Kevin Vasquez and Henry Schein Animal Health stay sharp in the face of challenges to remain an industry leader

Kevin Vasquez’s biggest fear is complacency. So he strives to maintain a sense of urgency as chairman, president and CEO of Henry Schein Animal Health — and it’s working.

“Being No. 1 is one thing. Staying No. 1 is quite another,” he says. “The only way you can do that is to keep sharp — to stay in tune every day to what’s happening in your business and what the competitors are doing to try to unseat you from that position of being No. 1.

“We’ve got a team that stays that focused and we’ve never rested on our success. Consequently we’ve been able to push our business forward.”

Under Vasquez’ leadership the company has grown its annual sales to $1.7 billion, capturing 37 percent of the U.S. companion animal market segment.

It also has been sold three times, most recently becoming a division of Henry Schein in 2009.

But when you represent 450 channel partners, selling 50,000 products to 26,000 clients, there are always challenges, Vasquez says.

“Sometimes you’re faced with challenges that you can’t do much about,” he says.

“But you can still respond to them. You can still make changes within your organization and within your own strategy and tactics to face those challenges that you really had no control over,” Vasquez says.

Here’s how Vasquez and his leadership team face problems, taking a step back and finding a way to turn the situation around — and remain the No. 1 veterinary distributor in the animal health industry.

 

Heading to the war room

No matter when it happens, losing a major customer is unfortunate, but it’s how you respond that tells how much effect it will have on your company.

Henry Schein Animal Health was blindsided when it lost a major diet food line after a supplier decided to eliminate distribution within the industry and go direct to the end user.

“They pulled the plug about mid-year of that particular year, ” Vasquez says. “It was going to impact our business very negatively because we were tracking to achieve approximately $100 million in sales with them for that year.”

Most recently, winter’s polar vortex reduced pet owner visits to veterinary clinics in the first quarter to the lowest point in 10 years. The number of warehouse “closure days” due to extreme weather also was more than the past 10 years combined.

It was two different types of challenges, but Vasquez says the response was relatively the same.

First, he assembled the leadership team to assess the situation thoroughly and collectively identified ways to overcome the challenge, through both internal and external strategies.

“I have always maintained that character is not created via adversity, it is actually revealed there,” he says. “This is where leadership is paramount.”

It takes a leader to pull the whole team together in a room, allowing everyone to throw different ideas up against the wall from their vantage point, and see if any of them stick, Vasquez says.

“We do a complete analysis with what this all means,” he says. “And then once we understand and get our hands around what the impact is if nothing is done at all — and we just basically let it happen, that’s one scenario — then we develop two or three other scenarios with different solutions to that problem or that challenge that can help lift us out of that situation.”

For example, when Henry Schein Animal Health lost $100 million in future sales, Vasquez says the answer to making that up wasn’t a one-system approach.

The company reached out to the competing lines of the supplier that walked away to develop tactics to try to capture that market share. It also examined its entire product portfolio to find other segments with high profitability to help offset the budget gap.

With the polar vortex, it would have been easy to accept the circumstances as out of the company’s control.

But Vasquez says it provided the company the opportunity to create business tools to improve internal performance as well as give customers communication strategies to improve client visits.

Peas in a Pod: Bill Frantz’s exit from Sandridge Food Corp. leaves friend Mark Sandridge to continue their legacy of success

Bill Frantz was a tax guy. He had no idea that he was about to become a potato salad guy.

“I was with Ernst & Ernst,” he says. “I went to law school, so I’m a lawyer. I intended to be a corporate and tax lawyer — it’s kind of where I thought I would head.”

“I think we had caught him right after tax time when he had probably worked a 90-hour work week and decided he didn’t want to be in that field for much longer,” says Mark Sandridge, CEO, of Sandridge Food Corp.

The food manufacturer, which was founded and owned at the time by Vincent R. Sandridge, was a client of Frantz’s. One day, the father and son approached Frantz about working for them.

“We had a beer, talked about it, and next thing you know I’m leaving Ernst & Ernst, and I’m going out to Medina to make potato salad,” Frantz says.

He was 30 when he started as vice president of finance at the 32-year-old Sandridge Foods.

“We probably thought we knew a lot more than we really knew,” Frantz says. “I found out it was a lot of hard work.

“I didn’t know much about the industry, and the business was pretty small, but I felt like it was a chance to make a difference. It was a chance to be a businessperson and make something happen, make something grow,” Frantz says.

He recently ended his career as president of Sandridge Foods, having helped the small company grow exponentially. Here’s a look at what it takes to drive that growth.

School of hard knocks

It’s often said the peaks and the valleys of a seasonal business can get to be too much, leaving companies scrambling to earn enough for a whole year in just a season. For some, it’s a question of survival.

When Frantz started, the company was small, doing most of its business — potato salad, coleslaw and macaroni salad for picnics — between the summer holidays.

“During the busy times, Mark and I were out in the plant making potato salad to try to serve our customers because we couldn’t ramp up that quickly,” he says.

Sandridge Foods had 60 employees then and just as many products, operating out of an older, 18,000- to 20,000-square-foot building.

Realizing the company couldn’t survive selling such seasonal products, Sandridge Foods expanded its lineup — pasta salads, some upscale potato salads. But the big find came when the company got into the soup business 20 years ago.

“Our business was the first warm day of spring until the last cold day in the fall when sales dropped off,” Frantz says. “We talked to a guy in the soup business and he said his business picked up the first cold day of the fall and drops off the first warm day of spring. So we started to diversify in fresh soups. Now we’re one of the leaders in the country in the fresh soup business.”

Today, the company has 600 employees working at its Medina and Morton, Illinois, plants.

“From a product standpoint, potato salad alone was 50 percent of our total volume. Now, potato salad is down around 15 percent of our total volume. We have 500 different products that we make today. And we serve customers all over the country,” Frantz says.

Putting it together

Adding the capacity to produce a wider variety of products certainly helped Sandridge Foods grow its offerings. But a new sales approach contributed to the proliferation of those products.

“When I first started, we used to go into a sales call and we’d take all of our stuff with us — here’s all my products, and here’s my price list; ‘What do you want to buy?’” Frantz says.

“I had to learn how to go sell, to be honest with you, because I was a food scientist by training,” Sandridge says. “And anyone who’s an engineer or a scientist wants to sell the features and benefits, but that’s bologna. People don’t want to buy features and benefits. They want you to learn what it is they need and then, by doing that, you come home and start developing products.”

Sandridge elicited the help of a sales coach who had a system to discover what the consumer really wanted.
“I’ve sent everyone in management to this sales training course because it’s just psychology; it’s not sales,” Sandridge says.

Now the company’s sales process looks completely different.

“We’ll go in to a customer today and show up at the first meeting with nothing other than a list of questions. And they say, ‘Well, where’s your samples?’ How would I know which of the 600 items you wanted me to bring?” Sandridge says.

Developing and producing the products Sandridge Foods needs for its customers requires a diverse team of people.

“If you’re not going to be the low-cost, high-volume producer, you have to pick a different strategy. And we picked the strategy that said we want to be more important to our customers. Therefore, we have to have more flexibility,” Sandridge says. To do that, the company has a culinary team and an innovation team that is able to discover what the customer needs and react.

“We spent a long time building a nice team of people that fit the puzzle,” Sandridge says. “Running a business is a big puzzle. Trying to fit all the support that you need here under this roof to fulfill the customers’ desires is our challenge. And that’s what we did very well.”

Losing a piece of the puzzle

Exit strategies are important as a planning document, but how do you predict what the thought process and emotional reactions will be?

“As you get in business for a while, you start thinking about where you’re headed,” Frantz says. “You think, ‘When is the right time to leave?’

“I’ve been with the company 29 years. I’m 58 years old. So I’ve been with the company half my life. The company is in a great place. We’re in the best financial position we’ve ever been in. We’re the strongest company we’ve been. We’ve got the best people in place that we’ve ever had, and it just felt right to me that now was the time to leave.”

Frantz retired from Sandridge Foods in April, leaving the company he worked most of his life to build, and his long-time friend.

“I will miss him. He’s been a friend for a very long time,” Sandridge says.

“You spent the better part of your life with an individual every day, going through the wars, going through the tough times and the good times, and there’s a lot of emotion to it.”

The two, however, had been preparing for Frantz’s inevitable retirement.

“I have a great group of people, young people, that are working in the business and a group of middle management people, middle-aged people, that are going to run the company for the next 10 years,” Sandridge says. “And then my boys will be ready, hopefully, at that point.”

Sandridge says he started putting together a succession plan nine years ago after his sons graduated from college, and it was determined they were interested in the business.

A big part of the plan was to identify people within the organization who can be the future leaders and how to prepare them for that role. So the two started by putting all the employees’ names on a list.

“We had our organization chart and we said, ‘Who can move up in the organization and where can they move up to? Who has potential and who doesn’t have potential?’ There are some people you realize don’t have potential. They’re doing a great job where they are, but they don’t have any interest or maybe don’t have the ability to do a different job,” Frantz says.

“We’ve created new positions, we’ve hired new people and we’ve promoted people. So we’ve got some homegrown, and we’ve got some new hires. We just have to find where those gaps are and figure out if there’s somebody internally who can fill the role or not.”

A transition team was also put in place, which consists of the top people in the company — “The people that should be the authorities in their particular field. That’s the group that’s going to train and school the next level of managers,” Frantz says.

Sandridge also brought on advisers specializing in sales, strategy, finance and psychology who understood the dynamics of a family run business to offer their input.

“It’s unusual to have a second generation be successful,” Sandridge says. “It’s even more unusual for a third generation to be successful. The only way I know to help prepare them is to have some really smart people who are really good professors and teachers. I wanted to make sure that I had a lot of ‘doers.’ And you need to make sure the doers can transition to teachers as they get a little more mature in their business careers.”

The succession plan the company has this time around is much different than the one Frantz and Sandridge had when Sandridge’s father transitioned out of the company.

