Patrick Mayock

Wednesday, 26 March 2008 20:00

Clean and steady ascent

When you climb the ladder of life, don’t poop on the rungs, says R. E. Crawford.

If you do, you’re going to encounter a big mess should you have to come back down.

While some might be offended by the musings of the founder, president and CEO of R. E. Crawford Construction, the benefits of their insight should be lost on no one. No business relationship should ever be overlooked, he says, adding that a loyal, long-term customer should be given just as much attention as the new customer you’re trying to woo. This burn-no-bridge approach to customer service has helped propel the construction service provider from a humble start-up in 1979 to a nationally recognized, 74-employee outfit with 2007 revenue of $74 million — up $6 million from 2006.

Smart Business spoke with Crawford about how to keep those rungs on the ladder clean, so to speak, as well as how to extend that commitment of maintaining relationships inward toward your own employees.

Do not forget about your long-term customers. What happens in a lot of companies is that long-term customers get pushed aside for the new customers.

You have to take care of your long-term customers. You can’t forget about them. They’ve been there with you for a long time and, in some cases, from the beginning.

Because you have a long-term relationship with a customer, you feel that they’ll always understand when something goes wrong or if you need to change a schedule. But really, they don’t.

You have to work harder to keep your long-term customers than you do your new ones. A lot of times, people do the opposite.

The bigger the company is, CEOs forget that they need to be out there meeting customers, seeing customers. Call on your customers: ‘Hey, how are you doing? Are people taking care of you? Is there anything I can do?’

If you don’t make sure that you’re listening to your customers, then you won’t (develop a good) reputation.

That goes a long way. It’s just being in touch with them. Don’t, don’t, don’t forget about them.

To lead your people better, get to know them better. Putting the right people in place is difficult.

That goes back to when you hire the people initially. You have to know what type of person you’re looking for.

The more input that you can give to your HR department or your headhunter about the type of person you’re looking for, the better the candidates will be.

Then, it’s just knowing your people and having a good feel for how they think and operate.

You have to try to get to know your people. You have to try to not only know them on a business level; you need to try to know them on a personal level.

Every year, we take our whole company, including spouses, on a trip. We’ll just have time to really get to know each other a little bit.

Play games together, have a cocktail together, have dinner together and meet their families. Basically, your employees have to be part of your business family.

Getting to know people personally, you can get a better feeling for their loyalties. If they’re loyal to their family, they’re going to be loyal to their business.

The more you get to know someone and understand them, the more you get to know how honest they are and how dishonest they are.

Treat employees with respect. To get buy-in, you have to have (your employees’) respect, as you have to show to them in return.

Once they respect you and they trust you, they’ll normally buy in to your vision, whatever that might be, and they’ll offer some good input on the direction it should go.

The best way to get respect from somebody is to show it: Make sure you’re compensating your employees fairly for the job they do. Make sure that you are reviewing your employees annually, sitting down with them and discussing their long-and short-term goals. Make sure you’re keeping everybody informed on company procedures and policies.

To get their respect, you have to show respect.

Address change head on — whether it’s good or bad. When there is change, the president, owners or CEOs have to be the people out their telling their people about the change, answering questions about the change, and talking about the positive and the negative about the change.

There are some changes you have to make that are negative. If you’re honest about a negative change and don’t try to mask it in a positive way, then change is always welcome.

It seems like we’re all afraid to bring up negative issues. The best way to solve a negative situation is to have a positive conversation about it. That’s part of being a good leader — not being afraid to make change.

The most positive thing you can do in a negative situation is to put everybody in the same room and sit down and discuss it and work it out. Just by getting everybody together and having a conversation is a positive way to deal with a negative situation.

People get disgruntled rather quickly when you make changes without getting input. Get their input.

The benefit goes back to people trusting you. They feel you didn’t try to mask a negative change with a positive spin. They feel that you were honest. They feel that you have integrity.

If they trust you, and if they feel you have integrity, they will follow change.

HOW TO REACH: R.E. Crawford Construction, (724) 274-5000 or www.recrawford.com

Wednesday, 26 March 2008 20:00

Behavior study

Nelson Chan loves to play mystery shopper.

Despite his wife’s protests, the president and CEO of Magellan Navigation Inc. frequently poses as a would-be consumer to observe the behavior of customers at retail chains throughout Northern California. It’s not that the GPS-unit manufacturer doesn’t designate enough resources for market research; it’s just that Chan is obsessed with understanding his customers, which he says is the key to success in business.

In a similar vein, the executive also analyzes the behavior of his management staff members by revisiting their personal objectives at employee-led quarterly reviews. The exercise sets a tone of accountability that has helped the company and its 475 employees worldwide push Magellan’s total market share from 1.9 percent in the second quarter of 2006 to 5.7 percent in the second quarter of 2007.

