How Martin Richenhagen spends up to $300 million a year to grow AGCO

Martin Richenhagen, AGCO

When Martin Richenhagen joined AGCO Corp. nearly a decade ago, he says the company was like a Volkswagen Beetle with a Ferrari engine.

“We had certain elements,” the chairman, president and CEO says. “We had good designs and strong features, but we didn’t make it a complete product range.”

At the time, the company, a global manufacturer of agriculture equipment, had grown through mergers and acquisitions.

“We had a lot of very traditional brands and products, but the approach of previous management was to do acquisitions instead of investing into your business,” he says. “That was not bad in order to basically buy the right pieces and in order to get up to a certain meaningful size, but that means if you want to do that on a continuous basis, you would have to have new targets all the time.”

That’s a problem when the industry is already very consolidated, so the idea of buying products or missing technologies from the outside wasn’t going to be as effective moving forward. To continue growing, he was going to have to change the strategy.

Richenhagen says, “That means you need to invest in your own organization, and that is much better than what we did before.”

Define yourself

Richenhagen started the process by making sure he knew what the company wanted to accomplish and looked at it from every angle.

“You do a (strengths, weaknesses, opportunities and threats) analysis where you compare your product and market analysis with your competition,” he says. “This shows you where you have gaps in your product offerings.”

Some gaps could include having a product that’s not state-of-the-art, having a leading product that is too expensive, or even not having a product at all for a certain market.

It’s absolutely critical to be honest when evaluating your products.

“You have to look at your product range and you need to ask yourself the question, ‘Is this the best product, or are there competitors that are better than I am?’” he says. “American cars are not sold outside of America because they’re lousy cars — not because people in Europe prefer European cars. The technology isn’t leading technology and leading quality. Today, you need to be able to lead in technology and lead in quality and have a competitive cost position.”

When you honestly look at your products, it will help you see where your strategy should be heading.

“When you map your product and compare it with the competition, then you know exactly where you need to be, and then that hole has to be based on your strategy,” he says.

For example, AGCO’s strategy is to have high-tech solutions for professional farmers feeding the world. He doesn’t mind having small lawn and garden tractors someone might need, but he wants to have all the leading-edge technologies for professional farmers in his suite of product offerings.

“You have to talk to your customers to identify future needs,” he says. “You could have a different vision. The vision could be low-cost tractors for family farmers in the U.S., for example … but there are certain implications coming from your company’s vision.”

He says you also have to look at the market and where it’s going.

“Define supply and demand and then you need to look into your own industry and you need to look into factors that influence the market demand in the markets you’re in,” he says.

For example, in his industry, the ability to get financing is critical and will affect demand for his products.

Get the right people

AGCO was spending about $50 million a year on R&D efforts, but Richenhagen knew it would take more than that to truly be the technology leader. He was going to need the right people to lead those increased R&D efforts. This came down to first creating job descriptions and then hiring the best person.

Beyond just the general characteristics that make up most employees within the company, he says it’s important that you know what specifically the job is you’re hiring for.

“We have a job description and profile for every position, so that means we try to invest some time in order to find out what is really needed and what we’re looking for,” he says. “This, of course, has to be updated every time you’re looking for someone else or hiring from the outside.”

It’s important to update these descriptions every time you’re looking to hire someone new for that position because the world changes so much, often the requirements for the job will change, too.

“You need to sit down and think about it, and you need to think about how sometimes that has a mirror impact on your organizational structure — you do it, and you find out you have overlap between two or three positions, and you may want to change your organization because sometimes there’s waste of energy.”

He says you need to work with a small team and brainstorm what you think are the key important areas of responsibility for each position.

“What we always do is discuss it with the guy who has the job, because I think it would be very bad if you have a job description, and the guy who’s doing the job would say, ‘That’s not me,’” he says. “That happens sometimes. If it’s getting too theoretical and you only have human resources involved or someone from the outside, this could happen.”

As you put together your job descriptions, it’s important to think big picture.

“You need to keep things simple in a way but also very pragmatic,” Richenhagen says. “This means don’t make it too long on details. The most important part of a job description is to describe the area of responsibility in the form of results you are expecting. Instead of describing what you expect somebody to do — he has to come into the office at 7 o’clock in the morning and open his door and start to make phone calls — describe activities and describe results you expect the leader to generate.”

This has been a critical recruiting tool for AGCO, because by defining results instead of job minutia, people are attracted to that kind of culture and want to be a part of it.

“With people who are more and more qualified and who have a very good experience, this is also much more motivating, because you leave the way how to get there more to themselves,” he says.

When you have job descriptions created, then you can actually look at bringing people on board. Make sure you get the right people with the right skills.

“First off, you need to have a pretty good understanding about the skills of your own people,” Richenhagen says. “Sometimes it’s very surprising, because when you look into it, you have people who have a lot more knowledge than you think. That needs to be documented and mapped out in a structured way.”

He says he had a strong HR leader, so he worked with her and a consultant to do a high-potential assessment of the organization. But from that assessment, he learned that he had really good people, but he didn’t have enough. He needed to hire more young, high-potential people from strong agriculture and technical schools as well as some leaders with strong team-worker skills and multiple language capabilities.

“What is also helpful is if you can also describe target industries where you might find those skill sets,” he says.

For example, he knows that looking at automotive, construction equipment, mining equipment, forestry equipment, the truck industry and other related fields will be the likely industries where he’ll find people with the skills needed to be successful at AGCO.

While he uses consultants to help him, he says not to use too many.

“Focus on maybe one or two,” he says. “Maybe you need to have some guys who are specifically good in a certain region. … The firms don’t make a big difference — it’s mainly the people. You need to have somebody you know and somebody who is on the same wavelength as you are, so he needs to understand what you’re looking for.”

The best indicator of that is to describe to them what you need, give them two or three weeks to identify a few candidates and then make an assessment.

“You meet the candidates and you know right away if the consultant got the message or not,” he says. “It means a very good relationship between you and your consultant to make things easy. It’s like in matchmaking a little bit.”

Move forward

Once he has the right people in place, Richenhagen pushes people forward by holding them accountable to detailed objectives.

“The objectives have to be ambitious because it’s motivating, but on the other hand, they also have to be achievable,” he says. “If you give someone a target that can never be achieved, that doesn’t motivate that person. Second, in order to get there, objectives need to be agreed upon. It doesn’t help if you just give people objectives without talking about it in detail. That means it needs to have some kind of negotiation process.”

This allows the person to talk about what they think is achievable or not and gives them buy-in to the goals.

Then the goals need to also be measurable.

“It doesn’t help to have a target that says to develop a nice product,” Richenhagen says. “This is a weak definition. You need to define the measureable objectives you’re shooting for, including a measureable time frame, and in engineering, it’s also helpful to define the budget you allocate — if you’re not in a position to make it on time, very often it’s getting more and more expensive.”

As he moved AGCO forward, R&D spending increased about 20 percent each year. By 2008, he knew he was on the right track as the company reached $8.3 billion in net sales. Even as the recession hit, the company suffered with revenue dropping to $6.5 billion in 2009, but despite that, he continued on his plan of increasing R&D money. The company even invested in some huge factory capacity additions during this time

“For two years, I was hanging out of the window with the tips of my feet inside, and then my guys were holding me,” he says. “Maybe they wouldn’t have held as firm as they could and I would have fallen out of the window. It’s a personal risk. It’s hard, but this is why the chairman and CEO makes more money than other people, because he needs to take more risks once in a while.”

That risk certainly paid off for AGCO.

“Due to the fact that it came back and we had invested, we’re also in a position to benefit and deliver on time while some of our competitors, who were more careful, now have certain capacity restrictions,” he says.

This has allowed AGCO to become a market leader.

“With every market, when you see your market share is increasing, you know you’re on the right track, but it’s also an entrepreneurial decision,” he says. “In the area of product development, you can fail easily by just developing the wrong product, so you’ve spent the money and nobody wants to buy it — you need to show some leadership if you want to make it.”

On top of that, revenue increased last year to nearly $6.9 billion. Now the company spends between $250 million and $300 million a year on R&D. While it’s a lot of money, he says he expects the company to continue growing and anticipates still increasing that R&D spend 10 to 20 percent each year. That VW body with a Ferrari engine has certainly changed these days as a result of his efforts.

“We have certain leading-edge technologies and certain brands that have a strong brand image,” Richenhagen says. “When you make this a company vision, all your brands benefit from that, and the whole company image is getting into the direction of technology leader. If you compare yourself with your competition, we now, from our customers, are more seen as the BMW or the Mercedes of our industry while some of our competitors are seen as the General Motors or the Fords of the industry.”

