Gary Kovacs keeps Mozilla Corp. moving with the pace of change

Gary Kovacs, CEO, Mozilla Corp.

When Gary Kovacs joined Mozilla Corp. a year ago, the company was on track to release the next version of its browser, Firefox 4.0., with immense anticipation from the user community. While everyone was excited about the 2011 release, Kovacs also saw that approximately 15 months were lapsing between each update. With the increasing speed of innovation, he knew the company couldn’t afford waiting another year or longer to introduce Firefox 5.0 if it wanted to stay competitive. Fifteen months might as well be 15 years in the Internet space.

“What I came in and helped all of us understand, which is something that everybody knew but we didn’t really internalize, is the market’s moving at a different pace than it did even a year ago, and our mission is to lead in the creation of the open Internet that gives the user choice,” says Kovacs, CEO of Mozilla. “Lead means continuing to push new features, new products at a pace that is ahead of others in the market, and we weren’t doing that.

“Coming in as a leader, what I understood and I think everybody understood is that the pace of the Internet is moving at a very rapid rate. We needed to continue to evolve our offerings and our processes and organization to keep up and to continue to lead. That requires some changes and adjustments.”

While Mozilla had already been growing when Kovacs arrived — generating $104 million in revenue in 2009 — his ability to expedite change through his leadership has been instrumental in expanding the company’s scope, offerings and size over the last year. By reenergizing Mozilla’s mission through swifter execution on several key initiatives, Kovacs has made sure Firefox remains a leader in the evolution of the Internet.

Reframe the issues

Transitioning the Firefox browser to a rapid-release cadence was just one opportunity Kovacs saw for Mozilla to move quicker in adapting to the change around it. However, one of timeliest areas he wanted to address when he came in as CEO was how to handle the Internet privacy issue of Web tracking. After many months of going back and forth, the company had still not reached a decision on whether or not to add a “do not track” feature to Firefox 4.0, which would enable users to opt out of being tracked by websites they visited online. So to get closer to a decision, Kovacs says he needed to put the issue into a different context for his 350 employees.

“Sometimes I make the decision and surface it and socialize it with the group,” he says. “Sometimes I just facilitate the decision getting made. A practical example would be on do not track. I asked a question. I felt this wasn’t exclusively my decision to make, but I felt we had to make one. … I asked, ‘What’s stopping us from making a decision?’ — which is a really different question than, ‘What do we think we should do?’ ‘What’s stopping us from making a decision to implement this?’”

When a decision is at standstill, asking people to examine it from a new perspective can help them identify what are the most significant roadblocks and obstacles to progress.

“I call it the yellow car syndrome,” Kovacs says. “You don’t realize all the yellow cars on the road until you buy one, and then you realize all the yellow cars on the road. After you see the behaviors a few times, you start to recognize them. The behaviors sound like this: When a team or a group or a community is debating on an issue, they start covering the same points and then they cover them again. At that point it’s like ‘OK, done. Time for a decision.’”

When the same, familiar answers came back about the do not track feature, Kovacs reframed the issue for his team again, this time as a question of mission accountability.

“I came back and said, ‘Our mission is to lead the Internet where users are in control and choose, and this is an issue with privacy where users aren’t in control” he says. “‘So do we think some solution is going to be needed this year?’”

Everyone agreed it was.

“Then our only question was are we truly going to be a leader or are we going to wait until somebody else develops something and then fast follow it?” Kovacs says. “The former was the only one that felt right to people. I said, ‘OK, then the harsh reality is, we’re going to have to take a step sometime before knowing the final outcome because the answer can’t be created until you take many steps toward it. Let’s take this first step.’”

Sometimes getting people to see the urgency of taking action begins with getting them to think about choices in new ways. Reframing an issue as how it ties into your vision, mission or core values for instance can help people who are caught up in the initial challenges of a decision see the larger value and implications of making a change. Once Kovacs got his people to redefine Mozilla’s mission and vision of leadership, the team recognized the necessity of making changes to execute both moving forward.

“Everybody to the core said, ‘Absolutely. Time to lead. Time to move,’” Kovacs says. “Once we created that highest order vision, which really tied closely to our mission of leadership of the open Internet, then the work of leadership turned into the work of management, just making sure the processes and structures were in place to actually drive what everybody wanted to do anyway. But it was really calling that out and making that something that was visible.”

 

Set parameters

By redefining the challenges at hand, you can help your team turn the corner to move forward on a tough decision. However, to balance a participative decision-making culture with efficient execution, you have to have mechanisms to hold people accountable to progress. By providing your people time constraints and clear responsibilities, you can give them input and encourage dialogue without letting a participative culture turn stagnant.

“Doing anything where it involves the ‘I’ word — ‘I think’ or ‘We’re going to do this because I say so’ — that’s death,” Kovacs says. “There are organizations that benefit from that type of leadership. It’s not here. That doesn’t mean that you have to be slower than if it was just you, but you have to be much more inclusive in your leadership style. … The second thing that is negative is if we confuse communal with no need for crisp execution.

“People will follow you, but they want to know that you are going to execute crisply, effectively and things are going to get done. You are going to stay true to your word. If you say you are going to do something or the organization says it’s going to do something or starts to do something, they’ll do it. So the execution, the metrics around that, the processes around execution, getting things done is really critical. And the negative, of course, is if it’s just sort of arm-wavy and nothing gets done.”

If you want to remain competitive, you can’t afford to let your organization stall in its decision-making. Ensuring decisions are made decisively is easier if you set parameters to steer people toward the end result by keeping everyone accountable to progress.

After asking each of his senior leaders if a week would be long enough to research the different aspects of a do not track decision, Kovacs gave them the time period to investigate the issues and then report their findings to the rest of team. He also set a two-week time limit on the final decision. In two weeks, a call would need to be made one way or another. When the team regrouped before the deadline, it reached a decision in favor of the Do Not Track feature.

“Then we moved right to ‘OK, let’s talk about how we are going to execute this over the next three weeks,” Kovacs says. “‘How are we going to communicate it? How is it going to get built into the product? Who is going to own each piece?’ We put a dashboard of operations to it. That’s my approach. You give people an opportunity, but you don’t give them an infinite time to exercise their opinion. You time-bound it, you make it specific, and then you execute based on that.”

Explain your reasoning

If you were in Mozilla’s corporate office, you would see huge boards and monitors constantly rolling user feedback from mechanisms built into the Firefox product, beta channels and its external channels pushed out into the user community. Mailing lists, briefings and community meet-ups that Kovacs attends also provide ongoing consumer feedback to help the company make decision about its direction and product.

Yet while Mozilla relies heavily on input from its user community, Kovacs understands that the company is never going to please every one of Firefox’s 400 million users with a decision.

“If I make a decision or send an email or think through a strategy or even ask an opinion, I’ll get a wide range of feedback that will be everything from, ‘Hey, that’s great. I love it,’ to really in-depth how it could be better, to ‘You’re an idiot, and I’m not sure why you are leading that organization and that’s the dumbest thing I’ve ever heard,’” Kovacs says. “If you are uncomfortable with who you are and uncomfortable receiving that kind of feedback in as plain form as it comes sometimes, it’s not going to work.”

Although it’s probably impossible to have every customer back your decision every time, when you communicate why you made it clearly and assertively, you make it easier for people to meet you halfway and buy in to it long-term. That’s why once Mozilla decided internally to implement its do not track feature — being the first in the market to do so — Kovacs made sure the company reached out fully and transparently to its user community, using every one of its community touch points to explain and discuss the reasoning behind the decision.

“We posted,” Kovacs says. “We blogged. We helped them understand our rationale. We shared all of that, and we expected some to be upset with it. What came back was ‘I’m not happy that you did it, because we don’t have the full solution, but I really get why you did it and once I understood it, I think it was the right thing.’

“You can’t manage by averaging the opinion because then you please no one. In the end, there is a judgment call that needs to be made. What we have learned and what I certainly have learned and has been reinforced … is people will accept a decision. They’ll accept a judgment, but what they also expect is that you’re clear about how and why you made that decision.”

In order to inspire confidence in the long-term vision of growth, transparency is critical. Even if people don’t agree with some decisions you make, if you are clear that you have the mission and core values guiding your choices, they will be able to buy into your judgment as a leader.

“People see you make those decisions – and we’ve made lots of them in the last six months – where we’ve had to say this might result in more revenue, or might be more interesting or might move us in a better direction short-term, but it wouldn’t be good for the mission so we don’t do it,” Kovacs says. “The mail that we get back constantly is ‘Way to go. Way to stand up.’

“You have to be comfortable servicing that point of view, comfortable taking feedback, but the most important piece then is over some period of time, and not too long [saying], ‘OK, we’re going west and we’re going west for these reasons. I’m going to communicate it openly − but we’re going west.’ Then sometimes there is sort of a hailstorm of negative feedback and you have to push through it. If you believe and you create that belief for the right reasons, then you push through it. It works.”

How to reach: Mozilla Corp., www.mozilla.com


The Kovacs File

Gary Kovacs
CEO
Mozilla Corp.

Born: Toronto, Canada
Education: completed undergraduate and graduate degrees at the University of Calgary

Who are your role models for success?
My father — due to his outstanding integrity, fairness and keen ability to clarify thoughts — and Lou Gurstner. I admire him for his steady resolve, absolute simplicity and clarity of thought in the face of tough obstacles. I also find Reid Hoffman extremely inspirational as a leader.

Who were your mentors in transitioning to the role at Mozilla?
I had some of the greatest people who have led major organizations and major missions both in the Valley and globally. I’m very pedantic about this. I sat down with them prior to coming to Mozilla. I asked their opinion. I involved them in the decision and then I put the touch on them. I said, ‘Look, I’m going to need help and perspective, and I would love to be able to come to you. I gave them a frequency — we’ll have a glass of wine or we’ll have a dinner — and I’m going to be thoughtful and mindful of your time. I think I can give something back to you. So we created a little bit of a mentorship agreement. When I faced some of the toughest challenges or decisions or issues, I relied on the mentor network to help me navigate through them.

What can California do to create a better environment for business?
We have to improve our fiscal plans and budget in order for businesses to be more effective. I think as a state we need to take steps to make major improvements to the primary education system in California. Great education is fundamental to the success of future generations.

