Thom Stork was walking through The Florida Aquarium one day when he passed by the shark exhibits. As he watched the divers swimming in the tanks, his curiosity led him to begin posing questions to a nearby employee: ‘How many people go in the tank? How often? Has anyone ever been bitten?’ And before long, he asked the kicker: ‘Can we put our guest in there?’
“He looked at me like I was crazy, ran away and came back a few days later,” says Stork, who became president and CEO of The Florida Aquarium Inc. in 2002. “Then he said, ‘OK. Listen, we can do this.’”
Before heading up Tampa’s not-for profit aquarium, Stork worked as a marketing executive for Busch Entertainment Corp. for nearly three decades. When he retired, he was approached by the aquarium’s chairman with a proposal to bring his marketing expertise to running the organization.
“I said, ‘I’m not a scientist. I’m not a biologist. I’m not an oceanographer. I’m a marketing, business guy,’” Stork says. “And he said, ‘That’s what we need.’”
Since the aquarium implemented its “Dive with the sharks” program, the exhibit has been extremely profitable and remains sold out. It’s these kinds of unique and memorable experiences that connect people to the organization Stork aims to create every day. To accomplish that, he encourages his people to run with their ideas, even when they seem a bit nuts.
“They come to my office,” Stork says. “They grab me in the hallway or they grab me over in the restaurant and say, ‘Have you ever thought about doing this?’ Every time you hear that you go ‘Yeah! Let’s think about that.’”
In addition to offering encouragement, when you ask people to be proactive in trying new things you’ve also got to be able to demonstrate follow through and constructive feedback once they do. Otherwise, people may get discouraged.
“They have got to understand that it failed,” Stork says. “It failed. This did not work, and here is the reason why. Or ask them, ‘Why did it fail?’ Just have that dialogue.
“They know they are not going to be criticized for wacky-ass ideas.”
When a dive master presented his idea for a “Biologist for the day” program to the senior management team, Stork gave him kudos but also asked him to think bigger picture than the proposed $300 annual profit. The employee was able to rework the program, which today brings the organization thousands in revenue.
“I went, ‘Michael, you did an incredible piece of work here, but here is my challenge for you,’” he says. “‘I want you to go back and I want you to figure out how we can make $30,000.’ He was thinking in a not-for-profit mindset.”
Whether it’s creating new education programs or adding unique events and exhibits — the aquarium recently developed a one-of-a-kind penguin attraction — Stork challenges his 159 employees to explore the boundless possibilities for growth while staying committed to the mission of the organization.
“I believe strongly in the adage that there is not an original idea,” he says. “So I constantly look at what other facilities of our type are doing. I read extensively about new products that are out there for zoos and aquariums and theme parks, trying to determine what works in terms of bringing people through the front door. But then I also do put on my mission hat and say is it good for our business, does it further our mission, does it further our culture?
“So today I say, when I do retire, my legacy will be that I was able to take a bunch of scientists, biologists, teachers and environmentalists and turn them into entrepreneurs, to think about how to make the business work.”
How to reach: The Florida Aquarium Inc., (813) 273-4000 or www.flaquarium.org
Thom Stork, president and CEO of The Florida Aquarium Inc., is always asking guests what they want to see at the aquarium, whether it’s dolphins, sea lions or what he and his team affectionately call “big-ass sharks.” Yet now that the organization is in a position to look comfortably into its financial future, prioritizing what people want versus what the business needs has become more important.
“In the analysis of everything, you have to look at the things you need to do to further round out this facility and this business,” Stork says. “So we’ve spent a lot of time over the last 18 months looking at what we need to do.”
This year, Stork spearheaded a $15 million capital campaign to address the needs of the organization’s 700,000 annual visitors and 100,000 school kids who visit for its education programs. The project, which broke ground in September, will incorporate lobby renovations, expand classrooms — there are currently two — and add much-needed event and exhibit space, including a ballroom to seat 500 people.
“The priority is ‘What do we need?’” Stork says. “All of those things have a return on investment. They will produce revenues for the aquarium which will further grow the aquarium.”
Amar Panchal didn’t plan to start “waffle day.” It came about after he and a group of employees arranged an impromptu breakfast one Friday at the office. But it didn’t take long before waffle day became a company tradition.
