Chris Elliott drives improvement at Beef ‘O’ Brady’s to return the company to growth

Chris Elliott, CEO, Beef ‘O’ Brady’s

Of Beef ‘O’ Brady’s 213 restaurant locations, Chris Elliott has eaten at 50 of them to date. He’s tasted every single item on the menu and is prepared to tell you what he thinks, good and bad. Yet that kind of honesty was harder to dish out last March when he joined the company as its new CEO. After eating at several of the restaurants, Elliott had the difficult task of sitting down with his franchisees to tell them candidly, your food isn’t very good.

“What franchisee wants to be told by a new guy, who they think doesn’t know anything about our brand: ‘Guys, I’ll be honest with you. The food is mediocre, and on top of that, the execution is very uneven from store to store,’” he says.

As a new leader, Elliott was also trying to build relationships with franchises in 23 states — consisting of more than 5,000 companywide employees. Understanding that they had faced several tough financial years prior, he knew that to execute a strategy that could reposition Beef ‘O’ Brady’s for growth, he first needed to win the trust and buy-in of his people.

“You have a new guy coming in, and the last three of four years have been very difficult,” Elliott says. “So it’s a matter of gaining the trust of the franchise community.

“I said, ‘This is what I see, and then based on my experience if we are going to move this business back to where you want it, back to where it belongs, back to where it deserves to be — we’re going to have to fix the food quality and we’re going to have to fix the execution. We get focused on those things and then we get after it. That’s what we’ve been doing in the last year.”

Engage people

When you are a new leader trying to gain perspective on where your company stands, a good place to start is by talking to the people in the company who have been there and understand the brand’s history.

“The first thing I do is sit and listen to what people have to say about the past, what they are passionate about as far as the brand is concerned and what they think the brand is all about,” Elliott says.

“You have this sort of window of opportunity when you come in new to company to establish this trust level that makes people comfortable in dealing with you, which makes people more likely to try and implement the things you ask them to implement.”

Because the company is 99 percent franchised, right away Elliott decided to create a ‘franchise advisory council’ to consult with him on decisions. Made up of a diverse group of 15 franchisees nationwide, the council has been vital in helping him gain a range of opinions and insights on how the business operates.

“I try to get a broad spectrum of people’s input to make sure that we fully vet the ideas,” Elliott says. “Sometimes a good idea is not meant for a particular system. So it’s not only finding the right idea, but making sure that you can actually implement the idea within your system. That’s why, for me, the more people I involve up front, the higher the probability I feel that we’ve made the best decision we can make.”

Furthermore, people are much more receptive to changes when they don’t feel like they are being bossed around. While Elliott knew major operational changes were in order across the board, he realized he couldn’t lead those changes successfully from a corporate office.

“There’s a natural dynamic tension between franchise owners and franchisees,” he says. “We own the brand, but they own the business. They paid for that business. So if they don’t feel like they are getting good leadership, good communication, good ideas and good business results from the franchisor, then they feel like, ‘I’ve got to save myself.’”

It would take relationship-building and strong, two-way communication to keep people from jumping ship and get everyone in the company moving together in a new direction.

“The power of a brand is in consistency,” Elliott says. “It’s everybody on the same team, everybody on the same page, everybody running the same menu and executing at the same level.”

By showing people you want and need their help, you build a foundation for trust that helps them accept what you have to say.

“You involve them much earlier in the conversation,” Elliott says. “Collaborate with them on how to do it. Don’t come and tell them how to do it. Collaborate with them so it’s as much their ideas as your ideas, and that carries a lot more weight.

“I like people to challenge the ideas that we come up with and I look at a lot of different points of view to make sure we didn’t miss something. Almost inevitably you will if you don’t have that kind of organization where you are collaborating with the people who are actually going to wind up implementing your plan.”

To find out how he could improve alignment and engagement of his team, Elliott held private meetings with all 30 corporate employees as well as with franchisees on the advisory council.

“I said, ‘Look, I’m just here to learn what the issues are, what the challenges are, what’s been happening and how do we get better,’” he says.

“The human relations aspect of any business relationship is huge. It’s e-mail. It’s picking up the phone and calling. It’s getting out into the field and being present. There’s a lot of ways. Basically, we call it engagement. It’s one of the four principles of our franchisees.”

Elliott also began checking in more frequently on communication between franchisees and the corporate office, setting a more stringent expectation about getting back to franchisees, answering their questions and solving their problems.

“There were some silos in the departments and now that’s gone,” he says. “Everybody is working with everybody, communicating with everybody. The increased communication builds trust but also holds people accountable.”

Provide evidence

To convince people to take action on the company’s issues with food and execution, Elliott realized he also needed some hard evidence on where the company stood against competitors. To put the business’ strengths and weaknesses into a larger context, he and senior managers spent a lot of time initially studying the company’s competitors such as Applebee’s, Chili’s and Buffalo Wild Wings to clearly define the company’s niche in casual dining.

“You need to thoroughly understand the business that you are working in,” he says. “You need to really understand your niche.

“You benchmark your company against other successful organizations, and you demonstrate the benefits of the types of changes that you are proposing in ways that are meaningful to your employees, that would be meaningful to your customers and that would be meaningful to your franchisees.”

Elliott principally examined Buffalo Wild Wings’ restaurant concept, which is similar to Beef’s in many ways and offered some key insights into where the company could improve.

“We looked at them very hard,” he says. “We benchmarked sales volumes. We benchmarked the sales in day parts. We benchmarked the sales in particular items. We benchmarked everything you can think of, the initial investment, the profitability and all of that. It was a real eye-opener for a lot of our franchisees to see how other companies that are similar to us in a lot of ways do so much better in certain areas of their business.”

Then you look to your customers. In addition to working closely with his franchise council, Elliott visited many of the restaurants in person to try the food and listen to people’s ideas, concerns, attitudes and recommendations. He also communicated the importance of making decisions based on experience and data rather than just people’s opinions.

“Very early on I said to the franchisees, ‘This is not about what I want and this is really not about what you want,’” Elliott says. “‘What it’s ultimately about is what our customers want. So in any arbitration of what we’re going to do next, we’re going to let them tell us what they want to do next, what they like.’ That makes it easy for us to make a better decision. We always come to the table with the consumer data to support what we want to do next.”

The company has done more consumer research in recent months than it did in a whole year prior, using outside research firms to evaluate ideas, conduct segmentation studies and put on focus groups.

“Every time we have an idea to go out in the field and set up a field test, we test it for several months and gather the data and then come back,” he says. “That’s very time-consuming and it takes a lot of energy and a lot of resources, but that’s the only way to do it.”

Show results

Even if you get people to buy in to the value and vision behind making changes, winning them over long-term is a matter of proving to them that you can deliver success.

“When you come in and you say we’re going to do these things differently, and then it works, that helps build trust,” Elliott says.

“Once we have an agreement to move forward and are excited about where we are going to go, then it’s be persuasive. You can’t force a plan down people’s throats if you really want it executed. You’ve got to persuade them. That takes relationships. That takes communication. That takes some selling skills.”

Instead of ordering franchisees to switch from frozen to fresh marinated chicken tenders, Elliott convinced them to make the menu change by showing them the results of doing it differently.

“They went bonkers,” he says. “They didn’t think that was possible. So we actually had to go into the stores on Friday night during the busiest part of the night, set up a little station and do it to show the franchise community that ‘Yes, you can do this.’ And not only can you do it, they got to see how consumers reacted to the new product versus the old product.

“There are a lot of things that we did like that. We just recently changed out our burger. We had a good burger, but we went to a better burger. We went from a frozen steakburger to a fresh Angus burger. And that’s one of the reasons our sales turned around in May.”

After pulling the entire menu apart at the corporate office and spending about seven months fleshing out and testing ideas, Elliott estimates there are now 20 examples of ingredients or products that the company has already improved on or changed. The lunch menu now includes smaller portions and lower prices, and there is a stronger focus on efficient execution. Phase one of the main menu innovation launched in January 2011 with phase two implemented in August.

When one franchisee said to Elliott, ‘Why you would spend your time working on something that’s not broken?’ he tried to explain the problem behind that way of thinking.

“I said, ‘It’s not about it not being broken,’” Elliott says. “‘It’s about: Is it as good as it can be? Is it better than what anybody else has got?’ Because the way you’re going to get somebody away from these other customers is to have a better burger, not just a good burger.”

Today, the numbers speak for themselves. The company achieved positive comparable store sales growth in the first quarter of 2011 for the first time since 2006.

“It sort of opened up their eyes to the possibilities that exist out there when you do things a little bit differently,” Elliott says.

“That process of explaining why we were doing what we were doing and then seeing the results of it is beginning to get more and more franchisees on board.”

As people see the small successes add up, they can buy into bigger changes ahead.

“What people are seeing is we can effect positive change in a difficult environment, if we stick to our knitting, if we do some of the basic things better than other people are doing,” Elliott says. “That builds confidence in the franchise community and it also builds the willingness to not just listen to your ideas, but to get behind your ideas, push your ideas harder. It builds that bond of ‘Hey, maybe these guys do know what they are doing, and if we work together we’ll really get this thing on track.’”

How to reach: Beef ‘O’ Brady’s, (813) 226-2333 or www.beefobradys.com

The Elliott File

Chris Elliott
CEO
Beef ‘O’ Brady’s

Born: Montgomery, Ala.

Education: University of Georgia, BBA in accounting, 1977

What is one part of your daily routine that you wouldn’t change?

Having my Starbucks Grande Bold coffee before I get started.

Who are your heroes in the business world and why?

Any and all entrepreneurs. It takes guts, determination and a belief in your own ability to step out and be your own boss. Where would we be without entrepreneurs? I wouldn’t have this job.

What would your friends be surprised to find out about you?

I play guitar and sing a little.

If you could have dinner with one person you’ve never met, who would it be?

Dead — Abraham Lincoln. He was a great storyteller and master politician. Alive — James Taylor. I love his music, and maybe I could get him to show me his technique.

Favorite part of the job: The whole act of drawing on your experience, assembling a team and the data needed to analyze a problem, then developing a solution that you find out later actually worked. In short: problem-solving.

Elliott on hiring good people: I’ve been doing this a long time and I can tell you if you have really good people working for you, life is good, and if you don’t, nothing ever changes. You spend all of your time managing people instead of managing the business. So a smart executive will hire really good people so they don’t have to spend all of their time managing people. They spend their time managing the business.

How Tom Reilly led ArcSight’s integration into HP using strategic communication

Tom Reilly, vice president and general manager, HP Enterprise Security

A little over a year ago, Tom Reilly’s company was smack in the middle of what he calls a pretty amazing transition.

Reilly was president and CEO of ArcSight LLC, a high-growth, publicly traded company in Silicon Valley, when the company was acquired overnight by Hewlett-Packard Development Co. LP in a $1.5 billion transaction. ArcSight was about to become part of the largest IT corporation on the planet.

“It’s probably the most monumental transition that we’ve had to navigate through — going from a 500-person company that’s very nimble, can set its direction and has a lot of autonomy to becoming part of 300,000-person organization,” Reilly says.

“We went through a cycle of emotions. When the acquisition was announced, there was a tremendous sense of euphoria, success and great validation of what we had built as a company, but quickly after that, a bit of disillusionment as you realize that we’re part of a bigger company and there are a lot more people that we have to interface with and a lot of integration activity that takes place.”

As CEO, Reilly understood that how he steered employees through the first six months of change and uncertainty would be a critical in the company’s continued success and harmony within HP.

Show the value

Reilly was elated to have his company joining a multibillion-dollar corporation with vast technology assets and research teams that were incredibly advanced at understanding the latest cyber security threats and techniques. These resources would mean better security for customers and increased opportunities for his $181.4 million business.

“I’m in the cyber-security business,” he says. “So everything we do every day is to help our customers protect their brand, protect their customers and protect their operations from cyber attack. Being part of HP has allowed us to do it a lot more effectively.”

When people don’t know what to expect, they can become fearful of change and afraid to embrace it. While Reilly was aware of the many advantages of the acquisition for the company, he knew he also had to communicate that employees and customers to get their buy-in.