What is one part of your daily routine that you wouldn’t change?
Every morning, I get to enjoy my first cup of coffee with my family. This helps to keep me grounded and allows us to spend quality time together. Also, some sort of physical activity is essential in my day to day.

Rick Sasso builds the MSC Cruises brand through top-notch customer service

Rick Sasso, president and CEO, MSC Cruises (USA)

Because it meant coming out of retirement to take the reins at MSC Cruises (USA) Inc., Richard Sasso did have some reservations when the company first asked him to lead its North American expansion in 2004. Yet with his track record in the industry — and having served as the president of his own cruise line, Celebrity Cruises, in the past — it didn’t take long for those reservations to give way to excitement. First of all, Sasso realized he already had a great product and brand to build on with the MSC parent company.

“We think that the product itself is the one thing that will always be your ally,” says Sasso, the president and CEO of MSC Cruises (USA). “So if you have a strong product, you not only can sell the product easier, but you can also have referrals and repeat guests.”

Yet to achieve fast success in a new market, the company needed to set itself apart from competitors with its service, as well. That’s why Sasso’s strategy for growing the brand began first and foremost with a foundation of customer service excellence.

“The cruise sector is very much a product, but it is about the customer and customer service. … At the end of the day, if we don’t have a customer and we don’t satisfy him, then they’ll be an end of the road for us,” he says.

“We want to have our best foot forward 24 hours a day, seven days a week. It’s much more important for an emerging brand to follow the customer and the experience of the customer than an established brand that may already have its own accolades or its own position in the market.”

Drawing from his long career in the cruising industry, Sasso focuses on this objective at the company by ensuring every one of his 70 corporate employees as well as thousands of offshore team members are aligned toward improving and enhancing the guest experience. Consequently, the 36-year cruising veteran is now heading up the fastest-growing cruise line in the world — in fact, the fastest-growing cruise line in the history of cruising. Last year, the Fort Lauderdale- based company sailed with more than one million passengers.

Hire the right people

No matter what the product or service you’re selling, the real predictor of a company’s success or failure begins and ends with your people. By making sure you hire people who have the tools to succeed in a customer-service-driven organization, you set the groundwork for a highly successful service culture.

“This is a professional business, and we need to find the right caliber of people,” Sasso says. “Age is never a factor. It’s if they have the right characteristics to be a good customer service representative. Those characteristics are a lot in the speaking skills, language skills and technology skills … and do they have a customer service mentality? So one is you find the candidate.

“We’ve been at 100 percent occupancy since day one, and with very few exceptions, we’ve been able to fill every ship we’ve brought out and increase our presence around the world at the same time. So it’s been a challenge, but one we’ve been able to manage because from the beginning, we’ve had the right people in the right seats.”

One way to find people with specific traits is through targeted recruiting. While experience is important for senior leadership positions, the recruiting process can help identify other intrinsic qualities people have, such as attitude, communication skills and friendliness.

“You always need to make sure you have the most talented, qualified, enthusiastic people running your company. The guy who is the CEO or the guy who’s the president, he may get all the accolades and all the awards for stellar performance, for a company’s growth and all of that, but at the end of the day, it’s the result of everybody in the organization and in our case, it’s support staff and shore-side staff. We have to have great customer service on both ends of that.”

To recruit team members that excel in specific roles, Sasso enlists the help of agencies all around the world to locate qualified people that fit MSC’s criteria for characteristics such as enthusiasm, professionalism and the ability to adapt and solve problems creatively.

“So you’re constantly looking for ways to improve and be the best you can or better than the competition in almost every area of your business,” he says. “We encourage our management on a strategic level to have those kinds of thought processes.

“We constantly have our executives in each area thinking outside of the box to figure out what is the best way for us to get our message out, what’s the most cost-efficient way, how would you do that and which technology would you use to do it.”

In addition to a strong skill set, Sasso looks to fill leadership positions with people who can demonstrate a history of effective leadership. To determine this in an interview, Sasso says the best question to ask is if the person can provide references of former employees rather than former bosses.

“I want to know more about what the employee who worked for him says about him than somebody he worked for,” Sasso says. “Think about that. If you ask John to give me references and he gives you his boss as a reference, well, of course, he was brownnosing the boss all the time and was there. But I want to know what Mary Lou says about John and how he was as a boss. That is one of the first questions I ask in an interview to help weed out the kind of people I want working in the organization.”

Be forward-thinking

The long-term test of a company’s customer service doesn’t come from just being able to meet the needs of today’s customers. You also have to meet the needs of future customers. When it comes to customer service, it’s important to make sure that your organization is positioned to anticipate customer needs and be able to adapt to meet them effectively. To keep MSC customers happy, Sasso knows he always needs to be thinking one step ahead.

“Change is so fast nowadays, you’ve got to keep on top of things,” he says. “Even though you don’t think it’s broken, look at it again and see if you can make it better. Some companies fail to do that, particularly when it comes to addressing the customer’s needs. If you’re not addressing the customer’s needs of what you think he’ll want from you tomorrow and not just today, you’re going to start losing some ground.”

To plan for what customers are going to want, you need to stay attuned to how their needs and interests are changing. Utilizing feedback forms that measure and track consumer trends over time can help your organization make knowledgeable decisions on how to adjust and grow. MSC relies heavily on its comprehensive customer comment forms — passed out by ship management — to identify where its services can be improved in the future. Sasso then uses a two- or three-year cycle of strategic planning to evaluate improvements in areas such as entertainment, ship remodels and adding new destinations or services.

“We really dissect the experience through the comment form,” Sasso says.

“Then we take those forms within one week of the cruise being finished — we analyze all of those forms and look for trends. We look for positive trends and we look for negative trends. If there’s something that looks like it’s producing some negative comments, we look to fix it immediately. So we’re able within a week to measure everything that’s happened on board with our ships in terms of the quality experience.”

By taking swift action to analyze and categorize the feedback, the company is able to head off smaller issues as they arise while staying abreast of larger trends.

“In order to keep ahead of the curve you always have to be looking out,” Sasso says. “You’ve got to be thinking about what might be the next phenomenon or the next type of on-board service people are expecting. Twenty-five years ago, spas on cruise ships were just small rooms with some dumbbells and a couple of bicycles. Today, those ships that we’re building have 20,000-square-foot spas. And why did that happen? [It’s] because we started to forecast the consumer’s appetite was starting to be a little bit more pampering, a little bit more spa driven, and we started to make sure that our ships could now accommodate that desire.

“We have some of the finest spas in the world on our cruise ships, but that would have been too late to think about it today. You needed to think about it three to five years in advance of that. So that’s how we plan the future.”

Reinforce accountability

Helping employees succeed as ambassadors of MSC customer service is the overarching goal for Sasso. Yet even when you hire and train the best people as quality representatives for your brand, there is always room for improvement. It’s important to provide clear goals and feedback for employees about their performance.

Leading a culture of accountability from the top down is an important aspect of that. Sasso makes himself and his senior leadership team available and open to assist and mentor employees. In addition, there are several levels of managers whose job on board the ships is in large part to oversee the execution of customer service.

“Their job is to witness the process and to try and intervene in the process if it’s not working,” Sasso says. “They also do reports that will tell management what’s going on on board and what we may want to think about to improve the guest experience.”

On the ships, MSC also uses its customer comment forms to keep tabs on its service execution. Because they take time and effort, Sasso encourages the ship staff and management try to give the forms out to guests at times where they are most engaged, including during on-board entertainment and surprise events. When you approach people in these appealing environments, they are often in a better mood and may be more uninhibited in offering their opinions. Once guests receive the comment form, they are able to assess everything from employee performance, housekeeping, food entertainment, quality, management and cleanliness to the overall cruise experience.

“If we look at something that’s producing some very high-level positive comments, we look to improve on that and to do more of it,” Sasso says. “That goes down to every skill set. If it’s about a crew member, we might even look in detail if this crew member is getting a few complaints about not serving properly or the housekeeper wasn’t attending to the cabin as sufficiently as we have in our protocol. We’re able to pinpoint it right down to an employee.”

Once on the ship, the feedback is customer-driven, but on shore, Sasso utilizes technology-driven metrics to monitor individual performance.

“On the shore side, we are able to monitor every phone call,” Sasso says. “We have supervisors and manager-trained people who do a lot of phone interviewing where we can listen to the caliber of conversation. We can listen to the techniques. We have performance skill metrics that are technology-driven. We know how long they were on the call, what the benchmark is for the time they should have been on that call, so are they being efficient? How many sales they convert on a call is benchmarked through technology.”

The goal of performance metrics isn’t to police employees, but rather, give everyone tangible goals by highlighting areas where they can enhance skills or improve through training. Having ongoing feedback about how your service culture is performing keeps everyone accountable to its continued success.

“You can never think you’ve done it all,” Sasso says. “I’ve had phrase in my vocabulary for many, many years, and it’s a takeoff on that phrase that says, if it’s not broken don’t fix it. My phrase is, if it’s not broken, make it better. I think some companies become complacent if they are doing well and not getting complaints and they’re just kind of rolling along. That’s complacency that doesn’t fit today.”

How to reach: MSC Cruises (USA), www.msccruisesusa.com

The Sasso File

Rick Sasso
president and CEO
MSC Cruises (USA)

Born: Bronx, New York

Education: Miami Dade College

Residence: Delray Beach, Fla.

First job: During college, I was the special service representative for British Airways in Miami Airport. At the time, it was called British Overseas Airways Corporation.

What are the characteristics of good leadership?
I have been in this business for 39 years. I’ve been the president of two cruise lines and been a senior manager running an office since 1979, 30 years actually running an office and being a leader. The characteristic that I have always deployed and one I will never not deploy is you need to make sure that all of your employees realize that they can make a mistake. They will make a mistake. Just be honest about it and let us know so we can fix it together.

I always have that conversation with anybody that works for me. And the other is that I’m always there to be with them. The CEO should not be behind a closed door. He should answer his own phone. … He should never exclude himself from anything in the office and he needs to be part of the process with the open door. Answer the phone when somebody calls.

Jeff Mullen

Jeff Mullen
Jeff Mullen, founder and CEO, Dynamics Inc.