Smart Business spoke with Chan about how to foster such accountability by pushing back on decisions and practicing transparency.

Don’t be afraid to push back. I really like decisions to be made at a different level than always having to be at the CEO level. Decisions made at the lower level are better made.

When decisions are pushed up to me, and I don’t think it’s the right place, I push back.

It’s listening to them and basically saying, ‘Guys, this decision should not be coming to the CEO’s office. This decision should be made by you,’ whether I’m talking to my staff or multiple levels below in the organization.

You’re just encouraging their behavior if you don’t push back. The fact that people come to you and expect you to make decisions all the time, and you do it — well, guess what? That reinforces that.

There are a lot more decisions that really should be made at other levels in the organization. It’s even healthier for the organization — not only is it a scalability issue but also a knowledge-level issue.

There are many people, if you hire smart people, that can make much more intelligent decisions than if they filter all the way up to the CEO. It’s not healthy if employees don’t feel empowered and don’t feel like they’re held accountable.

Hold employees accountable. When people succeed, you reward them. You reward them lavishly, and you reward them publicly.

When people don’t perform, you do the opposite. If they don’t perform consistently, you have to make changes. Those are also made very public.

If you say you hold people accountable, you have to show you hold people accountable, which means you have to fire people, and you have to reward people.

I have a quarterly meeting with my staff where they stand up and they basically review their objectives. They tell me, ‘Here’s what I’m committed to do this quarter.’

Likewise, they spend time reviewing the objectives from the previous quarter that they committed to the organization. They get a chance to grade themselves and say, ‘Based on this objective, I said I would do such and such. This is how I would grade myself whether I did or didn’t do it and why.’

The whole idea there is having very specific, measurable, achievable objectives that are black or white, whether you did them or not. There are no shades of gray. You’re standing up there and holding yourself accountable to your peers and the company on whether you achieved them or not.

They are doing that not just for me as their direct management but also to their peers, which I think is even more important. When you commit, it’s not just committing to your boss but to your organization and your peers.

This is a team sport. That peer pressure is very important. Sometimes, it’s even more important than any other pressure you can get.

Practice transparency. When I talk about transparency, it’s really no hidden agendas. We don’t come into a room and try to have a strategic decision and people are having different agendas. We’re all trying to achieve the same goal.

A lot of it has to be basically aligning your goals and objectives. You want to make sure that the management team as well as the employee base all understand what your goals and objectives are and also what your values are.

[It’s also] communicating to employees the status of the company. Be open and forward with them with both the good and the bad. Not everything’s rosy.

It makes life a lot easier. It makes a lot less politics. Everybody knows where they stand. It makes getting to the point much quicker and much easier.

Keep moving. A lot of people get into an analysis-paralysis issue, where they feel like they need to have all of the information before they make a decision.

In life, unfortunately, you don’t have all of the information, and you’ve got to know when you’ve got to make a decision. At the end of the day, if you don’t make a decision, a decision’s actually made for you, whether you like it or not.

I like to sail. If you’re moving [in a sailboat], it’s much easier to change course and change direction than when you’re sitting still.

The same goes for business. Even though you may be making the wrong decisions, you get a lot of feedback, and you get a lot of data that says, ‘Hey, this is wrong. You need to change course.’

If you’re moving in the wrong direction, it’s much easier to turn because you’ve got momentum that allows you to change course.

HOW TO REACH: Magellan Navigation Inc., (408) 615-5100 or www.magellangps.com

Sunday, 24 February 2008 19:00

Give and take

Give and what shall you receive? Ask Renee White Fraser and the answer would undoubtedly be success.

As founder, president and CEO of Fraser Communications, the advertising psychologist has sparked colossal growth — from 2003 revenue of $5.7 million to 2007 revenue of $42 million — at her advertising, market research and media-planning agency by turning her attention outward.

“Fraser Communications has really taken off in the last three years because I’ve started to focus on community involvement and socially responsible work,” she says.

In the process, Fraser has gotten buy-in from her 30 employees by leading the charge on projects, such as a walk for the homeless and a holiday party spent serving food at a homeless shelter.

Smart Business spoke with Fraser about how getting involved in the community can bolster both your employees and your company.

Q. Where should executives look to get involved in the community?

A good place to start is the United Way in your community. They’re a good guide, and very often, they’re building relationships between businesses and the public sector, so they have opportunities for businesses to step right into where you can be effective.

It’s one thing to go to the local school and meet with the principal and try to establish a program, but that takes a lot of effort and a learning curve. I think it’s better to always learn on somebody else’s time.

Q. How do you get employees to buy in to community outreach programs?

You have to share this spirit and the enthusiasm with your employees. You have to roll up your sleeves and be part of it. It certainly can’t just be a speech you give once a year, and you’re not out there with them.