“People really enjoyed it, so then they volunteered to make this a monthly event,” says Panchal, the co-founder and CEO of the Akraya Inc., an IT consulting and staffing business in Sunnyvale, Calif. “Every second Friday of every month, there’s a team of employees who volunteer to arrange for breakfast. It’s amazing how excited people are about it, because every month we’ve had a completely different menu for breakfast. That’s how much people enjoy it. And since they are working in a team, there’s a sense of achieving something together as a team. Everybody is enthusiastically part of participating.”
Providing breakfast for employees is just one of the ways Panchal leads his company to celebrate and reward employees for their contributions.
“All of us have achievements on a regular basis and it’s important to recognize and celebrate the achievements and milestones that we have,” he says.
At the company level, key achievers are recognized on a monthly basis at an all-hands meeting. Also, to celebrate success on a daily basis, employees come together to ring a bell in the center of the office whenever a person or group has a significant achievement.
“Everybody actually gathers around and high fives, and that’s a constant recognition of people hitting milestones during their everyday tasks,” Panchal says.
One of the company’s most obvious forms of employee appreciation is its unique perks for personnel. Panchal says each of these is the result of listening to people and identifying ways to reward them for their hard work. A good example is the company’s biweekly cleaning service for employees, which came about several years ago when the company was much smaller but gained it attention on Inc.’s Top 10 Perks We Love list in 2010.
“One day a few of the employees were discussing in the break room that they had to spend a long time over the weekend cleaning up their homes because they had visitors coming in,” Panchal says. “So I said, ‘OK. What can we do to help in this situation?’ We identified a cleaning service that every two weeks goes and cleans people’s homes.
“We listen to employees needs. Small things make a big difference to people.”
Yet although the ideas for a cleaning service and a monthly breakfast took off, there have been other ideas that did not work out financially or culturally long term. Implementing perks for employees comes down to trial and error.
“Some of them will work; some of them will not,” Panchal says. “We recognize that and continue to evolve.
“We’re constantly experimenting with ways to recognize or celebrate within the company, which is why people enjoy working here.”
In recent years, another challenge of having employee perks has been managing expectations when people begin to take certain cultural benefits for granted. Over time, a perk can become something that employees feel entitled to, and you may need to remind them of its value.
“Part of the solution is refreshing, especially the older employees, that these were things that although you have had for several years and think that everybody has it, that is not the case,” Panchal says. “It is still a fairly unique benefit or culture that we have in place.”
Although the costs of certain recognition programs and perks have increased as the company has grown — it grew to $32.5 million in revenue in 2010 — Panchal says he sees culture as an ongoing investment.
“Each of these has a significant cost in terms of not just hard dollars but time that it takes,” he says. “It’s something that is part of the prohibitive cost of doing business.
“When we were smaller, the costs were lower but as we’ve continued to grow, the costs have added up. But the value of that small perk is immense, because it benefits not just the employee. It benefits the entire family, and they appreciate it.”
How to reach: Akraya Inc., (408) 907-6400 www.akraya.com
Cultural success at Akraya Inc. is the result of not just building a great culture for employees but working hard at maintaining it, says the company’s co-founder and CEO Amar Panchal.
“We consciously work on not just creating the culture, but we work on maintaining it and continuing to evolve it,” Panchal says. “It takes effort. All of us are busy with meeting our customers’ needs. It’s a competitive industry and people have a lot of tasks on their plates, but I venture that we take time out and do things that we value as a company, whether it is celebrating or it is giving back to the community.”
Though the company has been recognized for its culture in the past, Panchal continues to look for ways to improve its recognition program. That is why he invited an outside consultant to meet with employees one on one to gain more employee feedback about how they view the company’s culture.
“We’re actually going through that process right now, where we have compiled information and we are actually working on more of a companywide recognition program,” he says.
This has helped the company create a recognition program that takes into account the various contributions of different roles within the company.
“In most companies, it’s very easy to recognize the achievement of sales people because that is very measurable, but there are operations teams, there are customer support teams, there are marketing teams, there are finance teams. How do you have a recognition program that recognizes their achievements too?”
When Rob Hillman speaks about the needle, the president and general manager of Anthem Blue Cross and Blue Shield in Indiana isn’t talking about a shot in the arm.