“He just threw us the keys and said, ‘Have fun, boys,’” Sandridge says.

But the two can look back on tremendous success.

“I don’t think we would ever dream the company would be as big as it is,” Frantz says.

Though Sandridge’s dad passed away in 1999, Frantz says he’s sure he’d be happy with what they’ve been able to accomplish.

“He’d be smiling,” Frantz says. “He’d be very proud.”

Takeaways:

  • Sell consultatively.
  • Learn from your customers.
  • Plan early for major transitions

The Frantz and Sandridge File:

Name: Bill Frantz
Title: President

Name: Mark Sandridge
Title: CEO
Company: Sandridge Food Corp.

Education: Frantz has a bachelor’s degree in finance from Miami University in Oxford and a law degree from the University of Akron.

Sandridge has a bachelor’s degree in food science and technology from The Ohio State University.

What hobbies are you looking forward to indulging in now that you’ve officially retired?
Frantz: My golf game has really suffered the last five or 10 years — I’ve not played much. I used to be a single-digit handicapper. My goal for the summer is I want to get back to single digits. I’m hoping to do that by being able to play more. My fear is that I’ll play more and my game won’t improve.

Sandridge: We used to golf quite a bit, then we got busy working. I’m sure he’s going to take my money (on the golf course).

What advice would you offer the person who ultimately takes on your role at the company?
Frantz: Be honest to the people. I think most of the people would say that if I tell them something they believe me. I think, the next person to sit in that seat, if the people believe them they will do extraordinary things. You’ve got to always strive to improve to change things, make it better. If you’re standing still you’re losing ground.

How do you hope you’ll be remembered at Sandridge Food?
Frantz: I want people to look back and say Bill Frantz was a fair and honest guy. He didn’t always make the decisions I wanted him to make but he was fair and honest. And I’d also like them to say he was a pretty important person for our company to get us to where we are today. I guess if people thought those two things I’d be pretty pleased.

Sandridge: (Bill will be remembered) as an intricate part of (Sandridge Food’s) success. The company wouldn’t be here today without the two of us working as well as we did together. (Like) Batman and Robin. I was always Batman.

Bill Papariella is finding a new groove as he pilots Jet Edge International to lead the private jet industry

Bill Papariella grew up dreaming of a life spent making movies. He took the classes in high school and college that he hoped would help him achieve that goal. He couldn’t get to Los Angeles quickly enough to get started on his career in the film industry.

Unfortunately, things in Hollywood then were changing, and it was about to push the Pittsburgh native to a different path.

“I had no aspiration to go into the jet business,” says the president and CEO of Jet Edge International. “But one thing I did want was more stability. The movie business was changing pretty dramatically.”

It was the early 2000s and the major film studios were focusing more on bigger movies, leaving some of the smaller companies in the business in a tough spot.

“You just couldn’t make a living making movies outside the major studios,” Papariella says. “Maybe you’d make $50,000 or $75,000 a movie. Let’s say you made one movie a year. You’re 32 or 33 and nobody is dreaming of having kids in Los Angeles and putting them in private schools making that kind of money. It forced me to think maybe I should take a hard look at what I’ve learned and the people I’ve met.”

Papariella had earned the post of senior vice president of production and development at Universal Studios. He learned a lot about how to get things done, how to get people where they needed to be and how to stay within a schedule and a budget.

As he moved away from that business, Papariella gained quite a bit of knowledge about the private aviation industry working at Marquis Jet, NetJets and Sentient Jet. It allowed him to buy Jet Edge in August 2011 and make a go at leading a private jet business from the top.

“I almost would rather have less money to be in the movie business and say, ‘I’m in it and doing it,’ than be in the jet business making a lot more money,” Papariella says. “It was a very difficult decision. It took me probably six months to really get my head out of the business and wake up every day knowing I wasn’t in the business. I still struggle with it.”

Despite the struggle, Papariella has built a business with 75 employees and 120 full-time pilots that is taking off in a big way.

Choose your battles

Papariella bought Jet Edge because he wanted to get involved with heavy jets, planes that had large cabins and flew wealthy customers.

“That’s where the money was at, where the big boys played,” Papariella says. “It’s an area that was a little more recession-proof.”

There was a lot of money to be made, but the private jet business is not without its challenges.

“We’ve grown faster than any other company in this industry by far in the United States,” says Papariella of his business, which expects to make $125 million this year.

“That growth, coupled with the logistics of flying these aircraft has created a lot of process issues, a lot of structure issues. Those can really cripple you in certain areas if you don’t get them fixed quickly.”

One thing Papariella had to learn was how to deal with customers without losing his cool when they didn’t treat him the way he felt he should be treated.

“A lot of these guys are very terse,” Papariella says. “They want what they want. I would combat that, and it didn’t go well for me. I’ve learned to listen first and hear the clues of what it is they are really saying to me versus me thinking I hear it and being combative with them.

“I’m a Type A kid from Pittsburgh who grew up on the south side of Pittsburgh. I’m predisposed to a street fight. I’ll go there if I get angry enough. So for me, it’s a really good lesson in listening better. It’s served me well. I still could do better at it, but I’m growing in that area. I think any successful entrepreneur had better learn how to listen or they are in real trouble growing their company.”

Find the right fit

As Papariella has found his groove as a customer service provider, he has also worked tirelessly to integrate automation into his operational processes and thus reduce logistical problems.

“We’re trying to get more automated than manual,” Papariella says. “Manual leaves you more open to mistakes and scheduling errors. Aircraft scheduling errors, pilot and crew scheduling errors, maintenance scheduling errors, permit issues in China, visas, etc. Those are all things that can trip you up.

“We’re developing new software systems to help automate this process better and have a little more predictability on how we’re running things logistically.”

But even if you have the best automation system in the world, you still need good people to manage it and execute the plans. It’s another area where Papariella has learned and evolved as a leader.

“The cool thing about being an entrepreneur is you start off, and you get all these minefields in front of you, and you’re trying to hire the right guy,” Papariella says. “I had worked with my senior managers for a long time outside while I was at other companies, and they were at other companies.

“But when you grow from 12 employees to 78, there are a lot of people I don’t know. Originally, we would just hire people because we thought they fit the culture and thought they interviewed well.”

The process has changed to include a hiring committee that collaborates on personnel decisions.

“People have to interview with the committee in order to be hired and there has to be a unanimous decision by the committee,” Papariella says. “We look for you to be a cultural fit. The committee will come up with a number of action items that we want to accomplish inside the interview.”

When Papariella interviews, he likes to probe to see what kind of difficult situations the job candidate may have faced in his or her past.

“How did it work out for them?” he says. “Different lines of questions like that can help me understand how they might operate internally here. We’re much more stringent on who we’re looking at and what we want to do. For me, it’s worked pretty well. I would say nine out of 10 employees we hire now, it’s been good.”

The better you can get at getting others involved in leadership and matters such as hiring, the better off you’ll be as a leader.

“I think all entrepreneurs obsess,” Papariella says. “It’s a learned trait to let it go, but you almost have no choice but to do it because you wouldn’t survive if you didn’t. It would drive you into the dirt. For any entrepreneur, it’s delegation, good process and good structure. It will help your life and your health immensely.”

Don’t look too far ahead

You won’t find a five-year plan on Papariella’s desk, nor a three-year plan or even a one-year plan.

“When you’re growing at this level, the chance of you not changing your business plan is probably zero,” Papariella says. “I run the company off of a three-month plan right now. We hit the three-month plan, and we go into the next three-month plan. Maybe in the next year, we’ll look at a longer term goal. We look at what want to look like, the dream scenario, but we build this company on a three-month basis versus years.”

Papariella believes there are two kinds of entrepreneurs in the world. There are the startup entrepreneurs and those who have built and established their businesses and can now make more concrete plans to deal with the future.

“A guy like me, I’m trying to get to a place where we’re a viable business,” Papariella says. “We’re a good business and we’re getting better. But there are still a lot of roadblocks we have to get through. I think in the next 18 months, we’ll be a viable business. But you have to separate the two, the guys in the shoes that I’m in versus the guys who are established.”

If he were to develop a three- or a five-year plan, Papariella says there is almost no chance he would be able to stick to the points of the original plans.

“The deals you’re cutting with partnerships and sales will inevitably change the dynamic of where you’re going,” Papariella says. “A lot of entrepreneurs in my shoes would feel very similar that it’s a struggle to meet the three- to five-year goals, so why do it?”

As Jet Edge continues to grow, Papariella is firmly focused on making his business a leader in the private jet industry. But he has not completely abandoned his childhood dream of a career in Hollywood.

“Frankly, I probably will go back to it at some point,” Papariella says. “Now is just not the time. But I have a love for that business. I know it very well. I’ll probably get into it a little differently than I did the last time.”

Takeaways

  • Get better at being a good listener.
  • Involve your team in the hiring process.
  • Don’t get carried away with your future.

The Papariella File

Name: Bill Papariella
Title: President and CEO
Company: Jet Edge International

Born: Pittsburgh

Papariella on not being starstruck: Coming out of the movie business, I had princes of countries pitching me stories. I’m sitting in a room with a guy who is worth $10 billion, and he’s pitching a story that he wants to be made in Hollywood, and I’m the decision-maker. So being in the movie business, you work with people at a very high level because everybody wants to be in it. So I’ve never been starstruck.

Papariella on the enjoyment he gets from his work: There’s not a day that goes by that I don’t want to be here. Even if I’m feisty, it doesn’t mean I don’t want to be here. It just means I want to win.

Papariella on his introduction to the private jet industry: I had a friend who worked for the PGA Tour, which had signed a jet company as a partner. The CEO was looking for an inroad into Hollywood. So my buddy came calling and said, ‘We just signed this new partner. You should really take a look at it. It would be a really cool thing for you.’

I had never been on a corporate jet before in my life and had no interest whatsoever. Working for the studios, the big guys flew private, but they would never take the mid-tier executives on the plane. So I said no.