I’ve also incentivized them. I know it’s a half-day on Saturday, so I give them a half-day off work at some other time to compensate them for their time.

It’s hard the first time, but the second and third and fourth, people truly get into it.

This year, part of our holiday party is going to be serving food at a homeless shelter around Thanksgiving. I know it will be awkward for people driving there and getting there, but once we’re there, I know they’re going to feel like, ‘My gosh. It’s intriguing to look into the eyes of these people and to know that I was making a meal and to see how kind these people are.’

When you don’t get to touch the lives of homeless people, this will be a good way for the employees to get a feel of what it’s like to help others.

Q. What is the benefit when employees get involved?

As a psychologist, I believe that when people share things on a very deep, emotional level, it builds bonds.

For teamwork, it’s an excellent thing. It makes people see people in other departments in a new light, and they share in their humanity.

That actually has positive manifestations in the work-place; it helps to retain employees. When you’re engaged in community activities like this, it’s a recruitment tool, but it’s also a retention tool.

We have a very low turnover rate compared to our industry. Our turnover rate is just below 10 percent. A lot of our employees have been with us six to eight years, and that’s unusual in the advertising business.

Q. What should CEOs know before getting involved in community activities?

You need to address your own priorities and assess whether or not that’s in sync with the priorities of your employees.

Another campaign that we’re working on is a campaign called ‘Stay negative.’ It’s a campaign to get people tested routinely for AIDS.

We participated with our client in a gay pride parade, and we made that nonmanda-tory. A lot of our employees decided to get involved, and it was an exciting opportunity for them. You just want to make sure you find programs that are aligned with the values of your employees.

The second thing a CEO should consider is impact: Is this going to be an effective program?

There’s nothing wrong with asking the nonprofit or the organization you’re joined with, ‘Tell me how you’re going to demonstrate results.’ Ask for something in return. Recognition is something they’re often willing to give, which is valuable. ‘Demonstrate to us that this is really going to have an impact’ — that’s even more important.

Q. How has this involvement benefited your company?

It benefits us by increasing the visibility of the company. It also puts us at the table with large corporations. They begin to see us as a serious player, a strategic player and a smart player, and it does give us an entry to talk with them.

HOW TO REACH: Fraser Communications, (310) 319-3737 or www.frasercommunications.com

Tuesday, 29 January 2008 19:00

The ties that bind

Never sit in the middle at a dinner table with a large family or you’re going to spend the entire meal passing bowls to both sides. That’s just one of the things that Anne Belec learned growing up in Quebec as the fourth of six children.

Now, as president and CEO of Volvo Cars of North America LLC, Belec applies more life lessons when managing an even larger family of 351 employees. Among the lessons: Express ideas clearly and concisely, don’t cut others off when you should be listening, and assume a fair amount of the shared responsibilities.

Smart Business spoke with the personable executive about how best to become acquainted with your staff before applying some of these lessons in the workplace.

Know thy staff. You have to invest the time upfront to get to know the people, their styles and their strengths. There’s no shortcut for it.

When I went to work in Sweden, I was facing a different culture, and I was coming into a new company. One of the things that I implemented, I call them skip-level meetings. I’m not just talking to my direct reports; I go in the organization a level or two and bring in groups.

On a two-hour block of time, the full first hour was just setting up a situation where people talk about themselves. I would give them a make-believe situation like, ‘We’re on a desert island, and you can only bring one person and two of your favorite things. What would they be?’

I let people talk this way, and then I would stop and say, ‘What has this revealed about this person?’ and get everybody to start talking about their insights into this particular person.

It really speeds up getting to know the individual and establishing the trust and a connection so that when we then move to the business part of the discussion, there’s already a certain level of trust and comfort that is established.

When you lead a large group of people, it also helped me remember people’s names. ‘OK, this is the guy who collects trains. This is the person that would have brought Tiger Woods instead of his wife.’

I still do these skip-level meetings on a regular basis to gauge the level of happiness, some of the things that are bugging people in the organization that we can pick up on or things that are common nature and then address as a management team.

Prep your staff before meetings. The more prepared people can be before they actually get to the meeting, the more efficient the time spent.

(Provide more than) just an agenda. It’s trying to provide a little bit of texture, some questions, or, ‘Come prepared to discuss the following topics ...’

(If employees) know what we’re going to be discussing, and they have time to formulate the ideas in their minds, when you get into the meetings, they’re more organized in their thought process.

I demand that they come in prepared. If they believe enough in their point of view, then they will have done good research and provide some good arguments for it. ‘Why do you say that? Do you have facts? Do you have data that supports your point of view or your direction?’

For a manager, it is difficult to back off from the point of view that you had. I am willing to do that as long as a different direction is well supported.