Rather, it’s about efforts to move the needle on key company performance metrics that measure how well employees are building relationships with customers and how well customers are relating to Anthem.
“When we are talking about a high-ticket item like health care and how personal it is, relationships are very important,” Hillman says. “Things work so much better when you focus on the value of the relationships and not the value of the transactions.”
While companies are putting more emphasis on communicating with customers and employees through ever-developing means, it still boils down to the best ways to develop personal interaction.
“Maybe I'm old school, and there are a lot of this social media out there today, but relationships are very important,” he says. “We spend a lot of time with our associates, talking about the value of our relationships and how important an asset our relationships are with the broker community, with our customers, with our medical providers in the community.”
The results? Anthem is growing its footprint in the marketplace in terms of customers served, and the percentage of customers sticking with Anthem year after year is above the industry average ? typically in the high 80s to low 90s as a percent range.
Here’s the prescription Hillman uses to build relationships to help push the needle upward for Anthem Blue Cross and Blue Shield in Indiana.
Diagnose the situation
To understand the role of relationships, the first steps are to study your core values and look for common threads among them. Draw conclusions as you examine them. It often means taking a look at the basics and factoring in what will make the relationship thrive.
In terms of core values, companies can’t go far off track if they set customer service and integrity at the top.
“What we sell every day are sheets of paper that have promises written on them,” Hillman says. “When all you do is sell promises, customer-first and integrity are No. 1 and No. 2.”
But tangible and intangible products both share a promise ? a manufacturer or organization will stand by what they deliver. The recipe is the same for both types of companies.
“The customer is first, and if you meet or exceed their expectations, you have delivered on your promise,” Hillman says. “Any company that does this consistently, no matter what it is they sell, builds brand loyalty, repeat business and referrals. They are well-positioned for success.”
Do some thinking about your promises. Stick by the ones that you will deliver, whether they are merchandise or services listed on a sheet of paper.
“If it is adhering to the language of a contract, the performance of a product or delivering on your commitments, they all have the same effect ? you build credibility, trust and confidence in your company,” Hillman says.
The benefits you sell to your customers are the same benefits you provide to your associates. This indicates that you believe in your product.
“If you don’t believe in it for your own employees, then don’t try to sell it to your customers,” he says.
“You have to make sure that the way that your contracts are written and the benefits that you have sold are the promises that you can deliver,” Hillman says. “If you can't deliver, if there has been a miscue, and if you have a promise that you sold to someone that seemingly you can't deliver on, you have to make sure that you make it right.”
Remember in your analysis that there is only one occasion to make an initial impression, and doing that correctly will go the distance in establishing a relationship.
“Try to do it right the first time,” Hillman says. “If you mess it up, make sure the second time you do it right.
“Everything has to be tied together in terms of your systems, your people, their focus, to make sure that they know what to note in those promises that you sold and that you are delivering on the promises.”
Examine as well the localness of your product or service.
“Make sure that you are providing the type of value that the local market wants and needs,” Hillman says.
Evaluate the role of the customer. He or she is more than just that. You want to create loyalty, that the person will be a return customer and that the interactions the customer will have with the company will leave him highly satisfied.
If you have been mindful and put the customer first, operate with integrity, and hold employees personally accountable for excellence in everything that you do, those are the common threads that over a period of time will allow you to retain the local touch.
“Customers are folks that you define as more than just people you send a bill to and they send a check every month,” Hillman says. “By virtue of that fact, they are customers. But the thing that can be attributed to success is how you define customers based on the relationships that you have with them personally.”
When it comes to considering how to build successful relationships across the widest possible segments, expand your definition of customer. Anyone who expects you to deliver at some level qualifies as a customer, ranging from the traditional definition to the level of subcontractor to consultant.
“When there is that expectation that you’re going to deliver, however that’s defined by any one of those constituencies, regard them as customers,” Hillman says. “So the key is, it may be a cliché, but you need to deliver what you promise. If you do that basic blocking and tackling, you’re going to build relationships over the years.”
Examine how it is beneficial to keep your focus on your pledge over the long term. Concentrating on short-term gains disregards the consequences that may happen and can give a distorted picture.