So on day one of the announcement, Reilly made sure he explained in detail how the move would accelerate the company’s vision and mission by improving security for customers, advancing research and providing more tools for employees, greater facilities, better test labs and so on.

“One of the first things I had to do with my customers and with my employees when it was announced that HP was acquiring ArcSight was explain why is this was a good thing,” he says.

“What we did is a lot of communication, first on why we felt that our business, our customers and our employees would be better served as part of a larger company. We continually came back to our long-term vision of what our capabilities were and how being part of a larger company could actually help us accelerate that vision.”

By setting a clear vision upfront, you can fend off uncertainty that can make people uncomfortable or insecure about embracing change. Once people saw that falling under the ownership of an established company like HP would be a positive move for the business, their uncertainty turned into excitement and eagerness.

“All of this is allowing us to deliver a lot more a lot faster, and our customers benefit from that,” Reilly says. “And then for my employees — there are greater career path opportunities for them, a lot of other really smart people for them to collaborate with, down to simple things like we have better briefing centers. We have better facilities when they are playing basketball at lunch. All of that stuff just comes since we’ve become part of HP and that is making us a better company and more competitive. And it directly benefits our customers.”

Align messaging

Because the organization was dealing with a great deal of change during the first six months of the acquisition, it was extremely important to give people direction so everyone was on the same page. Providing clear and consistent communication for employees was critical in achieving that.

“We tried to communicate as much as possible what was going to be happening in the coming months around the integration challenges because there was a lot of uncertainty,” he says. “Uncertainty leads to concern and concern gets people unfocused. We tried to communicate the rationale, why we were part of HP, the long-term vision and then what to expect in the coming months. That helped us really keep the team focused and motivated and excited.”

Reilly and his team have always spent a lot of time keeping the organization aligned on communication and making sure there is alignment on goals and strategy internally and externally.

“I’m very comfortable with anyone communicating with my customers or partners as long as they understand those things, and then we have a consistent message and voice,” he says.

Aligning communications starts with the leadership team. Every quarter Reilly takes his leadership team of around 40 executives and goes offsite for two days on a retreat. The purpose is to align everyone on three to five key focus areas for the company, which Reilly calls “business imperatives.” Since the acquisition, redefining these imperatives has been vital in pushing out a consistent, focused message for employees and customers.

“When I say align, we talk them through and really make sure that everybody understands what it is we’re trying to accomplish,” Reilly says. “We don’t lay out every tactical action item or plan, but we make sure that everyone’s very comfortable with why this is our strategy, why these are the key business imperatives that will get us there and what are the main milestones that we want to achieve in the next six to 12 months.”

Focusing communication on continual refinement of the key business imperatives and then letting employees determine how to achieve helps the organization minimize most centralized decision-making and proof-of-processes thinking. With strong alignment, the decision-making process can be loose and independent.

“What we find is it’s a very efficient way of getting everyone on the same page, yet giving people a lot of autonomy and accountability for striving toward a goal,” Reilly says. “If everyone understands the vision and everyone understands the business imperatives and how you get there, suddenly people can start charging and making decisions.

“When it comes to communication, I think if you always try to funnel it through any one individual you are always going to get one perspective, one slant on things.”

Reilly meets with his leadership team every week in addition to the cadence meeting to check in against the key business imperatives that they are leading. As the company continues to implement changes, those imperatives can change and grow with the company. Reilly says he knows the fewer decisions he has to make as CEO, the better the job he is doing in creating strong alignment within the company.

“The day that I show up at work and I have no meetings on my calendar, no one walks into my office with an emergency, discussion or request, I get all my e-mail done and I find myself surfing the Web and I head home at 3 o’clock — that’s when I know I’ve done my job very well,” he says. “I know my organization is in alignment and they’re all working together.”

Give and take

One of the most visible challenges in merging 500 people into a company with hundreds of thousands of employees is integrating two developed and successful corporate cultures.

“When you look at the world’s largest IT company, that in of itself says it’s a very successful business,” Reilly says. “HP has some great cultural aspects that make it the world’s largest IT company. That said, ArcSight was one of the fastest growing high-tech companies and it recently reached the public market. So it obviously was a successful company and has some great cultural aspects.”

The 11-year-old company was its own cultural success story, so Reilly knew there would be some give and take involved when merging its culture with HP.

“We don’t want to adopt everything that HP does, because HP doesn’t grow as fast as our business grows,” he says. “Yet we don’t want to retain the culture that ArcSight had standalone, because we won’t necessarily be leveraging the breadth and power that HP brings.”

When you are in a situation where your culture needs to adapt, it’s important to take time and define which aspects and practices are most crucial to your success to make sure they are not compromised in the process. Reilly and his team spent a lot of time evaluating the culture before joining HP. Over time, it becomes obvious what parts of a culture are most essential to your company’s success.

“If our technology fails, it can have a big impact for our customers,” Reilly says. “I think it’s that level of focus on customer success, which is one of the things that’s unique about our culture and what’s unique about the company when you look at us and evaluate us versus other vendors. It sets us apart.”

While HP is also focused on customer success, Reilly says the degree and communication on this area within his company is core to the business’s revenue and growth. It is a cultural focus that employees have redefined and built a cadence around over the years. So maintaining or increasing this focus at HP is of chief importance for Reilly.

“That is something that I know is near and dear to ArcSight’s success and I will protect that level of investment, emphasis and kind of culture within HP,” he says.

When people know you are keeping intact the parts of your culture that are valuable to the vision, employees and customers, they can embrace other areas where they need to adapt more openly. Once Reilly called out which cultural aspects he wanted to protect, he shifted to planning how to adopt new ones that could help give the company scale. The key is to first identify and retain your cultural strengths and then build on other areas.

“So we knew the things that worked very well for us,” Reilly says. “That said, there’s a lot of things within your culture or your environment that aren’t necessarily all that differentiating — you don’t have to be as defensive and you can adopt things from the broader company. It is really understanding what is core.

“The thing that we’re very focused on, and I am with our leadership team, is not defending one or the other but really trying to identify which are the important aspects of each culture that we either need to retain or adopt to succeed in this new environment.”

Over the past year, Reilly has succeeded in minimizing uncertainty and motivating his team to embrace the many changes that it made and will continue to make. In 2010, the Bay Area News Group ranked ArcSight third in its category of top workplaces in the Bay Area. Reilly, who now has the title of vice president and general manager of HP Enterprise Security Products, credits the ranking to the company’s clear, enduring vision, strong communication and environment of employee autonomy.

“There are a lot of things that I don’t know, like what the world will be like six or 12 months from now,” he says. “It’s something that you continually have to work on, continually having to communicate, continually having to anticipate what may come about, and make sure you have good actions in place.

“Your job as a leader is to always assume that there will always be uncertainty and that it never goes away. Your job is to always try to give your team the confidence that the path that they’re executing on is the right one.”

How to reach: ArcSight LLC, (888) 415-2778 or www.arcsight.com

The Reilly File

Tom Reilly
Vice president and general manager of HP Enterprise Security
(Before the acquisition, he was president and CEO of ArcSight LLC.)

Education: University of California, Berkeley — class of 1985

Born: San Francisco, Calif.

What was your first job?

Held three paper routes for San Jose Mercury News

What is one part of your daily routine that you wouldn’t change?

Waking up to my 1-year-old boy standing in his crib, all smiles.

Who are your heroes in the business world and why?

Entrepreneurs — whether they are successful, unsuccessful or yet to find out.

How Jun Hamuro positions SESA as a leading brand

Jun Hamuro, president and CEO, Shin-Etsu Silicones of America Inc.

Earlier this year, Jun Hamuro celebrated his company’s 25th anniversary with employees at its Akron headquarters. As he recognized the customers and employees who were instrumental in the company’s success and double-digit growth, he also reflected on the vision ahead and what it would take to continue to build the brand.

“Twenty-five years ago we almost were nameless in the United States, but we have been getting a reputation technologywise and qualitywise,” says Hamuro, who is the president and CEO of Shin-Etsu Silicones of America Inc. Today, we’re probably No. 1 in the world in the silicon industry.”

As the U.S. subsidiary of Shin-Etsu Chemical Co. Ltd., an 85-year-old global corporation based in Japan, SESA has flourished since it was launched as three-person office in Los Angeles, Calif. In 1995, Shin-Etsu Chemical increased its production facilities in Akron to own another silicone company, Shincor Silicones Inc., which now works in collaboration with SESA under the parent company. Today, SESA employs more than 160 employees, generating more than $100 million in revenue last year.

“I let all the people here know and they are very conscious about what we need,” Hamuro says. “They are serious about their jobs. I really appreciate the people we employ and I think we have a bright future if we keep growing 15 percent in the future.”

Under Hamuro’s strategic leadership, the company has been able to chart a course for future growth and become an industry leading manufacturer silicone compounds in the U.S.

Here’s how Hamuro positions SESA as a leading brand in its industry.

Promote harmony

Hamuro’s ability to adapt his leadership style to U.S. business culture has been vital in helping the company transition to a future as a flat organization. When he first came from Japan to grow the business in the U.S., he had to bring together the two cultural styles in order to set the new market up for successful growth. However, he quickly noticed some major cultural differences in the way his U.S. employees expected him make decisions.

“We have a lot of hierarchy in our organization in Japan,” he says. “The thinking is the bottom up and not the top down.”

While it allows collaboration, the problem with consensus decision-making is that it’s nearly impossible to have everybody agree on an issue.

“In Japan, of course, the CEO must take responsibility, but the decision-making process is very complicated,” Hamuro says. “We must have everybody’s consensus on everything. That’s a very tedious process. But the basic thing is the decision-making is bottom up. So it sometimes is frustrating. It takes a long time to make some decisions.”

Having come from this model of leadership, Hamuro was somewhat puzzled when his team in the U.S. was looking to him to take charge of the decision-making process.

“The first day, I misunderstood that I must decide everything,” he says. “I must dictate something.

“I had some hard discussions with them because the way to do operations in Japan and operations in the U.S. is much different. So we were actually fighting each other in the discussion.”

Soon Hamuro realized that employees weren’t really seeking a dictator. Instead, they were used to top-down leadership from the CEO, who drives the direction of the company, leads collaboration and ensures decisions are made efficiently.

“We must discuss before making a decision,” Hamuro says. “We must try to make a consensus on different decisions, but also the CEO must make a decision and then take responsibility on all decisions. I include key people in decisions, such as the site managers and the Japanese business side.

“There’s certainly top-down leadership and sometimes I must make decisions and direct people. Yet I’m conscious of listening to people and what they are thinking about, listening to their opinion.”

At the same time, if there is a lack of agreement on an issue, that is when the CEO needs to step in and offer solutions to speed up the process and push through a decision.

“I can correct the direction,” Hamuro says. “I’m always listening to the harmony, so if one person makes some noise, I deal with it.”

Since he came to the U.S. 12 years ago, Hamuro has also hired several key managers who understand the country and its culture. These people also serve to help monitor the success of the culture and advise him on how to facilitate an environment where people understand and are engaged in the company’s direction.

“At first I must understand why this person thinks this way, and then the next step is I can provide some alternative ideas,” Hamuro says. “That is very important.

“It’s like in an orchestra. Of course you need excellent instruments, but in the orchestra we need harmony. So that’s mostly the thing that I’m conscious of when a person is hired in the organization.”

Adapt quickly

One of the principal areas Hamuro sees the company’s advantage over established industry competitors is its knack for adapting swiftly to customer demand.

“The key thing is networking key personnel with customers, R&D people and engineering people to motivate them to find new technologies,” Hamuro says. “We are not developing ourselves but interacting with the customers and hearing their needs to develop new chemical molecules.”

Hamuro estimates the company has generated 3,000 U.S. patents in just the past few years as it works to identify and invest in new chemicals based on customer interest. To recognize new opportunities, he spends significant time gathering information about industry movement, whether it’s consulting magazines, newspapers and the media, talking to his technical, sales and marketing people or most importantly, meeting with customers.