If they come in and say, ‘I’ve done my homework. This is why we think it’s a better decision or it’s a better idea or whatnot,’ if you have a good discussion around it and, at the end of the day, there’s an argument that is stronger, let go of your own point of view.

Validate decisions by explaining the rationale you used to make them. When you do get to the end and you say, ‘This is going to be the decision, and this is the direction that we’re taking,’ explain why.

We always circle back and say, ‘OK, I know this was not all your points of view starting out, but this is where, as a team, we’re going to go. This is why we’re choosing this path. Walking out of here, we all have to agree that now the decision is made and that we all support it.’

It’s a learning process for all of the managers who may be responsible for a very specific discipline. When you hear out the thinking process or the argument that others bring to the party because of their different backgrounds or because of their different experiences, you have the ability to share. You’re developing the whole team through that process.

Set the boundaries when granting autonomy. Micromanagement undermines people’s capabilities. People tend to start relying on the fact that you’re going to be verifying and changing things and doing stuff. They have less ownership of what they are doing when you overmanage.

Trust and empowerment does-n’t mean you’re not going to check what’s going on. Blind trust can lead to a lot of surprises. It only works if you understand the boundaries.

Empowerment is not embraced at the same level by every employee. Some people like to be directed much more closely than others, and others like to have a lot more leeway in what they do.

HOW TO REACH: Volvo Cars of North America LLC, (800) 458-1552 or www.volvocars.us

Tuesday, 29 January 2008 19:00

Tailor-made

Remo Picchietti hates being kept in the dark. Take air travel, for instance: “There’s nothing more frustrating than sitting on the tarmac not moving and not knowing why,” says the CEO of World Commerce Services LLC. “All the pilot has to do is get on the PA system and tell us why we’re not moving.”

To avoid similar frustration at the 54-employee transportation management and consultation company, Picchietti is actively engaged in client transactions in order to disclose changes and anticipate specific needs.

“It’s all about sharing the information,” he says.

Those airlines should take note — from 2004 to 2006, Picchietti’s emphasis on open communication has helped the company post increasing revenue, from $55 million in 2004 to $65 million in 2005 and $80 million in 2006 before selling it to Wako Logistics Group Inc. in 2007.

Smart Business spoke with Picchietti about how to meet each customer’s unique needs.

Q. How can leaders anticipate their clients’ changing needs?

My advice is always to keep the customer completely up to date, good news or bad news, because then adjustments can be made accordingly, and then there are no surprises.

It’s all about listening, to begin with. One customer is going to certainly have a different need [from another]. Listen to that customer, and try to tailor to their needs.

The CEO really has to get his or her hands dirty. That’s the only way that I can properly lead this business is if I know what is happening within our industries and with our customers.

I am quite often on the road with salespeople, visiting existing or potential customers.

That is a competitive advantage against the big boys and girls of the industry.

If somebody is having a problem or a challenge, they have my direct-line number, they have my cell phone number, and, in some cases, they have my home number.

If they have a problem with one of the larger service providers, they have an 800 number, and they don’t know who they’re going to speak with.

Q. When tailoring services to a given customer’s needs, how do you avoid overpromising?

There are some companies in any industry that attempt to be everything to everyone. Quite often, that’s impossible.

It’s only going to lead to disappointing the customer and not winning that customer.

Our philosophy is consistent and constant sharing of what our abilities are. We don’t want to misguide or even misspeak on either side. We want them to know everything we can do, but in no way, shape or form can or should we make promises on what we might be able to do because that will only lead to disappointment on all sides.

Q. Have you ever turned down customers because they were asking for too much?

Absolutely. It’s so counterintuitive, and it’s probably one of the most difficult conversations I have with key staff, managers and salespeople — to actually make the decision to walk away from a customer.

That needs to be a key component of your strategy — the willingness and hopefully the capability of walking away from a customer if you can’t properly service that customer.

Q. What is the benefit of communicating that to your employees?

If they were attempting to take care of the needs of a customer for whom we can’t service properly, so much time and effort and energy is taken in trying to do something that we can’t do or something that they want us to do that we won’t do.

That’s time spent away from those customers that need our services elsewhere. With staff, they come to understand that, in the long run, (it’s better to) properly service the nine customers that we can versus serving just the one that has expectations beyond what we’re telling them we can do.

Q. How do you know when to expand offerings that consistently limit your ability to serve customers?

Counsel very closely with customers and attempt to anticipate what they are going to need.

In some cases, we are invited by the customer to be involved in their strategic planning.

These are wonderful customers that want their vendors to know well in advance of what their plans are so that everybody can make the proper adjustments.

If there’s expectation or anticipation that a vendor is not going to be able to keep up with us, then we have to make a different decision.

Therefore, when I’m on the other side and I’m promoting our services to our customers, I look at myself from their eyes. Only if I’m going to be able to be flexible and adjust are they going to stick with me.