Jeff Mullen was in a unique position to combine expertise in technology, business and law to found Dynamics Inc., a company centered around one of his many innovative inventions. His Card 2.0 technology, described as the “holy grail” for the payments industry, can send dynamic information through the domestic payment infrastructure for the first time without necessitating change to the existing system of magnetic strip readers.
The former patent attorney, who is considered one of the most prolific young inventors in the country, is teaming up with Citi, the world’s largest card issuer, to introduce the card-programmable magnetic strip this year. The Card 2.0 technology is a paper-thin, flexible yet durable computer platform in payment card form. Designed to last for three years on a single battery, buttons and even displays can be added to the platform to enable users to input and receive information from the card.

Dynamics aims to grow in size to support the continued national release of Card 2.0, both in terms of staffing and production. Mullen, who founded Dynamics while pursuing his MBA at Carnegie Mellon, plans to keep the company in the region long term throughout this rapid growth. In addition to keeping his business in the Pittsburgh area and utilizing the wealth of magnetic expertise in the region, Mullen is committed to performing the final assembly and personalization of Dynamic’s cards within the United States.

Mullen has won a number of international business plan competitions, while his 2.0 Card technology won Dynamics both the DEMOgod award and the $1 million People’s Choice Award at DEMOfall 2010. The company also won Best in Show at Finovate that year, and Best in Show for Personal Electronics at CES 2011, the first time a payments company has won a CES tech award.

How to reach: Dynamics Inc., (412) 369-4600 or www.poweredcards.com

How Bob Ketterer helps HDA Inc. keep it positive in tough times

Bob Ketterer, President and CEO, HDA Inc.

Bob Ketterer didn’t expect to get a lot of support from his board at HDA Inc. for his decision to give employees a pay raise in 2010. Board members were still a bit skittish about the slow pace of recovery from the global recession.

“I didn’t even want to bring up this 3 percent increase I gave across the board,” says Ketterer, president and CEO at the 1,695-employee book and magazine distributor. “I just did it because I didn’t have to get their approval. I didn’t give myself a raise because that is a board resolution. You say, ‘Well, why would you do that when you lost money last year?’ I’m anticipating that this will be a better year for us and I’ll make up for it.”

Optimism definitely has its place in Ketterer’s leadership arsenal, even if it has to be a little more cautious.

“Business is about risk,” Ketterer says. “A lot of people will say, ‘OK, it’s a tough time. I’m not going to risk anymore.’ That’s a mistake. I think maybe you have to pull in your horns a little bit, but you still better be prepared to gamble a little bit because you’ll be stymied and run over by your competitors if you don’t.

“My board of directors, they said, ‘We shouldn’t do this, and we shouldn’t do that.’ I said, ‘Wait a minute. We’re still in the business of managing risk.’ Every CEO has to do that. I’m not going to shut down operations and sit back as long as there is something I can do.”

Ketterer has led his company from $11 million in 2000 revenue to $257 million in 2009 by learning to bob, weave and adapt to the market. The business began by selling residential blueprints through magazines and catalogs and grew to become a seller of custom-made books in the home improvement sector.

Just as the market continues to evolve, Ketterer says so will his leadership style. What won’t change is his desire to turn problems and challenges into opportunities.

“It’s a mental attitude that has to be constantly reinforced that things will get better,” Ketterer says. “If you handle the business to a point where you can survive, and unfortunately, some guys aren’t going to make it, but if you structure it so that you can get through these tough times, the times will be better.”

Here are some of the key principles Ketterer follows in leading HDA that keep the company driving forward as a competitive force in its sector.

Keep talking

You may be tempted to hole up in your office when the times turn tough so you don’t have to face your employees and reveal your frustration about the latest batch of bad news.

That’s a big mistake.

“You don’t want to be paralyzed,” Ketterer says. “You want to be honest with your folks. That’s not to say you have to tell them everything that’s pending because half the things I find that I worry about, it’s gone tomorrow. I’ll worry about something else tomorrow. But you do have to give a sense to your people of what is happening in the business.”

You also have to give them a reason to believe that there is something out there worth fighting for and worth exerting their energy for.

“You don’t want to kid them,” Ketterer says. “Any sunshine that you have out there that you can substantiate, make sure they understand that. We might see this information and we’re not sharing it with our people. There’s always sunshine someplace. Even if you don’t have anything other than what you hear on the nightly news about oil prices coming down, you have to continue to communicate. If you don’t say anything to your people, that’s a scary thing.”

It doesn’t have to be news that you’re sharing. You can also try empathy.

“We looked at special situations like where a person is driving so much,” Ketterer says. “They had been with us for a number of years and had proven themselves, so we allowed them to work at home more than we did in the past. Some of the lower-level hourly folks, we looked at gas cards.”

In addition to delivering a positive message and showing empathy, you also may need to step up and combat negativity that may be festering with your employees.

“I had someone tell me the other day that housing starts, because this was a good and very profitable part of our business selling house plans, he said, ‘We’ll never see that again,’” Ketterer says. ‘He’s a senior guy in the organization and a smart guy. I said, ‘No, let’s look at the past 50 years of housing starts.’ What you find is that there were housing starts a lot higher than we had back in 2007 when the bubble burst.”

Ketterer’s point was that doomsday scenarios don’t help anyone and are often not completely true. You need to continue to be the voice of hope for your people.

“Certain things will change,” Ketterer says. “How many people are going to use e-readers? Does that mean books are going to go away? No. I know books aren’t going to go away.”

Fear can be a contagious and corrosive thing in your business. It’s up to you to dig deep and find real and substantial reasons why it’s worth continuing to push forward and then share those reasons with your people.

“I tell them, ‘We lost the Michaels account, but at the same time, we’re gaining this here and we’re seeing a positive coming up at Lowes with the how-to books,” Ketterer says. “Even Warren Buffett told his NetJet folks, ‘Guys, you better hunker down and wait this one through, because there’s not going to be a lot of guys wanting to fly private jets in the next couple years.’ There’s probably not a lot they could do, but I’ve seen that they have come up with other programs that are attractive to some people. You just have to keep looking for anything and everything you can do to improve your situation. It’s easier said than done, but you have to.”

Ask questions

Do you ever feel like you’re a teacher checking up on who did their homework when you step into the conference room? It can be a necessary step to ensure that your leadership team is doing what needs to be done to keep your business going.

“As you go around and you’re meeting with your people, are they prepared?” Ketterer says. “Have they taken the time to be prepared for this meeting? If you have metrics in place, look at those metrics. If you don’t have the metrics, at least have them report on their successes. If they can’t report on any successes, you know you have a problem there.”

Maybe you have a team of people who are self-starters and require no pushing to get things done. Maybe your leaders are procrastinators who constantly need a kick in the butt. The point is, you need to have a sense for what they are working on and what they are getting accomplished.

“If they are constantly giving you excuses why this isn’t getting done or that isn’t getting done, you almost sense it because their peers will give you a look like, ‘Oh, Joe didn’t get it done again this month,’” Ketterer says.

Take the time to get out and see what your people are working on.

“Walking the office is so important,” Ketterer says. “Just stopping and asking, ‘What’s going on? Give me a rundown.’ Where you can, be more fluid and check it out and see what’s happening. Just walking around and talking to your folks without a prepared agenda, you’ll find out all kinds of things.”

There is a danger, of course, in just relying on your observations and questions to get a read on your business. Your best course is to combine those observations with some type of measuring tool, whatever that may be.

“When you don’t have all the metrics in place, it’s difficult,” Ketterer says. “We have a lot of district managers with our field force. We have something like 28. There were a number of ones who we thought were rising stars.”

It turned out they were a lot better at talking about getting work done rather than actually getting that work done.

“You want to have good measuring tools so you’re not just rewarding the guys who talk a good story,” Ketterer says. “You can’t be buffaloed. I had a guy before who I thought was doing a great job and I found out he was stealing from me. He was selling product on the side. All I can say is, if you don’t have metrics, it’s a tougher thing. So get the metrics. Get something you can use.”

Share the burden

When Ketterer meets with his leadership team, he does not demand a seat at the head of the table. Maybe it’s a small gesture, but it helps reinforce the idea that he’s not the only one who makes HDA go.

“Even though I’m the president and CEO, I can sit at the table and let other people run the meetings,” Ketterer says. “It’s important they be given an opportunity to shine and show other folks what they can do. I do reserve the right to make the final decision, but I only exercise that right if I have some burning desire to exercise it. I just don’t think it’s that often that I feel I have to.”

Ketterer recalls a situation a few months back when the company was looking to hire a high-level position.

“We were down to two candidates,” Ketterer says. “It was my vice presidents and I that were making the decision. So it was five of us and the HR director. Five voted one way, I voted the other way. I went with their suggestion. It was after I agreed and thought about that evening that I said, ‘Now I guess you’ve got the right people. You trust them enough to go against your gut feeling.’”

The sharing of the leadership burden with others becomes even more critical when you’re going through a tough time. If you run yourself into the ground trying to do it all without anyone else’s help, or by trying to impose your will in every direction, you’re not going to be any good to anyone.

You need to keep your people engaged in the fight so that they feel part of it all and know that they play a key role in helping your business succeed.

“All of us, we can’t take this pressure day in and day out,” Ketterer says. “Take care of yourself. If you love to run, run. Don’t give it up because you feel you have to work 80 hours a week. Take the time off, a couple days, to relax. If you don’t, it’s just like when they say on the airplane when you’re sitting next to a child to put the oxygen mask on your face first and then put it on your child. Otherwise, you’re no good to anybody. That’s the same thing. All those things that can help your mental attitude are critical.”

How to reach: HDA Inc., (314) 770-2222 or www.hdainc.com

The Ketterer File

Born: Breese, Ill.

Education: Bachelor of arts in chemistry, Saint Louis University; bachelor’s degrees in biology and architectural engineering, University of Illinois

How did you find your career path?

My father was a surgeon and he wanted me to follow in his footsteps, so that’s why I went down the chemistry route, but I hated it. I finally told him I wanted to go into architecture. I built things as a kid and that’s how I got in the home plans business. [For example,] I took a glove box in my old car and I converted it into a refrigerator. I got eight cans of soda and put them in there and they would be so cold you could barely touch them. It wasn’t soda, of course. I was 18 years old. It was beer, and it made ice cubes, too.