After some convincing and meeting the CEO, I finally agreed, and I joined a company called Sentient Jet in 2006. That’s when it started. At the time the economy was booming. Even people who shouldn’t be flying private were flying private. You could trip and fall into a jet deal back then.

It’s all positive performance at Cadence Bank as Paul Murphy builds a strong company culture

Paul Murphy, CEO and president, Cadence National Bank

Paul Murphy, chairman, Cadence Bank

When Paul Murphy was named CEO of Cadence Bancorp LLC, a merger of three financial institutions, he knew the staff would be asking, “Who is this Murphy guy who just bought the bank, and what is he all about?”

But he was not taken aback. He had prior experience as the CEO of Amegy Bank of Texas for 10 years, and the task of building one culture out of three was not an insurmountable one for him.

Murphy’s challenge was to bring Cadence Bank, a 127-year-old institution; Encore Bank of Houston; and a failed bank all under one nameplate. He believed it was first a job of gaining trust among employees.

“People are willing to give you the benefit of the doubt, but to really become committed and trusting, you’ve got to pass the time test,” he says. “You have to get to know them by sharing past experiences, background, how we approach business from big picture things like what type of culture are we trying to create; also in smaller things involving execution and delivery of service and the customer experience.”

While in such a situation you can’t expect that all three entities would have stellar company cultures, you can take the best of what there is and build on it.

“All three banks had elements of good cultures that we wanted to merge,” Murphy says. “But we wanted to raise the level of commitment to values and goals in all cases. We really wanted to hammer home the importance of customer service. We tried to do that in a way that is engaging and memorable.

“I think we are making great strides; we are generating a lot of new business and new revenue.”

With annual revenue of $240 million and 1,400 employees, Cadence Bank is showing the benefits of a strong company culture.

Here’s how Murphy, who in 2011 was named chairman of Cadence Bank N.A., fashioned a new culture by living it, meaning it and being committed to it.

Make it a good place to work

Murphy had previous experience with a merger when he helped found Amegy Bank in 1990 as Southwest Bank of Texas. With the bank chairman, he bought other institutions, including Klein Bank & Trust and Lone Star Bank and melded them into the fold. It gave him an edge when it came to Cadence Bank, but it still took some hard work.

“It is a combination of spending a lot of time together sharing ideas,” he says. “Credibility is of paramount importance. And communicate, communicate, communicate. You’ve got to bring the words to life. That creates the environment for the culture.”

Driving culture requires talking about it from the top, but it also can occur in situations like conference calls while you look through the nitty-gritty processes to be sure you aren’t micromanaging.

“Have adequate controls, but allow people still to be empowered and able to get their job done — in a sensible and timely fashion,” Murphy says.

Building a company culture is a long-term process that has to be nurtured constantly.

“To me, the culture is much more than posters on a wall,” Murphy says. “It is what you do every day. And when your company’s culture aligns with your personal values and your shared values, adoption is really quite simple.”

To determine the best aspects of the culture to save and nurture, look for those that make the company a good place to work.

“It’s about taking care of employees, providing them with opportunity and chances to advance, grow and expand their careers,” he says. “I think the customer service focus and intensity is something that really worked in all our three cases to be even more responsive — better products, bigger investment in technology, and providing tools to customers. That makes that a more robust product offering.”

Have a culture with a can-do attitude

In a merger, you may have to hire anew to fit the culture you’re creating. That is often a silver lining in the dark cloud.

“We have been fairly aggressive in terms of hiring commercial lenders, for example,” Murphy says. “Where the prior banks had small, almost nonexistent commercial lending competency, we have hired about 65 bankers with extensive commercial experience. That’s the most fun part of the job because you have new talent that is excited about being here, and they are on fire; they can’t wait to get to work. That’s pretty cool.

“We have been really successful in that regard.”

Murphy says he feels Cadence Bank’s culture plays a part in attracting new talent.

“For a highly motivated team of bankers, this is something that they would value, and they’re choosing where they want to be,” he says. “All these people who have joined us to help grow the business — the talent inflow has been phenomenal.

“There’s one man I have been trying to hire for 20 years. He was well-placed and doing well. His bank went through a series of transitions. To be part of something that is freshly, strongly capitalized, that has a great board of directors, a good management team, and to have a culture with a can-do attitude — so yes, this is something that a superstar team saw as a different place to work, a better place to work where I can do a better job for my customers and be more successful and be happier.”

If you’ve hired a new team, the employees’ first thoughts may be about the sincerity of the new company they’ve just joined.

“People are first going to say, ‘How sincere are these people about this mission? This goal? Who are they; are they really sincere? Are they genuine? It sounds good. I am going to give them the benefit of the doubt,’” Murphy says.

“But as time passes, you’ve got to be consistent,” he says. “Then you circle back the second time and the third time. And then people will say, ‘You know, they seem to be really committed to this. They talk about it all the time. Maybe they do mean what they say.’”

The bottom line of a good culture is that it drives revenue and profitability.
“One of my favorite sayings ever — how your employees feel is eventually how your customers will feel — leads to a kind of enlightened self-interest,” Murphy says. “Your employees feel good, and know that this is a good place to work. The company cares about its customers and is sincere about doing a good job.”

Put a focus on attitude

While companies talk about enjoying your work and having fun at your job, Murphy knows there are realistic limits.

“It just can’t be ‘rah rah’ throughout the day,” he says. “I like enthusiasm, but I like sincerity and thoughtfulness as well. If you could put all of those together, then you have something that people can really take hold of.”

If you draw a flowchart about company culture, those three attributes should be radiating from one database called “attitude.”

“Attitude is a huge part of culture,” Murphy says. “Give me a person with a great attitude and a good work ethic and I think the sky’s the limit. But someone with a difficult attitude who’s not willing to be flexible — it’s going to be much harder for that person to be successful.”

While you may expect some employees to step right up to the company culture and engage to the fullest, others are bound to be less engaged. It’s important to discover the attitude. Subpar attitudes can weaken the culture.

“That is when you have to hold people accountable,” Murphy says. “Accountability is an important part of our culture. If we are not getting the job done, we need to address the issue and find the root cause. If it is that people aren’t well-placed, we have to address the issue. Turnover is never easy, but it is sometimes required.”

Murphy has found that by weaving the aspect of company culture into the annual employee evaluation process, it sends two messages to the employees. The first one involves the employee’s engagement with the culture and the second one communicates the point that the company places a high value on company culture.

“Our annual evaluation process is subjective: ‘Do you embrace the culture? Do you show a good attitude? Are you on board with what the company is trying to accomplish?’” Murphy says. “It is intangible in terms of how it is numerically rated.

“I think they see that if we are putting this into their evaluation, it must be meaningful to them [the bank] or we wouldn’t be going on about it so much,” Murphy says.

“Culture is a commitment of time and energy and training materials. But I think it is worth every penny. I think it is one of the best investments that you can make in the future of a business.”

Down the road, the company culture should continue to be a big part of the leader’s job, Murphy says: “Just continue to communicate, to live by example and to follow-up and follow-through on the little things around customer service to be sure that you are getting resources to people who can resolve customer service issues.”

How to reach: Cadence Bank, (800) 636-7622 or www.cadencebank.com

Takeaways

Make it a good place to work
Have a culture with a can-do attitude
Put a focus on attitude

The Murphy File 

Paul Murphy
CEO
Cadence Bancorp LLC
Chairman

Cadence Bank N.A.

Born: Vicksburg, Miss.

Education: My undergraduate degree is from Mississippi State University, and I have a MBA from the University of Texas at Austin.

What was your very first job?

My first job was washing windows at the bank that my mother worked in. I am from a banking family. Some of my uncles, my mom and my grandfather were bankers. I was probably 13 or 14. I also had a lawn-mowing business where I had several neighborhood lawns. What did I learn? I think the motivation to generate revenue and have more spending money and more impact on your quality of life or work ethic. I think I learned early of the importance of having a good work ethic, of being responsible for taking some financial responsibility for myself as a young person — that was a very good thing for me.

Who do you admire in business?

I love entrepreneurs. These people go out and start businesses, risk their own capital and walk away from a good job and safety net to create jobs, to bring new ideas to market, to change the world. I think the folks who are willing to do those things are extremely impressive and we should celebrate entrepreneurs more than we do.

What was the best business advice you ever received?

Work hard. Be persistent. I think a big part of success in life is being consistent, persistent and effective and follow through on the task ahead. I think that is really from my mom, Sally Wailes. What I learned from her is to be flexible, to not take yourself too seriously, and to have a good attitude even when things are not going your way. Look for the positive things in life; look for the bright side and persevere.

What is your definition of business success?

I think it is a couple of elements. One, to be financially comfortable would be a measure. Doing a good job for customers and creating value for your customers. A tight ship comes to mind. Being well-run, being accountable to shareholders, regulators, all the third parties and vendors. You want to be a good partner with all those groups which you encounter, and being a place that has high integrity and consistency.

 

 

 

 

 

 

When it sounds like a plan, Jorge Gonzalez executes it, and City National Bank has the best year ever

Jorge Gonzalez, president and CEO, City National Bank of Florida

Jorge Gonzalez, president and CEO, City National Bank of Florida

Four years ago, Jorge Gonzalez didn’t have to be told that economic factors were not conducive for banks to report good earnings. There were indicators everywhere: the economy was weak, the real estate market was weak, interest rates were down and regulatory costs were up.

While those uncontrollables made it challenging to reposition City National Bank of Florida, of which he was president then and later CEO, Gonzalez had a plan. And it worked. Last year, the bank had the best year in its history. Net income was $190.2 million, compared to $34.4 million for 2011. Revenue for 2012 was $190 million.

The success caught the eye of several suitors, and Banco de Credito e Inversiones of Chile in May purchased City National Bank from Bankia of Spain for $882.8 million, which was 1½ times its book value.

Gonzalez’s plan centered on having the right foundation in place to create the scalability and the proper infrastructure to support growth.