“I travel a lot,” Hamuro says. “Probably 50 to 60 percent of the time, I’m travelling to the customers. So communication with the customer is a very key thing for me to establish my idea of which area we are going ahead.

“In the past four or five years I have changed the product portfolio industrywise. We have made a lot of changes servicing industries. It used to be that we were very strong in automotive industries, but now we are very strong in the personal care industry, and we are looking at different industries like the health care industry in the future.”

Investing in multiple industries with a varied portfolio allows Hamuro to take risks and position the company to be nimble for growth. Yet from a CEO standpoint, he says you need to make sure that before you commit to enter a new market, you first gather as much information as you can about the opportunity.

“I must be very conscious of what is and isn’t a growing market,” Hamuro says. “Number one technologywise and also geographicall wise.

“Getting information as much as possible is the key thing. I can then decide the distribution of resources, especially if it’s human resources, facilities and those kinds of things.”

In a fast-growing industry with a lot of innovation, the company also benefits from its model of vertically integrated manufacturing, which allows for more flexibility and efficiency in operations. The company trains employees to work in many different capacities and make various products for both Akron-based Shin-Etsu Chemical subsidiaries, Shincor and SESA, helping it can adapt with industry fluctuation.

“It’s difficult to control, because we have two companies here in Akron,” Hamuro says. “It’s a small company, but it’s a wide variety of people and a complicated corporate structure. That gets very challenging.

“So the two companies still exist but we’ve tried to integrate those companies. We are now under one site manager and sometimes we are exchanging operators. If Shin-Etsu Silicones is very busy, Shincor people are helping with operations. On the other hand, if Shincor is busy then SESA will them. So there’s that sort of flexibility.”

By having employees who can shift to wherever they are needed, you can switch gears quickly in times of greater and less demand without having to worry about staffing up or down.

“In 2010, at the busiest period we temporarily increased the shift numbers, one shift to two shifts,” Hamuro says. “But we didn’t have to hire new people for the training. So it’s very helpful for us to be flexibly manufacturing oriented.”

Prioritize profit

Hamuro needs to make decisions about the future of hundreds of silicone products in numerous industries, so he spends a lot of time educating himself on the profitability of different business segments.

“My philosophy is with every product — we are selling 500 or 600 different kinds of products to the market — my target is not going with one product that is negative in profit,” Hamuro says. “That means every product must bring in profit somehow. But it’s very difficult to control 500, 600 products.

“I divide it into 20 major segments. And every time I watch a profit figure. Every segment has a profit, regardless of the manufacturing or importing. Those products are profitable.”

Hamuro monitors product profitability by monthly re-evaluating which areas need to shift or change to keep the company on track for growth.

“My controller is reporting basically every month on the segments and how much profit we get,” he says. “If one segment has a very slow and has a low profit, then we take a look at the inside. I break it down into every product, find out what is wrong and find out why.”

When he recognizes which area isn’t profitable, first Hamuro will consider cost cutting and reducing cost on the manufacturing side. Next, he will try to convince clients to increase the price or ultimately may eliminate a product. In industries that are growing, you can increase the human resources of facilities into those profitable areas to ensure resources are most effective.

“We prefer highly profitable industries,” Hamuro says. “Nowadays, it is very difficult to make a profit in the automotive industry, for example. So we are always looking for a wide variety in our portfolio. Fortunately, in the personal care industry especially, we have original technology in Japan. So recently we built a new laboratory in New Jersey to correspond to those customers and make new formulations.”

One way Hamuro is hoping to create a stronger position for his company in the U.S. is by moving some of the basic production in Japan to Akron, where it currently has none. This would give the company a competitive advantage in being able to make more basic products, such as a silicon monomer within the next three or four years, and take advantage of U.S. manufacturing.

“My current goal is integrated silicon manufacturing based on the Japanese technology,” he says. “But existing in the United States, we will have more opportunity to expand in a global position.

“Currently, our parent company has a basic brand in Asia only, in Japan and Thailand. We don’t have any of the basic plants outside of Asia. So I think the making of the basic production outside of Japan is very meaningful for us to further development as a global company.”

How to reach: Shin-Etsu Silicones of America Inc., (800) 544-1745 or www.shinetsusilicones.com

The Hamuro File

Jun Hamuro
President and CEO
Shin-Etsu Silicones of America Inc. (SESA)

Education: Keio University, Tokyo, Japan

Born: Suburban Tokyo, Japan

What was your first job?

General Administration Dept. Shin-Etsu Chemical Co., Ltd. Isobe Plant

Who are your heroes in the business world and why?

Our chairman, Mr. Kanagawa, is my hero as genius in business decision and strong will to accomplish difficult task.

What would your friends be surprised to find out about you?

Most of my friends in school days were surprised that I had chosen a sales type of job when I started my career.

What is your favorite part of your job?

Sometimes my job is complicated, difficult and hectic but challenging and joyful when we have successes.

How Jim Bolch got Exide Technologies to play to win

Jim Bolch, President and CEO, Exide Technologies

When Jim Bolch took over as president and CEO of Exide Technologies last year, the 122-year-old battery company was doing well.

It had fallen on tough times in the first part of the last decade, but the previous CEO had remedied that and gotten the organization back on track.

“He did a lot of tough love, if you would, to put the company back on track and did a very good job of it,” Bolch says. “But what came away from that environment is the company became very risk-adverse. The people were very reluctant to take accountability for decisions and sort of step out.”

His initial gut-feel told him he was going to need to change the mindset of the organization in order for it to continue improving.

“My challenge is, as I’ve sort of coined it, moving the company from a ‘don’t lose’ mindset to ‘play to win,’” he says. “People were scared of making a mistake. With 10,000 people, [we had] to change their mind and say, ‘It’s OK; it’s time to grow this company and time to win the market,’ and we’ve spent a lot of time over the last year doing just that.”

Build your case

While Bolch initially suspected that the company needed to change its mindset, he wanted to test that theory before he moved on it.

“Early on, you develop some hypothesis, but you want to go out and test them, so a little bit of it was collecting data to test, but also it’s starting to build some consensus as you go along,” he says.

He spent only two weeks of his first three months on the job actually in the office. The rest of the time, he was out traveling to more than 20 countries, touring his factories and talking to different employees, customers and investors.

As he met with each of these different constituents, it was important for him to ask a lot of questions to make sure he was gathering as much information as possible.

“The questions vary depending on where you are and who you’re talking to,” Bolch says. “Typically, if I’m talking to employees, one of the first set of questions I start to ask is, ‘Who are your customers? How does what you do add value to your customers?’ … If people don’t really understand how they’re going to add value, then we have a problem.”

He also asks a lot of questions around how do they do their job, how do they know that’s the most efficient way to do their job, and if they had an idea on how to do that better, how do they implement it.

With customers, the questions are different and more focused on asking them how Exide can do better — what do they like about doing business with the company, what don’t they like, are they responsive, and are they innovative?

“Especially with a customer, asking more open-ended questions, you can learn a lot,” he says.

Then with investors, it’s yet another set of questions.

“With investors, it’s all about expectations — what would cause them to want to invest in our company, what would they expect to see back from that,” he says. “With them, a lot is results, a lot is transparency and understanding of the direction of the company and what we’re trying to do to improve.”

As he traveled and talked to people, he started to see evidence that supported his theory that the mindset had to change. For instance, he went to visit a plant in Kansas City, Kan., that made the company’s industrial products. One of the things he asked them about was how often they went to another plant two hours away in Salina, Kan., which is where he was headed next, to share best practices.

“The room was just silent,” Bolch says. “The simple fact was they had never been there. It wasn’t part of the culture to operate as a global company. It was just small local entities.”

Turn hunches into plans

As a result of his travels and conversations, Bolch thought he knew what needed to happen to start changing the company’s mindset, but he needed the right people in place. He made some changes to his team, and about three months after he started, he took the new senior management offsite for a week to put together a new plan and get their buy-in for it.

“It’s about getting them engaged in the process,” he says. … “We did a lot of prework of understanding where the business was and where it could go. A lot of that is really externally based. You have to look outside the company. You get too internally focused, and that’s a problem. Look outside the company. Look at how you deliver to your customers.”

They brought in both customers and investors to talk about plans.

“I don’t think they had had that as much in the past,” Bolch says. “We weighted the pros and cons. It wasn’t necessarily a smooth process. There was some disagreement along the way, but in that, you build understanding. At the end, we came out as one team that was committed to the plan.”

That formalized plan — no longer just a hunch — had three main components: one Exide, driving competitive operations and global growth through innovation.

The first part was necessary because the company was divided up in a lot of different ways both geographically and businesswise. It wasn’t just in the Midwest that people had very little knowledge of what happened in other areas — it was everywhere — so he wanted to knock down the walls. Going forward, a plant could make multiple products instead of just one and a salesperson could sell multiple products instead of just one. It also meant doing some restructuring. Senior leaders were supportive of this, even though it left their jobs in jeopardy.

“What tells you a lot about the people is the way they go about it — if they really engage and say, ‘Yep, we think this is the right thing for the company. I’m not sure what it ultimately means for me, but I want to be a part of it,’” he says.

The second big part about driving competitive operations centered on making the plants and processes more efficient and cost-effective as well as being a leader in the environmental field. They used objective measures to identify the five most important activities to work on — continuous improvement, environmental health and safety, preventative maintenance, energy efficiency, and equipment standardization and cost reduction. Bolch says he looked at the operating metrics for all the plants to make these determinations.

“You can look at who has the best quality measures in terms of defect rates or who has the most productive work force in dollars per part, those kinds of things,” he says. “Then there’s also the subjective version — when you go to visit a plant, you can say, ‘This is a well-run plant.’ Typically it’s the more objective measures to say if you’re getting good results. Chances are, all the other stuff is going to be good too, at least on a consistent basis. Random is never good when it comes to things like that.”

Then the third part about driving innovation was key to developing new technology based on what customers were telling them — they had to play to win.

“It’s time to grow this business, and it’s time to establish ourselves as what I like to refer to as a company of choice — first choice for suppliers and people who want to work here for employment, first choice for investors,” he says.

Communicate your plan

As he began to move forward, the next step was to communicate the company’s new plan to each different constituent group. He did this through various venues, such as an all-company webcast, internal newsletters, in-person and starting an annual meeting.

“Although you have to craft the format differently, I believe you have to be very consistent with the communications, whether it’s your employees or customers or suppliers or investors,” Bolch says. “You can’t have different messages. You have to have a consistent strategy and talk to them and adopt it to their viewpoint a little bit. You can’t create different ones for different people — it doesn’t work.”

He says you have to start with a simple message.

“Making it a simple message is very hard,” he says. … “You have to be able to communicate not only to your senior people but also be able to reach somebody who is working on a factory floor who may not speak English, and translate it and be ruthless and streamline the message down.

“When you do that, it means you have to be very clear about what you have to do. If you use a lot of words, you don’t have to be so clear. If you use very few words, you have to be much more clear.”

That’s why he ultimately came back to just those three big ideas of one Exide, competitive operations and global growth through innovation.
“That seems to translate well and people understand it,” he says.

But he couldn’t simply leave it at just those three things. He also had to explain what those three things really meant to each constituency, and that meant tailoring that consistent message in different ways.

“It depends on their ability to understand, and what’s important to them,” Bolch says of how you do that. “If you’re talking to senior leaders in the company, you can be very explicit, and you can back it up with a lot of details.”

Then it’s different if you’re talking to a lower-level person in the company.

“They can be very intelligent, but they may not have all the knowledge to absorb it,” he says. “You tend to want to state it in more basic terms so they can appreciate it, and give them examples of how they can contribute because I believe that everybody at the beginning of the day, wants to come in and make the company a better place — I’m just optimistic that way.”

Then it’s a completely different approach when you go outside your company and talk to your customers.

“They don’t care as much how you pay your people,” he says. “What they want to know is how you’re going to run the company in a way that benefits them and how they run their business. Take those same messages and how that’s going to translate into better products or lower costs or higher quality.”