“Customers may leave, but they will always come back if you’ve dealt with them with integrity and delivered on your promise,” Hillman says. “And if you don’t, some customers are very difficult to get back.
“If you bat with a good average of delivering on your promises and value those relationships that build because of that, whether it’s internally or externally ? brokers, customers or the folks you work with every day at the company ? that’s a pretty good recipe for success over a long period of time.”
Learn the value of metrics
If you are going to focus on evaluating relationships, performance metrics can help a company compare its operation against customer requirements and the value created. In short, metrics can help keep the company on track and ensure consistency.
In an organization the size of Anthem with 5,000 employees, metrics are part of the core value of continuous improvement. In order to maintain a competitive position, a company has to strive to better itself.
“There are all kinds of activities that end up impacting either your service level, your ability to grow your business and ultimately whether or not you are able to produce a successful bottom line,” Hillman says. “Every input or activity that can impact any of those three, measure it. If it moves, measure it.”
For instance, WellPoint’s member health index measures more than 40 areas of the quality of care an individual has received, some of which were developed using national standards and others which were developed by WellPoint’s clinical experts.
There’s a unique connection that Anthem uses, as do the other divisions of parent organization WellPoint Inc. They directly link improving the health of members to the compensation of every associate in the company. Improvements in members’ health index are used to help calculate employees’ annual bonuses.
“These could be things like were we able to move the needle along the percentage of women who had mammograms,” Hillman says. “Were we able to move the needle on individuals who have reached a certain age needing other types of preventive measures and scans?”
Another indication of how well a company is doing in terms of growth is an analysis of its market share.
“When you couple market share with the fact that you’re growing at the same time that you’re losing some percentage of your business (in part due to the economy), that means that your value proposition for those folks already on board is resonating with those who are just deciding to do business with you,” Hillman says.
Metrics are not only important in helping gauge a company’s performance with its customers, but for its employee-management relations, as well.
Conduct an annual employee survey to measure strengths and weaknesses between both parties. The goal is to nurture continuous improvement.
“Tie every manager's performance review to some degree to associate survey results,” Hillman says. “It is something to take very seriously. Benchmark yourselves not only within the industry but outside the industry to what's considered best in class as well as to what is the average across the entire organization.”
If you are clear about the mission of the company, what the core values are and the level of seriousness that is given to employee engagement, you will obtain positive results.
Watch for threats
Relationships that stand the test of time are those that have received consistent care and feeding ? and that have survived challenges. A company that continually monitors them is in a position to prevent derailments.
Complacency ranks as one of the top concerns that can sink a relationship. It can prevent a company from seeing it needs to change and grow.
“Don’t take any success that you're having for granted,” Hillman says. “Take your eye off the ball, the train leaves the tracks, and it's a bumpy road to get back on. When that happens, you lose customers.
“You lose credibility. You jeopardize relationships.”
Promises made but not kept are often at the root of failed relationships. Going hand-in-hand with keeping promises is the proper attitude toward standardization.
“A second threat is not maintaining discipline in your decision-making ? deviating from the kinds of types of decisions that have helped you become a success and just becoming less disciplined,” Hillman says
While inconsistent discipline is equally a threat as complacency, its effects are different. Sticking to the standards that are ethical and morally right is a desirable quality. Human nature sometimes lets discipline slide just at the moment it may be needed the most.
“Being less disciplined is sort of moving the edges of what are acceptable decisions and non-acceptable decisions out a little bit,” Hillman says.
A third major threat is losing touch with your customers. It’s often said that the longer a company is around, the greater the danger it has of losing customers. Maintaining a personal connection comes down to building relationships, building trust, keeping promises and delivering.
While maintaining a connection can be a time-consuming process, it is necessary part of a disciplined approach to your business.
“You have to stay connected with your customers,” he says. “You have to understand what issues they’re dealing with. You can’t allow a competitor to come in and drive a wedge between you and your customer.”
How to reach: Anthem Blue Cross and Blue Shield in Indiana, (317) 488-6000 or www.anthem.com
Customer service and integrity should be top priorities
Measuring performance ensures consistency
Complacency is a top threat
The Hillman File
Born: I was born in Shelbyville, Ind., and I grew up in a small town called Fairland, now the exit off I-74 for Indiana Live Casino, which growing up in a rural farming community, I thought would never happen.