Ketterer on his childhood: I was flying when I was 14. I got kicked out of school for three days because I was buzzing the high school when I was a sophomore. They saw the numbers on the plane and the FAA called up my Dad and said, ‘Dr. Ketterer, what are you doing buzzing the high school?’ He said, ‘I’m not, but I can tell you I know who did, and we’ll take care of it right away.’ Those are the kinds of things that are not uncommon for entrepreneurs, to be distracted about so many things and be inquisitive.

Who would you most like to meet?

President Obama. Every day I’m more impressed with that man. He has a lot to teach us. Coming up from essentially nothing to where he is to how he conducts himself. He’s a true gentleman. I’d just like to know how he was able to accomplish what he has with very little to begin with.

Jack Fusco brought Calpine Corp. out of bankruptcy and led a turnaround

Jack Fusco, President and CEO, Calpine Corp.

For Jack Fusco, the first day on his new job was anything but laidback. Calpine Corp., a major U.S. power company that owns, leases and operates power plants across the country was in complete disarray in 2008. The company had just come out of bankruptcy and its stock was hovering in the $4 range. Morale in every area of the business was as low as it could be and to make matters worse, the economy was just starting to take a dive. Fusco, the new president and CEO, had his hands full.

“My first day on the job was extremely hectic,” Fusco says. “The company was announcing its second quarter earnings on the morning that I started my job here at Calpine. The business processes or systems were antiquated and didn’t keep up with what you would expect for a publicly traded company. So it was extremely hectic getting the financial numbers together and presenting those to the street. It happened to be the very last day that our [earnings report] could be filed on. That’s something I try to forget about is my first day of my first week.”

Fusco didn’t let a bad first week get in the way of his determination to overhaul and turnaround the struggling power company. Here’s how Fusco boosted morale, created a vision and mission and led the company through a dark time.

Asses the situation

Calpine Corp. got itself into trouble because the company was too focused on growth instead of paying attention to the factors that allow for growth.

“I wasn’t here, but from what I can asses, it was the typical founder’s dilemma, which is build, build, build,” Fusco says. “Whether it’s grocery stores or drugstores or whether it’s power plants, they get into really focusing on new stores or new power plants and not keeping your eye on the ball. It was a phenomenal growth that the company had undertaken and the economics of it just didn’t keep up with the growth projections. They basically ran out of cash flow.”

As the organization came out of bankruptcy, there were a lot of different moving parts within the company and it was up to Fusco to make sense of it all and begin to make changes for the better.

“The company still had an enormous amount of consultants that were in running the company in various forms and fashions that were legacies from the bankruptcy,” he says. “So working through the organizational structure and trying to define a structure that made sense where we would have full-time Calpine professionals in those seats rather than consultants was something I had to address within those first weeks of being on the job.”

Due to the uncertainty that bankruptcies carry with them and the worry of what the future held, morale in the company was awful.

“The employee base had just come through an extremely difficult bankruptcy,” he says. “A lot of reorganizing and reorganization had taken place and there wasn’t a whole lot of organizational clarity on who was doing what, so there was a lot of overlap and people were worried. There was a lot of worry that the company was going to be sold, so morale was bad. I think there are still folks and I know there are still employees that worry that the company may be sold or that we won’t survive.”

Despite the tough situation, Calpine had its best financial performance during the worst economic recession and that hasn’t been easy. It’s required the company to increase productivity through a lot of reductions in headcount.

“We tried to do it swiftly,” Fusco says. “You have to try to get it done as quickly as possible so you can start recovering. It doesn’t always work that way, but we tried. We tried to do it on a voluntary basis. If we knew that we were getting rid of one whole group or one whole area, we would do a voluntary program first versus an involuntary program. You have to move quickly and don’t let the company suffer from a 1,000 cuts.”

Calpine didn’t just let go of ground-floor employees, it had to restructure its management team, as well.

“Most of the other management team either left or were asked to leave prior to or at bankruptcy,” he says. “The people that I brought in from the outside were replacing bankruptcy consultants. Bringing in somebody in that case that was going to be a Calpine employee stabilized that position rather than having a third-party consultant firm. Some of them were folks I have worked with in my past, others were here. As I got into the organization and got down a few layers, I uncovered a lot of very talented individuals and gave them an opportunity to rise to the top. They were rough-cut jewels. It makes a much bigger impact if you are able to utilize the existing work force.”

Once cuts had been made and people were put into key roles, it was time to get the company stabilized and moving forward.

“Remember, when I started it was right at the beginning of the recession and our stock dropped into the $4 range very quickly,” he says. “So stabilizing the company and making sure that we could strengthen our balance sheet, keep an eye on our cash flow and understand where all the cash is going so we didn’t run into any tough situations again was paramount. We came out of that very, very well. That was probably the most challenging part of taking over was just the time of when I took over and then having all the other forces outside of us that collapsed.”

Address the issues

The next step in Fusco’s turnaround was to develop a vision for the company that would allow it to be a great organization without overextending itself as it did prior.

“The company went through a couple of different cultures,” he says. “The first culture of Calpine was build, build, build. It was very much a development company run by developers. They would acquire sites and construct power plants. That rapidly changed to a company that was focused on trading in a very large commodity trading floor here in Houston. I wanted to change the company to be more asset-centric, to be more focused on power plant operations and not speculative trading and not building for the sake of building. That’s where we developed a vision to be the premier independent power plant company in the U.S.”

To make a significant change like the culture of your company, you need to take a good hard look at your business and what you ultimately want to achieve.

“You need to figure out what your strengths and weaknesses are as an organization or at least try to be nimble enough to anticipate where your sector is going,” he says. “It’s a little bit of a double-edged sword. We were very fortunate that we had great people already in place that could move the company forward for where we thought the sector was headed. In other cases, I can envision a CEO may have to acquire or divest businesses.”

Fusco not only had to review the organization to make changes, but he had to make sure his management team was behind the idea as well.

“We ended up pulling together the executive officer team to develop the new vision, mission and value system so we were all bought off on it,” he says. “I think it is imperative, because it is more than just a one-person job that at least the core group of officers are all bought off on the new direction that the company is heading before it gets rolled out to the work force.”

When moving forward with a new vision, mission and value system, it is critical that once they are changed and put in place that they remain constant.

“For me I know what has been successful is we didn’t change our values or vision or mission. We stayed true to it and we’ve held it steady. We’ve tweaked it a little bit, but for employees to have that consistency and that focus, and they’re not trying to shoot at a moving target, I think is very important. You have to stay true to it until you feel like you’ve achieved it and everybody feels like they’ve achieved the original mission.”

Along with a change in the culture came a change in the company’s focus. Calpine didn’t want to get caught up in too much as they brought the business back from bankruptcy.

“We’ve had a crystal clear focus to be in the wholesale power generation business, period,” Fusco says. “We haven’t tried to confuse the work force by getting into other aspects of the business. We weren’t running off building electric vehicles or trying to build recharging stations or getting into other flavor-of-the month types of strategies. We said, ‘We’re just going to be the absolute best company at providing wholesale electric power to the utilities and retail aggregators.’ That’s what we stayed with and that seems to be rewarding us.”

Fix relationships

Once the key organizational changes had been put in place, Fusco turned his focus to the customers and mending those relationships.

“When I came on board, I asked for a list of our top 10 electric customers and our top 10 natural gas providers, and then I proceeded to call them and introduce myself and my No. 1 electric customer wouldn’t take my phone call,” Fusco says. “I had to work through one of the regulatory commissioners to get them to force the CEO to meet with me just so I could introduce myself. That’s how bad the relationship was. I had to start at the highest levels. It really had to start from CEO to CEO.”

With the company’s new direction came an increased drive to give customers what they needed and that took cooperation on both sides.

“The other key was [customers] giving us time to get our house in order so we could prove to them that we could be the premier operator in the space,” he says. “We focused on delivering above and beyond what the customer expected and not just having a smiling happy person on the end of the phone line to take a phone call when they were upset. Organizationally, we actually created customer origination teams in our different regional offices where they could focus on developing products and services that the customers needed. It was somebody’s full-time job instead of just something they were supposed to do on the side.”

Implementing changes throughout the entire organization takes a lot of communication to make it work. You can’t communicate enough and you can’t give up.

“Don’t assume that the communications are effective at all the different levels in the organization,” he says. “I find even as much as we try to communicate with the work force, it’s never quite enough getting everybody on the same page and getting them all aligned. I’m a firm believer that if everyone has the information that we have, we’d all end up in the same place. So trying to go a little bit deeper and describe why we did what we did and what we expect to get out of it I think is very important organizationally for the employee base.”

Fusco and the Calpine management communicated in a variety of ways. From personal visits to filming quarterly DVDs, they made sure to keep up communication through the change process.

“You need to be clear about what your expectations are,” he says. “Be consistent and follow through when something doesn’t turn out the way you had expected or if somebody’s not following your value system that you enforce it appropriately so that everybody understands that you mean it and it’s not just writing on the wall.”

While communication plays a huge role in driving the company through change, not everyone will get onboard and you need to be prepared.

“That’s the harder part is trying to give people ample time to get onboard with the new vision or the new mission or the new company and when do you cut the cord versus when do you keep continuing to counsel or work through the issues,” Fusco says. “It’s not always going to work. In some cases it may just be better for the employee and for the company for them to move on.”

While letting someone go who isn’t willing to adapt to change is the right move, no one wants that to happen. You have to be out in front of employees and customers making sure you are aware of what is going on.

“I’m a very informal person, so on the employee side, I just like to show up at the plant and talk to them,” he says. “Since I have been in power plants most of my career, I actually understand what the issues are and the technology that they’re dealing with. So I think that helps add some credibility. It’s the same with the customers; I think I’m an approachable person. Getting the customers to trust the new management team was important and part of that trust was that we actually heard what they were telling us and we made changes to make it better for them. Reorganizations are hard. Change is hard for everybody and we’re all human beings. You have to be fair.”

Move forward

A turnaround is the hardest thing a company will ever go through, and it takes a strong group of employees to help drive a company through such a hard time.