How to reach: AGCO Corp., (770) 813-9200 or www.agcocorp.com

Martin Richenhagen, chairman, president and CEO, AGCO Corp.

Born: Cologne, Germany

Education: University of Bonn (Germany)

What was your first job ever as a child?

My first job was helping a neighboring farmer to harvest potatoes, and this was paid by 25 cents per hour at that time in the late ’50s. [I learned] that farming is very tough.

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

I always wanted to be a train conductor. We had a train track passing by, and I liked the idea that you could travel for free while working and I was attracted to speed and noise and engines.

What’s the best advice you’ve ever received?

I think good advice I received from my father is one should have a goal in life, and second, you should do every job as good as you can.

If you weren’t doing what you are now, what career would you have?

When I was a student, I always wanted to become a famous Olympian in horse riding. I went with the German Equestrian team to the last Olympics but as the coach, not as a competitor.  We came back with a gold medal, so that means we did a very good job.

How William Abbott got Crown Media Holdings to work as a team

William J. Abbott, President and CEO, Crown Media Holdings Inc.

William J. Abbott was concerned that Crown Media Holdings Inc. had lost its way. The company, which operates and distributes Hallmark Channel to more than 87 million television subscribers, didn’t seem to have a clear path that it was following to achieve success nor did it have a clear idea of what success looked like.

“We would come up with all kinds of different reasons to pursue an endeavor that might not necessarily enhance that singular focus,” says Abbott, the company’s president and CEO. “The biggest challenge I faced was getting everybody on the same page in terms of what our corporate objectives really are. Especially in the entertainment industry, that can be challenging and difficult in that different entertainment companies sometimes have different focuses and different points of view on what’s really important.”

Abbott wasn’t new to Crown Media. He had spent nine years running ad sales and this experience had provided a window into how the different parts that made up the 170-employee company functioned.

“Previous regimes were always focused on the bottom line,” Abbott says. “I just think that the path to profitability and the path to success were pursued differently and with a different vision. For example, producing volume as opposed to being more targeted in terms of what we produce would be an example of a strategic difference.”

Abbott wanted to change that. His goal was to instill a strategy and a sense of purpose to let everyone know what they were doing and why they were doing it.

“It’s delivering a hard-line business approach to a bottom-line driven emphasis,” Abbott says. “If it doesn’t deliver something for the bottom line, our point of view now is it doesn’t make sense for the business.”

See who fits

Before he could begin plotting this new strategic focus for Crown Media, Abbott had to look at the people who worked for him and determine if they were a good fit.

“The first thing you have to determine is that you have the right team in place that is willing to buy in to a new set of strategies and is willing to pursue things a little bit differently,” Abbott says. “It’s an analysis of the team that you have and ensuring you have the right people on board.”

Abbott knew things about a lot of the people on his team from his experience at the company. But he had to set that aside and gather input as to how they would fit into this new initiative.

“That’s probably a 100-day process of really learning exactly where they have been, what their framework for decision-making is and what they draw on from their experience in terms of how they approach their day to day,” Abbott says. “You don’t want to make snap judgments around looking at someone’s resume and deciding they don’t have the right experience to get where you want to get to. It’s living through the day to day for three to four months. That’s what you need to do to get a sense of their thought process.”

You’re looking at relationships and how people function with each other rather than just trying to appraise the skills of an individual.

“It’s seeing what their relationships are like with other team members and people in their group and in their departments,” Abbott says. “The story is told pretty quickly that way versus any kind of evaluation or fact finding that I would do. It’s through their interaction with others that ultimately tells the tale and the respect or lack of respect they have with other leaders.”

Your observations should not be gathered by planting yourself in someone’s office and watching people work.

“That’s the last thing you want to do,” Abbott says. “The evaluations you make really don’t come through wandering around and talking to people. That creates way too amped up of an environment where it becomes an us-versus-them mentality where everybody is fearful when you walk in their office.”

You’re not trying to size them up on an individual basis, which is often where that pressure comes from. You also shouldn’t necessarily be worried about how they respond to you. It’s the way they interact with others, and with their direct supervisors, that will tell you what you need to know.

“It’s the respect they have in the marketplace, their knowledge overall in the business and their ability to function as the leaders in the organization that are much more important than any one or two questions that you might ask them when they are having a bad day or just got off the phone with somebody else,” Abbott says. “I’m not a big believer in how conversations go in the hallway at 5 o’clock at night or 9 in the morning. It’s a much bigger landscape that you need to look at.”

Talk to your people and gather impressions about how they function as part of a team. Ask about others too and see what you learn.

“Who could say, ‘I’m willing to sacrifice my own personal objectives for what I believe is a philosophy or strategy that results in a good product,’” Abbott says. “It’s having that candid, honest conversation that will begin to help you make that determination about who can get there and who will have more trouble.”

Explain what you’re doing

Abbott learned that he did need to make some personnel moves at Crown Media to get the company on the course he believed it needed to be on. Those changes can be tricky to make as you want to do it without rocking the foundation too much for those who aren’t leaving.

“I don’t know that there is a way you can do it without creating some questions and some sense of trepidation,” Abbott says. “It’s a vigilant communication to the employee group of how well they are doing and how much they are valued. Be as present as possible and as visible as possible and try to reassure people, even on a one-on-one basis, that they are valued and very good at what they do and that they have a bright future in the organization.”

You can’t make the moves and then expect to instantly move on as if the changes had never been made.

“To make changes and not really give a very strong explanation as to why and leaving people in the dark and questioning … is very poisonous,” Abbott says. “You need to overcommunicate and be very clear and as approachable as you can possibly be. At the end of the day, everybody is a human being and they have families and responsibilities and hopefully they work to live and don’t live to work. You’re dealing with peoples’ livelihoods. You want to be sensitive to that fact.

“Not only does it make sense from a business perspective to have an environment where people flourish and like coming to work, but also from a personal perspective. If you’re going to run an organization that has integrity and have people who thrive personally, that’s just the right thing to do. There is a responsibility of leadership to put people in the right places and try as best as you can to ensure their confidence levels are high with what they are doing and that they can feel good about the job they do when they go home at night.”

Get the ball rolling

Abbott did not wait until he had made his personnel moves to begin formulating a plan to create better strategic alignment at Crown Media.

“When I took over, I knew exactly where I wanted to go,” Abbott says. “So I didn’t have to spend a lot of time fact finding or searching for what a strategy might be to make it successful. We were able to roll something out pretty quickly.”

You need something to present to people that shows you’ve done your homework on these big changes you’ve been talking about. But at the same time, you have to show people that they have an opportunity to influence the changes that are going to be made.

“Judging what makes successful television is in the eye of the beholder,” Abbott says. “Through the course of conversations, there will always be that type of creative tension which I think is good and I think it just needs to be solved through talking it through. At the end of the day, hearing what makes the most sense for the brand and for the business is what the ultimate gold star is in terms of making that decision. We view everything through that lens, which makes the decision-making a lot easier than it would be if we were just trying to evaluate something for art’s sake.”

With that in mind, Abbott called on his department leaders to meet with their people in groups to have more intimate conversations about what was happening at Crown Media.

“We don’t put everybody together in one big town-hall meeting, but we have smaller town-hall meetings,” Abbott says. “Communicating that message on a level where you have as few people in the room as practically possible is a strategy that is important. If you’re in an organization that’s too big, it’s absolutely incumbent on the leaders of the divisions to really be the messengers and deliver the news and the new strategy in a compelling and coherent way.”

If you’ve made good personnel decisions, the plan should begin to come together fairly quickly. But there is, of course, no sure thing in business or in any aspect of life.

“At some point, you’ve done the best you can,” Abbott says. “There is a level where you have to have confidence. There is a point in any senior management team’s development and evolution where you make decisions and then you just have to believe in your vision and relentlessly pursue it and make it work. But there is no such thing as a sure thing. You have to have that confidence and a little dash of hope as well.”

The successful execution of these steps is in large part based on your ability to be honest with yourself about your abilities and those of your people. If you’re unwilling to make the tough personnel moves when they need to be made, you’ll have a tough time moving your business forward.

“You have the wrong people in place and you’ve got to make changes,” Abbott says. “There’s no room, at least here in our organization, for people who at the end of the day can’t walk away and learn how to have meetings where they are productive and there is the proper amount of respect given. People need to be mindful that they have colleagues as well who are working for the common good. I’ve been on some of those teams, so I understand what that dynamic is like. It’s not a fun place to work and it’s certainly not a productive place, because you don’t have the type of dialogue necessary to move the business forward. It’s the leader’s responsibility to make sure the team is restructured so that it’s part of the culture.”