“You can’t just start to grow organizations,” he says. “So many times when we run across companies that have very good growth plans on the top line relative to how they are going to acquire new business, they haven’t necessarily thought through how they are going to be able to absorb and manage it once it is in the door.”

Gonzalez also issues a caveat. There is more to a plan than words on a piece of paper.

“You can have the best business plan in the world but if you don’t have the right people to execute the plan, you’re not going to get home. You’re not going to be able to get across the finish line.”

Here is how Gonzalez made sure the foundation of the organization, the backbone, the people and the technology were all in place and had the scalability to create a larger organization.

Build a rock-solid foundation

There is an undeniable benefit to having an organization’s foundation in place before successful growth can occur. Gonzalez envisioned a simple “if-then” approach.

“This allowed us to do to things,” he says. “No. 1, accelerate the growth because we were ready to take it on, and No. 2, navigate the less-than-easy landscape economically because the different ingredients were in place that were necessary to be able to execute our plan.”

When you are about to build the foundation, identify the empirical formulas.

“The foundation to any business is, No. 1, people,” he says. “In our business, I like to say that our money is not any greener. It is about having the right people in the right seats.

“So we spend a lot of time making sure that we have people who have the right skill sets, the right experience, and very importantly, are willing to operate within our culture.

“It is one thing to hire good people, but if they don’t fit into the organization’s culture, then ultimately you don’t have people performing at high levels.”

When repositioning a company, you need to have the strength and presence to lead you through some turnover.

“We had turnover of probably 50 percent of our employee base over the last four years as we’ve repositioned the company,” Gonzalez says. “But the 50 percent turnover was intentional. Sometimes the people that were in our organization had the right skill sets for the company at that period of time, but may not have had the right skill sets for the company that we were trying to build and the objectives that we are trying to reach three or four years later.

“It is just too important of a factor to not deal with.”

As for the “50 percenters” who made the grade, they need to understand how the culture has been redefined. The values need to be clearly defined and presented in a bottom-up approach.

“I wanted everybody to participate in trying to define and agree to what that culture should be,” Gonzalez says. “We made that a very critical component of the things that were in our plan that we needed to work on.”

The effort should be about defining the culture, having engagement, and everybody making that decision and sticking to it, he says.

“I think a lot of organizations do a good job of talking about core values. They do a good job about talking about culture but then in the execution of that, it is lost.”

Empower and measure

Empowerment is a big part of culture because people need to be empowered to take a sense of ownership of their respective businesses. Culture in many ways is the motivational quotient that may be the difference between business success and failure.

“The leader needs to be able to delegate the decision-making and the authority to the people who are executing the jobs day in and day out,” Gonzalez says. “Give them the ability to make decisions within certain parameters. Outside of those parameters, then we need to have a sit-down conversation. But they need to feel empowered to be able to go run the business.”

Another way to look at the parameters is to think of them as guardrails.

“We kind of set guardrails for ourselves,” he says. “In other words, we want to operate within these rails so we give people the leadership to say, ‘Hey, between these ranges, go do your thing.’”

It is essential to have measurable objectives that you want to accomplish over a period of time.

“I am a big believer in that if you don’t measure things, they typically don’t happen,” he says. “So that is also part of going back to culture. Each line of business has key performance indicators and metrics that we focus on because, again, if you can’t go back and assess or measure relative to what you set out to do, then how do you assess whether you are able to accomplish that or not?”

Write into your culture a goal of adaptability, about how important it is to be flexible.

“If you are not adapting, not changing, I think you are almost falling backward,” Gonzalez says. “Part of our core values is embracing change. We have to be able to adapt, and our plan can’t be so rigid that it doesn’t allow us to adapt with whatever uncontrollable wolves are out there.”

Much of the culture is really just about standard operating procedures.

“There is nothing I’m talking about here that is exotic in its execution,” Gonzalez says. “It is more about executing simple blocking and tackling techniques and how to operate a business.

“But sometimes people get lost in the complexities and forget about the basics. So focus on things that are really creative to the organization, things that really move the needle, and try to execute those to the best of your capability.”

Stress accountability

When accountability is discussed when talking about an organization, it also means employees being accountable to each other. Its value rivals that of family bonds.

“You are part of a team,” Gonzalez says. “If you are not doing your job, you are letting the company down but you are also letting down everybody else around you.”

Try to make sure people understand that their contribution to your plan is key to the success of everyone else around them.

“If they truly believe in the culture and that they are part of this big family, then they are letting the family down,” he says. “Your job is to create that accountability both from a leadership standpoint but also from a peer standpoint so that everybody feels there is a responsibility to the best of their capability.”

Accountability comes in many different forms. Gonzalez uses a lot of real-time coaching, assessing, and a lot of feedback.

“We take the opportunity when we see somebody doing something right to recognize them right away,” he says. “When we see somebody who needs help, we want to deal with that situation right away. I think sometimes there is a tendency to want to put that on your to-do list and unfortunately, you never get to that list.”

To make the feedback process as successful as it can be, it should be a continual process.

“It’s not just a once-a-year process whereby people sit down for 30 minutes and get their performance review and then go back to doing what they were doing,” Gonzalez says. “We try to make it an ongoing part of the management style over the organization.

“In other words, we want people to be given real-time assessments of how they are doing. And it’s not just the things that need improvement. It’s about reinforcing the correct behaviors and the results. We spend a lot of time on that.”

For the underperformers, you may either coach them up or coach them out, but always prepare for the unexpected.

“Make sure you always have a list of people that you are talking to in the marketplace that are potentially good hires for the organization. If you have an unexpected departure, you don’t want to just hire quickly,” Gonzalez says. “If you are not prepared with a list of people who you have been recruiting over a period of time, then you are probably more prone to make a quick decision that may not be the best one.”

How to reach: City National Bank of Florida, (800) 435-8839 or www.citynationalcm.com

Takeaways

Build a rock-solid foundation.
Empower and measure employees.
Stress accountability among workers and management.

The Gonzalez File 

Jorge Gonzalez
President and CEO
City National Bank of Florida

Born: Miami, Fla.

Education: I got my bachelor’s degree from Florida International University in Miami in finance and international business and am a graduate of the Kenan-Flagler Business School Executive Leadership Training program at the University of North Carolina.

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

My dad used to make custom kitchens for people and that was kind of a part-time job. The one thing that it taught me was to have a significant work ethic and the discipline to make sure that the things that have to be done are done. And the other thing was that my dad always taught me that you have to take care of your client. You have to make sure that when you deliver a kitchen that it is of the quality they expect it to be.

Who do you most admire in business?

I do read a lot of former GE CEO Jack Welch’s books. He has a very simple style of management which I can relate to. I like the things that he says, and I’m not sure how much of those, depending on the business, you can execute or not. But I really admire people who are entrepreneurs and take the risk to start a business based on an idea. The luxury of my business is that I get to meet so many different business owners and listen to their stories of how they started out of their garage or just ran across a business idea and now they have this $50 million or $100 million businesses. The entrepreneurial spirit and perseverance and the unwillingness to give up, and the willingness to take risks to me are characteristics that I find extremely recognizable.

What is the best business advice you have ever received?

No. 1 is don’t give up; persevere. That’s from my fathers, Jorge Gonzalez. I don’t think there is a substitute for hard work; the relentless desire to achieve something — that cannot be replaced. Going back to people, that’s somewhat in your DNA, in my opinion. I think you do you have that or you don’t. It’s very hard to instill. It can be done, but it doesn’t come easy. The other thing is always do the right thing, in other words, always take the high road. I think those are two important pieces of advice that I try to live by every day.

What is your definition of a business success?

I think so many times you measure success on your own terms, but ultimately I think the true definition of success is how your clients feel about what you are doing, and if they are sticking around. Sometimes we get too caught up in measuring our own success when really we should be asking our employees and our clients if we are being successful.

 

Rich Johnson knew he had to get together and fight when the bank called in ViaQuest’s line of credit

Rich Johnson, CEO, ViaQuest

Rich Johnson, president and CEO, ViaQuest

Rich Johnson was preparing to wrap things up for the week at his company, ViaQuest Inc., at about 4 p.m. on a Friday. It was in 2008, and while he knew the credit crunch was starting to affect the economy, the last thing he expected was to have bank representatives walk into his office and inform him they were not going to renew ViaQuest’s line of credit.

“That basically sucked the cash out of our account, and I needed to come up with a large sum of money to meet payroll on Monday morning,” says Johnson, president and CEO.

Johnson was in a state of shock. Lenders were waist-deep in the red ink flood, and many businesses were hurting.

“I was sitting at my desk on a Friday night, trying not to panic,” he says. “My strong faith had a lot to do with helping me not to panic, but the first thing I did was to calm down, and just try to clear my head. I started making phone calls to people who had the same experience; I had never had this experience. I knew that I’m a fighter — and I was preparing myself for a fight.”

While he understood the reasons behind the credit crisis, he was surprised that it fell upon his door.

“We had never missed a covenant payment,” Johnson says. “We weren’t overleveraged. It really had nothing to do with us as a company. It was what was happening with the banking industry. It just took us by surprise.”

ViaQuest at the time was a $15-million company. Its longest standing division serves people with developmental disabilities in the home and community-based settings, and it is one of the largest providers in Ohio providing those services.

“We had 1,100 employees who were dependent on us, and we needed to act quickly,” Johnson says. “We are passionate about serving a very special population of people with disabilities, older adults. Our staff is the most remarkable employee base that you can imagine. The first reaction was not, ‘How is this going to affect me?’ It was, ‘How is it going to affect the people that we serve? Let’s fight to make this work.’”

As you can imagine, ViaQuest had a difficult time for the next year to 18 months.

“We were late paying vendors; we were late making a lot of payments,” he says. “We had to decide what we could pay and what we couldn’t pay. It was just a very dark time in our history and we came very, very close to not surviving.”

But not only did ViaQuest survive, but the company grew. It now has 1,400 employees and is on track for revenues of $60 million this year.