“The biggest factors for success as a company today have been our employees,” Fusco says. “They’ve been extremely professional through all the change and extremely hard working. You have to get a great team. It’s much too big for any one person and you’ve got to surround yourself with great people that you all trust and you all work together seamlessly. That’s the No. 1 most important thing for a CEO.”

Through Fusco’s hard work and determination the company is once again in a good position. Relationships with customers are strong and operations have improved.

“We focused a lot on our customers and making sure we were meeting the needs that they needed from us, which was very important,” he says. “We focused on our operations and our productivity. Here at corporate, we put in a new business system that helped us process our financials a lot faster and much more transparent. At the plants, we put in a new scheduling and operating system that helps us plan our work better and actually got us to figure out more of the root cause of our problems we were having. We fixed those and we got our fixed outage factors to come way down from where they were in the past. So we were delivering a much more reliable product that our customers needed and wanted, and they felt more comfortable with our operations and in return we got higher-priced, longer-term contracts from them and that helped stabilize the company quite a bit.”

Things have improved to the point where growth is back on the agenda. Last year, the company bought Connective Energy for $1.6 billion in cash.

“That to me is a real success story to go from bankruptcy to where you’re buying a former competitor and consolidating that into the business,” he says. “I think we’re in an era now where we have stabilized the company.”

Today, the company employs more than 2,100 people and had operating revenue of $6.54 billion in 2010, up from $6.46 billion in 2009.

“We are Calpine, and we’re back and we’re strong and we like our position in the market, and we applaud our employees for everything they’ve been through and now we’re moving forward.”

HOW TO REACH: Calpine Corp., (713) 830-2000 or www.calpine.com

The Fusco File

Jack Fusco

President and CEO

Calpine Corp.

Born: Modesto, Calif.

Education: Bachelor of science degree, mechanical engineering, California State University in Sacramento

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

The first power plant job I had was when I was a junior and senior in college. I worked out at Rancho Seco Nuclear Power Plant. My first job ever was working for my father in his janitorial business. At about the time I could walk, I worked for my dad washing windows, picking up wastepaper baskets and cleaning bathrooms. That’s where I got a lot of my work ethic from were those early days.

What was your biggest fear when you took over as president and CEO of Calpine?

My biggest fear was that we were going to have to file for bankruptcy again. I’m well beyond that today, but when I started, when you’re fresh and the economy does what it did within the first month of being on the job, it was very uncomfortable.

Who is someone you admire in business?

Jack Welch. He changed the way I thought about work when I read his first book, “Control Your Destiny or Somebody Else Will.”

What is your definition of success?

For me, it centers on employee development. If I can take the treasurer and help him become the best CFO, I get a lot of satisfaction out of that. We spend an enormous amount of time on our succession planning throughout the whole organization. So trying to create something that’s long lasting and sustainable that has multiple layers and professionals on the bench means more to me. Concurrent with that would be our reputation. When people think of Calpine, they have good thoughts that we are a leader in the space or a leader in environmental quality and not something else.

How Tim Jahnke got Elkay Manufacturing to change its ways

Tim Jahnke, President and CEO, Elkay Manufacturing Co.

You can’t blame Tim Jahnke for feeling a bit like the wrong man in the wrong place at the wrong time as the new president and CEO at Elkay Manufacturing Co. He was taking over a construction product manufacturer that had experienced double-digit growth every year from 2001 to 2006.

Two million new homes went up in 2006, and it looked like Elkay was positioned for more of the same in the years ahead. Then Jahnke arrived in late 2007 as the company’s new man in charge and everything began to fall apart.

It wasn’t Jahnke’s fault. Many factors led to the global recession that socked economies and businesses around the world beginning in late 2007. But that didn’t make it any easier for him as he searched for answers to keep Elkay from going under.

“It’s not just that we went from a really good market to a challenging market,” Jahnke says. “It was the speed at which it happened that created such an emotional and terrifying set of consequences within our market.

“All the numbers just changed so dramatically and the market shifted so fast that you couldn’t run down the hill fast enough as a company. You couldn’t cut fast enough, you couldn’t close enough factories, and you couldn’t do all the things that needed to be done to cut costs.”

Jahnke knew people were scared, and he knew they were looking to him for answers. But he also knew that if the company was to be saved, it wouldn’t be done solely through his leadership and decision-making. He would need all of his employees to play a part in finding ways to help Elkay stay on its feet and to continue to be a viable option for customers.

“If there is a bit of good news to the dramatic speed that the market was changing, it was that it got everybody bought in pretty fast,” Jahnke says of the initial response he got at the now 3,775-employee company. “It didn’t take long for people to understand that you couldn’t just modify what we did. We had to change what we did.”

Demonstrate your resolve

Jahnke began the effort to turn around Elkay by issuing a challenge to every employee. He wanted the employees to begin looking at ways to make the company stronger, better and more efficient in the work that they did.

“We had to look at everything we did,” Jahnke says. “Not just how many people we had and how many factories and all this sort of thing. But really look at every procedure, every process, every method that we used for those many years in running our business. I had to believe it wasn’t just going to happen from me above telling people that they needed to do things differently. We needed to start looking at things in a very mechanical way.”

Jahnke had no desire to just make a series of desperate sweeping changes that would demonstrate action but produce no results. He wanted to get to the heart of the matter with his people and see what could be done to make Elkay a better company.

“I remember having a conversation when we were talking about customer service, which is such a critical area,” Jahnke says. “I said, ‘Who is the best person we have in the entire company?’ Everybody looked around and said, ‘Laurie Goldman,’ who at the time was customer service manager for our cabinet division. I said, ‘We need to get her involved in this team.’ When that got said, everybody looked around and said, ‘Wow, he’s serious. I really do have to ante up my best people.’ We did that pretty much across the board.”

Jahnke wanted his senior management team to bring forward talented people with ideas to improve functions. He made it clear that he wasn’t going to stand in the way of their efforts to make changes.

“I could voice my opinion on how we had to make change, but these were folks who were inside the organization working every single day in these areas and generating new ideas,” Jahnke says.

He found leaders for each key area in the business and then an overall leader who would coordinate the team’s efforts. That leader was not going to be Jahnke.

“It’s important that it not just be from the top,” he says. “It started to create some understanding in the middle of the organization.”

Jahnke would get reports about what was happening with the team and the team leader would report directly to him. But it would serve as another indicator that he wasn’t going to micromanage the process to remake Elkay.

“You’ve got these people who make a difference way beyond the job or the job title that they carry,” Jahnke says. “In our case, we took it very seriously. This team got things started. It wasn’t necessarily important that they got everything done. But they started to send the message through the organization that we were very serious about adapting and changing to the world as it was changing around us.”

You need other people in your company, people that are viewed as leaders in your organization, to be on board with you and to support your plan of action.

“You have to have your key leaders, functional leaders or divisional leaders participate and get involved,” Jahnke says. “If they’re not part of it, they’ll fight it until the last breath of implementation.”

Jahnke said despite his best efforts, he still faced some opposition from a few at the management level.

“There were more than a few conversations that had to become pretty aggressive,” Jahnke says. “You will participate, you will give up your key people, or you will listen to the recommendations of some of these teams. They were generating ideas that were going to cause us to do things differently.”

They needed to know that Jahnke was completely supportive of their ideas.

Get on the same page

As the team began to assess Elkay’s ways of doing business, it quickly discovered a key flaw: Elkay was not nearly as close to its customers as it needed to be.

“During that period of time of growth from 2001 to 2006, we really focused on getting the product out the door,” Jahnke says. “Orders came in so fast that the whole concentration of running the business was, ‘How do you get it out the door?’ What ended up happening was we became very internally focused. What was best for us? How do we manufacture it easier? How do we take that order from our perspective in a way that makes it easier for us?

“We really stopped looking from the perspective of the customer and the end user and the consumers of our products and what they wanted. It made it easier for us, but in some ways, it made it more difficult for our customers.”

As team members dug deeper, they found that the way Elkay was doing things wasn’t really easy for anybody, customer or the company itself.

“We had three distinct product divisions: Our cabinet division, our plumbing division and our countertop division,” Jahnke says. “Each of the divisions had multiple manufacturing facilities. We had separate sales teams, separate finance teams. Everything was done very separately. Then within each of our facilities, they were allowed to pretty much do what they want. Everybody purchased at each manufacturing site pretty much on their own what they needed from local suppliers. It really created complexity in our business that we didn’t need.”

Awareness of these problems filtered throughout the company not because they were announced by Jahnke, but because teams of their peers had brought the problems to the surface.

“When people saw we were doing things in so many different ways, they said, ‘That doesn’t make any sense,” Jahnke says. “We should be doing this the same way. It got buy-in from all levels of the organization in a more rapid way than if it was just pushed from above.”

Jahnke tried to reinforce the idea that there could only be one “best” way to perform a particular task. Things such as sales practices, financial decision making and the ordering of supplies needed to be more uniform.

“There can’t be six best ways to do the same thing,” Jahnke says. “We started identifying ways we could take out waste in our own processes and systems to become easier to do business with. It was not only a message from me that we needed to do things differently, these were individuals who had been with the company for many years. They were experts in their own field and their own areas of responsibility.”

Jahnke wasn’t looking to create drones who would eradicate the character and uniqueness that separates selling countertops, cabinets and plumbing. But in the areas where tasks are pretty standard, it would be much easier all the way around if more systems were uniform.

The key is creating teams that can help you take a deep look at your business and then not getting in their way when they take that look and come back to you with their observations.

“They have to trust you,” Jahnke says. “Many times I use the phrase, ‘People do business with people that they like, trust and then ultimately respect.’ That goes whether you’re a customer, a supplier or an employee. For example, initially with an employee, if they like you, they’ll come to work for you. They like what they hear and they like what they see and you’re at that level. After a while, they are starting to trust you because you’re doing the things you said. They start to develop a trust level with you. Then ultimately, they develop respect because they see the results and they see the impact on them and that you have their concerns at heart also and they develop that respect.

“You could apply that mindset to customers, suppliers, employees, everybody. If people who lead realize that it is all about getting people to trust and respect you, that doesn’t mean telling them what they want to hear all the time. It doesn’t mean that everything is always going to be great. If they really trust what you’re saying and respect what you’re trying to accomplish and you get everybody pulling in the same direction, it makes the journey a lot easier.”