Then, lastly, Bolch had to take that same message and tailor it to his investors.

“If it’s a successful business and making customers happy and we’re engaged with employees, ultimately, there’s going to be better financial results for the company, which is what’s really of interest to them,” he says.

Move forward

After he had effectively communicated the new plan to all the different stakeholders, he then went about moving the business forward. As he worked with people, he continued to reinforce the new plan.

For instance, Exide used to have one large sales force that went out and sold to car manufacturers, such as BMW and Toyota but then had a completely different sales force that sold batteries that go into forklifts. Once when he was out with a salesman in one of the car factories, he took the opportunity to further the plan.

“I would say, ‘It’s great that we’re selling them car batteries, but what kind of batteries are in those lift trucks running around?” 

The salesman didn’t know, and when Bolch would ask why not and wouldn’t it be great if they were Exide, the salesman would respond that it would be nice but it wasn’t his job to know.

“It’s the classic, ‘Not my job,” so now we make it their job,” Bolch says. “As you start to unearth these opportunities, one is you change the incentives and objectives, but the other one is you really communicate where we had victories.”

After that conversation and several others like it, now Exide is seeing victories in cross-selling opportunities across the businesses.

He’s also starting to see the fruits of his labor in other areas. For instance, in the past, you could only build an industrial battery in an industrial plant or a transportation battery in a transportation plant.

“Now we’re breaking through that paradigm saying, ‘If we have the skills, and we have the capacity to build in this plant, why can’t we do that there?’” he says. “We’re doing that and generating a lot of productivity that way.”

And the numbers prove that things are changing, as net sales for fiscal 2011 improved to $2.8 billion from $2.6 billion in fiscal 2010.

He’s also seeing more engagement with employees when he communicates with them, which is a sign of success.

“The first time you do a webcast globally, it’s absolute silence because people aren’t sure what to make of the new guy,” he says. “But as time has gone on, you get more and more questions about, ‘Well, can you tell me about this? I’m really interested in this. Or I had this idea — what do you think about that?’”

He’s now getting more e-mails form employees, which is really exciting for him.

“It says to me that people are now starting to engage more and are starting to understand the business,” Bolch says. “When I go into a plant, people interact differently. It’s not just me. Our whole leadership team is reaching out like that. When you see them engage back, you know you’re making a change.”

How to reach: Exide Technologies, (678) 566-9000 or www.exide.com

The Bolch File 

Born: Jackson, Miss., but I didn’t live there very long. I moved to Shreveport when I was about kindergarten age.

Education: Bachelor’s degree in mechanical engineering, Tulane University; Master’s degree in mechanical engineering, University of Florida

What was your first job and what did you learn that still applies?

Mowing lawns. I was probably 10. One [thing I learned] is you probably don’t want to mow lawns for a living. I think it’s just you have to take pride in what you do. If you’re going to commit to do a job, you do what you said you’re doing to do.

As a child, what did you want to be when you grew up?

I wanted to be an astronaut. I was born in 1957, so when President Kennedy wanted to go to the moon, I was like 5 years old so it was an impressionable age I suppose. I used to write letters to the people at NASA when I was a kid, and they would write me back. I had two problems. Once I was 12 years old, I was already over 6 feet tall. And at that time, you couldn’t be an astronaut if you were over 5 feet 10 inches, and also I didn’t have perfect vision. I was written out of the program early on. I had to go be an engineer instead.

What’s the best advice you’ve received?

‘Trust, but verify.’ I think I it is critically important to empower your team, but periodically you need to drill down to ensure that you are getting the whole story and you are comfortable with the direction.

What’s the best book you’ve read lately?

‘Unbroken.’ It’s a story of a WWII army aviator. It was a young man who went into the army at a young age, but he was ultimately shot down and stranded in the Pacific and was a prisoner of war, and it was an incredible story of someone’s personal story and how they survived and how they conquered incredible things. It was pretty inspirational.

How Robert Korzenski helped Solo Cup Co. discover its identity

Robert M. Korzenski, President and CEO, Solo Cup Co.

When Robert M. Korzenski took over as president and CEO of Solo Cup Co., the $1.6 billion food service product maker had a bit of a problem.

It had been two years since Solo had acquired SF Holdings and its well-known Sweetheart brand of cups, plates and other single-use food service products.

“The outlook for that combination was a great opportunity and one that could change the way the market was being serviced by taking two brands and putting them together to ultimately serve a much broader and larger customer base,” Korzenski says.

Unfortunately, the integration was not going as well as everyone had hoped.

“Part of what I had to try to understand and look at was what caused two companies of similar size and nature in the same industry with similar product lines and so forth, what caused them to be at the point that they were two years into the integration,” Korzenski says.

What Korzenski discovered was that these two companies that seemed to be so similar were actually pretty different.

While Solo had always been a family-owned business, Sweetheart had gone through multiple transitions over the years. The two companies took very different views on the external world and the task of financing their operations.

“Those were two cultures that were clashing as they came together in 2004 through the period that I came in in 2006,” Korzenski says. “It was like we took a blanket off what was happening in the company to say these are all the problems. I certainly single-handedly am not smart enough to figure these all out by myself. And even the executive management team and all the talent and energy that is brought to the party isn’t capable of figuring these out themselves. We need all 7,000 employees in the organization helping us figure out how to do it better.”

Speak with clarity

One of the first things that became clear to Korzenski was that Solo Cup Co. had a lack of leadership. This shortcoming, combined with the lack of a clear identity that had come about through the joining of two conflicting cultures had created a lot of confusion for employees and customers alike.

“Whatever communication or whatever strategic plan existed, it was usually owned by outside consultants, outsiders to the company,” Korzenski says. “It wasn’t developed and owned by that leadership team at the time. It’s my belief that if you don’t own it and you don’t help develop it, you can’t execute it the same way as if you did own it and you did develop it.

“As I looked at the landscape at the time, you could clearly see they were internally focused and that there were confusing signals to the employee base about what was important and what we were trying to accomplish. More importantly, there were confusing signals to the marketplace about who we were and what we were trying to do.”

Korzenski needed to move quickly, because the company was bleeding cash and had a lot of debt, which put Solo Cup in a very precarious financial situation. There wasn’t a lot of time to get things turned around.

“One of my objectives was to bring in place strong people, a strong leadership team that could help right the ship and put it back on track,” Korzenski says.

Korzenski revamped the management team, bringing in people who he felt could make an immediate difference and deliver a clear message about what Solo Cup Co. was doing. It was both simple and desperately needed.

“Truthful and honest and open communication,” Korzenski says. “That’s what people want. People can’t solve problems if you don’t give them all the facts. People won’t want to solve problems or won’t jump on board if they believe you are misleading them and people will quickly begin to not follow you if they suspect that the company is really doing something else and communicating another story.”

Korzenski needed his new management team to step up and help him deliver this message. It would be a lot more meaningful if he wasn’t the only one talking. It also wouldn’t hurt if they did a little listening too. The key was for both Korzenski and his team to be approachable.

“It absolutely can’t only be me,” Korzenski says. “The executive team, which is seven other members that report directly to me, the team understands that my expectation is you listen carefully to what you’re hearing and what people are telling you so you can then translate that into what do we do in response to those situations that are unfolding.

“It really is about your own approachability and about how often you are out visiting not only with your customers, but with your employees and about how well you listen. Sometimes you come in and because of the position, people may be a bit intimidated and might not be as open and honest with their dialogue. But if you listen carefully, everyone is usually telling you what they are really feeling. You just have to listen to it.”

If you personally don’t feel comfortable being part of that communication effort to your people, lean more heavily on your team to fill in those gaps or find a way that falls more into your comfort zone.

“You may never be a speaker that can stand in front of 7,000 employees and address the group,” Korzenski says. “But if you can do that with smaller groups and more intimate settings where you feel more comfortable, use that. … It may not all look the same. It will be different. But everyone has that skill. If you have to do it five employees at a time, then that’s what you have to do.”

Korzenski and his team didn’t just hold meetings, they got out and visited factories and tried to canvas the company communicating with employees.

“It’s really making a strong effort to not only get everybody to hear what you’re saying, but making sure what you’re telling them, they can clearly understand, they can clearly believe in and that everyone is listening to the same message,” Korzenski says. “So it really is about getting to the factories, getting to the facilities and getting out with our sales people.

“Every action, every leadership move and every form of communication through the executive management team through every level of this company must be done in an honest and accurate way. Then people will believe and follow. Short of that, it won’t happen.”

Keep it going

Korzenski began to see the fruits of his and his management team’s labor through 2007 and into 2008.

“Our employees really signed on to what was happening and really started to get engaged in getting the company to new levels and new areas we expected to get to many years before that,” Korzenski says. “Our customers started to believe in us again. Our outside constituents, our suppliers and our board all started to believe that the company was moving in the right direction.”

Debt was reduced. Sales improved and so did cash flow. Then the economy tanked and demand, which was typically very reliable in the industry of plastic cups, plates and the like, took a big hit.

The loyalty that Korzenski and his team had earned in the first couple years was being put to the test.

“They were saying, ‘Look, you’ve been entrusted with a company that has a 75-year heritage,” Korzenski says. “It has one of the strongest brands in the industry. Don’t screw it up.”

The need to keep people informed and involved was even more important now than it had been before.

“I believe in the absolute expectation that all people will participate in a discussion and that we’ll reach consensus,” Korzenski says. “I don’t believe that an autocratic style is the way to win an organization’s heart and soul to move it forward.”

When you experience an obstacle in your path to achieving a goal, you can’t throw in the towel and give up. You also can’t be so loyal to your plan that you don’t recognize the need to adjust.

“You can set the target and you can set the end state, but if you don’t adjust along the way and you blindly follow that end game without halftime adjustments,” Korzenski says. “That will lead to failure as well. So it’s important to put that stake out there, put an end opportunity in front of the work force and in front of our customers as well so they understand where we’re going. But then it’s having the ability to change that, whether it be subtly or pretty significantly.”

But whether you’re adjusting or staying the course, remain accessible.

“My assistant knows that any customer that calls, whether it’s a hot dog stand down the street or Starbucks, she finds me wherever I am and I speak directly to that customer about any issue they may be facing with the company,” Korzenski says. “I expect that of every member of the leadership team as well. I think those are the critical pieces to being successful and then taking that information and turning it into results for the company.”

Continue to evolve

When the economy began to turn in 2009 and 2010, it was time to unleash the next phase of Solo Cup’s evolution. A new campaign slogan for employees, “Think Like a Customer,” was unveiled to indicate that the company had solved many of its internal issues and that it was now time to really focus on being a great brand again for customers.

“What it was intended to do was take this new company and say, ‘If every single employee in this company started to think like they were the customer, what would you do differently?” Korzenski says. “How would you act differently? What would you do in your daily lives so that the customer could visibly see a different Solo Cup?’”

The idea was to reinforce the notion that things would continue to change and employees needed to stay tuned in to so they could always be providing the best product and service possible.

“You want them to be able to depend on Solo to be the company that they can come to for their changing needs and for what they need to solve their solutions,” Korzenski says. “If you have an employee base that thinks that way, that thinks like a customer, then they bring that expertise. We know that listening to what the customers’ needs are in this changing environment is going to be critically important to our success going forward.”

How to reach: Solo Cup Co., (877) 765-6669 or www.solocup.com

The Korzenski File

History of Solo Cup Co.: The company was founded in Chicago 1936 by Leo J. Hulseman as Paper Container Manufacturing Co. It changed to its present name in 1946. The company has 10 North American manufacturing facilities and six state-of-the-art distribution centers, with additional manufacturing and distribution in Central America and Europe. The company is an exporter to more than 70 countries and has a broad product line encompassing many materials: paper, plastic, foam, post-consumer recycled content, annually renewable materials and compostable materials.