Here is how Johnson put together multiple approaches to keep ViaQuest’s head out of water — including an astonishing bailout for the immediate problem at hand.

Leave no stone unturned

Many business leaders may admit that one of the biggest fears is having your lender pull the rug out from under you. What Johnson found to help his situation, however, was akin to an angel investor stepping up to the plate and hitting a home run.

“When the bank came in and shut down my line of credit, they said they would not extend any credit to me without collateral to back that credit,” he says. “They already had my house that I lived in as collateral, and all my assets were in the company. I had to act quickly.”

The first person he called for help was his ex-wife Jill, with whom he was still good friends.

“This was Saturday and I asked her if she would be willing to put up the house [she had received it as part of the divorce settlement] as collateral to fund my next payroll. She started crying and said, ‘You know, this is the house that our kids live in, and I know that you would never let anything happen to me or the kids. You have always taken care of us, and I know how passionate you are, and I know that this, too, will pass.’

“That’s how we survived,” Johnson says. “She put up her house as collateral; it got us to the next payroll.”

While such a bailout may often give a little breathing space, it also is a cry for at least a major review of company operations.

Once Johnson started to review his options, he and his team worked on collections and vendors.

“Some vendors didn’t get paid for months, but they didn’t stop service,” Johnson says. “They hung with this. We are just very fortunate that we had a long history with them.

It is at times like that when you find out what relationships are all about.”

Involve the rank and file

Before you spend all your time with financial matters, you need to let your people know what is going on.

“Over the weekend I drafted correspondence to all of our employees and told them exactly what was happening,” Johnson says. “We are a very transparent organization. I am the sole owner. And good, bad or ugly, I always let people know where we are at all times with everything.”

Johnson told his employees that they were fighting for the future and asked them to stand with him.

“I said I understood if they wouldn’t, or if they felt that their family was in jeopardy and they needed to take care of their family. I understood that but I asked them to bond together and fight with me. And every single person did.”

One of the greatest things you can learn at the time is about the perseverance of the company and its culture.

“A lot of people were very afraid, but we did not lose any employees during that time,” Johnson says. “Most employees elsewhere would have been running for the door. I’m fortunate to have the greatest employees in the world who said we are going to stand and fight with you, and we are going to see this through.

“Today we are fortunate enough to have another bank in place,” he says. “We actually are doing very, very well. The experience taught us to manage the business a lot more efficiently, and it really made us tougher.”

Find a silver lining

Going through a crisis offers a unique opportunity to focus on the company culture that you have been building.

“The No. 1 lesson that I learned is that we really work on our culture more than any other function in the company. We spend a lot of time building our culture and showing our employees how much we value them.”

Johnson points to quarterly Culture Crusader meetings, where employees talk about living out core values, and annual conferences where managers receive inspirational training.

“It has built a culture that even if we didn’t know if we were going to be around in the future, the culture that we built together really bonded us, and we made it through,” he says.

Making it through a crisis shows how strong your culture has become and offers a particular insight.

“I guess we have matured a little bit,” Johnson says. “I never would have imagined that that would happen because we didn’t do anything [out of order]. It is not like we were doing something and the bank gave us a warning that said you had better stop. So now, we make sure that we have the proper systems in place. We make sure that we have the cash and not depend so much on credit.”

In ViaQuest’s case, executive team members realized that they needed a greater focus on the processes of collecting and billing.

“We were 100 percent government-funded, so if you don’t have your ‘i’s’ dotted and your‘t’s’ crossed, if you don’t have the systems and processes in place, your collections can get backed up and you can make any bank nervous,” he says. “So we make sure that we have all of core processes down to mitigate any billing or collecting issues. Then we develop different relationships and have alternative measures in place if this is ever to happen again so that we would not be taken by surprise.

“I think we have a great, great billing department now,” Johnson says. “Our finance department is outstanding. If there are any accounts that are just a little bit overdue, they start working it.”

It’s also a good idea to consider the role of the line of credit. If you rely on it, it becomes your safety net.

“We do not look at it that way,” Johnson says. “We view us as not having any safety net, and we still operate like we need to meet payroll every month. We still operate today like we did during that six-month period of time when we needed to fund every payroll. It’s kind of like we are Depression-era babies for hiding money under the mattress and all those things.

“We’ve been scarred a little bit so we don’t take that for granted, and it taught us a great lesson. We run better as a company because of it.”

How to reach: ViaQuest, (800) 645-3267 or www.viaquestinc.com

Takeaways

Leave no stone unturned when seeking help.
Involve all your employees in the recovery.
Find a silver lining.

Born: Columbus, Ohio.

Education: I was one of those kids that the judge said, ‘It’s either jail or the service.’ I went into the U.S. Air Force, right out of high school. It provided me with the G.I. Bill, and I finished at Capital University, with a bachelor’s degree in accounting. My experience in the Air Force helped me. After going through different things in the military, when this happened to the bank, I think those experiences helped me to a large degree.

What was your very first job?

I was 16 years old and I worked at Rax restaurants. I was the second employee hired by them in Marysville and got my baptism by fire in the restaurant industry. I did everything. They were famous for roast beef sandwiches.

Who do you admire in business?

Herb Kelleher and Southwest Airlines and the way they built culture. I have to admit I am not a huge fan of how you fly with Southwest, but you always know that you can get there on time, and you know it’s going to be a fun trip. I wanted to build a culture like that. I really studied Southwest Airlines. In 2001, we signed up Southwest Airlines to speak at our annual conference. Our conference was two weeks after 9/11. I said, ‘Look, we all know what is going on right now in the world. We respect that and if you want out of the speaking engagement, I completely understand.’

The speaker said, ‘We made a commitment to you. We understand what is going on in the world but our commitment that we made to you — we are going to honor it.’ And she showed up at our conference, was our keynote speaker and did not accept payment. It was absolutely just moving. It was incredible.

What is the best business advice you have ever received?

A gentleman gave me the advice, ‘If you don’t have time to do it right the first time, you’re not going to have time to go back and fix it. So take the time to do it right the first time.’ That really stuck with me. But my personal mantra that I started early in business is if you do the right things, the dollars will follow. You always do the right thing first and not let financial pressures get in the way of that. I have stood by that and there are times when we were going through all the ups and downs that we had that it would have been easy to cut corners and do something differently. But I always believed if you do the right things, the dollars will follow and everything will be in place. That’s how we have operated this company.

What is your definition of business success?

Positively impacting as many lives as you can so you can make as many people in your organization successful as they determine success. It is not monetarily. It is changing people’s lives; it is changing the way things are done, it is changing the world. Innovators to me are a business success. When you say you have change someone’s life or have helped them improve their life, that is business success.

Angie’s List passes 2 million on its subscriber list, and Angie Hicks credits the quality of authentic reviews

Angie Hicks, co-founder and CMO, Angie's List

Angie Hicks, co-founder and CMO, Angie’s List

Angie Hicks is pleased to note that new categories get created all the time on the eponymous website Angie’s List, where consumers go to find reliable and recommended local service professionals in fields from home improvement to health care.  In fact, she lists one category that is particularly representative.

“There are categories today where services didn’t even used to exist,” she says. “ Angie’s List earlier this year tallied its 2 millionth household subscription, which was secured 18 months after the 1 million mark was reached. In contrast, it took 16 years for the first million to sign up.

But that is only the tip of the iceberg that’s one of the biggest consumer website success stories. Revenues for fiscal year 2012 were up 73 percent to $155.8 million. More than 1,000 are employed at the company’s headquarters in Indianapolis.

While that may be impressive itself, Angie’s List earlier this year tallied its 2 millionth household subscription, which was secured 18 months after the 1 million mark was reached. In contrast, it took 16 years for the first million to sign up.

Hicks, who punctuates her upbeat conversations with “Exactly!” “Absolutely!”  “Yup!” and “Right!” is more than the face of the company’s television commercials. As well as the founder, she is the chief marketing officer with an MBA from Harvard University and a bachelor’s degree in economics from DePauw University.

She spoke with Smart Business about the success of Angie’s List, and how an emphasis on quality makes the service stand above other business reviewing services.

Q:  What was the motivation for founding Angie’s List?

A:  We [she and CEO Bill Oesterle] started 18 years ago in Columbus, Ohio, and it came out of when Bill was trying to renovate an old house and was having trouble with a service company. He was familiar with a referral business that had been around in Indianapolis that he had used and started looking around and realized it was unique just to Indianapolis. So we started our own version of that company, and then about a year later I ended up buying Unified Neighbors, the Indianapolis company.

We named it Columbus Neighbors at first, which was kind of our spinoff of Unified Neighbors, but what we realized over time was that people just didn’t realize that the list was dynamic. This was pre-Internet days so we were a call-in service in our magazine. We decided to rename it. It was going to be named after one of our friends’ mother named Jackie who just knew everybody in town and everything in town. So in many ways, she kind of represented what we were attempting to do.

Then at the last minute, Angie’s List was suggested. Bill was a big proponent for it. ‘OK, she is the only employee,’ he said. ‘It certainly makes the story easier.’ Women today control the home checkbook, so it makes sense that it had a female name.

Q: Has your brand goal evolved over the years?

A: Our brand goal has always been the same — to help consumers find top rated local service providers and especially in the high cost of failure services. For example, going out to dinner, they could undo my dinner. It’s not a big expense. It’s not impacting me as much as if I hire plumbers and they do work wrong; it floods my kitchen and I am out time and effort.

So were really focused on those. We started in the home improvement categories; we expanded into auto repair, pet care, lawn care, and most recently the health care industry.  So far we have opted not to review attorneys, but it is something that gets talked about. I mean it would work just like any of the other reviews in that kind of situation. There is certainly opportunity.

Q: You recently made TV commercials and the exposure has been successful, even playing a part in reaching the 2 million subscriber mark this spring. Can you describe your marketing strategy?

A:  It wasn’t until we introduced our current ad creative that it really changed. I have only been in the TV commercials for the last couple of years or so. Before that, I would do media and things like that. But it’s certainly different now that we have the TV commercials running.

