorporate that into the budget to the best
of our ability,” he says.

To further his attempt to get people talking, Matuska also does
several town-hall meetings a year where he makes it a point to get
in front of all the employees — and he means all of them. With all
the different shifts at the hospital, and the different schedules of its
2,000 employees, Matuska makes a stop on each shift and during
weekends.

“It’s their opportunity to communicate with me directly, and I
generally have a little presentation about the hospital, and then I’ll
open the floor to any questions that they might have,” Matuska
says. “We take notes about issues and concerns, and we go back
and try to get to those.”

Doing those town-hall meetings isn’t easy, but to roll out a vision,
communication has to be job No. 1.

“When you are running 24 hours a day, 365 days a year, and
you’ve got people, for example, who only work weekends, it’s very
challenging to try to communicate with everyone,” he says. “I just
block off my schedule and do the meetings around the clock, all
three shifts and on weekends,” he says. “You have to make time to
communicate.”

That time will eventually reap benefits, Matuska says, because of
the efforts employees will put forward in return.

“They want to participate, and they want to have a voice, and
they are extremely important to help us understand what the
needs are,” he says. “It empowers them to be proactive, and
they have some very good ideas and suggestions. They feel
part of the process, and because they are part of the process,
they become empowered to make decisions on how to do
things.”

Create accountability

At the core of Matuska’s vision is a desire for everyone to be
accountable for their actions. After all, if you have employees
involved in your vision-building process, they should feel attached
to the plan. From there, it’s a matter of tying that to tangible data.

“It starts with the vision that everybody has to understand and it
starts the moment an employee starts,” he says. “They have a
responsibility in helping us accomplish that vision. You instill that
in the employees, you instill that in leadership, you put the programs in place to achieve that, you track it, you monitor your success, you make changes and do whatever you need to do, and you
keep on tweaking it until you get better.”

Hitting employees with accountability when they walk in the
door is key to Matuska. He doesn’t hesitate to show a new employee that everyone is crucial to hospital function.

“When I give orientation, I talk about our vision statement,” he
says. “Then I try to make them understand that no matter what you
do, unless everybody works together as a team, we’re never going
to succeed. I tell them that if one person doesn’t do their job, it
probably affects the ability of 10 other people to do their jobs. You
set the stage by letting everyone know that they are important, and
it doesn’t matter what kind of job they have, what really matters is
they come in every day and give it their best shot.”

Matuska also puts the onus on his leaders to set the stage for
accountability with everyone at Mercy. To ensure that all levels
are doing their jobs, Matuska gets data from both patient satisfaction surveys and employee satisfaction surveys. The
patient surveys give an idea of the gaps in the hospital’s overall ability, the employee surveys help pinpoint the weaknesses
of managers. Once these weaknesses are found, the most
pressing ones are put into an action plan. The idea is to check
in on a quarterly basis to see how someone is doing on those
weaknesses — and give them goals to improve on.

“They’re detailed reports that break down each department
with each question, and each manager gets a copy of that, and
then they are held accountable for reaching certain goals,”
Matuska says. “We get a breakdown by manager of employee
satisfaction in their units or departments, and it breaks it down
the areas where they scored highest and where they scored the
lowest, and we ask every one of them to give an action plan as
to how they are going to improve employee satisfaction in the
future.”

The surveys give the benefit of pushing change and seeing
those who just can’t make changes. When an employee fails to
live up to his or her action plan, the employee is put on a probationary period as a last-ditch effort to help that person
change. If he or she can’t make the change, Matuska knows it’s
time to go another direction.

Following up with those action plans not only helps to weed
out those who can’t succeed at Mercy, it also validates the
efforts employees put in to give feedback to make positive
changes and makes them feel comfortable giving feedback.

“It validates the fact that the surveys are important and that
we need their feedback if we are going to make Mercy a better
place to work and a better place for our patients,” Matuska
says. “If you just do surveys and don’t do anything about them,
people are just going to take them for granted or not really take
them seriously, and then why even bother.”

Light the path

If Matuska wants his vision to be centered on accountability
and communication, then there is one thing he must do: Do
everything that he tells employees to do. To get a vision to
work, employees have to see that you are really walking the
right path.

“You have to have integrity,” Matuska says. “If you don’t have
integrity, people will not trust you, they will not follow you,
and you will not get anything done.”

That means that when you put out a new vision, you have to
adapt your leadership style to fit those things you ask employees to do. Like Burke did at Johnson & Johnson, that involves
sticking to the core values that you have laid out for the company.

“Any good executive today has to have a situational leadership style,” Matuska says

“Everything we do emanates from that mission statement and
those core values, how we act, for example, how we treat each
other, how we treat patients and how we treat visitors — all of
that.

“People watch how I behave, how I treat people, what I say,
how I say it, and then judge whether or not I’m living those
core values. If I’m not doing that, and I don’t set the example
or my behavior or my decision-making is inconsistent, then
other people are not going to believe that we’re really living
those core values.”

After all, you can send out any vision you want for a company, but the way to make it strong is through leadership. Though
other places may have quick runs at greatness without strong
leadership, Matuska says the eventual fate of a company rests
on the integrity of its leaders in following the course of a
vision.

“The leader sets the tone for the organization,” he says. “If
you look at all the organizations that have gotten themselves in
trouble, particularly on the business side, if you look at the
Tycos and Enrons of the world, everything emanated from
leadership.

“If you don’t have integrity, and people don’t trust you, and
you’re not open and honest with people about what the issues
are, then you really can’t lead. In order to be a leader you have
to have followers, and if no one trusts you, then you are not
effective as a leader.” <<

HOW TO REACH: Mercy Hospital, (305) 854-4400 or www.mercymiami.org