Innovations in single-use tableware that reflect the common culture:

1936                Paper cone cup

1946                Solo Cup

1950s              2-piece wax-lined cold cups

1960s              Cozy Cup and reusable plastic holder

1970s              2-color, red Party Cup

1980s              Traveler hot cup lid

1990s              Clear, plastic PET cup

2004                Solo Grips product line

2004                FDA-approved post-consumer fiber hot cup

2008                Bare by Solo line of eco-forward single-use tableware

2009                Solo Squared

Korzenski on delivering a message: It really goes back to something that I did as an intern through one of my summer jobs. I was given an assignment and I was asked to give that assignment to the executive team. I launched into the solution within the first 30 seconds. One of the members of the team took me aside and said, ‘Part of what you have to do is you have to polish this up a little bit. You have to make sure everybody understands the work and the effort that you put into it.’ So take your time to talk about what it is you’re doing.

Bruce Neil brings his team on journey to save The Doe Run Co.

Bruce Neil, President and CEO, The Doe Run Co.

In 2008, Bruce Neil watched 68 percent of his revenue at The Doe Run Co. disappear thanks to a severe drop in the price of lead.

“We needed a very rapid and dramatic response,” says Neil, president and CEO at the natural resource mining company and lead producer. “We knew prices would come back up, but we didn’t know when. We decided this was going to be a long-term thing and a long-term recovery, and we would need a couple of years.”

Neil knew he was facing a tough battle for the future of his business. He also knew he couldn’t fight that battle by himself.

“The reality is, as the CEO, I’m not going to survive alone,” Neil says. “I’m not going to get through this alone. I’m not going to do this alone. I need every manager, every supervisor and every employee to realize that as a company and as individuals, we’re all going to have to make sacrifices.”

Neil did offer one edict to his people that he expected to be followed as decisions were made about Doe Run’s survival plan.

“If there are going to be reductions in the company, they have to be across the board and at all levels,” Neil says. “They cannot be in one area and not another. We’re all in this. The long-term strategy of the company is that we’re going to continue to operate each of these parts of our business, and we had to make sure that we did not end up with one part of our business that was in terrible shape to the advantage of the other. We said, ‘We’re all going to have to make some sacrifices here. We understand we can’t do everything we said we wanted to do in our planning.’”

Neil was confident that if the 1,400-employee company was going to come through this storm in good shape, there would need to be a heavy emphasis on finding solutions collaboratively.

Show you trust people

Neil was adamant that the majority of the key decisions that would be made about the future of Doe Run would be made with a lot of input from people at all levels of the business.

“The guidance was around, ‘This is the situation we’re in, this is our reality, and this is what we need to accomplish,’” Neil says. “So my guidance was around broader strokes. It was not on details. I really relied on people. What is the best plan? I didn’t say, ‘You need to have a lower production plan.’ I said, ‘You need to have a plan that is going to economically enable us to get through the next 24 months if things don’t change. If things get worse, we need to have the assurance that the plan you give us, all the people in the company can deliver on it. There’s no point in having a plan that you think I may want to hear. You’ve got to give me a plan that you will deliver on.’”

Neil and his people needed to find ways to reduce costs. About 85 of the company’s production ends up in lead acid batteries. Many of these batteries are used by the U.S. auto industry, which itself was taking a major hit in the recession.

So that’s where one of the first cutbacks was made. It was a decision that made sense and that’s what Neil wanted.

“What was happening in Detroit was having an immediate impact on the need for our products and our ability to generate revenue to survive,” Neil says. “We made the decision that we were not going to produce one pound of metal more than what the market would bear. So if it fell to whatever level, we were going to match our production plan or business plan to meet that demand and no more.”

Neil wanted his people to understand that he trusted them to make these important decisions. He had no desire to stroll out of his office and issue proclamations about how things were going to be done, nor did he think that was the best way to go.

“I had full confidence in people to come up with the solutions that would be needed,” Neil says. “I just absolutely couldn’t say, ‘You have to do your job this way.’ Everybody knows how to do their job better than I know how to do their job. No matter how much experience you have over the years in different parts of the business, that’s a reality. People who are on the job today can do it better than I ever could. All I can do is give people a vision that this is what we’re going to look like when we’re through this and ask them to achieve their goals and we’ll make it sustainable.”

If people struggled to come up with things to cut, Neil encouraged them to talk to people in other departments who were having more luck.

“People felt they were under a lot of stress because of the understanding that pricing had dropped so rapidly that everything was at risk,” Neil says. “They were aware that we were going to have to make job reductions and that people that they worked with were going to be off for a period of time or be laid off on a permanent basis.

“The guidance that people were given when they were struggling was examples of how people were solving this problem in other areas. Just try to make sure that people weren’t leaving any stone unturned. Everything was on the table. It’s supporting and encouraging and just making sure people understood that what I was saying, it was something I believed in.”

Offer a bit of hope

It probably did little to ease the pain of the people who were laid off, but Neil went ahead with planned pay increases for those who remained with Doe Run.

“We insisted we were going to keep the top quality of the competencies that we needed for the future,” Neil says. “We held onto those. We paid people the annual increase. We decided that these were based on performance and so we paid those. We deferred any kind of incentive payments or incentive programs. We said, ‘In this situation, we can’t afford this.’ But as we went through, we not only retained the key staff, but we actually continued to hire some really top caliber people because if we needed a skill, we hired it. We continued to build the people skills that we had in the company.”

Members of the executive management team did not receive a pay increase. But he felt the message had to be sent to the other employees that the company was not giving up on its future.

“The truth is, I did not know how it was going to work out,” Neil says. “That’s for sure. Having been through the rough edges before, I wanted it to work out in a way that would enable us to have the hopes and dreams of who we wanted to be in the future and retain that. My sense was it was a question of telling people there was no certainty here. We’re in a tough position. But on the other hand, we’re in a good position. I would talk about our strengths and that we’re going to do this together. To some extent it was team building. For people to believe in the team and be part of the team, they have to believe in the goal.”

Neil did not sugarcoat the future and was upfront about the challenges Doe Run would face. But he wanted people to have a reason to believe that if they worked hard, there was a good chance things would improve.

“You have to have the credibility that if you say this will happen and you don’t know if it will happen, you have to say, ‘This may not happen and these are the problems,’” Neil says. “‘But I believe if we do this together and we share this, we can accomplish it.’ You have to believe that. I don’t believe you can tell people something that you don’t believe in.”

Prepare for the future

Cutbacks weren’t the only thing Neil wanted help with as he led Doe Run through the recession. He wanted people engaged in steps that could help the company be more prepared to thrive when the economy began to improve again.

There was one piece of criteria offered at the beginning of this particular process.

“If it’s not going to completely pay for itself within the next year or 10 months, we’re not going to do this year,” Neil says. “It had to be a very quick return if we’re going to spend capital on it. We felt we needed capital to pay our operating costs.”

These projects would also need to be pulled off without any outside help or consultants as that would be an additional expense.

So the plan was to bring people in from all levels of the organization to present their ideas on how to help the business generate more revenue.

“We set up a structured prioritizing process where we involved not the executives, but we involved senior leaders in the company and we involved people representing all areas,” Neil says. “We had people present their projects to each other and present to a larger group.”

Some projects got a lot of support, while others did not get as much.

“What is the result of that?” Neil says. “People are more focused on the business returns for a project or an investment they want to make in their area because they have been through this process where if it didn’t meet a very tight business standard compared to someone else, than that other project would go ahead and not theirs. There was a better understanding on that and the planning process is stronger than it was before.”

It’s also a good lesson to people about the barriers that may frustrate them when it comes to getting things done in a business.

“When you make change, there are going to be barriers, whether it’s the culture of the company or people saying, ‘We never did it that way,’ or people don’t want to give up something,” Neil says.

If you’re soliciting input for this type of participation and you don’t feel like you’re getting much of a response, you may not be as empowering and collaborative as you think you are.

“If you don’t communicate the vision and you don’t talk to people regularly about how you are doing and what you need to do, then when you tell them something, it’s going to be as if it’s coming out of the blue,” Neil says. “People want to be listened to. They want to have their ideas listened to. They want you to hear their ideas. People are all interested in a dialogue on what you’re doing and what their company is doing. I don’t think it matters where you are in the company. You have an interest in that, you need to promote that.”

As 2009 ended and 2010 dawned, Doe Run began to see demand increase again. Profit sharing and 401(k) matches came back into play and the company found several new options to begin growing again.

“You have to be direct and honest and say, ‘We may not get out of this when we want,” Neil says. “We may not all be here when this is through. But we believe in our products, we believe in our ability to do this and all we have to do is work together and we’ll deliver it.’”

How to reach: The Doe Run Co., (314) 453-7100 or www.doerun.com

The Neil File

Born: Tofino, British Columbia, Canada. At the time it was outside an Air Force base on Vancouver Island. My dad was in the Royal Canadian Air Force and I was born right at the end of World War II.

Education: Queen’s University, Kingston, Ontario. I took metallurgical engineering.

What was your very first job?

It was a retail store. There had been a heavy rainfall and the basement of this store was flooded. My first job was to clean and take apart as much of the old electronics that existed in those days. My job was to take out the tubes in the flooded television sets and test which ones could work and could be sold and which ones couldn’t. Once that was cleaned, I ended up working for the owner of the store.

Who has been the biggest influence in your life?

I would say the person that always gave me the best advice and best support was my father. I didn’t ever have a driving desire to be the CEO of a company. I’ve been fortunate to be given the opportunity. I’ve been fortunate to work with so many good, quality people.

What is the best advice anyone ever gave you?

When you graduate with an engineering degree, you believe that you’re going to be doing engineering, measuring, building and improving. There is some of that. But the reality today is what you and your business accomplish is accomplished through many people. So how you relate to people, how you talk to people, how you work with people is the most important part. And the best advice that I’ve been given is trust yourself, be open with your people and trust your judgment.

How Steve Germain works to get employees engaged ― to do more with less

Steve Germain, president and CEO, Germain Motor Co.

Steve Germain had some tough decisions to make. Even the area’s largest auto group, Germain Motor Co., hadn’t been immune from the 2008-09 economic recession.

The auto industry overall experienced a 35 percent drop in sales in November 2008. The next month, Germain had to lay off 60 workers. The following August, he closed Germain Chevrolet, a dealership earmarked by General Motors to be shut down.

“It went from bad to worse, and it really did force me to re-evaluate my strategies and priorities, and once we got through that time, we fortunately were in a position to review the way we did business,” he says.

Germain, president and CEO of the $914 million company, saw the situation not only as his biggest challenge, but also his golden opportunity to improve what he saw as the key to getting more done with less ― employee engagement.

If he could get employees more engaged in their work, it would offer a long-term solution to lower costs and boost productivity. And with 1,042 employees in 18 dealerships over four states, that was a tall order.

“The only way that you can do that is that employees need to have a better understanding of the direction of the company, and you have to get more people going in that same direction,” Germain says. “Then you can get more done with less. You can’t get more done with less if they are less engaged or no more engaged than they were five years ago.”

Germain was committed to the idea and felt it was crucial for employees to understand that he and his top level managers supported the initiative.

Here’s how Germain has been able to get employees more involved in their workplace environment, more willing to contribute ideas, and on the way, earn more for themselves and the company.

Seize the opportunity

To help employees get a better idea of the direction of a company, Germain realized there may be no better time than a recession when employees are concerned about job security. Employees are more willing to make changes, at least in the short term, which could lead to long-term benefits.

Germain first studied the importance of employee engagement, understanding the value of increased productivity and attendance, customer focus and generating support of change. Those areas would define the direction of the company.

“Those things are all tremendous benefits,” Germain says. “When you’re trying to drive down costs and increase productivity, engaged employees, in my mind, are the low-hanging fruit.”

He found that new employees, in general, are more engaged than older employees ― and it gave him an opportunity to use that information to look for ways to sustain that engagement in new employees and rekindle it in older employees.

“Sometimes your best salespeople are the new ones that you hire,” Germain says. “Their first month is their best month. Then their sales start to fall off.

“Why? It’s perhaps because their level of engagement starts to drop. Their engagement drops, their productivity drops.”

Statistics show that employee engagement drops 9 percent in the first year and 12 percent in the second year.