Public relations was always a part of our marketing mix. We started as local marketers. We would open our offices city by city. We usually received good PR in the market as we were opening. It always was a great boost. There would be an article in the daily paper or a TV opportunity. Those were always important for us.

Then it was about probably 2005 or 2006 when we had enough markets open that it made economic sense for us to start advertising nationally versus locally. You obviously get some scale when you do that. We were looking for an alternative to the daily newspapers, so cable television became the vehicle that we tried and have been successful with. So that was the switch. Our marketing mix includes television, radio, online and some print. It’s working well.

Q: Angie’s List promotes its reviews as high quality. Explain your thinking on that. Isn’t that hard to ensure?

A: I think the big differentiator at Angie’s List is the focus on the quality of the reviews. We do not accept anonymous reviews. So you are known to Angie’s List as well as the company you are reviewing. I think there should be accountability in what you say because people are using this information to make important decisions.

Obviously we have members who are driving the reviews that drive the ratings for the companies, so based on the fact that we have a deep relationship with them because they are members, there are also plenty of ways that we can run algorithms against the data to make sure we’ve got high quality reviews. If ever a review gets tripped in that process, we actually have a team of people that will look at that review.

One of the most common complaints we get is that service companies don’t return phone calls. That is something that we see as an opportunity to make it better.

A consumer can give a review in a scenario like that. Since there wasn’t work done it’s not weighted as heavy as when work is actually done so if they just come and mess up the plumbing work it is different from should they not return your phone call.

But it is still important as customer service feedback so the company can be alerted to that information. They are welcome to respond to the concern and make improvements to their business, based on that.

Their rating is an average of the reports of the reviews they receive, so each report counts — just like a school report card. There is an A through F scale, and the search request is also returned based on the grade.

Q: Are there ever any fraudulent reviews?

A: Every once in a while we will find one. We will find a company that tried to report on itself. There is a cost for that. A, we are very good at finding it when that happens because of our system. B, the cost is that we will stop returning the company in searches. If they are a plumber, we will stop returning them in searches for plumbers. That can be very costly because it is not unusual for us to drive a large portion of  a company’s business. A company never leaves the list. So if people look for the company by name, they could see it but, if somebody just searched for ‘Angie’s List I need a plumber,’ the name won’t show up.

Q: How do you keep your employees motivated and on the same page to carry out of the brand promise of Angie’s List?

A: We spend a lot of time focused on culture. I am a firm believer that good culture doesn’t just happen; you have to cultivate it. We empower our employees to do what is right to help the consumers and focus on core ideas. Take your work very seriously; don’t take yourself too seriously. Be honest. Be frugal. It is just those basic things. It’s both by talking about it and also leading by example that creates that kind of culture.

Q: What do you foresee on the horizon? What are you working on in your R&D department?

A: There are a couple of things. One is continuing to expand our member base, making sure that consumers are finding the best companies they can, but we are also spending time thinking about ways that we can help improve the interaction between consumers and service companies: ‘Here is the company that I want to call or want to get in contact with. How can Angie’s List help facilitate that communications cycle?’ Getting a quote, getting it scheduled, that whole process. So we are spending a lot of time thinking about the real opportunities there.

How to reach: Angie’s List, (888) 888-5478 or www.angieslist.com

The Hicks File

Angie Hicks
Founder and chief marketing officer
Angie’s List

Born: Ft. Wayne, Ind.

Family: Mother of three children and lives with her husband in Fishers, Ind.

Education: Bachelor’s degree in economics from DePauw University, in Greencastle, Ind., which named her a 2007 Distinguished Alumni for Management and Entrepreneurship. Master’s degree in business administration from Harvard Business School.

Awards: In addition to the distinguished alumni award from DePauw University, she was named a Torchbearer Award winner in March 2009 by the Indiana Commission for Women in recognition of her entrepreneurial accomplishments and for providing a positive example of the influence women have on their community and the state of Indiana.

Her causes:

She is nationally known as a consumer expert.  She has raised awareness to attempts to gag consumers from freely discussing customer service experiences; pitfalls in the real estate industry; and home improvement safety. Hicks has issued calls for action in several areas, including health problems caused by lead paint, radon and mold. She is also an advocate for accountability and fairness in the consumer ratings and reviews niche.

She currently serves on the DePauw University Board of Visitors. Hicks also is a co-founder and past member of the Board of Directors of The Governor Bob Orr Indiana Entrepreneurial Fellowship Program, which provides a two-year fellowship at an Indianapolis-area business to graduates of Indiana colleges and universities or Indiana residents.

On her competition:

There are certainly online players, but I always remind people that if you add up all the online players, it is still very small to the total service industry. We follow a very old-fashioned way of doing things — you literally just ask your neighbors, you ask your coworkers, things like that. We collect about 65,000 consumer reviews each month covering more than 550 home and health services.

Marcia Taylor put Bennett International Group back on the road to financial health by prioritizing people over profits

Marcia Taylor, CEO, Bennett International Group

Marcia Taylor, CEO, Bennett International Group

Marcia Taylor isn’t your run-of-the-mill CEO. She’s a soft-spoken matriarch, who transformed Bennett International Group LLC from a small, five-truck contract carrier into a $266 million logistics and freight services powerhouse.

The key to her accomplishment? She attributes her early success to fostering a family-oriented culture and deliberately sidestepping head-to-head battles with conventional competitors.

“We grew organically by adding services to meet the unique needs of our customers,” Taylor says. “We were positioned outside the mainstream, so we were used to competing against just four to five firms.”

Riding the coattails of customers helped the company expand beyond long-haul trucking into lucrative new segments like warehousing, logistics and vehicle transport.

Over time, Bennett International built a stable of disparate companies and service lines with random reporting lines while earning a reputation for being one of Atlanta’s best employers. In fact, the company has been recognized as one of the top workplaces in the area by The Atlanta Journal-Constitution.

But the recent recession illuminated the shortcomings of the company’s unorthodox structure as domestic revenues sagged and the management team struggled to win new contracts, especially in burgeoning international and government segments.

“I think we became a bit complacent before the recession because things were going well, and we were making money,” Taylor says. “In hindsight, I can see that we weren’t as efficient as we needed to be and our management structure prevented us from offering clients bundled services or a single point of contact, which were essential to winning bids and new contracts.”

Realigning a family-owned company is never easy. Here’s how Taylor got Bennett International back on track without sacrificing key staff or its family-oriented culture.

Prioritize people over profits

Taylor wanted to avoid draconian staff cuts and the potential loss of institutional knowledge that could impede Bennett International’s ability to rebound when the economy improved. In addition, she didn’t want to violate the trust of long-term employees or tarnish the firm’s vaunted employment brand, so she reduced ancillary expenses, watched cash flow like a hawk, and asked everyone to make small sacrifices.

“I’ve always believed that if you treat people right and give customers great service, the profits will come,” Taylor says. “Our goal was to come out of the recession in a better place and we achieved our mission because our employees were willing to pitch in which helped us avoid massive layoffs.”

Taylor asked employees to take off one day per month without pay, while the management team worked on reorganization and hunted for new sources of revenue. The camaraderie was so strong, that financially secure employees helped their cash-strapped co-workers by volunteering to take off additional days without pay.

“Our employees supported our long-term strategy because we didn’t make hasty decisions and kept them in the loop throughout the realignment process,” Taylor says. “CEOs can reduce fear during times of crisis by being candid about their motives, prioritizing the needs of their customers and employees, and avoiding cuts that might hinder growth and profits down the road.”

So far, it seems that Taylor’s penchant for delayed profit gratification is paying off. Bennett International is projecting revenues of $275 million in 2013 and Taylor says the organization can sustain 20 percent annual growth for the foreseeable future without increasing overhead, thanks to its increased efficiencies.

Exploit synergistic opportunities

Given her intimate knowledge of logistics, it’s not surprising that Taylor took a methodical approach to Bennett International’s realignment initiative. Her management team pinpointed the needs of current and prospective clients and redefined the firm’s core services, while looking for ways to streamline and consolidate its vast slate of offerings.

They also looked for ways to extend their capabilities by leveraging the firm’s prized fleet of owner-operator truckers, who have primary relationships with Bennett International and a vested interest in the company’s success.

In turn, Taylor earns the loyalty of owner-operators by treating them like family, which is smart, given the current and projected shortage of transportation professionals.

“We looked for synergistic opportunities to combine several services under a single umbrella and leverage our existing assets and owner-operators so we could up-sell current customers and attract new clients by offering them a package of services,” Taylor says. “Second, we wanted to be more efficient by leveraging our existing technology and consolidating back office tasks without inconveniencing our existing clients.”

The goals served as the linchpin for the reorganization initiative and a rallying point when the team disagreed or veered off course. In the end, they were able to segue from a company with a host of competing fiefdoms into an integrated firm with several divisions. Plus, realignment created opportunities to consolidate billing and accounting systems and eliminate redundant processes that increased overhead while adding little value.

For example, the team created an international logistics division by bundling project cargo, cold chain and other services that had been housed under different entities giving the firm expanded capabilities in full spectrum logistics planning and support. They also created Bennett International Transport and Bennett Distribution Services to enable rapid expansion into key segments of the international marketplace.

Early realignment efforts spawned new contracts from clients with international needs and the U.S. General Services Administration, and validated the efficacy of the team’s strategy.

While some CEOs might hammer out a major reorganization plan in a few hours or days, Taylor’s team worked on the initial blueprint for nearly six months.

They often argued behind closed doors but eventually reached consensus by listening to each other and staying true to their goals and the company’s values.

“I think it’s healthy to disagree but you need ground rules so the discussion is respectful and fruitful,” Taylor says. “We’d take a break when we reached an impasse. I’ve always thought that sleeping on a problem is a great way to break a stalemate.”