Jahnke rewarded the trust of his employees by taking their suggestions to heart about the problems that existed at Elkay and the hurdles it was creating in building solid relationships with customers.

“You have to sit in front of folks and let them ask you questions and make sure you that you don’t either ridicule or be negative toward the people who ask you the questions that are the most important ones,” Jahnke says. “Those are invariably the toughest ones to answer. You have to reward the folks for asking. Create an environment where they understand that you’re willing to not just stand in front, but answer the questions and take the heat.”

Jahnke earned even more trust when the changes to create better task alignment and customer service procedures at Elkay led to positive growth in 2010 and a projection for growth in 2011.

He believes one of the keys to his success was convincing employees that the enemy they were facing was not the sales team or the finance team or anybody else at Elkay.

“We got people looking at things and seeing that the enemy is not within our walls,” Jahnke says. “The enemy is outside. The enemy is a declining market, high unemployment and falling house prices. Those types of things. We had to take action.”

How to reach: Elkay Manufacturing Co., (630) 574-8484 or www.elkay.com

The Jahnke File

Born: Green Bay, Wis.

Education: Bachelor’s degree in business administration, University of Wisconsin Oshkosh

What was your very first job?

I took care of a Little League field when I was 13 years old. I put the bases out and drew the lines out on the field and then umpired the games. It was the best job I ever had. I love sports and being involved in anything sports is a lot of fun. But it taught me lots of things.

I had to deal with the coaches, and they weren’t always that nice to the umpire. And I had to deal with the parents. It gave me a level of self-confidence that you normally don’t have when you’re 13. Sometimes you had to turn around and look at a parent and say, ‘Be quiet.’ When you’re 13 years old and you’re talking to a parent, that’s not the easiest thing to do.

Who has been the most influential person on you?

My dad. I think a lot of people say that, but my dad just passed away a few months ago, so it comes to mind real fast and the work ethic that he showed me every single day growing up. He didn’t rule with an iron fist. He was demanding of me, but that combination of knowing that he loved me every day and at the same time he had expectations of me that needed to be met, that helps create the balance you have to have in life. Having expectations doesn’t mean that you don’t care for a person. Being able to share both frustration and at the same time, caring, is important whether you’re a CEO or a dad or a husband or a member of a community.

How Avinash Rachmale keeps Lakeshore TolTest focused on growth and continuous improvement

Avinash Rachmale

Avinash Rachmale, president and CEO, Lakeshore TolTest Corp.

Avinash Rachmale has been in growth mode for 17 years.

The Mumbai, India, native founded the company that would later become part of Lakeshore TolTest Corp. in 1994. From the construction contractor’s early days with a staff of 30, Rachmale fed and watered his seedling of a company enough for it to sprout as a global outfit with 700 employees and $621 million in revenue last year.

To achieve the results, Rachmale says the term “growth mode” has taken on a more universal meaning for his business. He grows the capabilities of his people. He grows his business base. He grows enthusiasm for where the company is and anticipation about where it’s headed next.

“As a company, you want to have a vision about where you are headed, where you want to head and where you are actually going,” says Rachmale, who is the president and CEO. “Our vision was pretty clear. We wanted to be one of the largest contractors. We rallied people around that vision because people want to grow with a company that is growing.”
For Rachmale, growth means growing the culture in addition to growing new business opportunities. He wants every move made by the people at Lakeshore TolTest to be both a reflection and reinforcement of the company’s core values. It’s a belief that factors heavily into how Rachmale’s team hires new employees and trains them to conduct business.

“Our core values include items like client satisfaction, bringing a positive, can-do attitude to the office and taking responsibility when you take charge of something,” he says. “That is why we don’t hire people who have just the technical skills for the position. They can’t have the technical skills but no sense of our core values. No matter how competent they might be otherwise, if they don’t demonstrate those values, we won’t hire them.”

What follows is some of Rachmale’s lessons on how to grow some of the most important aspects of your company, from your culture to your people, to building a bigger portfolio of customers.

Build better people

To build the type of employees who can promote your culture and help your business grow on all fronts, you need to recruit people who have the right materials to begin with. Your new hires need to be a match for your culture, which is something you need to deduce through the interview process. But even once you’ve hired the best possible candidates, in order to keep them for the long term, they need to find career advancement opportunities at your company.

Rachmale says upward mobility is one of the most sought-after factors that determine whether a company retains its best and brightest players. Star performers want opportunities to move into higher-ranking positions, and the resources available to get the experience necessary to succeed in more demanding positions.

It aids your company, as well, since you will be developing an internal pool of management candidates, allowing you to promote as a first option and hire from outside the organization as a second option.

“People want upward movement in their careers,” Rachmale says. “As the company is growing, you’re looking to hire them and then to train them, so that you can promote them first, then look outside if there are no good options inside the company. If your people have the opportunity to move up as the company is growing, they definitely have an incentive to stick around.”

Training in and of itself can serve as a means of energizing employees. Many companies train employees for compliance on industry standards or as a measure of internal quality control. It’s a critical element of training, but the education of your employees should also come with a certain degree of “school spirit” about the company for which they work.

As the leader, you can begin to foster that level of engagement and enthusiasm by setting the example from the top, with the help of your leadership team.

“As employees learn more, they get more energized,” Rachmale says. “We have various programs to try and keep the energy level high. Monthly, we have what we call our Lakeshore University, where we have a topic of importance that we talk about and analyze. It’s basically like a webinar format. That is a big step in making sure that employees are getting the right training and feel more energized. It also helps if you can go above and beyond in how you take care of your people. If they need a little time off to deal with a personal matter, we accommodate that. Those are some of the things you do, both big and little, to keep employees motivated.”

How employees respond to your motivation efforts will give you a good feel for their potential to grow within your organizational structure. Rachmale informally divides employees into three categories: A, B and C. A players are your top performers, the employees with the best chance to grow into leadership positions within your organization. B players have the potential to grow into A players but might struggle in some areas. C players have significant problems with attitude, motivation or competency. Some can be salvaged and improved, some don’t have a future with your company.

“What I would say is that you will always have those three types of players in your organization,” Rachmale says. “You motivate B players to become A players. You try to motivate C players to become better, but if there are too many C players, you won’t be able to motivate your B players to reach their full potential.”

Rachmale and his leadership team use yearly performance evaluations to get an accurate read on the potential achievement level of each employee.

“The goals that we set are being monitored quarterly and yearly,” he says. “If an employee is coming in ahead of their goals, we know that is an A player, and that person has a chance to excel in a promotion situation.”

Plan for success

Building the best team is a major component of running a successful organization. But even the most talented team still needs rules by which to play. Your team has to know where you want to take the business in the coming years, how their jobs affect the goals of the company and what is expected on them — on a day-to-day basis, and in the longer view.

You give employees that type of structure with a well-constructed business plan. Your plan will aid in leading your company, and it will also become one of the first things that investors and banks will look at if you seek new avenues for financing.

It’s a lesson that Rachmale learned early on in leading his own company.

“Banks will look first at your business plan,” he says. “If you have a solid business plan, a solid vision and a good track record of performance, banks will be open to you, even with the economy as it has been. That is how we did it, one job at a time. We did a good job each time, we made good money on the project and we showed the banks that, yes, we can work with a million-dollar line of credit. The next year, we needed another line of credit for another job, and they said yes. That is really how you need to do it.”

A business plan has to outline what you are selling and provide evidence that you will be able to provide a return on investment. It has to speak to your employees, customers and all of your other stakeholders.

“You need to describe what you are selling and get your management team on the same page with you in order to promote it,” Rachmale says. “All of those things are important. Your product, your management team, the outside people you have contact with, your clientele. All of those groups have to factor into how you construct your business plan.”

A realistic, comprehensive business plan is the product of you and your leadership team knowing what the company can handle as a whole, and what each department is equipped to handle. You have to take a look at what markets you want to attack, the workload coming in the door and the resources available.

“As you put your plan together, you learn what you can chew on,” Rachmale says. “You start to learn what your team can handle, and then you need to answer the market with that. You look at what jobs are coming in and if you’re positioned right for that job. You demonstrate before you take a job that you have the pieces in place, and if you get the job, you’ll be able to do it. Then, once you win the job, you set the team in motion and make sure all the pieces are in place and working. Because clients will not give you a job if they feel you cannot manage the job. You have to demonstrate your abilities beforehand, which goes back to the importance of a good business plan.”

Face change

As you grow your business, opportunities might come along to add on to the company through a merger or an acquisition. Rachmale has recent firsthand experience in growth by acquisition, having been a key figure in the formation of Lakeshore TolTest. In April 2010, Lakeshore Engineering Services Inc. acquired Maumee, Ohio-based TolTest Inc., led by President Ernest Enrique. Both entities continue to operate separately, but under the same corporate umbrella, with Rachmale serving as the head of both Lakeshore Engineering and Lakeshore TolTest.

For Rachmale, the challenges associated with growth by acquisition are often related to culture. From your due diligence, you know if the acquisition makes financial sense. You know if the products or services are a good fit for where you want to take your company. But on cultural matters, it’s often a case of leadership from both entities sitting down together and piecing together a plan.

It requires a willingness on the part of both operating units to grow and change, and accept that their way of doing something might not be the best way.

“It is a challenging process when you have two cultures,” Rachmale says. “Every company has its own culture, so when you are bringing two cultures together, one group feels they have a better way of doing a particular function than what the other group might have been doing. That is why you put together an integration team, make a plan and a schedule and work through it. It’s something we have had to work with for over a year, and we have made progress.

“In our case, the integration team was in charge of finding the best practices from each site where we operated. It took us almost a year to do that, and there were a few fallouts along the way, but I think we’re where we need to be. But that is why you have a transition plan ready from the start. You can’t wait for something to transpire before you react. From the day you declare that you are going to acquire a company, you have to have that transition plan and integration team in place.”

How to reach: Lakeshore TolTest Corp., (313) 875-4115 or www.lakeshoreeng.com

The Rachmale file

Name: Avinash Rachmale

Title: President and CEO

Company: Lakeshore TolTest Corp.