The numbers at Crown Media  are trending upwards. Revenue grew to $287.3 million in 2010, up from $279.6 million in 2009.

“It’s really that consistent buy-in that we’re all singing off the same song sheet,” Abbott says. “We all really have in our minds where we want to be, not only this year, but in three to five years. Historically at our company, that hasn’t always been the case.”

Fair or not, the burden on making the tough call that sometimes has to be made to grow your business rests with you.

“Ultimately the leader is accountable and the leader needs to make changes so that he or she brings in the right people where that environment doesn’t exist,” Abbott says. “So yeah, ultimately the fault with the leaders. But individuals are responsible for their behavior and it’s a plague on both of their houses at the end of the day if the organization continues to operate in that kind of manner.”

How to reach: Crown Media Holdings Inc., (818) 755-2400 or hallmarkchannel.com

The Abbott File

Born: Manhasset, N.Y.

Education: English and political science major, College of the Holy Cross, Worcester, Mass.

What was your very first job?

Maintaining tennis courts at a country club. They were Har-Tru (clay) courts so they had to be swept and various things had to be done on the courts that aren’t typical of your typical tennis courts.

What is one of the biggest misconceptions people have about the TV business?

Why shows stay on the air and why they get cancelled. There is a definite bottom-line formula that determines the success of a show and the genre, and that isn’t always necessarily understood.

Do you have a favorite TV show?

In terms of quality and star appeal, the Hallmark Hall of Fame over 60 plus years has been a franchise that needs no introduction to the vast majority of Americans. It has served a vital purpose in the television landscape for a very long time. It continues to endure and do very well.

What is the best advice anyone has ever given you?

Work hard and be prepared. It sounds pretty basic, but preparation is so key to your success or lack thereof. Every day when you wake up in the morning, you decide whether you’re going to be successful that day or you’re not just by the nature of what you decide to do. Being empowered like that and knowing that it is a choice is very good advice.

How Hal Uhrman takes a long-term approach to lead State Industrial Products

Hal Uhrman, State Industrial Products

Something Hal Uhrman has learned in all his years of running 14 full and six half marathons is that you have to pace yourself. With that kind of distance, you can’t sprint out of the starting line or else you’ll run out of gas quicker than you think. It’s a steady, consistent approach to the race that will get you to the finish line.

He uses this same approach to run State Industrial Products, the cleaning products company where he’s been president and CEO for more than two decades. The $111 million company celebrates its 100th birthday this year, and to stay in business that long, you have to think long term.

Build on cash

One way Uhrman does that is by only buying in cash.

“There are all kinds of four-letter words, and the only good one is cash,” he says.

His cash-only policy even goes for buying other companies and facilities — one of which was 11 years old and sat on 10 acres of land.

“If we can’t pay for it, we don’t buy it,” he says.

“You can never get in trouble if you don’t owe money.”

He bought six companies before the recession started, but when it did kick in, he stopped because he didn’t want to run out of money.

Now that the recession is over, Uhrman is looking to make acquisitions again.

Two types of companies that he targets are family-run businesses, where owners are looking to get out, and struggling organizations.

Once he buys a company, he wants to keep as many of the field employees on as possible as well as the owner, if he or she still wants to be involved in some capacity. But there are certain areas where there’s duplication and he knows he won’t need some of those people.

“We don’t need their billing system or their collection system, so some of their employees would get eliminated,” he says. “Anybody who’s out in front of customers, we need all of those. Our payroll is all done here, so if they have a payroll department, we don’t need that.”

If he has good people who he doesn’t need but may be effective in other areas, he’ll look at moving them to a different position.

“If we can find them other jobs, we will, but we have to do what’s right for the company,” he says.

He says it’s key to make these changes right away instead of letting them linger on your to-do list.

“I try to do it as quick as possible because a lot of these companies aren’t making much money,” he says. … “You can’t do it [from the heart]. You have to be objective on who stays and who doesn’t. If they’re a good worker and there’s a place for them, we absolutely want them.”

Hire the best

Having good workers who are dedicated to the business is crucial for State Industrial’s success, and he’ll only hire people who fit that mold, because you can’t build a strong team if people aren’t dedicated to helping the company. He starts with people who are willing to take the time — even sometimes outside of work hours — to handle problems that arise. Getting these people starts with taking your time in hiring.

“You look at their track record to see what they’ve done,” he says.

If they come in right out of college, you don’t have a way of knowing for sure, but he says you can see if they’ve been involved in team-oriented activities in their past, such as sports.

He’s also dedicated to making sure they’re taken care of. This starts at the most basic level with making sure they have their job, even when times are tough.

“Most companies, when things get tight, they start cutting back people because they don’t have any money, and if you have money, you can kind of wade through, and that’s really what we did,” Uhrman says.

It goes back to his cash-is-king mentality, so he was able to take care of his team through the downturn. Beyond that, he says that good benefits and a 401(k) program are important, but it’s even more than that.

“The best culture for employees is one where they have the opportunity to help the company achieve its goal and achieve its personal success,” he says. “As you provide a large group of people with challenging work and the responsibility to get the job done and reward them for a job well done, the enthusiasm is contagious.”

He says that taking care of people also comes down to looking out for their long-term desires and needs.

“You have to be honest with them in everything you do, and if you get somebody out of school, if they don’t see a position with you where they can move up, they’ll leave you,” he says.

Additionally, he says you have to make work a fun place for them. One way State Industrial does this is by regularly participating in the Corporate Challenge program where companies compete against other local companies in various athletic competitions.

“We get nonathletes to do something,” he says. “They really contribute. When they have this Corporate Challenge, they have a cookout down there. We do things to try to make it fun.”

When you have a strong culture like that, it will show in how your employees treat your customers. A huge part of State Industrial’s success is that it takes care of customers well.

“If you do the right things for your customers or employees, it works,” Uhrman says. “If you take advantage of either one, it doesn’t work.”

One way he and his team takes care of customers is by looking out for their best interest. Every quarter, his team goes to each customer and shows them exactly what they’ve spent and what they can do to control costs better.

“Trying to make more money off the customer is narrow-minded,” Uhrman says. … “You have to take care of the customer.”

Taking care of the customer ensures you don’t lose that customer.

“If you don’t lose customers, you have to win,” Uhrman says. “Every company for one reason or another loses customers. We really try to do a job on them to convince them they’re spending less money.

“If a customer thinks that he is being treated fairly, you won’t lose him. … If you take care of customers, they will stay with you.”

In addition to treating his customers well, he also strives to make sure the product offerings they have are the absolute best. About six years ago, as he and his team went to different trade shows, they started to notice a trend: more and more companies were starting to come up with environmentally friendly products.

“Our challenge is to do it better than some of our national competitors and knock them out,” he says.

That meant that State Industrial needed to start adapting its product line, as well, so that customers had safe, effective and environmentally friendly products to choose from.

For that to happen, he had to get buy-in from his team. He started with his top people to lead a change process.

“Bring them in, indoctrinate them on what has to be done, and we train them, and their job is to go out and train their people, and it’s easy for us,” he says.

Overall, he says you have to continuously encourage and gently push people into changing.

“You can’t do it with a sledgehammer,” Uhrman says. … “If they don’t change, one by one they’re going to lose their customers. If it’s not to us, someone else will come in and convince them.”

How to reach: State Industrial Products Corp., www.stateindustrial.com

Carlos Sepulveda taught his Interstate Batteries team to embrace conflict

In the last five fiscal years, Carlos Sepulveda has grown Interstate Batteries from

Carlos Sepulveda, Interstate Batteries

about $700 million in revenue to $1.5 billion in revenue. In that time, he’s invested in facilities and people, and now has more than 1,600 employees at the Dallas headquarters.

The growth, while impressive, has created its own problems, including the conflict that comes from deciding which opportunities to pursue.

“It really comes down to a matter of we need to vet the opportunities we’re going to pursue because everything can’t be a priority,” Sepulveda says.

Different people evaluate opportunities based on different criteria most relevant to their position and experience, which can create conflict over which opportunities should be pursued.

“Conflict generally has a negative connotation in society, but I really don’t see it that way,” he says. “I see it as an opportunity to vet different perspectives and opinions and synergistically come up with a superior answer just from the dynamics of a well-functioning team. My challenge has been having our leadership team get to that higher level.”