HOW TO REACH: World Commerce Services LLC, (888) 873-9271 or www.shipwcs.com

Wednesday, 26 December 2007 19:00

Steve Ralph

Risk is the fuel for progress, says Steve Ralph, who as president and CEO of Huntington Hospital continues a tradition of calculated risk-taking that began more than 20 years ago. It was then that a savvy physical therapist suggested that the Pasadena-based community hospital bring in canines to assist with patient recovery and therapy. Though the proposal sparked a wave of initial controversy, Huntington’s leadership team took a risk on a program that proved hugely successful, and canine therapy programs have since become a mainstay in hospitals across the country. Today, Ralph is just as willing to take those kinds of calculated risks, whether implementing new staffing procedures among his 3,247 employees or taking new approaches to patient care at the hospital, which posted 2006 revenue of $398 million. Smart Business spoke with Ralph about visibility, connecting the dots and how to close the loop when communicating.

Make yourself visible. I make a point of welcoming (employees) at every new employee orientation we have. I tell them that they’re going to see me a lot. I’m not one of these CEOs that’s in meetings day in and day out from morning, noon to night.

I spend a lot of time roaming the halls. I spend a lot of time talking, communicating and listening to people.

(Employees can then say), ‘This is a real person. He understands. He can relate to what I’m doing. He can understand the issues I’ve got on the job.’

When you’re visible and a part of the organization, that doesn’t mean that people always agree with everything, but they certainly can appreciate where you’re coming from and develop a respect and a trust, which is important in relationships.

Recognize extra effort. I spend a lot of time just walking through the cafeteria when people are eating and talking to them about their jobs and recognizing people in terms of doing a good job.

Just simple things like, the housekeeper was swamped doing some things, so one of the security guards helped empty the trash. It’s recognizing those people for doing it.

It’s also connecting the dots. In any industry, you’ve got people behind the scenes that are doing a lot of the things, but they don’t get the recognition. It’s important that you balance it and really recognize (them).

We’ve got some ways that people can accumulate points. A patient can recognize an employee, a fellow employee can recognize a fellow employee or a team of employees, and they can accumulate points.

They can use that to benefit something in their department — get a new video machine for their education department, whatever it is. You can do things that might end up being a pizza party for the department.

They feel that they’re an integral part of this organization. They feel good about themselves when we have celebrations, and they’re doing things better.

As long as people feel that they’ve made a contribution to that and have gone the extra mile, they got a lot of rewards professionally and get a lot of rewards within their own peer groups.

Close the loop. Too often, organizations can go in lots of different directions, or people don’t really understand the fundamental reasons for what we’re doing, why we’re doing it and where we’re going. One of the biggest responsibilities that any leader has is to effectively communicate. When I say that, it’s not talking so much. It’s oftentimes listening — listening effectively.

Listening effectively means following up with (employees) effectively.

If I get input from people but I decide to do something else, it’s important to close that loop. Tell people, ‘Here’s why we did it the way we did it. We looked at this, and we looked at that.’

If people feel like you’re giving them lip service and not really listening to them, they’ll quickly say, ‘Hell, I’m not talking to this guy anymore. He doesn’t do anything I say.’ It’s important that you tell people why you made the decision that you did.

Don’t make hasty decisions. You don’t want to act too quickly. You don’t want to be a bull in a china shop, breaking all the glass.

But on the other hand, if you know there are some major challenges in the organization, and there are things that need to be improved, you’ve got to move on some of those things.

You’ve got to gather the data, get the facts, and try to balance the pros and cons. You’ve got to say, ‘In the best interest of this organization, in terms of where we are and where we’re going, this is what we need to do.’

At the end of the day, you’ve got to make decisions and move forward. The key is to make sure you communicated the reasoning behind it and that rationale and develop that confidence that people have to have in you.

(Employees) certainly won’t always agree with you, but if they have confidence that you’re going to listen, look at all sides of the situation, and then make an informed decision, they’ll have confidence and trust in you, which, at the end of the day, is what you really need to have.

Take a hike. People’s success is all boiled down to how they balance their life.

The role of CEO is really a full-time, 24-7 kind of role. You need some downtime to balance your personal life and spend time away from it all.

When I get away, I try to get away. Last year, I went on a hike in Northern Scotland for 95 miles. [Previously] I went on a hike around Mont Blanc, which is the highest mountain in Europe.

I have confidence that I can do that, and things are fine here. I’m not bringing cell phones or BlackBerrys and stuff.

You need time away. People all need some time to think and put their life in perspective.

HOW TO REACH: Huntington Hospital, (626) 397-5000 or www.huntingtonhospital.com

Sunday, 25 November 2007 19:00

Curtain call

Roughly 15 years ago, Tim Pistell was a long way from home. His duties at Parker Hannifin, a motion and control technologies manufacturer, had sent him to England for five years.