Born: Mumbai, India

Education: Bachelor of science degree in civil engineering, Government Engineering College, Aurangbad, India; master’s degree in environmental engineering, Wayne State University

Rachmale on answering the bell for clients: When you are putting together a proposal for a project, you are telling the client what you can do for them. You might not have all the pieces in place, but you have enough pieces in place that the client feels good about you.

We once put in a proposal that said we were going to have a certified accounting system in our offices. That was one of the requirements of the contract. Then the client looked us over and said that we had demonstrated that you have this, you have some key components, but you don’t have the whole team. But you have enough that we will use you. As soon as we got the job, we put all the remaining pieces in place. That is one example. There are so many others like it.

Junior Achievement of Central Ohio inducts three into Business Hall of Fame for 2011

Greg Moran, chairman of Junior Achievement of Central Ohio

A letter from Greg Moran, chairman of Junior Achievement of Central Ohio:

On behalf of our community partners, Junior Achievement of Central Ohio is proud to host the 2011 Central Ohio Business Hall of Fame ceremony. The Hall of Fame has recognized more than 80 distinguished business leaders during the past 24 years.

This year’s inductees — Sue Doody, George McCloy and Robert White Sr. — are deserving additions to the Central Ohio Business Hall of Fame. Excellence, leadership and an entrepreneurial spirit will be well represented by the class of 2011.

The 2011 Hall of Fame inductees act as role models for students in our community. Junior Achievement celebrates their careers as we prepare young people to succeed in the global economy. Junior Achievement volunteers and staff teach financial literacy, work readiness skills and an entrepreneurial mindset to students throughout the central Ohio region.

I am excited about what the entrepreneurs of the past and present have done for Central Ohio. Working closely with business and economic development leadership, we look forward with anticipation to the contribution that Junior Achievement alumni will make in our community during the coming decades!

Today, we have an opportunity to celebrate these Hall of Fame inductees, standing on the foundation they’ve laid as we help young people take control of their future and fully live to their potential in our region. We are proud to be partners with our school systems, employers and community leadership in educating our future work force. We invite you to join us at www.jacols.org or search Junior Achievement of Central Ohio on Facebook.

Greg Moran is chairman of the board for Junior Achievement of Central Ohio and senior vice president and chief information officer, Infrastructure and Operations, for Nationwide Mutual Insurance Co.

How Sprint Wholesale Solutions’ Matt Carter gets his employees involved in forming the future

Matt Carter

Matt Carter, president, Sprint Global Wholesale Solutions Group

Three years ago, Matt Carter was the president of a business unit that was anything but booming.

The competition was, however.

Carter was the president of Boost Mobile, part of Sprint’s prepaid wireless group. Boost had made its name catering to lower-income customers in urban centers. But staying confined to that niche wasn’t helping expand the division’s market share.

“It was a very challenging situation,” says Carter, who is now the president of Sprint Global Wholesale Solutions Group, an Irvine-based division of Sprint Nextel Corp. that generated $1.8 billion in revenue last year. “Boost was in a category that was growing, but we were the only brand in the category that wasn’t growing. So it became very critical to give people a sense of reality, but it couldn’t just be me that was standing up there and saying, ‘Here is the state of the business.’ Half the deal was really presenting facts and data, and letting folks come to that conclusion themselves and buying in to the need of finding new ways of doing things.”

Carter needed to leverage the brainpower of his people to help redefine the Boost brand. But in order to get people at Boost thinking, he had to engage them in the process of developing new ideas. This meant everyone under Carter’s leadership umbrella had to realize their input and opinions mattered to management.

“It’s critically important in that situation that you let folks know that you are the leader, but you aren’t going to do this all by yourself,” Carter says. “This isn’t Moses laying down the Ten Commandments. You have to let folks know that you’re there for them, that you’re here to serve them and that you want them to buy in to what you’re doing and trust you in leading them. But you can’t force it. You have to figure out a way to get them to want to believe in you and what you’re trying to accomplish. That’s the type of trust that helps you move a business forward.”

Envision the vision

Carter was the leader, but he was also the new guy. He had people on his staff who were much more familiar with the Boost brand than he was and could see the potential directions for growth more than he could. Early in his tenure at Boost, after talking with a number of employees, Carter started to see the brand through the eyes of his people — and it was a brand with a great deal of untapped potential.

“Many of our people felt that there was a great deal more underlying value here that can appeal to a broader segment of the population,” Carter says. “Not just credit-challenged people, but people who are simply looking for good value.”

Carter developed a vision for Boost as a company that could appeal to consumers of different age groups and different income levels, in the city, suburbs and outlying areas. Boost began developing a diverse selection of marketing campaigns, broadened its product distribution and expanded its product offerings.

It sent a strong message to consumers, and it also sent a strong message to Carter’s work force.

“They started to see that, ‘Hey, he’s listening to what we have to say,’” he says. “There is greater potential here than just where we’ve been. Everything from our devices to marketing to distribution, it was all affected by the input I was getting from our people out there.”

Carter gathered the input by getting on the road. He spoke with customers and employees. Many company leaders pound the pavement, interacting with stakeholders and soliciting feedback, but Carter says the most critical step is the one he took next. He turned the talk into action in a short period of time.

“What happens in that process is that as you get their input, they start to see action that reflects the things they were talking about,” Carter says. “It makes them feel as though they had a vested interest in the process, in the outcome, in the decision. It wasn’t just me as the leader, sitting in a room by myself. It was really me getting input from a lot of smart, passionate, engaged people. As most folks saw that, they bought into what we were doing. They felt like, ‘Hey, I’m being heard.’ You can’t underestimate the importance of that. It just makes people more engaged.”

Make it cultural

Once you’ve set a tone of collaboration, it’s up to you to continue reinforcing that message to your employees. If you start out working hard to seek input and turn that input into action, but let the momentum trail off over the following months and years, you’re going to kill the cultural seeds you planted at the outset.

To make collaboration and engagement a part of your culture, you need to hire the best people, define their roles and continually show them how their work benefits the organization as a whole.

Ultimately, Carter says that as a top-level executive, you’re not in the business of manufacturing your company’s product or providing your company’s service. That’s the job of those under you. As the leader of the team, you’re in the people business.

“I view myself as a player-coach,” Carter says. “I’m in the game, but I also coach and provide guidance. As a leader, your first job is about people. You have to make an evaluation around the type of people you have on your team, who is working collaboratively, who are the people who will help us get to where we need to go. At the same time, you also have to make the tough decisions around those who are not part of those plans. So, it’s being really clear about how you maximize the team’s capabilities. That is absolutely numero uno for me as a leader. It is my belief that it is all about how you maximize your team’s capabilities.”

You need the right puzzle pieces on the table, but you also need them to fit. Fitting the pieces together requires you to define roles for the people on your team. If your team is comfortable with collaboration and sharing ideas, your people need to know what you expect of them and what they can expect from you.

“I don’t try to come in and prejudge people,” Carter says. “I try to give them the benefit of the doubt. Some people work better with certain types or leaders or in certain types of situations. What you try to do is come in with an open mind and a clean slate. This is what I need from you and your team, and this is what you can expect from me. And that starts the evaluation process. How are they performing against the expectation that is required for the team to be successful?”

Some people will perform above expectations, some will perform at the level of expectation and some will fall below. If someone falls below, you take corrective steps. If those don’t work, then you are forced to make a judgment call on whether you can move forward with that person as a member of your organization.

“The worst thing you can do is keep bouncing around people who are not performing,” Carter says. “You have to protect the integrity and the performance of the team.”

Develop solid practices

Carter says there are few things more important in business than defining metrics and goals and consistently executing on them until you’ve gotten it right. Without practice and execution, Carter and his team would never have seen their vision for Boost Mobile come to fruition. It’s a lesson he’s seen illustrated in pro sports.

Former NBA league MVP Allen Iverson once famously ranted to the media after he was criticized by his coach for missing team practices.

“Maybe Allen Iverson didn’t completely believe in practice, but you have to practice,” Carter says. “You have to be able to work on your game. So I have put in practices that allow us to have good habits as an organization.”

Carter and his leadership team continually assessed Boost’s performance with a series of metrics and used some tools they formulated to help keep everyone abreast of how the company — and their department — was performing against the metrics.

“Every week, we made sure everyone was clear on the state of the business,” he says. “We had a weekly scorecard to indicate how we were performing against all the key metrics. It was set up like a gas gauge, with red, yellow and green. Green meant you were performing at or above the plan, yellow was kind of a warning area and red meant you were underperforming. The goal of that was to get everyone performing from the same sheet of music, the same metrics we were going to use to evaluate the business. Everyone has a common language. And you don’t want to underestimate the importance of that. Having a common language is what allows everyone to have a robust conversation as an organization.”

If you don’t have that method for uniform measurement that allows for consistency in your execution against your goals, you end up like the Lakers did this past spring when they were swept in the second round of the playoffs.

“The Lakers are unquestionably one of the best teams in the league, and what happened to them? There were all kinds of personality issues, emotional distractions, psychological drama,” Carter says. “They’re people, and they weren’t all operating on the same page. And they collapsed. L.A. could still have lost that series, but I don’t think they should have been swept four games to none. And the same thing applies in business. People come to work, they have all kinds of things going on, and you as a leader have to figure out how to keep people together and focused on helping the team best the best that it can be.”

With that approach, Carter had refashioned Boost as a prepaid wireless services brand with appeal to many different market segments by the time he was promoted to lead Sprint’s 4G network expansion in 2009 and to his current post in 2010.

“It just keeps coming back to the fact that it wasn’t just one person as the head of the business, telling everyone else what to do,” Carter says. “We had a forum that was collaborative but invited dissent. You get different points of view and then encourage debate around those points. At some point, if you reach a stalemate, the leader has to make a decision. But you get everyone to understand where we’re going, how we’ll get there and the pros and cons of any decision.

“Having that as part of the process was absolutely critical to getting people to buy in to the vision. And that’s really what you’re trying to do — establish habits and routines. Practice still makes perfect, and you have to put some form of practice in place.”

How to reach: Sprint Global Wholesale Solutions Group, wholesale.sprint.com

The Carter file

Matt Carter

President

Sprint Global Wholesale Solutions Group

Education: Radio, TV and film major at Northwestern University; MBA, Harvard University

First job: I did the newspaper thing. I used to deliver the Boston Globe back in the day, when people used to read the paper.