While difficult, during that time he succeeded in making his team better at resolving conflict by having open meetings, having the best team and embracing reality.

“I see that we’re making progress on some very big initiatives, and we have other initiatives queued up that we believe are going to be next … so [we have] a focus and the results reflecting that we are doing better at communicating alternatives and having more open conversations around the leadership table that are reflecting a deeper degree of respect and even trust and the ability to talk about these things.”

Have open meetings

One of the first keys to getting his team to embrace conflict was increasing the flow of communication in meetings.

“When most people hear [communication], they’re thinking of transmitting, so we really tried to put the emphasis on receiving,” Sepulveda says. “It’s making it a part of the leadership culture to emphasize listening well and asking appropriate questions to enhance absorption of what’s really being attempted to be communicated. That’s not a natural skill.

“People typically default to being better at transmitting than receiving. You can see that in a variety of ways, but one way you can see that is when a discussion of reasonable intensity is going on and one party is communicating to another, you can almost see that other party stop listening to start formulating what their response is going to be on what they’ve heard so far.”

One way he deals with this common problem is to “hit pause.” The team may be having a substandard discussion, so in the middle of it, Sepulveda will simply say, “Let’s hit pause here.” He’ll then ask the team to make observations about how they’re communicating. How are they doing with listening? What do they see that indicates that they’re listening well? What indicates that they could do better listening? What kind of effect is that having on everybody?

“I don’t mean to make it sound psychoanalytical — it’s business driven, and it’s about generating the maximum value, so it’s about sharpening the ax — not just swinging the axe harder,” he says.

That took about a year to perfect, because it’s hard for a team to adjust to.

“First, it’s a bit awkward and unusual and people are wondering how safe this is, and it takes time for any team, in my opinion, to have enough revolutions to build a respect of that team to understand we’re genuinely pursuing the delivery of value here,” Sepulveda says. “When people see that metaphorical ax get sharpened, over time people say, ‘Wow, there is a value here,’ and next time we debrief and critique ourselves stylistically, there’s more inputs.”

The other way he increases communication at the meetings is to have open agendas instead of set ones. Each Monday, Sepulveda meets with his 12 top officers at 1:30 p.m. Nobody submits anything in advance, but instead the agenda is broken up into four main categories: housekeeping, revenue/gross profit updates, major things happening this week, and then challenges, problems obstacles and opportunities.

“The value there is for everyone to be present to be able to participate on the achieving of what we do or what we don’t do,” he says. “No system is perfect. As long as people are involved, they’re not going to have a perfect system, but it’s valuable.”

Because of how the agenda is structured, sometimes the meetings may go until 3:30 and sometimes 7:00, but everyone always blocks off the entire afternoon so they can make sure to get through everything anyone wants to bring up.

“The primary benefit is you get superior results,” he says. “The primary benefit a CEO can get is a greater confidence that the leadership team’s decisions are market relevant — they have a robustness for success and a competitive marketplace that they would not necessarily have if that decision were made in a vacuum.”

But that’s not the only benefit to taking this kind of approach.
“Those officers then go off and own the culture within their subculture, and then what you get is a leader in that subculture that knows, ‘Hey, I was there, I know what we’re doing, I can explain it,’” he says. “They can handle any question that comes up and do it within their capabilities of handling it in an excellent fashion so that other parts of the organization know that their subculture leader is genuinely at the table when things are being decided and genuinely has an opportunity to have an impact on that.”

Hire the best people

Another factor that was critical for Sepulveda in getting his team to better resolve conflict was to make sure he had the most qualified, competent people sitting around the table. He started with 10 senior officers, and he now has 12, but of those 12, seven of them were not here seven years ago.

“Sometimes that happens because the CEO decides it needs to happen, other times it just happens,” he says. “Regardless of what initiates it, when that change takes place, it’s vital for the president and CEO to get the right fit to impact that team. Every time one of those members around that table changes, it changes the dynamic of the entire team, and then there’s a resettling to get your pace back.”

To make sure you get the right people, it’s part art and part science.

“The science part is looking at experience, looking at education, asking the right kind of questions in interviews, listening very carefully,” he says.

Make sure potential employees have the right expertise so that if there’s a financial issue at the table, you’re confident that the person with the financial expertise knows what they’re talking about. Do this for any area that could affect evaluating opportunities.

Then the art part is just paying attention to the sense you get when you’re around them. He likes to take a candidate and their spouse to dinner with himself and his wife to see how they act in that setting.

“If someone I’m with treats the wait staff in a way that’s not reflective of appropriate, respectful appreciation, I’m done,” he says. “That’s all I need to see. That’s how they’re going to treat other parts of the enterprise. Maybe not their direct reports, but that’s how they’ll treat other team members.”

Other factors that contribute to the art side of the equation are how they spend their time outside work.

“If they’re doing things with vigor outside of their career, that’s a real positive,” he says. “If they take personal responsibility for their physical health, that’s a real positive.

“One of my personal theories is that no one will ever lead anyone else better than how they lead themselves, so I look to see how they’re leading their self.”

If you bring in top people, you’re going to get better results when it comes to resolving conflict and choosing opportunities.

“It really doesn’t do you any good to have a facilitated, interactive leadership forum if it’s void of competence,” he says. “I don’t think any company would get very far, and I certainly wouldn’t want to participate in that.”

Embrace reality

The last key to getting his team to embrace conflict was a principle Sepulveda actually learned as a teenager.

As a child, his parents divorced and his father was an alcoholic. He saw how addictions affected people and distorted reality, so as a 15-year-old leaving home to find a better living environment, he learned that being tethered to reality was critical.

“Addictions are a tremendous deflector of absorbing reality,” he says. “So [it was] just seeing what I would categorize as suboptimized leadership to maybe even just dysfunctional leadership — good benefits don’t flow from inoculating yourself from the reality of the situation.”

That lesson is something he keeps in mind as a leader today.

“We cannot deliver value if we don’t have a good, solid absorption of what the current state is,” he says.

Often leaders like to avoid reality, but he says as the CEO, you can’t do that.

“It’s not if, but when, CEOs can be confronted with reality,” he says. “Maybe you can defer it or delay it, but it is unavoidable that whatever the market realities are, they’re going to reach your desk. … Let’s not be so enamored by our current understanding of what’s going on in the market that we miss shifts or changes and therefore are delayed in being able to respond or harvest value as a result of those shifts or changes.”

This is one of the hardest things to get your team to do though.

“You can’t make your team do anything,” he says. “You can only provide the opportunity, invite them into it and allow the team to see the successes that happen as that opportunity gets laid hold of, and then those successes generate momentum and that momentum builds, and then the velocity accelerates because of proven successes.”

He’s also quick to point out that this isn’t the only way of leading a business.

“I’m not saying you have to embrace reality,” Sepulveda says. “You don’t have to have an open culture. I’m just saying results are enhanced if you embrace reality, if you have a leadership culture where you have confident, ambitious individuals who are invited into a full discussion of the relevant business issues. … There are companies that are having success without doing this. The difference is, that’s awesome, but how sustainable will that success be? It’s important to factor in. We’re in our 60th year here. We plan to be around another 60 years at least.”

How to reach: Interstate Batteries, (866) 842-5368 www.interstatebatteries.com

The Sepulveda file

Born: Houston

Education: Bachelor’s degree in business administration, University of Texas at Austin

What’s the best advice you’ve ever received?

Colossians 3:23 — Do your work unto the Lord rather than men, knowing that it’s from the Lord that you shall receive your reward. That’s a paraphrase. It’s an awesome verse. I came across a Bible when I was 15 years old, and I’ve been a student of the Bible for the past 39 years. I view my studying and equipping myself with that knowledge as a strategic advantage in living a better life. It’s really almost unfair — but it’s out there and everybody could do it, but it doesn’t appear that many are.  Quite frankly, I’d say it’s the only reason I’ve made it from 15 to 54.

What was your first job?

I was 15. I had just left home. I left my mother in Oklahoma City, went to my dad’s in El Paso, stayed there nine weeks, that didn’t work out, so I went back to Austin where I had been previously until my mother had moved to Oklahoma City and contacted the football coach because I was a pretty good football player. I told him I needed a job before I checked into school, so I got a job bagging groceries, pretty much through high school. In the summer, I did fence construction.

What did you learn from that job that still applies?