Education: Purdue University, with a bachelor of science degree in management
What is your definition of success?
Delivering on my promises, the ability to deliver on our promises, to our customers, to our sales associates, to our shareholders, staying true to the company’s mission and our core values.
What’s the best business advice you’ve ever received?
You can only lead from the front. There are many people who think they can lead from the back of the pack. To lead from the front, you must lead by example in all that you do. That’s a full-time effort. It’s not a part-time thing because your customers, your fellow associates or whomever you do business with will see through that in a second.
The second advice is you can’t fall off the floor, which has always been to me courage and conviction in your decision-making. If you’re confronted with a challenge, you have to make a tough decision and have the courage and conviction to make that decision, particularly if you are the leader of the organization because that is your job.
What was your first job?
It made me not want to be a farmer ? it was baling hay and detasseling corn. I was probably 10 years old, and it’s hard to detassel corn when you are only 10. [I wasn’t] tall enough. It was $1.55 an hour. I would have rather been paid by the tassel.
When Michael Brunner looks at all the challenges posed by the economy over the past few years, he has always stayed true to one thing: client satisfaction. While the economy has put everyone in a tough situation, Brunner makes sure that his clients are the No. 1 priority. M.J. Brunner Inc., a 220-employee, $200 million full-service advertising agency, understands that in a down economy you have to be stronger to push through or you don’t survive.
“One of the things I learned along the way is something that we absolutely have to and we did do is stay close to our clients,” says Brunner, chairman and CEO. “It is so important to remember that you’re not the only person going through this, they are as well. The last thing you want is to work your way through the down period and then find that once you’re through it, your client feels that you were very little or no value to them during that time.”
It is through the company’s continued effort to deliver success and its focus on a people-first culture that allows the ad agency to work with companies like H.J. Heinz, Huffy Corp. and GlaxoSmithKline.
Here’s how Brunner focuses on the client and consumer relationship and a strong culture to get great results.
Get close to customers
When tough times are eminent, it is critical that you find ways to help your clients improve their business. If you do, those efforts will be rewarded.
“I found it just makes more sense to get even closer, to be more sensitive and more aware of the issues and the challenges that they have,” Brunner says. “If you can find a way to really help them through that period, you’re going to be so much more valuable and particularly at the end of the downturn that relationship has probably been strengthened considerably. That’s one of the things that we’ve done or at least we’ve tried to do. In many cases, we’ve done it by being as creative as we can or inventive or imaginative in looking for answers to questions that they’re facing and problems that they’re having. It can go in lots of different ways, but when they need you most is probably when you need to be most sensitive to that need.”
Creating client satisfaction in a down economy takes more creativity and the ability to get results with fewer resources.
“You have to be very sensitive to their needs and to their problems and then help them solve those problems, which may mean you most likely have to invest more in resources than you normally would,” Brunner says. “That’s hard because in most instances their spending is probably down. I call it basic human nature. If I stay with you through a tough period or if I help you through a tough period, most likely when that tough period is over, you’re going to remember that. You just may have to do more with less in those kinds of times. You may have to find ways to answer problems that are very difficult, because you don’t have the resources that you normally would to do it.”
One of your most important resources is your team and the partnerships they make with clients.
“Our customers and clients are satisfied when we are building and delivering successful programs that drive results for their organization,” he says. “It takes a tremendous amount of communication and work that requires partnering with the client so that you clearly understand whatever their specific issues and needs are. One strategy isn’t going to work for every client. If the only tool you have is a hammer, then every problem looks like a nail. Every client is very different and has very different kinds of needs and has different marketing issues. Can there be similarities? Of course, but one size does not fit all. One size fits one and the challenge is finding the right size.”
To figure out the unique qualities of the clients you are working with, you need to have people responsible for those clients.
“The way we do that is we put teams on those businesses and those teams work with those clients over periods of time and the knowledge gets deeper and hopefully our approach gets stronger and better with each passing year,” Brunner says. “One of the first questions you have to ask is, ‘What problem are we trying to solve?’ Then you apply the necessary resources.”
Whether times are tough or not, it’s not enough to produce good results for your customers. You have to be looking to produce great results.
