He was hired as president and CEO of a foundation to raise funds to build a new hospital in Indianapolis to replace an existing one — a public facility that never had a major fundraising drive in its more than 150-year history.
Previously known as City Hospital and Indianapolis General Hospital, the public entity had been renamed Wishard Memorial Hospital in 1975. The last time there was new construction there was in 1914. So Vargo was tilling new soil, and he went ahead with his efforts to survey the situation.
“We were talking to a lot of people, and we were not on their priority list,” Vargo says. “There were so many groups ahead of us. People were already involved with some really good causes for a number of years. We did not have that long-term base of support.”
Undeterred, Vargo developed a strategy to get the buy-in from his target groups. He focused on going out into the community, to educate and inform citizens about the great things happening at Wishard Hospital, which served the most vulnerable people in the community.
His most successful visits were with Sidney and Lois Eskenazi, who owned Sandor Development Co. and who donated one of the largest gifts ever made to a public hospital in the United States — $40 million — and Fifth Third Bank, which donated $5 million.
In honor of the Eskenazis’ gift, the foundation was renamed the Eskenazi Health Foundation, and the new hospital will be the Sidney and Lois Eskenazi Hospital when it opens in December.
Having grown up on the South Side of Indianapolis where the hospital is located, the Eskenazis wanted to give back to the community in a way that would impact many people.
The fundraising efforts didn’t stop there. Vargo gave tours of the current facility just to familiarize potential donors with the hospital — and he knew he was getting the buy-in when long-time area residents were admitting, “I never knew that! I never knew!”
Here’s how Vargo achieves buy-in by staying in focus to his mission.
Concentrate, focus and deliver
When it comes to getting people to donate to a cause, it’s not that different from getting employees to buy in to a new corporate vision statement. The main premise is to focus on the mission.
A hospital’s mission is to advocate, care and serve — those are its core values. By keeping those core values in focus, Vargo believed he could engage his staff who would then engage people. That meant crafting a sales pitch that would be consistent with the mission.
“Be very thoughtful in your approach,” he says. “We don’t ask people for money the first time they come here. But we are trying to engage them so that they feel good about a gift and hopefully, that results in bigger gifts for us.”
The sense of making a contribution to a team, even an emotional feeling of belonging to a worthy effort, is as important as an employee who has been newly empowered with new responsibilities at his company.
Vargo also stresses that his team is in many ways a collection of networks. As many company leaders find early adopters among employees, Vargo found early contributors. These are thought leaders, and their enthusiasm is an invaluable asset to engage others.
“All of those folks on our board of directors and our campaign cabinet were all early contributors,” he says. “So they also had credibility when they were calling on people because not only have they volunteered to give their time to do fundraising but they have already made a sacrificial gift.”
Vargo says the Eskenazi gift never would have come into being if the board chairman hadn’t personally known Sidney and Lois Eskenazi. The chairman had been having a conversation with Sid Eskenazi when the potential donor asked what was going on at the Wishard Hospital project. It opened the door.
“That was the beginning of that conversation,” Vargo says. “It has really been a networking success.”
While there was a certain amount of good fortune in landing that donation, Vargo is careful not to rely solely on luck. That’s why so much effort goes into education and contacting people — to communicate the mission.
“It has really been an outreach to folks,” he says. “Not surprisingly, most people we ask in the community if they have ever been to Wishard say, ‘No, I should have. I’ve lived in this community all my life, but I haven’t been.’ And in many cases, they will say nobody has ever invited them.”
So Vargo and his staff invited them to take tours. It was a teaching moment and the lesson was to weave value-added features into the approach.
“So when you take components of a new, modern facility, plus our relationship with the school of medicine — all our physicians are on the faculty of the Indiana University School of Medicine — there are a lot of compelling reasons for people to give to the foundation,” Vargo says. “The other thing that is very compelling especially to the business folks is just that we have a good business plan — our finances show how we have been turned around.”
The personal touch, the tours, the face-to-face conversations show people what is happening and what the vision is for the new hospital has really resulted in phenomenal support for an organization that had not done this type of campaign before, Vargo says.
Grassroots support is not overlooked. Nonphysician employees of the hospital have donated $2.2 million to the fund, whose annual revenue for 2011 was $48 million.