By way of example, at the grocery store, maybe three nights a week I would close the store. There were like seven or eight steps to closing the store – taking out the trash, stuff like that. One of them was sweep under the candy racks. I did that, and it didn’t take me long to figure out I’m the only guy sweeping under the candy racks, because there’s no way they’re getting this dirty in one day. I thought, ‘It is what it is, so I’m going to keep sweeping.’

It wasn’t too many weeks after that the manager said, ‘Do you realize you’re the only guy who does that?’ I said, ‘Yeah, I figured it out.’ He said, ‘Why do you do it?’ I said, ‘Because it’s on the list for closing and that’s what I’m going to do.’

It wasn’t too long after that I got moved to cashier, even though some of the bagboys had more tenure than me. Any individual can only decide how they’re going to be valuable, then it’s up to that organization, whether it’s part of their culture, to reward that individual being valuable or not. If I worked for a government entity, there’s no way they’d move me from bagboy to cashier because other bagboys had been there longer. That’s one reason I’m a big fan of delivering value in an entrepreneurial business, because you let value adjudicate when opportunity gets harvested.

Michael P. Robb

Michael P. Robb

Michael P. Robb, executive director, Center for Community Resources, Alliance for Nonprofit Resources and Nonprofit Development Corp.

Executive Director Michael P. Robb has grown the Center for Community Resources from one agency to three in just over five years, adding the Alliance for Nonprofit Resources and the Nonprofit Development Corp. Dedicated to serving the region, this expansion has been driven by Robb’s progressive vision for growth. The success of this vision can be attributed to Robb’s passion for helping people and communities thrive, as well as his sound business sense and strong leadership skills.

By adding two sister agencies, Robb aimed to evolve and diversify CCR to further the regional human service agency’s mission: to make a positive difference in everyday lives by connecting people to a network of supports and services essential for actively learning, working and living in the community. While the CCR seeks to improve communities by assisting people, the ANR and the NDC focus on doing so by helping fellow nonprofits. The ANR provides backend support and services, while the NDC provides property management for nonprofit entities, as well as technical assistance, training and capacity building opportunities.

Robb oversees a total of 19 programs, which are available to more than 180,000 residents in the region. He pursues programs and services to fill gaps where services aren’t already being offered, as well as to clean up programs that are not operating efficiently. Programs include utility assistance, transportation, homeless housing, education and outreach, and shared services for nonprofits. His business models for these programs are based on three principals: to provide quality of service, to operate a program within a supportive environment and to administer it at an affordable cost. These principles reflect Robb’s dedication to serving people.
This dedication has paid off for the agencies. Annual revenue has increased from just more than $1 million to $8 million, with the original staff of 52 grown to 143 employees.

How to reach: Center for Community Resources, (724) 431-0095 or www.ccrinfo.org

How Robert White Sr. leaves egos out of the picture at The Daimler Group

Robert White Sr., co-founder and chairman, The Daimler Group Inc.

Robert White Sr., co-founder and chairman of The Daimler Group Inc., admits that up until he was drafted into the Army during the Vietnam War, he probably could have won an award for Junior Underachiever.

“It was easy to do enough to get by, and that’s about all I did,” he says. “The Army was a big plus for me. I was a college graduate so I was placed in a leadership role and was responsible for other people’s lives. It was a wakeup call, and life became a little more serious. It certainly took me from an underachiever to more of an achiever.”

Once he returned from Vietnam, White knew he was at a crossroads. A political science major in college, he was little qualified to do anything, but he didn’t let that stop him. He made a gutsy move and began selling real estate on a commission-only basis.

“I was able to learn the business during that period, make mistakes, and they allowed me to do lots of things that I was not qualified to do, but it worked out fine,” he says.

After depositing regularly into the bank of experience, White was ready to withdraw all he needed to start his own business. He co-founded The Daimler Group in 1983 with a distinctive philosophy ― to try to respond to market needs and not the egos of sales representatives or to meet the budget for overhead.

Within the first few years, the company was involved in large projects such as One Columbus, the LeVeque Tower and the LeVeque Garage. The company has grown into one of the dominant development firms in the region.

While much of the commercial real estate industry may be driven by strong personalities and egos, White sees to it that The Daimler Group operates as a partnership.

“With the associates who work at Daimler or outside partners, we’ve always strived to do more than we said we were going to do,” White says. “Most of the time we have been able to do that, and we exist because of those partnerships and people.”

Most of Daimler’s business is with repeat customers.

“I think that’s had more to do with our success than anything,” he says.

A stable work force helps contribute to that repeat business, supporting the well-known observation that if a customer works with the same sales agent over time, he or she develops a relationship that can make a difference in a competitive field.

“We have 34 employees and a big percentage of those have been with us for 20 years or more,” White says. “Everybody is treated well. Expectations are known and achieved. If we have financial partners, it’s many times the same folks that we have relationships with.”

With a veteran staff for a relatively small company, the operation usually goes smoothly due to the depth of employee buy-in.

“It goes on seamlessly because of the amount of time, energy and longevity of the various folks who have been here and continue to be here,” White says.

While on the surface, an operation may appear seamless, underneath there are strong currents of motivation.

“It’s a combination of fear and reward,” White says. “With success, people count on that success. The fear of not having that is there, and it’s real ― it’s the reward aspect if we do things well and profitable. Then there’s the fear that that may very well slow down, and so it’s that combination that helps motivate employees.

“In a company our size, there is certainly peer pressure, too, from various departments,” he says. “If a division is dependent on someone else to make sure the flow of work is there, and it’s not happening, different divisions within the company do apply pressure.”

Another motivating factor is the need to think long-term. After the completion of a project or a sales deal, you can’t rest on your laurels.

“You constantly have to reload,” White says. “You may have had a really good year, several really neat and good projects but they end, and you have to have others that start. When we’re going very strong, it’s hard many times to motivate people to be thinking a year from now when they are quite busy doing what they have on their plate today.

“Yet we have to always do that,” he says. “That’s probably the biggest leadership requirement right now. When you’re in a down economy, that becomes even more critical as we’re all competing with each other.”

A combination of a solid work ethic and knowledge of what needs to be done is also a sure key to effective results.

“It’s probably more work ethic that anything else,” White says. “We know what we have to do; it’s whether we do it or not. When you get complacent, and you get older folks who believe their wisdom will cover other things, it’s not necessarily true. We’ve still got to have the work ethic. The wisdom is great, but if it’s not being used, it doesn’t mean much.”

How to reach: The Daimler Group Inc., www.daimlergroup.com

Mark Adamson made quick decisions to beat the recession and position Formica Corp. for growth

Mark Adamson, President and CEO, Formica Corp.

Three years ago, Mark Adamson was staring at a company that was losing more than 50 percent of its demand in some of its global businesses. It was the height of the credit crunch, and the situation called for immediate action. Adamson, president and CEO of Formica Corp., an $800 million building products company with more than 3,000 employees, had to make quick decisions to help restructure and refocus the nearly 100-year-old organization.

“Fifty percent of our revenue was disappearing overnight,” Adamson says. “It didn’t happen gradually as you might expect if you have a category decline or a major competitor advance; this happened one week to the next. Any of the normal business decision-making processes that you might expect in largish companies, we just didn’t have the luxury of time to go through that. It was interesting watching management resort back to the old techniques of good judgment, having the balls to make a decision quickly based on the data available and just act.”

The business was kicked into survival mode. The company was losing money, losing employees, and no one could help the organization but itself. Since Adamson was a new CEO at the time, he had begun some restructuring just a few months before the crisis hit. 

“We had the management team focused on the need to improve,” Adamson says. “We were ready to hit the deck running, whereas I think some companies were hit unaware and took a couple months to react. It really sorted the men from the boys so to speak in terms of the management team. I thought we really went into the crisis, not in good shape per se, but certainly in good shape managerially in terms of our focus and our ability to address it.”

Adamson had to make quick, sound decisions, rally his team around changes and do what he could to keep Formica from succumbing to the recession while positioning the organization for future growth.

Survive

The financial crisis has forced businesses to throw out the old ways of decision-making and implementing changes. It’s a new game, and if you don’t act quickly, you lose to those that do.

“I think the biggest challenge was to react quickly,” Adamson says. “In some respects I’d rather have made an 80 percent correct decision than none at all because the level of need at that time was huge. You needed people that come with a focus and were bright people, intelligent people who could make quick decisions and execute them quickly, and I was fortunate enough to be surrounded by enough of those sorts of people that, within six months of the Lehman situation, we pretty much found a level. The base of earnings was established — it wasn’t good, but it was a base of earnings.