During that same time, Great Lakes Theater Festival was a critically successful but financially stagnant theater group working out of the Ohio Theatre in Playhouse Square.

That these two paths would cross stemmed from a simple request: A friend of Pistell’s, who just so happened to serve as president of GLTF at the time, asked if he would join the board upon his return stateside. Pistell, who is also active in the Ohio Buckeye Chapter of the National Multiple Sclerosis Society, was more than happy to oblige.

“Theater has always been something that my wife and I love, so it was sort of a perfect fit,” he says.

It wasn’t long before Pistell helped the board and staff complete an updated strategic plan that stressed long-term success and sustainability.

More importantly, he helped GLTF get its finances in order. “Back in those days, the financial statements weren’t always received on a timely basis, and there wasn’t necessarily a high degree of credibility,” Pistell says. “We were having a hard time making money.”

Now, statements are timely, credible and accurate, and GLTF has generated a surplus for five consecutive years.

Pistell hopes to continue that success with the recently announced “Re-Imagine a Classic: A New Home at the Hanna Theatre” campaign.

As chair of this capital campaign, he will oversee the transformation of the Hanna Theatre into the new official home of GLTF. Plans call for a complete restoration and renovation of the space, which will eventually downsize the number of seats while implementing a thrust stage to create a more optimal setting for dramas and plays.

If everything goes as planned, the opening of the reimagined theater should coincide with the start of GLTF’s 2008 fall season.

“Cleveland has some real crown jewels to attract people and retain them,” Pistell says. “We think we can be one of them.”

HOW TO REACH: Great Lakes Theater Festival, (216) 241-5490 or www.greatlakestheater.org

Friday, 26 October 2007 20:00

Jim Cragg

Observe — then act. To be a great leader, you must first step back and assess the culture and the current state of your company before blindly applying your own experience, says Jim Cragg, president and chief operating officer of MegaPath Inc. Having spent his adolescence moving from country to country with his father, an executive with Pan American World Airways, Cragg speaks with some authority. Whether in Tokyo, Munich or London, he patiently immersed himself in the culture before becoming an active shaper of his surroundings. That approach has served him well at MegaPath, a 480-employee communications provider, where Cragg oversaw three successful mergers while leading the company to 2006 revenue of $160 million. Smart Business spoke with Cragg about communication styles, culture and why you have to invest in your employees.

Adapt your communication style. The definition of leadership is the ability to get people to willingly follow. We have [nearly] 500 employees, and they’re at different stages of their careers. You have to find a leadership style that addresses that stage in their career or that particular role that they play in the business.

The four quads of that leadership are: Telling. Some people do like to be told, ‘This is what you need to do,’ and, ‘This is how you do it.’

Selling. Some people like to be sold on an idea so that they feel more a part of the decisions.

Participating, which is a more participative leadership style.

And then delegating. Some people have all the get-up-and-go that they need. They just need to be given an assignment, and they’re off to the races.

It’s not overly transparent. To lead effectively, you have to have flexibility in how you communicate. You have to understand the group that you’re communicating to or the individual. You have to allow them the opportunities to talk and ask questions, and you have to give them a level of comfort that they can tell you what they think.

Validate change. We communicate that change is inevitable as we grow as a company. People have to see change as bringing a value. If you just zig and zag and zig and zag, they don’t perceive that as value. You have to validate on an ongoing basis.

It will be challenging at times. If we change, and it doesn’t work, we’ll acknowledge that we made a mistake. When you do change, if you make a mistake, that’s OK.

Keep adjusting the formula to really get customer satisfaction to the point it needs to be that the business grows.

Find a common theme. The culture is the company. You have to find very common themes in order to get a culture to change.

You can say things like, ‘You’ve got to be profitable. You’ve got to grow revenues.’ But that is kind of nebulous. People don’t see the financials necessarily in depth.

Our approach is to enable people to feel like they make a difference. The way that people can make a difference is with a cando, positive attitude about getting things done for customers.

You definitely have to lead by example. You have to be involved in the challenges of just about every aspect of the business to show that you’re willing to participate in getting through those challenges and hurdles in order to be successful. You have to stay engaged and close to some of the things that are being changed.

I think the real benefit is that you get through your projects in an agreed-upon time frame and you accomplish goals.

Show people they’re important. People have to feel like what they’re doing is important in order for them to feel like they’re participating in the success of the business. When they’re working for a company, they want to know that they’re making a difference.

There is a lot of recognition involved. There’s weekly recognition for jobs well done. I always respond to the job-well-done notes. Any time a sales rep wins a deal, I’m notified, and I acknowledge and thank them for that.