“It’s just been an amazing outpouring from our employees,” Vargo says. “Forty percent of those gifts came after we announced the Eskenazis’ $40 million gift.”
Don’t get sidetracked after a ‘no’
After a process has been developed and is put into use, there may be occasional challenges. These give you an opportunity to meet the challenge by staying true to your mission focus.
For instance, Vargo closely followed the caring approach when faced with an unusual rejection from a potential donor.
“Out of the blue, the man called me one day and said, ‘I feel really bad about this, but my wife had breast cancer years ago, and we’ve really never done anything for the hospital that treated her. We are not going to make a gift to you. We are going to make a gift to this other hospital.’”
Vargo assured the couple that it was the right thing for them to do. With his thoughtful approach, he enabled them to see the value of a philanthropic donation, although it was to another hospital.
Afterward, he did some self-reflection, and saw how this experience reinforced that his message was delivered clearly but it was only the outcome that was different.
“We are all in competition obviously, but it is ultimately what is in the best interests of the donor — and all donors are different.”
Capitalize on your success
If you complete a successful merger, acquisition or turnaround, there is a payoff — and that payoff is often only a new beginning, not the culmination of your efforts.
The next step is about taking advantage of that accomplishment. For the hospital campaign, the large gift from the Eskenazis allowed for construction to begin — and it offered another opportunity.
“One thing that obviously has been helpful is having this new magnificent facility because it can be that stepping stone to get people involved,” Vargo says. “We are having this success but it will be a failure if we don’t capitalize in the future on the success we are seeing today.”
If your project reaches its goal, it is time to enjoy the moment but keep looking ahead. For the Eskenazi Health Foundation, it was resetting the original $50 million goal to $75 million after the campaign’s large shot in the arm.
“We want to keep the same fundraising staff moving forward because it would be silly to ignore all these people who made gifts to us once the new hospital has been built,” Vargo says.
To build on that intention, continue to be in front of people to take the vision as far as what the future is going to be in regard to funding priorities, he says.
“One of the things that we have done is to begin adding new board members who are key players in the community,” Vargo says. “Our incoming board chairman and vice chairman are some higher profile people in the community who are really engaged.
“There is something about building a brand-new project that is exciting,” Vargo says. “But I also think that there are people who would prefer to give to programs. I think we will continue to have success. It is really identifying and articulating what it is that we are going to do.” ?
How to reach: Eskenazi Health Foundation,
(317) 630-6451 or
Get a focus on your mission.
Don’t get off track after hitting a brick wall.
Capitalize on your success.
The Vargo File
President and CEO
Eskenazi Health Foundation
Born: Akron, Ohio.
Education: University of Akron. I majored in communications.
What was your first job?
Working at a car dealership in the Akron area. When people bought a new car, I was one of the guys who got them ready. I learned the importance of doing your job well. If we could work really hard and get it done right the first time, you didn’t have to take it back and do it over. I also got to be involved with the business a little bit. I became familiar with the owner and learned a little bit about how a car dealer business runs.
Who do you admire in business?
A good friend of mine whom I got to know well when I served on the school board here in town was a man named Bob Laikin. He was the founder/entrepreneur of BrightPoint. He’s a guy who is just a passionate, driven person, but also a very caring person. He is just this incredible entrepreneur who just has a lot of integrity.
What is your definition of business success?
The reason I like fundraising is that we have tangible goals. You either make them or you don’t make them. I am really driven by goals and like to have numbers in front of me. But take those short-term goals and incorporate those into long-term goals — how can we be judged and be successful today and raise the money that we need to raise but also how can we take that and make that a long-term success — that’s what motivates me. I am really goal-driven.
What is the best business advice you have ever received?
I came to Indianapolis to work for my college fraternity. I worked for the executive director who was this really brilliant guy, George Spasyk, and he taught me so many little things, such as, ‘Always carry a pen in your pocket so you’re ready to write down whatever you need.’ But more importantly, ‘Treat everybody equal. It doesn’t matter if you are an executive or you are the person in environmental services, they are all important. And if you treat everybody the same, it comes back to you, and you will be successful because of that.’ And the other thing that he taught me was just the importance of having a strategic vision, having a goal for what it is that you were going to do.