“Those six months during the credit crunch was like triage. You had a patient wheeled in from a traffic accident and there’s blood everywhere. You just have to stop the bleeding. Once you got the patient stabilized … you really did have to redesign your business model for the new edge. The five years of boom — where if you wanted to argue, a fairly average CEO could run a company and make money — was over.”

In any situation where quick decisions and changes are necessary, you have to be able to rally your team together, analyze data quickly and confidently, and make a decision without second-guessing yourself.

“I always find it useful to look to the sporting world for advice on management,” Adamson says. “Alex Ferguson, the manager of Manchester United, is really good at creating a kind of siege mentality — us against the world. I think we did manage to create that internal need where everybody pulled together against a common enemy, which was the economic woes. To do that however, you have to be able to look the people and that team in the eye, and it’s very difficult to do that if you don’t act quickly.”

In order to implement necessary changes and move forward, you need to have the right team in place to do so.

“Unfortunately, you do have to release people,” he says. “You do have to very quickly gauge the people that you think will be at your shoulder acting in a way that you think will get you through the recession. It’s not always the guys and girls who are good at managing status quo. I released some very sound senior management who had served us well in the past but who I just didn’t think were going to get us through the difficult times. You have to have balls, and you have to be cruel in some cases and release those people and create the team that you think will get you through.”

Adamson stopped Formica from bleeding and turned his focus to creating a company that could live on leaner times. Companies have to be able to adjust business models appropriately.

“Having kind of saved the business, it was a matter of growing the earnings with flat revenue,” he says. “I think during the good times a lot of businesses had extended their products, grown their SKUs and grown their product portfolios. What we did was we stripped the product offer right back to what we genuinely thought the customer wanted and needed because during that time of boom, people didn’t talk to their customer base enough. I think a lot of companies during that phase became internalized and just assumed what customers wanted.”

Restructure

If getting past the survival stage isn’t hard enough, it’s crucial to keep plugging along to restructure what is no longer working and determine where you want to go.

“You’ve got to have people with intellect and experience, some young ducks and old heads, and quickly come up with a destination,” he says. “The key is the destination. There’s always enough brains in an organization to work out how you’re going to execute to get there, but determine where it is you want to get your business. It may be in phases like we did — survival, restructure the business model and then grow. You shouldn’t have 20 phases, but you shouldn’t have one so big that people can’t get their head around it. Break it down into phases of 12 to 18 months. People can get their head around that in the business.

“You then have a rallying call and you can say, ‘In the next 18 months, we’re going to do this. This is what success looks like and this is what happens after that.’”

Part of forming a new destination for your company in a time of restructuring is seeing the positive.

“We were able to paint a picture of what the business could become and in some respects turn the recession into a positive,” Adamson says. “You explain how it would enable us to make the decisions that maybe in the past we wouldn’t have been empowered to make. Our parent company gave us an awful lot of autonomy and leeway to make big, quick decisions and some of these decisions in truth may well be decisions we’ve always wanted to make, but we didn’t have the bravery to do so. This was an opportunity to actually do stuff that historically we might have shucked.

“I don’t want to talk so warmly about the recession, because it was ugly for a lot of people, but it was a great enabler to allow you to do all sorts of things that you might not have otherwise got away with. Any manager that didn’t take advantage of that should be shot. See it as an opportunity.”

During such a time of unrest and uncertainty, you have to remain strong and confident or your employees will lose confidence in the changes.

“I look back now and the management team and I used to walk around smiling,” he says. “People take their lead from the senior management. If you walk into the office every day with a face like a fiddle, looking as if you’ve got the weight of the world on your shoulders — it surprised me in my early days of senior management just how much people would base their rumor mill and their views and emotions on how I looked in the morning when I came into work. You have to be cognizant of that. In times of crisis, do a lot more walking around, a lot more smiling, a lot more talking. People need reassuring.”

Once you have decided on a destination to take the company, make sure you keep everyone in the business informed.

“The ultimate destination was a stronger company with a platform for growth was what the objective was,” he says. “Once you’ve established that destination, very frequently measure against it and communicate. Don’t leave people in the dark.”

Re-evaluate customer relationships

Adamson knew that for Formica to restructure and return to growth, he would have to change how the company worked with its customers.

“What we did was we were very honest and we went to our customers with our assessment of the profitability of that customer, and in some cases, we don’t make money on you,” he says. “We were very pleasantly surprised in how that honesty was repaired with the customers and nobody wants to be a loss-making customer. We were able to work with them and said, ‘Well, one option is to increase price, but it’s really an option of last resort, because you’re in the recession as well and you’re suffering and we don’t want to do that to you. What if we supplied you once a week instead of twice a week? What if we reduced your product offer? Do you really need all these range of products? Could we not reduce that and still be able to give you the chance to fight in your marketplace?’

“As a result of that, we reduced the number of SKUs by over 50 percent. We rationalized our shipping routes, and by and large, we achieved fairly significant increases in profit without necessarily relying on the old levers of just trying to jam the customers with price or slash cost.”

Having engineered the business after the immediate recession to be what they thought was cost efficient, the company generated more revenue out of the customer base and doubled earnings in an 18-month period. To return to growth mode, you have to look externally.

“For those who have had the foresight to have a base to move on from, it’s about consciously changing your focus from inside to outside,” Adamson says. “The recession did bring us all back internally. It focused us all on fixing our cost bases, restructuring our management and our product offer.”

Formica went through this for a period of about six months. Adamson quickly moved to the next phase and focused on customers, top-line growth and innovation.

“The challenge I now face, which is a very different challenge to cost-cutting and profit execution, is how you grow the top line,” he says. “There’s three ways you can grow the top line. You can sit on your ass and wait for the economy to come back, but we’re not doing that. You can convince your existing customers to buy more or you can go out and find new customers. What we’re trying to do is the second one, which is to convince our existing customers to purchase more from us. A key component to that is innovation.”

To aid in the search for innovation, Formica is trying to get to the customer in the marketplace and understand the dynamics of what they want and what they need.

“I think traditionally people think innovation is R&D. If you throw a load of money at your scientists, keep your fingers crossed, something might come out of the other end. What we’ve said is, ‘Innovation is a virtuous circle.’ R&D does have a role in that, but so does customer need. It’s one thing inventing new stuff, but that’s no good if the customer doesn’t want it or if the customer really wants you to go down this path and not the other path.”

Formica is focusing on gathering feedback from its sales force, customer service reps and other avenues the company has to better analyze data on what customers want.

“You’ve got to be able to analyze the feedback and see trends.”

Establishing trends in the marketplace is helpful, but you still have to be certain that the trends work for both you and the customer.

“The customer isn’t necessarily always right. You have to help him understand what he really needs. We’ve done it before and developed products that in truth people said they wanted and when we went to market with a product it was, ‘We said we wanted it, but we’re not going to pay for it.’

“Make sure you understand what they truly want and what they truly value and are prepared to pay for and put your dollars into developing that.”

HOW TO REACH: Formica Corp., (800) 367-6422 or www.formica.com

The Adamson File

Mark Adamson

President and CEO

Formica Corp.

Born: Newcastle, Northern England

Education: Graduated with an honors degree in business and finance from Newcastle University

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

The government in the U.K. decided it didn’t really have a handle on its roads network and needed to survey all of its major trunk roads (interstates) and they needed people who would walk around all summer with these little wheels and computers and … try to take a digital snap shot of every mile of road right across the U.K. We were given these utility trucks and given so many miles a week that we had to perform and were asked to survey these roads. The speed of execution, the prioritization, setting targets, I guess you could say it all started then. It was an outdoors job and you used to get wolf whistled by all the girls driving passed in cars. It was a perfect job for a 19-year-old boy.

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

It was the importance of networking. You’re never too senior to benefit from the ability to make a phone call and ask a favor. The power of networking and communicating is huge.

What Formica product are you most excited about?

There’s the 180fx products. It’s a product that really hit the market strongly and is a product that has the look of real granite — big bold patterns with texture. That’s a really exciting product. The other product is a departure for Formica. Formica’s traditionally seen as an interior decoration product. We’ve just embarked in the last 12 months on a product for the exterior of buildings. All the colors and patterns that you got internally from a Formica product, you can now apply to the outside of the building. It’s called Vivix.

If you were going to remodel your kitchen, what Formica products would you use?

I’m not an interior designer, but I operate in this field so some of it rubs off. I think modern kitchens are quite like contrast. I would probably use two patterns. I would have one on the island and on the island I would use our 180fx product and then maybe a more sedate, darker pattern around the outside with one of our etchings products. That allows the 180fx island in the middle to really standout.