We have employee of the month, in which we recognize [employees] and give gift certificates. That is acknowledged on a companywide call. We acknowledge team performance, and we acknowledge salesperson of the month. There’s always the opportunity to give stock options, which we give to every employee in the company.

You have to continue to make sure that they recognize that what they are doing is an important piece of the business. If everybody feels that way, the endgame is happy customers.

Invest in your employees. If you’re asking your employees to deal with change and accelerate growth, you’re asking a lot of them. You’re asking them to make a difference and work very hard. That’s their investment in the company.

The company has a reciprocal investment that it has to put in place for the employee. We need to show employees that we’ll build company newsletters, and we’ll give them good benefit plans, and we will give them career-path opportunities and encourage them to look at internal postings. We’ve got a budget going into ’08 for a lot more training.

You need to make sure as executives that you acknowledge and have a reciprocal investment that at least matches the efforts that your employees are putting in.

Share success stories. That’s a common theme in our all-hands call. I will acknowledge individuals’ performances from our customers’ view.

Since I get out and meet a lot of our customers, I touch base with them, and I get very positive feedback on our employees. I pass that on either through e-mails or through acknowledgement on company calls. We’ve got a newsletter ... that will have a large part (about) employee recognition.

The benefits really are the culture. People want to know that they’re making a difference. They want to know that the customers like and appreciate our products. They want to know that we are successful as a company. And they want to know that they are growing as a businessperson.

HOW TO REACH: MegaPath Inc., (714) 327-2000 or www.megapath.com

Friday, 26 October 2007 20:00

An ear for communication

Jason Kubasak isn’t afraid to let his 98 employees lead themselves. “I try to say, ‘Here’s our end goal. Let’s all understand what our part of it is and move toward it,’” says the CEO of D&S Communications Inc.. “Rather than make them follow me, I like for them to strive for it on their own.”

With 2006 revenue of $14 million, the employees of this privately held provider of refurbished telecommunications systems are heading in the right direction.

Smart Business spoke with Kubasak about why following up is such an integral part of communication and how understanding your customer base is a sure path to growing your business.

Q: How do you keep a business growing?

While it’s definitely great to go out and do acquisitions and marketing and try to acquire new customers, the No. 1 thing to do is to retain and build upon your existing customer base. The first and best investment of intellectual capital would be to try and understand what other services and how much more service you could be providing to the people that you’re already reaching.

Q: How do you retain customers?

Don’t promise something that you can’t deliver — no matter what. If a customer leads you down that road, you have to know when to say no. You can’t say to them, ‘Yep, we can do it.

No problem.’ Ultimately, the other business that you’re doing with them will go away when you fail them on the new project.

Not overpromising, not taking on things you can’t do, and then recognizing where the areas of opportunity are with those customers and trying to be there at the same time that they’re there or before they’re there.

You tend to lose customers in transitional periods, when they go to a new product or a new person gets hired. Communicate with them: ‘Hey, if you’re making any kind of change, let me know. We might be able to accommodate you.’

Then you can retain that customer through a transition where you might normally lose them.

Q: What has been your biggest challenge in business?

Fitting in to the culture. Coming in as an outsider and trying to work with all of those people and getting them to do things that I wanted them to do rather than the way they were doing it before.

I met with all the managers individually right off the bat. I didn’t tell them anything that I wanted or anything that I expected — I just asked them questions. They have a better feel for it than I’m ever going to have just walking in blind off the street. Who better to ask what would make this job easier?

The main thing that I tried to get out of them is, ‘What, if anything, is an impediment to you doing better in any area? What slows you down? What’s inefficient? What’s time-consuming that shouldn’t be?’ If you’ve got something that was a pain and I can help it go away, then you’ll be more willing to listen to me next time around.

You have to be genuinely open to listening to what they have to say. If you’re doing it as a strategy, then I don’t know if it will work as well.

Q: How do you show employees that you are actually listening?

Follow up and say, ‘Here’s what I’m doing to address your problems, and here’s the exact outcome.’ People pay attention to that. They recognize that if you follow up, you actually did take it seriously.

Most importantly, make something happen. If I say, ‘Tell me what your problems are,’ and you say, ‘Well, my laptop is all screwed up,’ I actually have to do something. I have to either say, ‘Here’s a new laptop,’ or, ‘I need to buy you some software.’

Q: How do you communicate your goals with employees?

I recently had an operations meeting with our warehouse manager, our operations manager and our repair center manager. I brought them in and showed them all visually the exact financial impact that putting one more order out every day had on the company.

Showing them the financial ramifications, it got them motivated. You don’t have to get them all wound up with rahrah kind of stuff. Just lay it out logically and say, ‘Here’s exactly what happens.’

I showed them a way of measuring it — ‘Here’s the numbers. Here’s how you can go into the accounting system to see how many orders are pushed out’ — and they took it from there.