Germain established that the key was to keep the engagement level where it was, to keep employees as excited and feeling as good about their decision in year five as on day one.

“If you can do that, there’s no question that you can be a leader in your industry as it relates to revenues,” he says.

He realized that he had the opportunity to engage employees now more than before because they were more willing to listen to senior management.

“Prior to the recession, they didn’t listen to me quite as much as they listen to me now, right or wrong,” Germain says. “I think my message is better, and I think I’m communicating better, I have dealership meetings every six weeks, and I have the opportunity now to influence the way that our employees go about our business.

“But you have to work at it. It’s a lot of work to engage employees, even in today’s environment, but there is an opportunity now that maybe we didn’t have prerecession.”

Once Germain made the cost-cutting moves to weather the recession and sold himself on what needed to be done, it was time to recover ― and discover the hidden talents of his employees.

The second step was to determine the current level of workforce engagement. Simply put, the engaged employee is one who will go the extra mile to bring a high level of satisfaction to the customer. If you don’t know how willing your employees are to give the extra effort, you’re not going to be able to know where you need to be. One of the simplest methods is to conduct a survey.

“If you go around asking your employees are you engaged, what are they going to tell you?” Germain says. “Or, what are they going to tell their superior? Through a survey, they will be more honest than they will be otherwise.”

Germain made sure the survey asked frank questions, such as “Do you feel valued as an employee?” and “Do you feel your opinion counts?” It was important to cover all the bases to get as true a picture as possible.

“That’s part of the pain,” he says. “We did see a higher than average score (with an overall grade of 3.83 out of 5 with a 54 percent response), but we also saw a lot of opportunities where we could improve.”

To get the information, Germain chose online survey company Survey Monkey, which he felt was aligned with what he was trying to accomplish. Employees were assured their responses were anonymous.

“It’s important that if you go through the survey process, you encourage your employees to return it,” Germain says. “Do the survey by department; it’s important to understand by department, but you certainly don’t want to know by individual.”

Germain and his staff decided that to be of continued value, surveys should be taken on a regular basis, perhaps twice a year. That way, results could be compared over time and any progress or setbacks could be noted.

Choose where to start

Once he thought he had a good idea of the pulse of the work force, it was time for Germain to devise plans to get people going in the same direction.

The first task was to review the survey results to see what was suggested most often ― and to determine if it supported the goal of more employee engagement.

Employee surveys often point out several concerns, and Germain expected to find some enlightening comments.

“I was surprised that the level of engagement wasn’t higher; we pride ourselves on knowing our people as best we can, but we still saw huge gaps between what we think and what they think,” Germain says. “It’s as important to understand what they think as it is for them to know what I think.”

Common themes that are often mentioned by employees on surveys are management and communication. Openness between management and associates is necessary if the goal to generate support for change to succeed.

In that respect, Germain felt that employee suggestions for mechanisms to express their views should be taken seriously.

As a response to employee concerns, Germain and his management team created employee committees, one for each dealership. The director of human resources initially chaired the committee. Managers selected the members in the first go-around, and the hope is that the committees will become such a voice within the dealership that employees will actively seek positions on the committees. Feedback is expressed in a forum-like atmosphere.

“That’s something we are very excited about,” he says. “Members include one representative from each department, and they meet once a month.”

“You put together your ‘worker bees’ and they are going to be the ones to address employee engagement,” says Tessa Pekarcik, director of human resources. “Steve or I can talk until we are blue in the face about how we think this is the way the operation should run, and if employees don’t agree with it, that doesn’t increase engagement. Employees are going to be more receptive to their peers.”

Germain wanted to make members of the committee aware that the group is for the employees to help make the best work environment that they could have. In that respect, the committees are composed of members who aren’t necessarily going to tell you everything you want to hear ― they will be brutally honest.

Work with your findings

As committees started their meetings, employee members were encouraged to express their ideas and concerns. Now the real work began as discussions focused on potential solutions.

One of the first orders of business was to stress how important it was for employees to know that the committee members were going to be their voice ― as in a representative government. Results of the survey were shared with members at the first meeting for discussion, and the groups were urged to maintain their focus because it is easy to fall into the trap of just talking about grievances. Random discussions are avoided because they lead nowhere.

“With the committee, we try not to go off on tangents complaining about what is wrong,” says Jessica Germain, general manager of Germain Honda of Dublin, who attends her committee’s meetings.

“These things are issues that you can’t change, but working with what you have, what you can do ― that will have a positive impact on the community of employees.”

Once she found that issues such as trust among departments, accountability and teamwork were initial concerns in regard to improving employee engagement, employees were able to put the concerns in the context of having all departments’ best interests in mind.

When it comes to specific solutions, employees will decide what they think is the best manner to improve employee engagement.

“If you allow the employees to decide what they think is the best way to increase engagement, you’re going to end up increasing engagement even more,” Pekarcik says. “That is going to earn them money. That is going to end up making the company money.”

While employee engagement may be measured more in intangible results rather than sales volumes, Germain thinks that having the employee committees says that management does care, and that he and the dealership general managers are willing to listen.

“I really feel that having the employee committees has sent the right message and created more of a teamwork-type atmosphere,” Jessica Germain says.

As Steve Germain began the engagement efforts, he was willing to allow that it would take some time to see results of the initiatives.

“It’s a long-term strategy,” he says. “We’re not going to see our score go from 3.83 to 4.2 overnight. It’s going to take years.”

The initiatives, after all, are for the long-term survival of the company, and Germain hopes to turn it over to the fourth generation some day.

“You start that now, and 10 years from now, you will be a highly engaged company, and your margins will be greater than your competition,” he says. “You will have more sales than your competition, you will be able to attract and find the best people in the industry and they will be willing to stay longer.”

How to reach: Germain Motor Co., (614) 416-3377 or www.germain.com

The Germain File

Born: Columbus, Ohio

Education: Denison University. A good school and a good experience. I was a physical education major and got my teaching degree and thought maybe I might want to teach history and football. But I got into the car business. I never taught. I felt that there was more opportunity at that time to support a wife and perhaps children down the road by getting into the family business.

What was your first job?

My first job was a salesman down at my grandfather’s Fort Lauderdale Lincoln-Mercury dealership in 1978. That was a lot of fun for 22-year-old kid. I had a great time and learned how to sell cars. If I didn’t sell anything, I didn’t make any money. It was straight commission. I did that for a year. I finally talked my dad into hiring me into the family business and coming up here. The rest is history.

What was the best business advice you ever received?

My dad, Bob Germain, made it very clear that our employees are our greatest asset. He told me that early on, and he believed that. I’ve communicated that to our employees for the last 30 years. Every time I have a meeting, I would say that our employees are our greatest asset. Regardless of the franchises that we have, the buildings or the facilities that we utilize, our employees are our greatest asset.

What is your definition of business success?

Obviously, revenue over expenses. But it’s more than just that. It’s about running a good business, and a good business is not all about the bottom line, bottom-line sales, bottom -line profits. It’s about improving the lives of not only the family but of your associates. It gives me great pride when I see employees get married, have children, buy houses and invest in real estate or college education. I feel some sense of being a part of that. It’s a good feeling because as they are successful, I know that I’m successful financially and personally.

Richard Hipple united 10 companies under the Materion Corp. banner

Richard Hipple, Chairman, President and CEO, Materion Corp.

One PowerPoint slide illustrated the problem that Richard Hipple faced.

The one slide he was showing his board had 17 division names and logos representing the 10 brands in the company.

“You can have all these other presentations, but I always used this one slide to communicate to Wall Street and internally and the board,” Hipple says. “It didn’t matter — you only needed one slide to tell the story. [It’s] simple communication.”

As he showed that slide, he needed only one question to communicate his point.

“This is our company — do you think we’re really one company?” he’d ask.

It was hard to argue for the affirmative looking at that slide, and the message he was sending was clear — the company needed to be more unified.

The problem started small, in just one division of Brush Engineered Materials.

The division had made some acquisitions, so when you visited some of those facilities, there could be as many as two to three names and logos on the signage — ultimately illustrating the point that the company was a division of a division of Brush.

“Who are you?” says Hipple, the chairman, president and CEO. “That’s what we had. It’s absolutely amazing.”

So it started with an effort to rebrand the entire division. But when he took a step back, he recognized this was a common problem across the entire company. Brush had doubled in size as it expanded beyond its Beryllium core into other materials. As it grew, it had acquired other companies, and those entities retained their logos and names.

“We had like 10 names, 10 logos, 17 websites, and so we were missing a lot of leverage,” Hipple says. “The people who knew us as Brush Engineered Materials was the community and Wall Street. Nobody else knew us as that. Customers didn’t know us as that. We really needed standard platform recognition as a company. We didn’t have it.”

Simply rebranding a division wasn’t going to cut it.

“We had other division names, so maybe it’s time to relook at the whole company because we were going to spend a lot of money to do this and still not really solve our problems,” Hipple says … “We had an opportunity here to get everybody on the same platform.”

Being on the same platform was critical if the company wanted to continue to grow, but it was going to cost money to fix.

“You’ve got a mess in the marketplace, and you’ve got to fix it,” he says. “Nobody wants to spend the money to do it, but you’ve got to do it. We didn’t approach it from an ROI standpoint — I have no clue. I just know we can’t get to the next step with this many names and brands.”

Hipple recognized there were only two solutions to this name problem. He could either start having all the various divisions refer to themselves as Brush as well, or he could start from scratch with a new name for everyone. Of the two options, renaming made more sense to him. With all the discontinuity, he thought it might be confusing to just regroup under the current name.

“Why wouldn’t you rename the company and use the Brush Engineered Materials?” he says. “We had that already. It loses the pizzazz. You’re not really renaming the company – you’re saying, ‘We’re Brush Engineered Materials, and by the way we’re Brush Engineered Materials.’”

Another factor that made him choose renaming was the cost associated with each option.

He says, “It would have been almost the same cost to rebrand under the same name, which is kind of crazy, so we thought we would get a whole lot more runway with what we’re doing.”

Choose a new name

Once the decision was made, the process of choosing a new name began.

The company brought in a rebranding expert to help with the process.

“He came in, and we talked about the company — what kind of company we were, and what kind of image we wanted to have, and he just started to spit out names,” Hipple says.

As a management group, they would pick out about 10 of the names the consultant had come up with. Then the consultant would research and flesh the names out. They went through a couple rounds of this process.

“It gets extremely difficult,” he says. “We picked other names — I couldn’t tell you what they were — but as you started to flesh them out across the globe, fundamentally, they’re not available, or there’s a cultural problem where it doesn’t work in Asia but it works here.”

As they would research each group of names, they would put it to a vote among the team.

“It was surely not unanimous, but you can’t keep going on forever,” he says.

It’s in those situations that he says you have to recognize what is a gray decision versus a black and white one.

“I’m involved in a lot of the gray decisions — there isn’t right or wrong, but it’s important because it’s going to take you in a certain direction,” he says. “There are a lot of things you do, and you don’t know if it’s the right answer, and you may not know for five years, and you hope you [are correct] 80 percent [of the time].”

The one thing gray decisions have in common with black and white ones is that you’ll have to make the tough call.

“You can never get everybody to come to a conclusion, but a decision has to be made — simple as that,” he says. “To expect total uniformity would be highly unrealistic, but everybody understands that you’ve got to move forward, and then people get behind it.”

In order to make sure he can make the best possible decisions in those gray situations, he says you have to do your research. 

“You just collect information,” Hipple says. “You have outside expertise, you have internal people, and you just listen and make a decision. You try to do the best job you can collecting knowledgeable people’s insight.”

In the end, the name that seemed to stick through these rounds and processes was Materion. They liked it because the “mater” part seemed to represent what they did — materials — and the “ion” part sounded futuristic, which made them feel like they were looking forward and evolving.

He says, “It was available, it fit, it was culturally good across the world, so we locked it down and bought it.”

Prepare for the change

Once he had locked in the name, Hipple set a timeline for the launch.

Instead of opting for a hard launch, he chose a soft approach to ease people in and give all constituents enough time to prepare for the change.