Amy Hancock

Amy Hancock

Amy Hancock, founder and president, AdvantageCare Rehabilitation Inc.

Amy Hancock is a true entrepreneur whose passion for health care and commitment to the Pittsburgh region has resulted in her founding not just one company, but three different companies operating in the health care industry. AdvantageCare Rehabilitation Inc., Advantage Home Health Services, and AdvantageCare Consulting are the organizations that make up the Advantage group of companies.

Hancock, founder and president, combines deep experience and high quality care with innovative technologies to strengthen both the patient and care facilities. Her three companies together deliver a wide range of health care, nursing, therapy, and social services.

The first of her businesses, AdvantageCare Rehabilitation Inc., was founded in 2003 to provide geriatric therapy services to long-term care facilities in the region. She started the company to provide a better contract therapy option than the large national therapy companies could provide. The large national companies were steadily decreasing services to facilities in response to reductions in Medicare reimbursements and Hancock wanted her company to improve patient care. The company delivers treatment that results in the best quality of life possible and provides facilities with improved therapy operations.

Three years after Hancock founded her first business she was ready for more growth and ready to expand the company’s offerings, so she founded Advantage Home Health Services in 2006. Advantage Home Health Services took the services of AdvantageCare and brought them into the home, including in-home nursing for ongoing nursing and therapy needs of patients as they left long-term care. The home service also offers HealthCheck which monitors patients’ daily health and can detect early warning signs of health trouble.

The AdvantageCare business was thriving, but that didn’t satisfy Hancock’s desire to continue the development of her businesses. In just five years and two businesses later, she was ready to add a third business to improve patient services and the overall operations of her group of companies. In 2008 she founded AdvantageCare Consulting, a management consulting company for long-term care facilities designed to help them improve patient outcome and financial performance through audit and cost management services. The company helps facility administrators and therapy directors evaluate current therapy operations to identify practices that are undermining the facility’s ability to deliver consistently high quality care over time, potentially threatening the long term health and viability of the facility. Hancock understands that at the heart of achieving the optimal relationship between care, results and reimbursements is the care assessment, categorization and management process.

Hancock’s drive to continually expand and improve the experience for her patients got her honors as one of Pittsburgh’s Top 25 Women in 2009 and one of Pennsylvania’s Top 50 Women that same year. With three businesses offering services very few other companies could compete with, 2009 proved to be a good year. She was named an Ernst & Young Entrepreneur of the Year in the Professional Services category and AdvantageCare Rehabilitation was named one of Pittsburgh’s Fastest 100 Growing Companies two years in a row.

Since the company’s founding in 2003, the Advantage group of companies has grown from just two employees to more than 235 today. The business continually sees a client retention rate just shy of 100 percent and that is due in part to the company’s motto; you deserve to get better.

While the motto keeps everyone in the company working toward achieving the same results, it is the employees of the three businesses that really make it exceptional. Hancock knows that a company is only as good as the employees who make up the organization. She does whatever she can to make her employees feel valued by doing things like hand-writing notes wishing employees happy birthday or recognizing their contributions and anniversaries. She also gives them cell phones and laptops for when they visit with customers on location to make processes run smoother.

The company has even added a 401(k) match at a time when most companies were cutting back their benefits programs. When the recession hit in 2008, Hancock was prepared. She approached the tough economy by employing technology to become more cutting edge and progressive rather than retrenching. These moves allowed the company to provide the benefits of the latest technologies, medical applications and procedures, attract and retain quality talent and leverage the cost benefits of better tools and resources.

Today, those investments have resulted in significant returns for the Advantage group of companies, which Hancock has put back into the company to continue its growth with new products and services.

HOW TO REACH: AdvantageCare Rehabilitation Inc., (412) 440-0145 or www.feeltheadvantage.com

How George McCloy finds success in financial services by believing in what he does

George McCloy, president, McCloy Financial Services.

George McCloy remembers back in the mid-1960s when he sold his first life insurance policy as well as when he delivered his first death claim.

“The first policy I ever sold I actually had to deliver to the guy in a hospital,” he says. “He was no longer insurable, but he had prepaid it, so I was able to deliver it. Because of that, his family was able to stay in America ― they were from Italy.”

McCloy feels this was the first incident when belief in his product was a key point in his career. “People who really succeed in financial services are people who believe in what they do,” he says. “If you don’t know the benefits of life insurance, it would be hard to sell because it’s intangible,” says McCloy, president of the 50-employee McCloy Financial Services.

“My first actual paid death claim was a fraternity brother of mine who was killed in Vietnam. I went to his wedding in May, his funeral in September and delivered an insurance policy check to his wife.

“So it’s not hard when you have that kind of thing happen early in your career to believe in what you do.”

Once McCloy secured a deep belief in his product, he found a second key to success was diligence.

“I am blessed with ‘stick-to-itiveness,’” he says. “I’m not afraid to work; I never had what is known as ‘call reluctance.’ So, I set a task for myself and stick to it, trying to accomplish that in a year ― tell people I would do it ― you mix those all together, and you end up usually building a pretty nice clientele.”

Persistence is a personal key to his success, and he heartily endorses it for others, especially those starting out in an industry.

“I would give them the advice that it’s not what the industry might do for them but what they might do for the industry, meaning that a lot of kids maybe come out of college not having the same work ethic that I had when I graduated,” McCloy says. “If they would put their head down and work hard toward whatever their objective was or if they could pick out their niche and stick to it, they could be successful in the business.”

Another key to success is working well with people. An understanding of figures or stocks and bonds and insurance-type products is a good thing, but it’s not necessarily a dealmaker.

“You’ll do better financially for yourself if you are good at working with people because you can get anybody to work with figures,” McCloy says. “The ability to work with, understand and listen to people would be much more to their advantage than just working with figures.”

Most people are born with some people skills that can be later groomed and improved. But the opposite for those only comfortable with numbers is not necessarily true.

“It would be much easier to teach somebody who understands how to work with people how to understand numbers than it is to take somebody who understands numbers and try to get them to be fluent with people,” McCloy says.

“I know some very successful people who are not terribly extroverted,” he says. “You could be an introvert but understand how to get along with people. You don’t have to be the big ‘rah rah’ guy to go out and be an extrovert to make it.”

Finding your specialty, believing in your mission and sticking to it can result in big accomplishments in your career, even if you aren’t a cheerleader, so to speak.

“I know some actually humble people who picked a niche like the pension business or the group insurance business and have done quite well by getting something they understood. They stuck with it, learned it, asked questions, listened to people and did well but weren’t that extroverted.”

Community involvement is one of the steps in developing people skills.

“Give to your community in some way,” McCloy says. “You get to know people, then people tend to want to talk to you. That’s my motif.”

A final key to success, although not the least one, is motivation to imagine your success.

“If a young person can paint the story of success and you ask that person what the definition of success is in the next 12 months or five years from now, you’d have some idea of either how logical that person is in the thought process,” McCloy says.

If there is a reasonable goal that is obtainable, you can motivate people by activity.

“Focus on a certain market segment activity, and if you are willing to do it two or three times a day, as opposed to two or three times a week, then you will be successful,” he says.

“If I believe in something and I’m excited enough to go out and do it and I can demonstrate a certain level of success — you know, if you sell two truckloads of this, you get X dollars — it’s not hard to motivate somebody else to say, ‘Well, gee, maybe I can sell a truckload.’”

How to reach: McCloy Financial Services, (614) 457-6233 or www.mccloyfinancial.com

Gary Sasso keeps Carlton Fields focused on continuous improvement

Gary Sasso, president and CEO, Carlton Fields

Over the last few years, Gary Sasso saw his law firm facing two substantial and markedly unique challenges. The first was universal: a worldwide economic downturn that impacted markets and businesses all over the globe, including his company, Carlton Fields, and its clients. Though the second challenge was limited to his firm, it was equally disconcerting.

“Maybe the most significant challenge to continuing to grow is one that people don’t talk about very much, but it’s complacency,” says Sasso, president and CEO. “It’s being satisfied with past success. We had been successful before the downturn and during the downturn, and there’s a temptation to be satisfied with that and complacent, but this is not a destination. It’s not about hitting this growth target or that growth target. It’s a journey. It’s about being committed to continual improvement.”

Sasso realized it was the combination of these challenges — the external economy and internal complacency — that had the real potential to hold Carlton Fields back from continued success. He also realized that while the two problems were different in nature, they in fact shared a common solution: growth.