Match the right people to the right jobs

Once the new divisions were created, Taylor faced the difficult task of realigning the company’s senior management team with its new structure. She took stock of each person’s strengths and performance before asking them to take on new roles. The fact that the senior management team includes outsiders and her two sons added to the complexity of her mission.

“I believe in putting people into roles that give them an opportunity to grow and maximize their strengths and talents,” Taylor says. “The decision to realign employees is difficult, but it gets easier if you put them into positions where they have the best chance to succeed.”

Taylor referenced the needs of clients and the company’s history of exceptional customer service to bolster support for her management realignment strategy. She’s an advocate of values-based decision making. Her business decisions support the company’s mission and core values. She also uses data to make tough calls but says executives make the best decisions by balancing data with intangible factors and thinking about what’s fair.

“I think if you have a lot of passion for your ideas and convey a clear vision, people will accept change,” Taylor says. “It may take time, but if the logic is there and your decisions don’t conflict with your values, people will eventually come around to your way of thinking.”

Taylor takes her time when making difficult decisions but defends her sluggishness by saying that she’d rather be slow and accurate than have regrets, especially when her decisions directly impact the financial health of the company and its nationwide team of more than 3,000 contractors, agents and employees.

While Taylor acknowledges that she and her children don’t always see eye to eye, she says they’ve found success as a family-operated company by fostering open communications and supporting each other through thick and thin.

“We’ve learned some valuable lessons from this experience, and we don’t plan to repeat our mistakes,” Taylor says. “By leveraging our excellent reputation, repositioning for growth, and remaining true to our customers and what we do best, I believe our company and our extended family will continue to do well for the foreseeable future.”

How to reach: Bennett International Group LLC, (800) 866-5500 or www.bennettig.com

 

Takeaways

Garner support for your plan by prioritizing people over profits.
Create operating efficiencies by exploiting synergistic opportunities.
Match the right people to the right jobs.

The Taylor File

Name: Marcia G. Taylor
Title: CEO
Company: Bennett International Group LLC

Birthplace:Clifford, Ill.

Education: High school graduate

What was your very first job?

I was an apprentice pharmacist in a small, solely-owned compounding pharmacy in Mt. Vernon, Ill. There were only four of us on the staff so I learned the benefits of a family-oriented culture at an early age. The pharmacist would extend credit to customers who couldn’t afford their medications so I also learned the importance of ethics and the value of prioritizing people over profits. Profit is important but it’s not the primary goal. If you treat people right and give them great service, you’ll have loyal customers, plenty of referrals and profits will follow.

Who do you admire most and why?

I admire Margaret Thatcher for sticking to her guns when she felt something was right. Although our styles differ, I appreciate the way she went about things. She was a tough lady who accomplished a great deal because she wasn’t afraid to take a stand and voice her opinion on difficult issues.

What is your definition of business success?

When your employees and customers are happy, you greatly increase your chances of success. Set high standards, focus on being the best instead of the biggest, and success will follow.

What was the best business advice you ever received?

Don’t rush to judgment or make rash decisions. Step back and think things through. And when you’re facing a tough decision, rely on integrity as well as facts and think about what’s fair. I’ve found that by practicing values-based decision-making, I make the right call most of the time. Plus, it’s hard to undo the damage when a leader makes unethical choices.

What’s the secret to working with family?

Set ground rules and then hash things out behind closed doors. Always speak with a unified voice when addressing the staff and don’t take things personally. Businesses come and go but you can’t replace family.

 

 

 

 

 

Mike Magusiak looks for cultural alignment when searching for prime global expansion opportunities at Chuck E. Cheese’s

Mike Magusiak, president and CEO, CEC Entertainment

Mike Magusiak, president and CEO, Chuck E. Cheese’s

Don’t look now, but family fun has become a prime export for the U.S. thanks to the global expansion efforts of Mike Magusiak, president and CEO of Chuck E. Cheese’s.

Facing a 12-year decline in the domestic birth rate and diminishing sales in the arcade, food and entertainment industry, Magusiak has redoubled his efforts to find new markets with a booming birth rate, burgeoning middle class, and a penchant for family-oriented fun.

“When I look long term, I see no reason why we can’t have twice the number of stores internationally than domestically,” Magusiak says. “There are lots of places where the population is growing and people like spending quality time with family. Those markets are ripe for a concept like Chuck E. Cheese’s.”

That’s a pretty bold statement, when you consider that the rodent-mascotted chain, which generated revenues of $803.5 million in 2012, currently has 566 sites and only 18 are located outside Canada or U.S. territories.

After a rather slow start, Magusiak and parent company CEC Entertainment Inc. are picking up steam. Together, they signed seven new development agreements for 42 stores in Mexico, Peru, the Philippines, Trinidad, Bahrain, Saudi Arabia and United Arab Emirates in 2012.

Although the international marketplace offers tremendous opportunities for growth, Magusiak says that a number of challenges must be properly understood and mastered before rapid expansion is wise.

“First and foremost, you need a differentiated product,” Magusiak says. “It would be very difficult to succeed if we were just selling pizza. Fifty percent of our revenue comes from food and 50 percent from entertainment. It’s our overall experience that sets us apart.”

Then you survey the marketplace and verify that your brand will stand out.

Here’s how Magusiak relies on this three-pronged strategy to identify and develop prime global opportunities.

Assess tangible and intangible assets

Magusiak says selecting an ideal global location isn’t rocket science but it does require an in-depth assessment of a region’s tangible and intangible characteristics.

For starters, he reviews GDP growth, birth rates and income data but surprisingly, population density is a better predictor of success than discretionary income. Historically, Chuck E. Cheese’s stores in affluent areas haven’t fared as well as those located in lower income areas with high density levels.

“We offer customers a great value, so we need sales volume to make our model work,” Magusiak says. “And because margins tend to be lower overseas, our international locations need even more volume than our domestic locations to turn a profit.”

Magusiak honed his location hunting formula by examining the profiles of top producing domestic stores like the one located in Bell, Calif. The store is adjacent to East Los Angeles, a largely Hispanic community, which happens to be the most populous unincorporated region in California.

As a result, his initial forays into the global marketplace were focused on Latin American locales with similar demographics however; the general population must also pass Magusiak’s cultural scrutiny.

“Our executive team visits the area and talks with prospective franchisees and guests to assess the cultural fit,” Magusiak says. “I’ve personally traveled to more than 150 locations including Abu Dhabi and the Philippines to gauge the local appetite for family-oriented entertainment.”

He says it’s easy to adjust menus, game distribution and pricing options to appease customers once they visit a store, but sustained growth hinges on cultural similarities, especially for a unique brick and mortar operation like Chuck E. Cheese’s.

“It’s not a ‘Build it, and they will come’ model; our guests have to like what we offer and what we represent,” Magusiak says. “You have to get out there and talk to people to see if your values match before committing to an overseas location.”

Find competent, passionate partners

A country’s populace isn’t the only place where Magusiak looks for compatible values, it’s a must-have requirement for Chuck E. Cheese’s franchisees. Successful candidates need business acumen, local market expertise, sufficient capital and what he calls a passion for the food and entertainment business.

“We don’t want absentee owners,” Magusiak says. “We’re looking for franchisees who are willing to immerse themselves in the business and interact with guests, because it’s their hands-on involvement that creates mutual success.”

Although 514 U.S. locations are company-owned, local ownership has been a critical component of Chuck E. Cheese’s early global success. In fact, every international franchise has been profitable from the outset.

Prospective franchisees are screened by staff and then interviewed by the executive team. Those passing muster then spend time in a U.S. store to get a feel for the guest experience and the basic operating model.

“We spend a lot of time with prospective franchisees, and we turn down a lot of people, but our slow and cautious approach has helped us avoid false starts,” Magusiak says. “Actually, many of our franchisees have been so successful; they’ve asked to purchase additional development rights.”

In addition to turning a profit, Magusiak expects franchisees to boost the local appeal of Chuck E. Cheese’s brand by suggesting advantageous modifications to the company’s menu and operating procedures. For example, the franchisee in Monterrey, Mexico, added pinata rooms, and the chicken wings in Santiago, Chile, are spicier than those served in U.S. restaurants in order to satisfy the taste buds of local residents.

To ensure that modifications don’t stray too far from the company’s core values and brand, alteration requests are reviewed and approved by the company’s executive team.

“We don’t want to change what’s sacred about Chuck E. Cheese’s,” Magusiak says. “But if you hire smart, passionate people with good judgment, you need to listen to them.”

For instance, targeting teens instead of children isn’t an option, and it’s not OK to remove pizza from the menu. But Magusiak had no problem shutting down a salad bar in a Chilean store after sales records showed that locals weren’t embracing the concept.

“Customization is less important if you’re selling products over the Internet,” Magusiak says. “But it’s vital when you’re selling an experience and our franchise model has been instrumental in helping us develop a local approach and a solid business plan.”

Walk before you run

Magusiak honed his expansion strategy for three to four years while using his existing staff to identify and develop selected global opportunities. While some executives might question his speed, his methodical approach was designed to protect the company’s bottom line, iron out the kinks in the franchisee selection and assimilation process, and ensure the success of early adopters.

“We didn’t try to force things,” he says. “We wanted to remain profitable by expanding our model based on demand and by adding resources as necessary. Now that we’ve built out our infrastructure, we’re in a perfect position to jumpstart global expansion.”

To keep costs low, early franchisees were trained in U.S. locations. For example, the Peru franchisee spent time in Bakersfield, Calif., learning the nuances of Chuck E. Cheese’s guest service model before transferring the concept overseas. In addition, Magusiak insists that locations are profitable before granting additional rights to global franchisees.

“Going slow helps us tweak game distribution, token pricing and the details that contribute to a store’s profitability,” Magusiak says. “Plus, we can fund infrastructure investments as we go which helps us try new things without incurring substantial risk.”

Once the company got its footing, Magusiak hired an experienced globe-trotting Sherpa to identify new locations and a salesperson to recruit franchisees. He also hastened the franchisee assimilation process by adding a regional trainer. Proof of Chuck E. Cheese’s concept, a proven track record and the addition of resources are behind the company’s recent surge in global expansion.