Businesses don’t grow … people do!
If you are the founder of a very successful company, other business leaders probably often ask you for the secrets of your success. As founder of Defender Direct, I get approached all the time — they all want to know about our “secret sauce.” How did we grow a small company operating out of a spare bedroom into a nearly $500 million business that has experienced annual average growth rates of 50 percent or more, with more than 2,000 employees and a nationwide footprint of 120 offices?
The answer can be found in five simple words: “Businesses don’t grow; people do!”
I believe our company has grown faster than its peers not because we are better at selling and installing home systems but because our people have grown faster than the competition’s people. The key is to stop trying to double your business and realize the way to grow is to double your team members’ enthusiasm, optimism and skills.
Send people to seminars, leadership conferences and self-improvement programs. Build your culture on purpose, not by accident. It’s that simple.
Groom your employees.
This concept has been a humbling learning experience for me as a business owner. I’ve learned that success isn’t about having a better plan or a widget. It’s about helping your employees, because every time they grow, you and your business will grow. That’s what keeps us going, that’s our true purpose — to build and develop leaders. Everything else just falls into place.
You don’t want to be in the business of buying and selling businesses. You want to be in the business of growing and developing leaders.
How do you best invest in your people? At Defender, every new hire attends what we call “Defender Corporate Culture Day” their first day on the job. This is an opportunity to share the company’s unique culture and get each employee engaged and focused on how he or she can be successful both personally and professionally.
On this first day, the focus is completely on personal written goals and a personal growth plan. We don’t talk at all about job-specific skills.
We insist that our employees “work harder on themselves than they do on their job.” Yes, I just said that and I mean it. Every new employee receives a tool called the Defender Leadership Advantage Board. This tool provides a four-year road map that guides employees on a path of self-improvement focusing on three categories: reading for self-improvement, volunteering to serve others and involvement in company culture-building events.
The DLA Board contains items such as reading “Now Discover Your Strengths” by Marcus Buckingham, attending an Ed Foreman Successful Life Course and even building a home for the poor in Mexico, just to name a few. Participation is always optional but is encouraged for growth. Defender’s investment in the DLA Board is about $16,000 per employee, as all expenses are paid for all employees and, in many cases, all expenses for a family member to attend events are covered, as well.
Don’t stress profit; stress growth.
I realized early on that, as a leader, I can only grow as fast as my employees grow, so I have devoted a lot of time and resources into developing leaders because it’s the only way our company can realize exponential, organic growth.
When you start sacrificing employee growth for profit, everyone suffers. Once Defender started focusing on people versus profit growth, the results were incredible.
Remember, the best thing you can do for your business is grow your people. In doing so, you and your business will realize exponential success because businesses don’t grow … people do!
Dave Lindsey is the founder, board member and chief missions officer of Defender Direct, a leading dealer for a portfolio of home security and digital communication brands including ADT and DISH Network. The company Direct employs more than 2,000 individuals in 50 states with more than 100 branch offices nationwide. Visit www.defenderdirect.com for more information.
Whenever Randy Reichmann needs to illustrate to his managers that what works for one person may not work as well for others — and that there may be other options — he usually talks about sifting flour.
“A mother and a daughter were making cookies at home, and they were getting ready to sift flour,” he says. “The young girl pulled out a fine-mesh strainer … and I remember, this is how my mom did it. She just pushed the flour through it with a fork.
“But the mom said, ‘Oh no, honey. That’s not how you sift flour.’ She reached under the counter and brought out a sifter with a little hand crank. Then she poured the flour in and sifted the flour while she turned the crank. The little girl said, ‘No, Mom. That’s how you sift flour.’
“The question is, if you didn’t see either person sift flour, would the cookie taste any different? The answer is no. The point is there is more than one way to do things.”
The advice that Reichmann, president and CEO of the Indiana region of Old National Bank, gives to new managers follows that mold — that they have to figure out what motivates people to do the things that need to be done in a way that they are comfortable doing.
“That’s really the message,” he says. “Young managers should not just expect people to do the things the ways they did them — but they should help them find the ways that they can do them and still be successful. That takes time.”