First, he would tell employees and then later tell customers. So in the fall of 2010, the management team let employees know that come March, the company’s name was going to change to Materion.

“We knew we had risk of them talking about it, but we said it’s worth the risk,” says Hipple. “We’re sharing things with the employees — we let you know first, talk about it, and this is going to be unfolding in the next six months. We said, ‘Look, if it gets out, it gets out.’”

He used the slide with all the logos on it to illustrate the need, but there were still challenges; there was history, identity and comfort in those names. They had to get people excited about the name change and make them feel like they belonged to Materion as much as they had belonged to whatever unit they were in before.

They created activities to get people’s buy-in.

For example, they created a three-minute video called “Pass the flag” so people could see all the different locations of the company. They had a new company flag and each location created about a 15-second video of all their employees with the flag. At the beginning of their segment the flag was “thrown” to them from another location, and they caught it, did whatever crazy things they wanted to with it, and then “passed” it to the next group, who would in turn catch it, and the cycle would continue.

“You have all these hourly and salaried people around the world not really knowing the breadth of the company,” he says. “Then you get these cultures — there were cultural things going on, and it was crazy and everybody just loved it. We’re all one. It’s Materion.”

The other thing Hipple had going for him in terms of buy-in was the results he had achieved. When the company saw that Hipple had led the organization to $1.3 billion in net sales for 2010, up from $715 million the year prior, they knew they could trust him — this wasn’t a rebranding as a last-ditch effort to save a struggling organization.

After communicating with employees, Hipple’s team contacted all of their customers to let them know about the change.

“We basically said, ‘It’s coming, here’s why we’re doing it,’” he says.

As they communicated the reasons, they found, not surprisingly, that many customers really didn’t know about the other business units, so in addition to an education about the change, it was also a sales platform to start introducing other products to existing customers. Some customers were already working with different divisions but didn’t realize those divisions were part of the same company.

To resolve these issues, they created sales literature to help better educate customers about all the ways Materion could meet their needs.

In addition to educating people about the change, Hipple and his team had to actually prepare the organization physically for the change.

“You have to be careful that when you switch over in March, you have to have all your computer systems talking, because we do like to get paid. We didn’t want invoices to get screwed up.”

So in addition to communicating the change, Hipple’s team used the time to work on IT issues so that when the switchover occurred, they could still service customers and still get the money due to them. They also looked at any legal items they needed to take care of, such as IRS numbers and the like.

“You have some customers who have to go through some process before they’ll accept you under the new name,” he says. “There are things, and sometimes it’s not easy and it takes some time, so we built in some space to allow the transition to occur to make sure it was a smooth transition, not just from an education standpoint but from an actual execution standpoint.”

Hipple had a team of about 10 people working on all these things — not full time, but with a project manager leading them to make sure they got it right and wouldn’t experience any adverse situations when it happened.

“I wouldn’t even dream of [micromanaging them] because I’m sure I’d create more problems,” he says. “You have to line them up, tell them what the goal is, and get out of the way. That’s true for all things. … I can’t do that. You’re crazy if you think you can. If you micromanage, things aren’t going to work.”

He says that when you’re making big changes like this, you have to recognize what your role is versus what it isn’t.

“The CEO’s job is really to figure it out — somebody has to make a decision, so figure out the direction of the company, keep making sure you put pressure on the company that you’re moving in that direction, and know when to step in if there are issues going on that you need to get involved in,” he says. … “If things aren’t going well, you have to step in.”

Roll it out

March 8, 2010, finally arrived for Hipple and his team, and Materion Corp. was officially rolled out. Seventeen websites overnight became one.

“We launched that website, and that process is going to go on forever, because you’re always tinkering with your website,” he says. “Other than that, we didn’t have any hand grenades go off. We got paid. Let me put it this way — the true test was there were no fire drills the next day. There was nothing. We have not had a fire drill on the outside. The most important thing is are there any problems with the customer base in and out, and there has been zero.”

Because of the amount of preparation for resistance and issues, the team experienced a successful launch, and after rolling it out, they had to really just focus on logistical issues. For example, internally, it would have been easy for Hipple and top management to continue to refer to divisions by their old names, but they knew they had to set the example and find a different way in order to promote the new one-company mindset.

“Before you say something, you have to say, ‘How do we talk about that operation?’” he says.

They now use geography. For example, one company in the organization was called Academy before, but it’s in Albuquerque, N.M., so now it’s referred to as Albuquerque. Another unit was Cerac, which was in Milwaukee, so now that unit is just referred to as Milwaukee.

“You try not to use the name, because the name doesn’t exist anymore,” Hipple says. “You have to get out of the names, and it’s really hard. It’s a little easier to use Materion, but when you start to talk about one of your locations, you want to go to the brand.”

And even the simplest of tasks, like answering the telephone saying Materion instead of Brush, still causes Hipple to stumble, even a few months later.

“I’m still slipping in that,” he says. “I just did that today — it’s not easy on anybody.”

Moving forward, he sees the company having far more continuity and more opportunities for selling as the market sees Materion as a whole versus 10 separate entities. Looking back, he’s proud of his team for what they’ve achieved.
“We renamed the company to get everybody in the company on one name, one logo, to get global recognition, and that was really the most important thing,” Hipple says.

“We followed a pretty disciplined process and had a lot of communications behind it. It’s not magic; it’s work.”

How to reach: Materion Corp., (216) 486-4200 or www.materion.com

Takeaways:

  1. Keep the process moving by quickly making the tough decisions
  2. Explain the reasons behind the change
  3. Lead by example and embrace the change

How Bill Whitmore secured the future of AlliedBarton Security Services by emphasizing culture and strategy

Bill Whitmore

Bill Whitmore, chairman, president and CEO, AlliedBarton Security Services LLC

Crime doesn’t pay. Protection from crime, on the other hand, has paid off in a big way for AlliedBarton Security Services LLC.

The 55,000-employee company bucked the downward trend during the recession, growing from 2006 revenue of $1.2 billion to 2010 revenue of $1.7 billion. Chairman, president and CEO Bill Whitmore attributes the growth to a selective, informed approach to business, along with a dusting of opportunism.

“The good news for our industry is that during an economic downturn, there is a focus on crime,” Whitmore says. “There is a concern with protection, a concern with preventing workplace violence. Those things still exist, and a company like ours is here to fill that need.”

The seeds for AlliedBarton’s winning approach to business in a recession were planted in 2007 and 2008, when Whitmore and his team formulated a strategic plan. Whitmore’s team didn’t know the depths to which the economy would sink, but they controlled what they were able to control — the markets they decided to pursue and how they reacted to whatever the markets and the economy, threw at them.

“When we sat down and wrote the plan, we saw a couple of things that we believed would happen,” Whitmore says. “One is that contracts in our industry would be consolidated. They were, and we put together a national accounts team that works with customers embarking on initiatives. That program didn’t exist in 2007, and now it is roughly $400 million of our run rate. The strongest pipeline we have in our company is for those clients that are looking to consolidate.”

To make a strategic plan strong and accurate, you need alignment. That means you need your plan to fall in line with the vision and cultural values you promote as a company, and you need a team that is willing to embrace those values and work toward the goals outline in your strategic plan.

It’s a task that requires you to be equal parts cheerleader, lookout and air traffic controller.

Get focused on goals

Every item in the AlliedBarton strategic plan is tied to a goal, which in turn ramps onto the overarching goal of the organization, which is to protect the people, property and assets of clients.

With goals ramping upward, the responsibility for achieving the goals has to be communicated downward and tied to goals and incentives that directly impact each of the 55,000 AlliedBarton associates around the country.

“Goals get translated into an annual performance plan, goals get translated into compensation metrics as basic as performance planning documentation for individuals, which is then cascaded into the company,” Whitmore says. “Then we sit down and measure people on how they did against those goals and how well we did as an organization. That’s the accountability part, that we hold people accountable for doing it.

It’s a mentality that is shaped by management from an employee’s first day on the job. From the beginning of the first day, employees are schooled in the company’s goals, strategy and values. They are given a copy of the company’s cultural primer, “Dare to be Great.” The booklet is often referenced by Whitmore in conversation, and employees are expected to know its contents.

With “Dare to be Great” providing the template and Whitmore providing the guiding hand and reinforcement, the culture of accountability has taken root throughout the expansive AlliedBarton footprint.

“The one thing I’m very pleased with is we’ve had a number of examples in the last few years where people in our markets would kind of light up in various ways,” he says. “They would say to us, at the account level and regional offices, that there is a leader who is not living up to the standards that we as a company expect. We expect more out of our leaders than this, and we know that you on the corporate level do as well.”

If an employee, particularly on the management level, is not knowledgeable about the goals and values of the company, their technical competency matters less. Technical skills can be learned, and in management-level positions, is often a job prerequisite. Values and a willingness to work as part of a team toward common goals are far more innate to each person.

“Anyone can learn the software and technology of the job, but you want people to lead,” Whitmore says. “I was interviewing a woman for a senior position recently, and I brought the ‘Dare to be Great’ book with me. I showed her what we’re all about, what we’re hiring for. She had the technical skills, we was a seasoned executive, but I told her if she doesn’t believe in what is in this book, don’t come with us. You have to reflect on whether this is in your heart.”

Continue the challenge

Employees stay motivated to strive for goals when they are constantly challenged by management to test the boundaries of their capabilities. It’s something Whitmore has kept in mind as he has continued to fashion a future direction for AlliedBarton.

“One thing I always try to be clear about is that ‘Dare to be Great’ is exactly what it says,” Whitmore says. “I’m daring you to do something great. I’ve had competitors say to me, ‘You guys think you’re great,’ but that’s not the idea. We’re the first to admit that we’re not perfect. With 55,000 employees, not all of them does the right thing or gives 100 percent every day. It’s about challenging everyone in the organization to be great.”

Whitmore says that mindset should be at the core of every leader’s thinking, if a company is to stand any chance of growing and thriving.

“It is at the core of everything we do in leadership,” he says. “You walk in every day and say to your employees, ‘I want us to be better and better.’ I’ve been here a long time, and I come to work every day trying to think of ways that we can better this business today. What can we do differently? What new thing can we try? How can we enhance what we do? And that’s generally the feedback we get from our clients, as well — that our managers come to work each day asking how we can improve our service, better improve and develop our security officers.

“It’s fundamental. I don’t care if you’re running a single McDonald’s restaurant or General Electric. You have to come to work every day and challenge your folks to do better.”

Developing a culture of continuous improvement is so integral to the process of strategic planning, Whitmore says he has trouble separating the two when it comes to explaining how AlliedBarton does business. Without driven, motivated employees, your strategy will never bear fruit. Without a strategy as a structure, your employees will have nothing on which to focus their efforts.

“It’s just at the core of everything we do,” he says. “In order for us to meet our goals, in order for us to build our business, none of it is going to happen without the desired culture in place. You can say you’re going to be anything you want. Without the culture for it, you just can’t do it. We could just work on selling contracts and making money. But one of the reasons you see us going from a small regional company 10 or 11 years ago to where we are today is our belief that the financial results will happen if you do all the other things well.”

Get smart

To point your company in a given strategic and cultural direction, you need raw materials in the form of good people.

Finding the right people for the job at AlliedBarton — regardless of what the job is — means finding people who have a high emotional IQ.

If your IQ is a measurement of your capacity for head knowledge, your emotional IQ is a more ambiguous measurement that takes the temperature of your softer, people-oriented skills and traits.

“We mean people who are good at dealing with individuals, who are willing to take responsibility, who are oriented around growth and can make a connection with people,” Whitmore says. “People who can show leadership skills.”

Whitmore and his leadership team promote teamwork and attempt to heighten the collective emotional IQ throughout AlliedBarton through the company’s training and continuing education programs, where leaders emphasize the concept of building a collaborative culture around the company’s strategic goals.