“You have to be patient,” Magusiak says. “We’re not just selling food. You have to make sure your brand aligns with the local culture when you’re selling quality family time and memories.”

How to reach: Chuck E. Cheese’s, (972) 258-8507 or www.chuckecheese.com

Takeaways

  • Identity prime global expansion opportunities by evaluating a region’s assets.
  • Look for aligned values when evaluating and selecting business partners.
  • Be patient; test your model and achieve profitability before undertaking expansion.

The Magusiak File

Name: Mike Magusiak
Title: President and CEO
Company: CEC Entertainment Inc., parent company of Chuck E. Cheese’s

Birthplace:Warren, Ohio

Education: Bachelor’s degree in accounting from the University of Southern Mississippi. Master’s degree in business with an emphasis in finance from the University of Texas at San Antonio. He’s also a CPA.

What was your first job?

I worked as an auditor for Holiday Inn in Memphis, Tenn., after graduating from college. It was there that I got my first exposure to international business, because I traveled all over the world auditing various subsidiaries.

Who do you admire most in business and why?  

Dick Frank, who served as chairman of the board and CEO of CEC Entertainment Inc. from March 1986 to December 2008. He was not only a great person, but from a business perspective, he was a great simplifier. He was bombarded by opportunities, demands and challenges all day long, but he had a way of filtering everything down into a few simple priorities. He would often say that the key to the business success is keeping guests happy or pursuing the right opportunities. He definitely had a knack for keeping everyone focused on what was important.

What is your definition of business success?

First of all, I’m not sure that you ever get there because success is a never-ending journey. But over time, seeing people grow is not only rewarding it’s the hallmark of a high quality organization that’s financially successful. It’s all linked together; you can’t have financial success unless you have successful people.

What was the best business advice you ever received?

You can’t go from good to great if you get spread too thin. Focus on what you do best, execute and your company will be successful.

 

 

 

 

 

How Steve Bilt positioned Smile Brands to give patients the best dental care they can get

Steve Bilt, co-founder, president and CEO, Smile Brands Group Inc.

Steve Bilt, co-founder, president and CEO, Smile Brands Group Inc.

There are lots of ways to run a successful dental practice, which became one of the biggest challenges facing Steve Bilt and his leadership team as they contemplated the future of Smile Brands Group Inc.

“Defining a simple agenda that supports what your customer wants and needs, understanding who that customer is and then delivering that value has been a big challenge,” says Bilt, the $600 million company’s co-founder, president and CEO.

“I could look inside the 400 different units we support and say, ‘OK, you can find every model under the sun in some way, shape or form working. But if we’re going to continue to expand and refine our services and systems to better serve and support those units, there has to be more consistency in what we do.’”

It’s a question that any business with units spread across the country or around the world must answer for itself. Bilt says it’s only getting harder to come up with the right answer because the market and customer needs are constantly evolving.

“So what may have been a focused-enough strategy five years ago is a path to doom five years from now,” Bilt says.

But as the members of Bilt’s team began to wrap their minds around what needed to be done for the company’s 3,800 employees, more than 1,300 affiliated doctors and hygienists, and their patients, they kept coming back to one philosophical belief.

“There’s no one absolutely right answer, but the right answer is one answer,” Bilt says. “If you think that through, it’s not saying my way is better than your way. You don’t have to make that call. You just have to say, ‘Look. We have to decide on one way, which might be a hybrid of models with each of us bringing something to the table.

“‘But what we have to do as a team is decide on one way and pursue that one way and make sure our systems support that one way and our talk and our attitude and everything we do down to our DNA supports that one way of us adding value into the marketplace.’”

Provide the best service

The operational evolution at Smile Brands was a four-year process that included a number of different opinions, ideas and suggestions. But one of the core ideals that the group settled on was finding the best way to harness all the dental skill that existed in the organization in order for customers to receive the best care.

“We used to say let’s just create a cocoon of support around this doctor so they can just be a doctor, period,” Bilt says. “Don’t have any other level of resource for them other than the fact that they get all the freedom to be a doctor.”

The problem with that type of practice in today’s world is it wastes so much potential to share expertise and solve problems.

“Any peer group is going to have some people who excel at one thing and have a lot of experience,” Bilt says. “But if you’re out in the dental office by yourself staring at a problem you haven’t seen before, you say, ‘Oh boy, I’ll figure this out by trial and error,’ which is what you would do 15 years ago. Or you’d pick up the phone and say, ‘Here’s what I’m looking at. What do you think?’”

Bilt felt Smile Brands had the capability and thus needed to make it possible for dentists who encountered these unique problems to be able to connect with a colleague in real time and reach a solution in minutes.

“There’s this opportunity in this digital age to create an incredible peer group in a lonely profession,” Bilt says.

The ability to use technology to solve problems or even for training purposes was just something that was too good to pass up. And the best part, Bilt says, is that the integration of the right technology at Smile Brands would also reduce expenses.

“The customer has somebody who has access to stuff that is so much more powerful,” Bilt says. “That gives the doctor the ability to charge less, which is great for the consumer as well. The combination of doctors being able to be just dentists so that they can see more patients means they have an ability to charge less because they have higher volume, and all the technology helps them lever their cost structure down.”

Stay focused

You get a great idea for your business and everyone is energized to make it happen. It’s at this point where trouble can be lurking.

“We all love that rush of the initial front-end strategy planning and brainstorming session that we all do,” Bilt says. “What we don’t tend to love is the concept of change management and how do you get from here to there?”

It takes work and effort to make a change happen and some of that work can be painful. This can very easily lead to the drifting of attention away from one project that has suddenly become a lot of work to another project that seems so much more fun to talk about.

“You allow another shiny strategic initiative to start while the change management and implementation of the prior one is incomplete,” Bilt says. “You don’t go back and measure whether the first shiny initiative did what it was supposed to do and then you get distracted with the next one and forget about ever measuring the prior one. That cycle can go on for decades. That gets people into a lot of trouble.”

One key to avoiding stress and keeping your organization focused is to let people who have expertise in certain areas apply that skill to get the work done and isolate the flaws before full implementation.

Listen to their needs, their suggestions and their feedback on the best way to implement your new system.

“The docs are our thoroughbreds, and we’re the plow horses,” Bilt says. “If we’re doing it right, the plow horses plow and the thoroughbreds run. That’s really the point of the model. Let them be the thoroughbreds they are and let us plow the fields or build the track. That’s what we’re supposed to do.”

Define what you want to accomplish and get it into a plan that everyone understands and agrees to. Make sure they are aware that while there will be highs and lows along the way, the end goal will make it all worthwhile.

“My role is to help provide some vision for what we’re trying to do,” Bilt says. “What do we hope to accomplish? I try to provide support for people executing it so that they can do it properly to make sure the phases are properly led, staffed and resourced to have some level of establishing accountability for the results of each phase.”

Be a good communicator

Another major step in the transformation of Smile Brands was figuring out how to roll out the changes at each of the 400 locations. Who goes first? Who needs the upgrade most? Which locations will be the hardest to change?

Bilt says there’s no perfect way to roll out a big change. But he says communication is always the key to making it work.

“Most people are less attached to the outcome that they want in terms of where they are in the order of priority than they are in understanding why you made the decision you made,” Bilt says. “I love to know why you’re doing what you’re doing. That shows respect for me. Then I want to know how I’m impacted. Are you getting to me and if you are, when? What should I expect?”

Bilt poses a scenario in which somebody might feel strongly that his or her location should be the first to be upgraded because it is the company’s most profitable unit.

“You could say, ‘You know what, I agree with you,’” Bilt says. “‘That’s why you’re going last. You are the best market. You want to go first because you’re the best. I’m saying you go last because I’m not going to mess with you. I can’t afford it and it’s too risky.

“‘So I’m going to the worst market because if we screw it up, it costs us the least.’ We could have the exact same rationale and the exact opposite conclusion.”

Explain to people your thought process behind the implementation of change and they’ll be much more likely to be onboard with you.

“You have to do it multiple ways,” Bilt says. “I always say the rule of three when it comes to communication. If you have a new concept or an important concept, you better give it three passes to get it communicated because there is always a gap between what we think we’re saying and what people are hearing.

“It just takes multiple passes to get it right and allow them to process it and understand it.”

As Bilt looks back on the process, he says there are always things that could have been done better.

“Everything is a journey,” Bilt says. “So how did we go along that journey and how did we carry ourselves and how did we perform and how did we pick ourselves up and dust ourselves off when it got tougher than it was supposed to get? Those are the stories that make a career.”

How to reach: Smile Brands Group Inc., (714) 668-1300 or www.smilebrands.com

The Bilt File

Steve Bilt

co-founder, president and CEO

Smile Brands Group Inc.

Born: New York City

What was your very first job?

Delivering The Denver Post in the snow. Back then, it was a crazy job for a kid. You took capital risk. You had to buy your newspapers from the newspaper. You had to deliver them, collect your own money, then pay back your cost of the newspapers and you kept your margin. So if a grumpy old neighbor didn’t want to pay for the paper, it was the 13-year-old kid losing out and not the newspaper. So I learned a lot of lessons on that job.

Who has been your biggest influence?

I have to give a lot of early credit to my dad. He helped me when I was going to fall down too far in the newspaper job by helping me fold the Sunday paper or pull the cart through the snow when it was too deep to physically move it. He did help with that job to make sure I had some success or at least got that job done.

The other thing is he was really good about not knowing all the answers to the stuff he was dealing with in business. He’d actually bring up a lot of the questions he was facing at the dinner table and let me opine.

I got this notion that a business is a living, breathing thing that had to be managed and cared for and fed. It was very formative from that perspective to be able to hear and listen and participate in some of those conversations about what makes a business go and how does it go and how do you do it and how do you care for it?

Takeaways

Don’t try to do it all.

Communicate at every turn.

Finish the job.