What is the best business lesson you’ve learned?

It is about people. You get things accomplished through others.  As soon as you understand that as a leader, the better off you are.

What traits or skills are essential for a business leader?

You have to be competent at what you do. You have to have confidence, exude optimism and communicate. You don’t have to speak like Barack Obama, but you have to have a willingness to reach out and engage people. And you have to have trust. People have to see that you as a leader are trustworthy. You need to have their back.

What is your definition of success?

It’s living up to your capabilities. If your capabilities can only get you onto the junior varsity team, then so be it. For me, success is really about giving it your all, to the best of your capabilities. Don’t be like Mike. Be like you, do the best you can do. If you can’t live up to what Michael Jordan did, you don’t need to feel like a failure. You give it your best try. It’s when you don’t give it your all that you fail.

How Gerald Shreiber keeps J&J Snack Foods ready to grow no matter the state of the economy

Gerald Shreiber

Gerald Shreiber, founder, president and CEO, J&J Snack Foods Corp.

In April, J&J Snack Foods Corp. announced that it had a deal in place to acquire several frozen-food product lines from ConAgra Foods. The acquisition added up to $50 million in annual sales for Gerald Shreiber’s company, but it also added new production facilities in North Carolina and Oregon, new people to integrate and new inventory to manage.

But as the economy slowly crawls out of the pits of the worst economic nosedive in almost 80 years, the acquisition is a reflection of Shreiber’s philosophy on running a business: Don’t be afraid to take a calculated risk in the name of growth.

“We have expanded our business almost every year,” says president and CEO Shreiber, who bought the company that would become J&J Snack Foods at a bankruptcy court in 1971, and grew it to $696 million in net sales last year. “Sure, we’ve been through three — or four or five — economic downturns, and we know it’s occasionally going to be bumpy out there. But we’re not going to manage our business out of fear, we’re not going to crawl into a hole and wait until it’s over. We’re going to expand our niches and expand our portfolio of products.”

Lean economic times may prevent you from spearheading across-the-board growth. You might find that certain areas of your business are treading water better than others. But you should, if at all possible, look for the select few growth opportunities that still make sense for your business, and capitalize on them.

At J&J Snack Foods, finding those growth opportunities means listening to customers, allowing team members to innovate, and maintaining a business structure that is always ready for growth and expansion.

“It is tough to grow a business and maintain levels of profitability when you’re faced with cyclical adjustments with respect to the economy and sales,” Shreiber says. “The fact that we’ve been able to meet those challenges speaks volumes for our people, our customers, our partners and our suppliers.”

Serve your customers

With a portfolio of products that includes cookies, soft pretzels and frozen beverages, Shreiber’s company has felt the pinch of consumers reining in their spending on trips to the supermarket. As more consumers stripped their shopping trips down to the basics of meat, vegetables, bread and milk, snack foods became expendable items on many families’ shopping lists.

“We realize that our products are not mainstay items,” Shreiber says. “They’re not meat and potatoes. They’re impulse items; they’re treat items. All of our items are not part of the everyday shopping experience.”

As shrinking budgets altered the way consumers spent, Shreiber and his leadership team have had to find new consumer touch points. They’ve had to look past the traditional concept of selling snacks in packages in a store aisle.

Customer feedback pointed Shreiber toward spaces where consumers were more likely to buy snack foods — such as sporting events, theme parks and schools.

“Now, we’ve developed a big presence in sports venues, from high school all the way to the professional ranks,” he says. “We have a big presence in sports, leisure and entertainment. With schools, we’ve had to reformulate several of our product lines that were being sold to school and education systems. We’ve had to eliminate most of the sugars, reduce some of the fats and reform some of our standards. But we’ve done it, all the while maintaining our sharpness and edge.”

The traditional method of soliciting customer feedback has been to collect it in the field, utilizing a salesperson at the customer interface point, talking to consumers and store operators about what they want and need. However, like the heads of many large companies, Shreiber has formalized the system beyond that.

“It’s a matter of getting good feedback, good marketing, good interactivity and good integration between our marketing people and our salespeople in the field,” he says. “Today, our research and development department likes to measure the opportunity that is being requested. We operate 12 plants throughout the country, so in that situation, you have to know where the request came from and start to get a reading on how you can best implement the thought and idea. That process has allowed us to invent new products, expand our product lines and development. I believe a good company has to take the box, shake it up and down, and reinvent itself from time to time. That’s where customer feedback comes in. They’re the people who are buying our products every day, somewhere, in some venue.”

Invest in growth

Even as the economy has faltered and Shreiber’s team has had to get more creative about finding new sales avenues, Schreiber has still maintained a willingness to invest in his company’s future. It is a major reason why J&J Snack Foods has remained in growth mode each year, regardless of the economic climate.

You might not always be able to invest large sums of money in large-scale growth initiatives, but if you are able to save what you can and carefully select the time to strike, you can still make a move with a lasting positive impact for your business.

“You do have to budget,” Shreiber says. “I like to say we’re flexible, but we’ve also been very conservative over the years. We don’t spend more than we earn, we’ve eschewed debt and stayed solvent. If you don’t shoulder a lot of debt, you give yourself more flexibility. We’ve had the availability of both cash and credit to look at expansion.”

Growth opportunities can help you expand on an existing area of strength, or can help you broaden your product offering. In Shreiber’s case, he’s looking for product lines that can supplement his company’s existing portfolio.

“If you look at a good football team with good management, they’ll find the missing pieces,” Shreiber says. “The good teams will do it constantly all the time. It’s a matter of making your resources fit properly. Occasionally, we’ll look at a dozen to 15 things before we think we’ll have found something that fits us — the right company, the right location or the right portfolio of products.”

Investing in new growth also means investing in the people involved. Shreiber refers to it as “installing new batteries” in the people, particularly if growth means acquiring a new business unit.

“We want to kind of give them a new energy,” he says. “That’s the whole point of installing new batteries. In the case of the recent ConAgra acquisition, we brought our key plant people to visit us here at our headquarters just before we closed on the business. We had two or three days of sales and strategy meetings, and had some of their other people visit our facilities.”

Shreiber’s staff and the incoming unit leaders collaborated on a series of lists, between 10 and 12 items in length, each with a 100-day goal in mind. At the end of the fiscal year, Shreiber and his team reviewed the progress against the stated goals.

“Above all, you’re looking at how this product line fits in with what we’re doing, how you’re getting the message out to existing customers in areas that you weren’t operating in before, and how we’re getting it out to new customers,” Shreiber says. “I’m cautiously optimistic about our situation with this acquisition, that we’ll get this to work and be on to the next challenge in a relatively short period of time.”

Investing in growth also means investing in the support structure to accommodate growth. Though a self-admitted computer novice, Shreiber has invested heavily in IT support over the past decade — an effort to make his company more efficient, more scalable and a better conduit for information.

“If nothing else, that technology gives the CEO good, concise, clear information all the time,” he says. “So you can’t be afraid to grow and invest in your company, and that is something I encourage other CEOs to do. Even though we area a public company and answer to shareholders, I’m still the controlling shareholder and as long as I’m around, my mantra will never change.”

Plan for growth

Even if growth isn’t an option right now, if you want to grow again at some point, you should continue to operate with growth at the center of your long-term plans. That means fashioning a strategic plan with aggressive yet realistic goals and ensuring that you don’t backslide on the principles that made your business a success to begin with.

“Sometimes it’s a little more difficult if gas reaches $4 a gallon,” Shreiber says. “People drive less. If they drive less, they go less often to the places where we sell most of our products. So we are often challenged that way. That’s when you’re looking to ensure that your merchandising remains a priority, that you’re taking a good look at the locations where your products are delivered and that you’re delivering good value to the customer and, ultimately, the consumer. It’s almost like a running train. All of the cars are connected in there, and if something comes loose, there is going to be an issue. As the leader, you have to be the supreme conductor to make sure nothing comes loose. If it does, you make sure that someone reconnects it right away.”

Shreiber tries to plan for the short-to-medium term, but refrains from looking five-to-seven years down the road. Too much can change in the economy and in the industry in half a decade to accurately assess the plan of action.

“If you plan for five or seven years from now and you get everybody following that plan like a book, there are things that can happen in the short term that can affect that,” Shreiber says. “You want to be able to respond and react to opportunities, so our long-term planning stays within three years.”

Every business is different. Each business has its own market to serve, its own processes, its own structure and different methods of management. But the same principles of facilitating growth apply no matter what product you make or what service you provide. You have to know what your customers want, know what your business is set up to provide, and you have to continually invest in initiatives that will help spur growth.

“Every business is different,” Shreiber says. “We turn over our inventory 12 to 15 times a year. If you’re in the auto industry or heavy construction, maybe it’s a little different. But we’re buying our raw materials, packaging and ingredients on a regular basis. You have to invest in the business and invest in the opportunities you find, as opposed to throwing a cover over yourself because of the recession. Good companies are impacted by the recession, but you get through it by doing more things more often, and doing them in a better way.”

How to reach: J&J Snack Foods Corp., (856) 665-9533 or www.jjsnack.com

Giving back

In addition to his business career as founder, president and CEO of J&J Snack Foods Corp., Gerald Shreiber is also an animal enthusiast and lifelong supporter of animal rights organizations in Philadelphia and southern New Jersey. Supporting animal rights causes has become one of Shreiber’s passions, and Smart Business recently spoke with him about it.

As a child, I always had an affinity and love of animals, particularly dogs, but certainly all animals including horses, cats and rabbits. I would find homeless dogs, bring them home and fib to my mother that they just followed me.

At 11 or 12 years old, I would clean horse stalls to ride for free. I always believed there was some magic in communicating with dogs and that I had some of that magic. Later when my career flourished, I felt a responsibility to give back and do what I could to help animals.

The Shreiber Animal Foundation Enterprise is a corporation organized and operated exclusively for charitable and educational purposes and for the prevention of cruelty to animals. I also support organizations such as the American Anti-Vivisection Society, the National Humane Education Society, the North American Wildlife Park Foundation, PETA and the Pennsylvania SPCA.

I believe animals should be treated with respect and dignity at all times and I support those causes that share my beliefs.