Rather than retrench, Sasso led Carlton Fields to focus on growing throughout the recession. As a result, the firm’s significant growth in 2009 made it an economic success story and one of nation’s fastest-growing companies on the Inc. 5000 list that year. In 2010, Carlton Fields generated $154 million in revenue. Now, in 2011, Sasso still hasn’t lowered his sights.

“We’re a fairly small piece of the overall economy and we don’t need that much more than our share to be successful,” he says. “So we just stay focused on growth relentlessly.”

Focus on service

Coming into the downturn, Carlton Fields was fortunate to be in a position of strength. Yet one drawback of having financial security is that employees can get into a comfort zone and they don’t feel driven to adapt and be proactive.

So rather than have people focus on the larger goal of growth, Sasso kept his team rallied around the more tangible goals of providing best-in-class service and adding value for clients.

“The economic climate can provide obstacles but also opportunities, because all of our clients are struggling to deal with the downturn and they need help,” Sasso says. “The firm that steps up to the plate to provide that help has an opportunity, and that’s the way we’ve chosen to look at it.

“Our overarching goal is really to provide best-in-class service in every area where we practice and to have the best of all worlds, not to accept false tradeoffs among our clients and shareholders and employees. That’s a guiding light for us and we test our goals against that vision. We do that first and foremost by talking to our clients to make sure that we understand their businesses and their needs.”

To furnish value-added solutions for clients whose businesses were impacted by the economy, Sasso encouraged Carlton Fields’ attorneys and staff to utilize internal meetings and sessions with clients to brainstorm creative ways to handle client issues. Providing these opportunities for employees to be resourceful and collaborative supports the kind of proactive, idea-driven culture that enables growth.

“When you’re in the midst of such change and evolving economic and legal circumstances, you have to be innovative to tackle new problems and new challenges,” Sasso says.

“We spent a great deal of time talking to our clients, meeting with our clients, asking them about their business, asking them how they were being affected by the downturn and taking the time and trouble to change the services that we provided to meet our client’s evolving needs.”

When you frame goals for your team around improving services and developing client relationships, you ensure there is never a point where people feel like they’ve maxed out opportunities to grow. At Carlton Fields, having best-in-class service is a goal that requires continuous improvement because to meet client needs better than a competitor, the firm has to adapt as those needs are constantly changing.

“When I talk about growth I’m not talking just about growth in revenues or numbers of people or numbers of offices,” Sasso says. “When we talk about growth here, we’re really talking about growing the strength, depth and quality of our firm, which can be reflected in numbers, but it’s not just about numbers. It’s about quality.

“We looked at what was happening in the economy from our client’s point of view and asked how was this affecting what they needed from us? We launched a full court press to anticipate what our clients’ needs were and we undertook to meet those needs.”

Don’t compromise people

Engaging employees in success is one of the key ways to affect growth. Although Carlton Fields has incentives in place to recognize and reward exceptional performance from team members, Sasso says that nonmonetary motivators such as job security, inclusiveness and transparency are just as important if not more so in keeping people committed to the vision and striving for excellence.

“We’ve tried to motivate employees by being successful as a business and as a result of that we have not had to engage in layoffs of staff or attorneys, which makes us relatively unique among law firms I believe,” Sasso says. “And that’s a big motivator — where we can provide a secure place of employment for our employees.

“We motivate people by means other than money or economics. We try to engage everybody in the success of the firm. We value everybody here. We reach out to everybody and include them in discussions about how the firm is doing.”

Making sure people feel recognized and valued is vital if you want them to give their best efforts and drive growth. When people don’t feel appreciated, it’s not long before dispirited becomes dissatisfied and they are doing the bare minimum to collect their paychecks.

To fight complacency at Carlton Fields, Sasso shows his team that security and growth can go hand in hand by letting them know that even though growth is the goal, they are the priority. He refuses to make tradeoffs for growth — financial or otherwise — that come at the expense of the firm’s employees. That’s one reason why, by each category on the whole, Carlton Fields’ shareholders, associates, special staff and all employees have been able to maintain or improve their compensation through the years, even through the economic downturn.

“We reject false tradeoffs among clients, shareholders and employees,” Sasso says. “There are some who argue that you can only promote the interests of your clients, your shareholders or your employees, but not all at the same time, and we reject that. We have to be attentive to the needs of all of them and then we’ll be able to serve each of them.

“I think you have to try to ask and understand what are your goals for each. What is a home run in each area? And then work hard to find ways to advance in each area without compromising another. Sometimes accepting a tradeoff results from just not thinking hard enough about how to balance all of them, giving up too soon. But I think if you work hard enough and probe deeply enough, there isn’t necessarily a tradeoff. All of the things can be working together.”

Invest in growth

No matter what challenges your business is facing, Sasso says growth should always be part of the criteria for CEOs when making financial or strategic decisions. Continuous improvement needs to be an ongoing investment. When leaders dwell too much on short-term problems and lose focus on continuous improvement, it can have stifling consequences on a company’s profitability and long-term success.

“I think that it’s a mistake to lose your focus and overreact to negative events and retrench,” Sasso says. “You can’t grow by cutting. Notwithstanding that, you do have to achieve operational efficiency. Sometimes controlling or cutting costs is necessary, but you can overreact. We’ve invested during the downturn to position ourselves to come out of it in a strong position. I think it’s important to stay focused on growth and not to panic and to continue to mind the fundamentals of your business.

“If you do nothing you are taking a risk. If you do something you are taking a risk. So you have to kind of get it out of your mind that you can function without taking risks. Then once you understand that, whatever the issue, you look at the options, you gather the facts, you analyze the options and you bring people together who have knowledge and value to contribute to making a decision. You make your best judgment and you move forward. And then you know whatever risks you’ve taken, you’ve taken with good information, with good analysis, with good input.”

As the economy sees signs of recovery, Sasso continues to take risks and invest in opportunities to position Carlton Fields’ for continuous improvement. In his view, even a misstep forward is an advantage over companies who are taking no steps forward at all.

“If you stay focused on the goal on the horizon, once in a while you are going to hit a bump or hit an obstacle, and we sometimes can call it a failure, but it’s just more information,” he says. “It may mean that that particular tactic or strategy is not working at that moment, so you sit back and say, ‘Well, what can we do to get over this bump?’ And the next attempt may even be better and more effective and smarter. So a failure can simply be an opportunity to do something better the next time.

“There’s no such thing as getting to a goal and stopping. I think that’s a mistake. If you are committed to continual growth and continual improvement then you have to keep taking risks to continue to grow.”

Today, Sasso sets his sights on growing Carlton Fields in size and strength, but also in the quality and value it provides clients. By emphasizing continuous improvement in all areas, Sasso keeps complacency in check and his team focused on where the firm can get better, stronger and more efficient. And in today’s business environment, the opportunities are unlimited for companies who set their sights the highest.

“I love the challenge of having to navigate through the economic climate that we’ve been facing,” Sasso says. “I’m excited about the opportunities we face. There’s a temptation to focus on the obstacles being presented by the current economy, but I see so much opportunity for our firm and for this profession. I think we’re really just getting started on what we can achieve as a law firm.”

HOW TO REACH: Carlton Fields, (813) 223-7000 or www.carltonfields.com


The Sasso File

Gary Sasso
President and CEO
Carlton Fields

Born: Miami, Fla.

Education: Bachelor’s in economics, Wharton School at the University of Pennsylvania; J.D., University of Pennsylvania Law School — graduating at the head of his class. While in law school, Gary was editor-in-chief of the University of Pennsylvania Law Review. He spent his first year after graduation as a clerk for Judge Spottswood Robinson III on the U.S. Court of Appeals for the District of Columbia Circuit and his second year as a clerk for U.S. Supreme Court Justice Byron White.

Who are the leaders you look to for advice and questions?

I have the opportunity to work with many fine business leaders in the Tampa Bay area, and I often bounce ideas off of my colleagues at the Tampa Bay partnership and United Way. We have a client advisory board, which consists of CEOs and general counsel and we brainstorm with them too.

What do you like most about your job?

What I like most is the time I spend with high-quality people in our community, among our clients and inside our firm.

What is the best business advice you’ve received?

I think it’s probably something that I came across in my first year as a CEO, when I was trying to grapple with the idea of taking risk and what kind of risk and how much risk. I read what I could get my hands on about the job, talked to as many people as I could about the job and one piece of advice that I received is at the end of your first year, if you look back and you haven’t made a number of mistakes, you’re not doing your job well, because you’re not taking enough risks.