There is one way to deal with problems, and that is directly, Reichmann says.
“You deal with them head on,” he says. “You have to be careful, too. I learned this lesson: It is one thing to have a positive attitude, but you can’t wear rose-colored glasses because there are real problems that come up, and you have to deal with those.”
Here’s how Reichmann learned how to look at problems through colorless lenses and teach his executives to do likewise as they confront challenges at Old National Bank, an institution with corporate assets of about $10 billion and 2,300 employees.
Make over your mindset
Surviving a traumatic event can help people develop resilience and the coping mechanisms to deal with the challenge — just as it was with Reichmann.
His experience with an economic crisis gave him the tools to help him and his staff survive future crises. Reichmann was managing about 125 people at an out-of-state bank group when the real estate market crashed as a result of out-of-control speculation, and he had to take action. He was trying to keep the organization afloat while at the same time trying to continue to conduct business as usual. But it was difficult, and he says he drove to work each morning wondering which deal was going to crash that day and what the resulting losses were going to be.
Banks and thrifts had to work hard to prevent panic among the public as well as among financial organizations’ employees. To combat the fear, Reichmann called a leadership meeting.
“It was an interesting meeting to me because it had nothing to do with banking and had everything to do with helping people deal with adversity,” he says.
The whole point of the meeting was that, with the right mindset, they had the ability to stand up to difficult times.
“There is a quotation from author Wayne Dyer, Ph.D., that says, ‘When you change the way you look at things, the things you look at change,’” Reichmann says. “We were trying to get people to focus not on the behind-the-scenes efforts to keep the bank afloat, because we already had people working on that. We were trying to get them refocused on what we could do with our existing customers and hopefully to acquire new customers to help grow the bank — to help grow revenue at a time when we were taking some pretty significant charge-offs.”
The results of the meeting were significant. But for Reichmann, it was a life-changing moment for his mindset.
“I grew up on a farm in central Illinois and learned that if you worked hard, everything will be OK,” he says. “I found out very quickly that sometimes there are things so much out of your control that there is no guarantee they were going to be OK, in terms of what your measuring stick is for a bank.”
His transformation took some time, however, because he had some “unlearning” to do. He says he needed to switch from a fear, or a scarcity, mentality to an abundance mentality.
“I just meant that we would get through this, we would do what we had to do,” he says. “I remember clearly thinking, ‘Once I get through this, I am going to catch the next train out of banking land because I don’t ever want to go through something like this again. It was horrible.’”
But with some patience, Reichmann found a silver lining.
“As things got better, and we improved dramatically, you get to the end of it, and all of a sudden, you realize that the situation is better; the bank was going to be OK,” he says. “In fact, we were making quite a bit of money. Also, we were the only bank in town that really made it there. Then you think, ‘Jeez, I just went through all that. Why do I want to leave now?’”
So he stayed, and his career continued to grow. But that period of time has stuck with him and has defined what he is capable of in terms of enduring hardship, in terms of leadership and in helping other people to see their way through a very difficult time.
“Ultimately, you come out on the other end in a way that you never could have imagined when you were going through it,” Reichmann says.
Pull back and regain focus
While there are many times when it is important for a business to keep looking at the big picture — an aerial view of your business, if you will — there are times when you should be flying at tree-top level instead. Reichmann says homing in to regain focus will help prevent getting engulfed in a situation, which often is unproductive.
Instead, you need to take your eye off of the big picture and just do the next thing because it is too easy to become overwhelmed with the magnitude of the problems you are facing.
“I couldn’t solve all the charge-offs and nonaccruals and try to get rid of the real-estate-owned properties that we had, but what I could do was I could go work on the next problem,” he says. “I could go on a call with one of our bankers. I could make a call myself to try to develop some new business.”
Once you shift the focus away from the big picture, employee anxieties often decline. Reichmann says that if everyone is doing the things that they are able to do instead of focusing on the things they can’t, the picture starts to become clearer. He says that an improved mindset and a focus on tying up loose ends can go a long way to restore stability to a business. And that’s what happened in his situation as he and his staff finally knew that they were going to make it and that they were positioned well in the marketplace.