“If you’re not doing a good job with your clients you’re not going to keep them,” Brunner says. “That’s really the price of admission. It’s a matter of creating a program or campaign that catapults a client to the top of their category, one that achieves dramatic results, one that fires up the entire internal organization, one that’s built around a big game-changing idea that transforms their business; a radical departure from the norm. Those are the kinds of things that I would say are going above and beyond.”
To offer that kind of result, you have to really get inside your client’s business and they have to be willing to let you in.
“You really have to understand the nuances of what they do, how they do it, how they make a profit and the best way to do that is to saturate yourself in their business,” he says. “The best way to try and understand what the client is all about is to try and live the client’s world. You’re not going to be able to do it forever, but you’re going to try and learn as much and as quickly as you possibly can about what factors ultimately become important to help you grow their business.”
Understand the consumer
A big part of getting close to your customers is to understand who they do business with and who their consumers are.
“It’s important for us to make sure that we’re lockstep with today’s consumer,” he says. “Today’s consumer is equipped very differently than yesterday’s consumer. I say that because that’s due to marketing technologies. One of the things we did was launch a lab called B-Hive lab and essentially it’s an idea incubator and it’s focused on inventing new ways to engage people on the go through emerging technologies. It’s incumbent upon us to make sure that we’re understanding the technologies that are in the consumer’s hands so that we can take those and make those meaningful to our clients situations. If we’re not out there in front, then why should the client invest in us or expect us to be the agency that handles their brand? Things like that are investments that you make when you look at your existing clients and you say, ‘Those clients are very important to us and we need to be ahead of the curve.’”
Staying ahead of the curve is critical when it comes to keeping pace with consumers. If you don’t, you won’t be effective for your clients.
“You want to know how their consumer thinks, how they behave, how they act, what drives them to a purchase,” Brunner says. “The better you understand what they do is imperative so you can put the kinds of programs together that will be most effective in terms of driving that purchase intent and getting them to be interested in whatever your clients’ products and services are.”
To find out what drives consumers to make certain choices you have to put in the effort.
“Some of it is plain old-fashioned hard work,” he says. “You need to learn the category and then you need to learn where your client is in that category and what the factors are. There’s no short cut to do that other than just spend time digging in. On the consumer side, you have to look at the past research and design different tools that will allow you to get to the way the consumer thinks.”
Create a winning culture
The culture of your company says everything about your business and when client service is your top priority, you have to have employees that enjoy their work.
“If you do not have a motivated and inspired employee base, you will never have clients for a very long time,” Brunner says. “If you don’t have a motivated and inspired employee base, then I don’t know how you can be doing the best job you can for your clients, because they’re cross-purposed then. There is uncertainty. I want them to know where they stand so we can put all of our energy, all of our efforts into the clients we have so we can be mutually successful. We can win and the client can win. That’s what we want at the end of the day.”
To keep a company running well with employees that strive to deliver the best results possible, you have to have a culture that breeds success.
“We have a culture here that’s dubbed people first,” Brunner says. “It’s about letting the people in this organization know that they’re important, that they are critical and that they are the difference in terms of what we do and that we will make all decisions in that direction. We will make decisions that will let them know how important they are and try to constantly find ways that either reward them or incentivize them to perform at the highest levels.”
No matter what your business is your people are the ones that make it successful or not and you have to be able to recognize and reward that fact.
“Ultimately, your own internal resource is what makes the difference at the end of the day,” he says. “Make sure that your top performers are rewarded and that you provide an environment where people not just feel comfortable, but they feel challenged and they know that there is an expectation of growth. They expect the company to grow and you expect them to grow.”
To grow your culture you have to be open and honest with employees about how the company is doing and where it is going.
“Communicating and being honest seems pretty simple but it’s not always done,” he says. “You have to let them know where you stand. It’s important for them to know where the organization is. You serve no greater good by telling them one thing when they’re seeing the company perform in another way. I think one of the most important attributes a CEO can have is to go out and be honest and frank with the entire employee base. I think they deserve that. They’re making decisions on their livelihood by working in your organization. At the very least you should be able to be candid with them and let them know where the organization is.”
Communicating the position of the company allows you to focus more on the task at hand.