“Sometimes I get complaints because we have too many people working on different projects,” Whitmore says. “But I like it because it’s what drives our culture. We have a class here called ‘212,’ which is a reference to the Fahrenheit temperature at which water boils. I once went around asking people how long they had been coming to the classes, expecting them to talk in terms of weeks and months. But one person had been going for five years. The person was a former operator who had moved over to the sales side, and one of the reasons they kept coming back was the number of people who stepped up and volunteered to guide and advise.

“Those are the types of things that become voluntary when they become a trait of your culture.”

Whitmore likes large numbers of people working together on projects because he feels it is critical to the culture to have people in different disciplines and locations working together toward common goals and developing a mutual understanding of what is happening in the departments and locations of their project-mates.

“You get interdisciplinary groups of people working together on projects, processes and initiatives, and that breaks down the silos that can develop in an organization,” Whitmore says. “But I’m not going to kid you, it’s work to do that. You get someone who works in, say, El Paso, and because of what they do, they get very inner-focused. It is something we have to work on all the time, because if we let that go, everything else won’t work as well.

“It’s all because in any business culture, the number one thing — and it’s been said over and over again — is teamwork. If your company is made up of leaders who can work together for a common cause, and who are there for each other in good times and bad, I think those are the companies that survive.”

How to reach: AlliedBarton Security Services LLC, (484) 351-1300 or www.alliedbarton.com

The Whitmore file

Born: King of Prussia, Pa.

Education: Bachelor’s degree in business, Philadelphia University

What is the best business lesson you’ve learned?

Be curious. The world is changing, so don’t get tied into what you do every day. Ask why people do things a certain way. As part of that, do a lot of reading and keep yourself intellectually stimulated.

What traits or skills are essential for a business leader?

Integrity, honesty and being highly communicative. And do what you said you would do — walk the talk.

What is your definition of success?

I think if we meet all of our plans, then it is a win-win-win for customers, employees and shareholders. That is what I define as a success.

Douglas Ewert keeps The Men’s Wearhouse No. 1 in retail

Douglas Ewert, President and CEO, The Men's Wearhouse

When Douglas Ewert first joined The Men’s Wearhouse Inc. in 1995, the specialty retailer of men’s apparel only had 200 stores and just the Men’s Wearhouse division. More than 15 years later, the company has 1,200 retail locations, six divisions, 17,000 employees and had 2010 revenue of $2.1 billion.

Ewert has seen the business grow quite a bit over the years, and as part of a succession plan, on July 15, 2011, he became the company’s new president and CEO. Previously serving as president and COO, he knows it will be a tough task to fill the shoes of founder George Zimmer, who will continue to serve as executive chairman of the board.

“I’ve learned a lot from George,” Ewert says. “Probably the two biggest are if you take good care of the employees, they’ll take good care of the customers, and secondly to listen to my instincts.”

Armed with years of knowledge in the retail industry and some guidance from Zimmer, Ewert is continuing to focus the company on a strong culture, customer satisfaction and retaining a No. 1 market share.

Be accessible

Since Ewert had a senior leadership history with the company and the management didn’t change much when he took the CEO role, Ewert had to focus on the strong aspects and initiatives of the company.

“Because I’ve been here for 16 years and George is going to be here for another 16 years at least, this has really been a succession story of continuity not of change,” he says. “One of the first things that I did do was reorganize the organization chart a little bit so I would have fewer direct reports to allow myself to fly at a higher altitude and spend more of my time focused on strategy rather than tactics.”

Part of that focus on strategy was aimed at getting more familiar with the investment community surrounding the company.

“I’ve met with a number of our shareholders, potential investors and analysts that cover our stock,” he says. “So I’ve spent time in the investment community more so than I have in the past. I think it is important for a CEO to understand the needs and motivations of all of their stakeholders: employees, customers and investors.”

The Men’s Wearhouse has always made sure that it pays attention to its stakeholders and most importantly its employees.

“If you had to rank all of our different stakeholders, we put our employees at the top of the list,” Ewert says. “We believe that if you take good care of the employees then all of the other stakeholders will get taken care of. It’s always been a focus in this company and I look forward to continuing that style of leadership.”

Ewert and the other executives in the company make sure that they are accessible to every employee in the organization. They want to know employees’ opinions and concerns.

“Every employee can contact me,” he says. “They have my phone number and my e-mail address and they have George’s. We hear from people throughout the organization every week, because we want to know what we can be doing better. Some of the best ideas that we’ve ever had have come out of the field. For example, our tuxedo rental business, which is something that we’re very proud of and is driving a lot of nice top and bottom line results for us, came from a suggestion from one of our store employees. So keeping those lines of communication open, remembering that our employees come first is just part of our heritage. We have a rich company culture that has always valued that.”

To get employees to voice their individual ideas, opinions and concerns, you have to be available and you have to be willing to listen.

“One of the keys is to spend more time listening than talking,” he says. “You have to be accessible. You have to be open to changing your mind with new information. It’s important to not to fall in love with your own opinions. You have to be open especially in retail and especially in this economy. Our company, just like most, has had to reinvent itself somewhat in the last couple of years. That took input from the entire organization and then winning the hearts and minds of the entire organization.”

Opportunities are all around you and as a CEO you have to make sure you utilize every avenue available in order to foster those creative ideas.

“If you hang on to your opinion on what the business requires too firmly, you may miss an opportunity or an emerging opportunity,” Ewert says. “A number of things need to be present for an organization to foster creativity. First, the CEO needs to believe that they don’t have to have the best ideas, but rather have to recognize the best ideas. Then you need to foster an environment that encourages creativity. Trust needs to exist throughout the organization. Trust that the ideas will be heard. Trust that they won’t be criticized and trust that employees will be recognized for their creative contributions. Finally, leaders have to create the space for people to share their ideas.”

To run a company as big as Men’s Wearhouse takes a lot of commitment and a lot of travel. If you meet those needs, employees will see that they have access to you.

“We do a lot of training and cultural events in our company and George and I both attend as many of them as we possibly can,” he says. “Every spring, we bring every store manager and assistant store manager out in California for three-day meetings and George and I make presentations at each of those meetings and spend the evenings socializing with all of our employees, giving them our perspective on the business and giving them an opportunity to share their perspectives. We have 55 holiday parties throughout North America every fourth quarter and George and I attend as many of them as we can. We visit a lot of stores and that just gets back to that access. I think most of our employees feel comfortable with us and feel comfortable talking to us.

“You have to be accessible. I wander through the office every day. I pop into offices and ask questions. They come into my office and ask questions — the door is open all the time. I visit stores and spend a lot of time talking to employees in the stores. With e-mail now and BlackBerrys, access is 24/7.”

Maintain market dominance

Having a No. 1 market share doesn’t mean you’re safe and have time to relax. You have to constantly be looking at ways to continually improve and protect that spot.

“One of the things that we did as a company about a year and a half ago was we changed our business model from being an every day value retailer to being a promotional retailer,” Ewert says. “We found that in this economy our customers weren’t responding to every day value pricing, so we adjusted our model to be much more promotional and the customers responded nicely. Our business is strong right now and we’re having a great year. We reinvented our company to figure out how to maximize our opportunity in what everybody’s defining as the new normal — this sluggish economy.”

To mitigate the challenges that the company is facing, Ewert has had to lean on his team to help find the best solutions.

“You need to surround yourself with very competent people and listen to their ideas and suggestions and trust your own instincts,” he says. “When it comes to reinventing your business those are pretty big decisions. You’ve got to be careful and you can’t do it all yourself. You need a strong team to reinvent the company and you’ve got to keep the lines of communication open so that everybody understands the direction you’re going and everybody is pulling on the oars at the same pace to move the ship, so-to-speak.”

The company had to leverage its suppliers to combat rising commodity prices, which helped increase its buying power. It also hedged certain materials like wool to help absorb cost increases.

“Most of the changes that we had to make we were able to test the change before we implemented it throughout the entire network,” he says. “We moved cautiously, and we didn’t make any dramatic changes without some assurance that we thought it was the right move and was going to work. You have to utilize the people around you and listen to their advice. You have to try and prioritize the areas where you think you can make the biggest impact.”

If you think protecting one No. 1 market share is tough work, Men’s Wearhouse has to look after five No. 1 market shares.

“We’re the largest seller of suits in America and the largest seller of suits in Canada and the largest tuxedo rental operator in both the U.S. and Canada,” Ewert says. “We’re the largest corporate uniform company in the UK and the largest retail dry cleaning operator in Houston. Our opportunity is to continue to drive our business with that strong dominant market share.”

The company’s biggest focus is on its prominent tuxedo rental business and its blooming Big & Tall stores.

“I think there is a lot of opportunity for us to continue to take more market share in tuxedo rental,” he says. “We believe that we have a compelling strategy. As a national retailer, we believe that we have market dominance throughout the country. Our competitors are primarily small independent regional players. For an out-of-town wedding where the wedding party is spread out around the country, we’re the logical place for that type of event, because you can go into any one of our stores and get measured and get fitted and pick up your tuxedo in one store and drop it off in another or pick-up your tuxedo in the city where the wedding will be held so you don’t have to travel with it.”

The company’s Big & Tall stores also continue to do well.

“Our Big & Tall business is growing at a double-digit pace and we are aggressively growing that business in all three of our retail divisions,” Ewert says. “In Big & Tall, we are increasing the amount of inventory that we carry and we’re also testing three free-standing Big & Tall stores — one in Houston, Manhattan and Dallas.”

By focusing on two of the company’s strongest markets, the company is doing what it can to remain on top.

“You need to evaluate the strengths of your brands,” he says. “You need to keep a close eye on the macro-economic conditions and the outlook. You need to keep an eye on the strengths and leveragability of your management team and the needs of all of your stakeholders.”

Ewert isn’t just reinventing areas of the company to beat business challenges. He is making these moves to also beat the competition.

“The pitfalls of being the No. 1 market share leader in a category is that everybody is trying to take that away from you,” he says. “In order to protect and preserve your position, you need to continually reinvent yourself, because whatever you’re doing this year, your competitors will be doing next year. You need to focus on constant reinvention and paying attention to your customers as the best ways to make sure you can retain that dominance.

“We have 1,200 stores and our employees are facing customers every day and getting feedback every day from those customers. We get hundreds of phone calls and e-mails from customers every week. We have a customer service call-in center where if somebody has a question or suggestion or compliment or concern, they can reach us. If you’re not satisfying the needs of your customers, you’re not going to have customers for very long.”

HOW TO REACH: The Men’s Wearhouse Inc., (800) 851-6744 or www.menswearhouse.com

Takeaways

–         Lookout for employees and be accessible to hear their ideas

–         Trust your instincts and ideas from your management team

–         Reinvent areas of your business to keep market share

The Ewert File

Douglas Ewert

President and CEO

The Men’s Wearhouse Inc.

Born: Riverside, Calif.

Education: Graduated from San Jose State with a bachelor’s degree in business

What was your first job and what did you take away from that experience?

My first job was as a bus boy in a restaurant. The only job I ever got fired from was as a disc jockey in a roller rink. I got fired because I wasn’t playing the kind of music the audience wanted to hear. I guess 7- and 8-year-old girls don’t like Van Halen. The lesson there was to listen to your customers.

What is the best business advice you’ve ever received?

I would go back to the things that I focus on most from George: listening to my own instincts. Don’t let self-doubt creep in too much.

How would you define success?

It’s always been important to me to be in a job that I enjoyed and I’ve been fortunate that, for 26 years, I’ve looked forward to coming to work every day, and I think that’s pretty rare. If you’re doing something you love, you’ve got to consider yourself successful.

In the corporate world, the suit-and-tie style is no longer the typical attire, how have you seen it change?

I think we’ve seen the suit transform itself from being a Monday through Friday, 9 a.m. to 5 p.m. uniform to being an element of your wardrobe that has a reason for being at times in the evenings and on the weekends. We’ve seen the suit jacket become an important piece to be worn with a pair of jeans and an open-collar shirt. You go back 10 years and you never would have seen something like that. The suit has become less of a uniform and more of a utility piece.

Do you have any plans to film your own Men’s Wearhouse commercial?

No. I promised my wife that I would not become our spokesman on TV. That was actually a condition of me accepting this job.