“We were the only bank in town that cleaned up its balance sheet, and that effort was just fabulous,” he says. “I’ve never seen a bank generate more profit in that period of time. We were much more disciplined than we had been. We were requiring equity, getting appraisals and doing all the things that we are doing now and just made it a healthier environment for everyone. It was just an incredible period of time.”
You have to bring perspective to a problem, a belief that you are going to solve that problem no matter what it takes. Reichmann says it’s easy to take on a defeatist attitude and begin to believe that you aren’t going to make it. But if you reach that point, you are never going to win. Instead, you need to remain positive and maintain the belief that you are going to come out ahead. If you lose a sale or even a customer, it’s important to adopt the attitude that it is not necessarily a loss.
“That’s not the way to look at it,” he says. “You are certainly not happy that you’ve lost the business, but you need to learn what you did wrong and what you could do differently to do better the next time. There is more business out there. Are you going to sit around and feel sorry for yourself about what you lost or are you going to focus on getting out there and seeing what you can win?”
Making the effort takes time, however, and it can be difficult. People tend to get into habits, and it takes a conscious effort. You have to make the effort to change your thought patterns and think in terms of abundance. Reichmann says that changing his mindset made him more optimistic, removed some of the fear and made him a better leader. That allowed him to step up and lead his employees to the light at the end of the tunnel.
He says that as a leader in difficult times, you have to show employees that there is a way out of the current situation. Then, as positive things occur, share those wins with them. However, you also need to share the negative, along with information about how you are going to deal with it.
Blend and make magic happen
As a challenging situation begins to improve, the ultimate measure of success is not financial achievement but personal enhancement. When you can tie a company’s level of earnings with an employee’s goals for personal development, you have what software engineers call “a killer application.”
“When you have blended those two things, you have a magic potion,” Reichmann says. “You have self-motivated individuals who feel like they are making progress not only in their roles but also in their personal goals for their lives, and that’s a pretty positive experience.”
If you can do that, employees are no longer working for themselves in one sense and working for the bank in another sense. As a leader, it is your job to find out what makes your employees tick, as everyone has their own personal goals and what works for one may not work for another.
Reichmann says he often tells new managers that they are not one of the rank and file. Instead, they have to move up the chain into a new position, which includes figuring out how to motivate individual workers.
“Typically, if I have an up-and-comer who is eager and aggressive and clearly has a bright track record, he or she may say, ‘OK, I did A, B and C, and I got here. So therefore, I need to have my people do A, B and C, and then they will get here,’ he says. “The point that you have to get through to them is that A, B and C worked for you, but perhaps X, Y and Z will work for somebody else to get the same results. To me, what leadership and management are all about is trying to figure out how people grow personally, because when you do that, they perform better professionally.” <<
How to reach: Old National Bank, (800) 731-2265 or www.oldnational.com
The Reichmann File
President and CEO
Old National Bank
Born: Carlinville, Ill., a small agricultural town about 45 miles south of Springfield, Ill.
Education: University of Illinois at Urbana-Champaign. I majored in agricultural economics.
What was your first job?
I worked on a dairy, hog and grain farm as a youngster. Aside from that, when I went to college, the first job where I got a check from somebody other than my dad was working for the university. I would fuel up the pool cars on evenings and weekends. I learned, having always worked for my dad, that it was fun to work hard for other people and see them appreciate it — for somebody besides your family. That served me well in my career because, on a dairy farm, there is no vacation from milking cows. What I found out is that, when you get into the professional world and you just work hard, you can go pretty far.
Whom do you most admire in business?
I admire Jim Morris, president of the Indiana Pacers. Being president of the Pacers is a high-profile position, but Jim is all about helping other people. Whether it is Boy Scouts or whatever else makes Indianapolis a better place to live, Jim probably is involved in that somehow.
What is the best business advice you have ever received?
I wish I could remember who said it, but, ‘Put your head down and do the next thing. And stop worrying about things you can’t control.’
What is your definition of business success?
Business success is being successful financially, and I hesitate to use the term ‘more important’ but just as important is that you are seeing people grow — that you see those things that you’ve invested in in terms of teaching and guiding pay dividends. Success is when you see them able to handle a situation that, heretofore, maybe they couldn’t have.