“If you’re letting everyone know where you stand, then you can put all your energy and all your effort into trying to accomplish whatever it is that you want as opposed to trying to send mixed signals or not sharing information and making people worry,” he says. “If you’re making people worried then how productive can you be. All those things do not bode well for client service.”
Having a people-oriented culture is more than just letting people know where the company is. It’s letting them know where they are as an employee.
“It’s letting them know how they’re performing,” he says. “It’s having meaningful, honest appraisals and evaluations on an ongoing and regular basis. If you don’t do that then they don’t know where they stand. What you ultimately want to do is give them that opportunity to improve, to be better, to be stronger, and you want to do your best to make sure that happens.”
HOW TO REACH: M.J. Brunner Inc., (412) 995-9500 or www.brunnerworks.com
- Remain close to customers to meet their needs
- Understand your customers’ consumers to better serve them
- Create a culture that breeds a winning attitude
The Brunner File
Chairman and CEO
M.J. Brunner Inc.
Education: Bowling Green University, Communications and Education; MBA from the University of Pittsburgh
What was your very first job, and what did you learn from that experience?
I was a paper boy. Delivering newspapers in many ways was the perfect primer. I quickly learned that better service meant better tips. I also learned how to manage money.
What got you into advertising?
My dad always had an interest in advertising even though he spent his career working in a steel mill. Obviously, it was enough of a spark. I also had two cousins that were in the industry, and I found it fascinating.
What kind of ad was the first one you worked on?
A newspaper ad for Isaly’s
What is your favorite type of advertisement to create?
One that gets noticed
If you could invite any three people to lunch, past or present, whom would you invite and why?
I would invite Bobby Jones, Ben Hogan and Jack Nicklaus. After a thorough discussion on their approach to life, we would go out for a round of golf. I can’t think of a better way to spend an afternoon.
Steve Germain had some tough decisions to make. Even the area’s largest auto group, Germain Motor Co., hadn’t been immune from the 2008-09 economic recession.
The auto industry overall experienced a 35 percent drop in sales in November 2008. The next month, Germain had to lay off 60 workers. The following August, he closed Germain Chevrolet, a dealership earmarked by General Motors to be shut down.
“It went from bad to worse, and it really did force me to re-evaluate my strategies and priorities, and once we got through that time, we fortunately were in a position to review the way we did business,” he says.
Germain, president and CEO of the $914 million company, saw the situation not only as his biggest challenge, but also his golden opportunity to improve what he saw as the key to getting more done with less ? employee engagement.
If he could get employees more engaged in their work, it would offer a long-term solution to lower costs and boost productivity. And with 1,042 employees in 18 dealerships over four states, that was a tall order.
“The only way that you can do that is that employees need to have a better understanding of the direction of the company, and you have to get more people going in that same direction,” Germain says. “Then you can get more done with less. You can’t get more done with less if they are less engaged or no more engaged than they were five years ago.”
Germain was committed to the idea and felt it was crucial for employees to understand that he and his top level managers supported the initiative.
Here’s how Germain has been able to get employees more involved in their workplace environment, more willing to contribute ideas, and on the way, earn more for themselves and the company.
Seize the opportunity
To help employees get a better idea of the direction of a company, Germain realized there may be no better time than a recession when employees are concerned about job security. Employees are more willing to make changes, at least in the short term, which could lead to long-term benefits.
Germain first studied the importance of employee engagement, understanding the value of increased productivity and attendance, customer focus and generating support of change. Those areas would define the direction of the company.
“Those things are all tremendous benefits,” Germain says. “When you’re trying to drive down costs and increase productivity, engaged employees, in my mind, are the low-hanging fruit.”
He found that new employees, in general, are more engaged than older employees ? and it gave him an opportunity to use that information to look for ways to sustain that engagement in new employees and rekindle it in older employees.
“Sometimes your best salespeople are the new ones that you hire,” Germain says. “Their first month is their best month. Then their sales start to fall off.
“Why? It’s perhaps because their level of engagement starts to drop. Their engagement drops, their productivity drops.”
Statistics show that employee engagement drops 9 percent in the first year and 12 percent in the second year.
Germain established that the key was to keep the engagement level where it was, to keep employees as excited and feeling as good about their decision in year five as on day one.