If you try to just tell someone, ‘Get one extra order out every day. It will really help out,’ they’re like, ‘Well, OK. I’ll do what I can.’ Instead say, ‘Take a look at this. Here’s how it all plays out.’

HOW TO REACH: D&S Communications Inc., (847) 468-8082 or www.dscomm.com

Friday, 26 October 2007 20:00

Lois Margaret Nora

Dr. Lois Margaret Nora conducts her own background checks while hiring. Most university presidents overseeing a $33 million budget might pass on this mundane task, but she makes time. Her reason? Integrity. At Northeastern Ohio Universities Colleges of Medicine and Pharmacy (NEOUCOM), Nora demands that new additions to her staff of 321 full- and part-time employees be living examples of the institution’s mission. Walking the talk, she says, is the only way to build trust among constituents and ensure long-lasting success. Smart Business spoke with Nora, president of NEOUCOM and dean of The College of Medicine, about integrity and trust and how using index cards can be a valuable way to gain feedback.

Lead with integrity. One of the most important parts of leadership is leading with integrity — acting consistent with values that are expressed and that people are aware of. It’s one of the most important things in building trust from internal and external constituents. The loss of trust, if it occurs, is very difficult to recover from.

Be explicit about what principles you adhere to, and then demonstrate that not just in what you say but in how you conduct yourself and in how you expect others to conduct themselves.

At the end of each day, I reflect upon what we are accomplishing and how I am behaving. I have built a relationship with people who would question me if they felt that I was not consistent with the principles I’ve articulated and attempt to adhere to.

We routinely question everything. I have a team of people who regularly question or push back on my ideas, both in one-on-one meetings and in group meetings.

If one acts with integrity and builds up trust, then there are times when perhaps you cannot be as explicit about why you are doing things, and yet people have confidence that things are being done in the right way.

If one leads with integrity, it is much more likely that the organization will have integrity throughout it. That will result in an organization and individuals in the organization who will be successful.

Get feedback. [In] Jim Collins’ book, ‘Good to Great,’ he talks about the value of using feedback from customers. For example, if somebody is not satisfied with the product, they are invited to discount the price of that product and explain why. That is providing feedback to those organizations in ways that are absolutely impossible not to pay attention to.

One of the things that I did during my first month was something that I call the index card exercise. I went not only to faculty but also clinical faculty across Northeast Ohio. I went to each one of the counties that we serve and met with everyone from Rotary groups to community leaders.

I handed out index cards and asked the question, ‘What are you looking for in your NEOUCOM doctor or health professional?’ We got hundreds of index cards back with literally thousands of answers. Many of those index cards were filled out by my colleagues, but many of them were filled out by the people that we serve who are not colleagues.

So many people were engaged, and those words did not come out of one executive’s head. They came out of the community.

Ask the right questions. When you’re looking for feedback, ask thoughtful questions that give you good information from the people that you’re communicating with.

Ask good questions, get the information, act on the information, but don’t leave it at that. You also go back and test.

If you ask the question of a smaller group and begin to assess the kind of feedback that you’re getting, if it’s feedback that responds to what you were truly asking, that gives you a message that it might be a good question. If it results in information that is not getting you to a point where you can act, that is a suggestion it is a bad question.

If you’re having unintended consequences or your questioning is not resulting in your organization moving to a better place, it suggests that you need to improve the questions that you are asking.

Lengthen the leash. Create an environment in which people are encouraged and allowed to put their own stamp on activities. Identify success stories within the institution, and try to derive best practices.

Part of free rein is also allowing people the opportunities to make mistakes or to not get it right. You allow tolerable mistakes to be used as learning opportunities. Then make sure that those mistakes don’t recur.

Mistakes may be tolerated, but beyond a certain number or beyond a certain level, they have real ramifications, as well.

Trial and error — it’s a very important part of staying fresh and making sure we’re remaining cutting edge. If we never try a new program or if we never try a new method of doing something, we’re going to become pretty stale pretty quickly.

Show how the pieces fit together. If (employees) are not motivated about what they’re doing, define what is being done in terms of things that are important to them. For people that answer the phones or work in secretarial roles, it’s helping them understand how critically important each of those individual roles actually are to the people that may open their eyes and see in the emergency room some day.

We have a number of our grads who have pointed out to us that the humane or caring way that they were treated in medical school made a difference in the kind of physician that they became. Share those stories back with individuals who are in student affairs. Talk to the faculty who went out of their way to help make sure that they taught a difficult point, or maybe taught it two or three times to a student who was having difficulty with it.

Share those stories and the subsequent letters from grads who talk about how that treatment helped them become a better educator to their patient or to their patient’s family.

HOW TO REACH: Northeastern Ohio Universities Colleges of Medicine and Pharmacy, (800) 686-2511 or www.neoucom.edu