“If you can do that, there’s no question that you can be a leader in your industry as it relates to revenues,” he says.
He realized that he had the opportunity to engage employees now more than before because they were more willing to listen to senior management.
“Prior to the recession, they didn’t listen to me quite as much as they listen to me now, right or wrong,” Germain says. “I think my message is better, and I think I’m communicating better, I have dealership meetings every six weeks, and I have the opportunity now to influence the way that our employees go about our business.
“But you have to work at it. It’s a lot of work to engage employees, even in today’s environment, but there is an opportunity now that maybe we didn’t have prerecession.”
Once Germain made the cost-cutting moves to weather the recession and sold himself on what needed to be done, it was time to recover ? and discover the hidden talents of his employees.
The second step was to determine the current level of workforce engagement. Simply put, the engaged employee is one who will go the extra mile to bring a high level of satisfaction to the customer. If you don’t know how willing your employees are to give the extra effort, you’re not going to be able to know where you need to be. One of the simplest methods is to conduct a survey.
“If you go around asking your employees are you engaged, what are they going to tell you?” Germain says. “Or, what are they going to tell their superior? Through a survey, they will be more honest than they will be otherwise.”
Germain made sure the survey asked frank questions, such as “Do you feel valued as an employee?” and “Do you feel your opinion counts?” It was important to cover all the bases to get as true a picture as possible.
“That’s part of the pain,” he says. “We did see a higher than average score (with an overall grade of 3.83 out of 5 with a 54 percent response), but we also saw a lot of opportunities where we could improve.”
To get the information, Germain chose online survey company Survey Monkey, which he felt was aligned with what he was trying to accomplish. Employees were assured their responses were anonymous.
“It’s important that if you go through the survey process, you encourage your employees to return it,” Germain says. “Do the survey by department; it’s important to understand by department, but you certainly don’t want to know by individual.”
Germain and his staff decided that to be of continued value, surveys should be taken on a regular basis, perhaps twice a year. That way, results could be compared over time and any progress or setbacks could be noted.
Choose where to start
Once he thought he had a good idea of the pulse of the work force, it was time for Germain to devise plans to get people going in the same direction.
The first task was to review the survey results to see what was suggested most often ? and to determine if it supported the goal of more employee engagement.
Employee surveys often point out several concerns, and Germain expected to find some enlightening comments.
“I was surprised that the level of engagement wasn’t higher; we pride ourselves on knowing our people as best we can, but we still saw huge gaps between what we think and what they think,” Germain says. “It’s as important to understand what they think as it is for them to know what I think.”
Common themes that are often mentioned by employees on surveys are management and communication. Openness between management and associates is necessary if the goal to generate support for change to succeed.
In that respect, Germain felt that employee suggestions for mechanisms to express their views should be taken seriously.
As a response to employee concerns, Germain and his management team created employee committees, one for each dealership. The director of human resources initially chaired the committee. Managers selected the members in the first go-around, and the hope is that the committees will become such a voice within the dealership that employees will actively seek positions on the committees. Feedback is expressed in a forum-like atmosphere.
“That’s something we are very excited about,” he says. “Members include one representative from each department, and they meet once a month.”
“You put together your ‘worker bees’ and they are going to be the ones to address employee engagement,” says Tessa Pekarcik, director of human resources. “Steve or I can talk until we are blue in the face about how we think this is the way the operation should run, and if employees don’t agree with it, that doesn’t increase engagement. Employees are going to be more receptive to their peers.”
Germain wanted to make members of the committee aware that the group is for the employees to help make the best work environment that they could have. In that respect, the committees are composed of members who aren’t necessarily going to tell you everything you want to hear ? they will be brutally honest.
Work with your findings
As committees started their meetings, employee members were encouraged to express their ideas and concerns. Now the real work began as discussions focused on potential solutions.
One of the first orders of business was to stress how important it was for employees to know that the committee members were going to be their voice ? as in a representative government. Results of the survey were shared with members at the first meeting for discussion, and the groups were urged to maintain their focus because it is easy to fall into the trap of just talking about grievances. Random discussions are avoided because they lead nowhere.
“With the committee, we try not to go off on tangents complaining about what is wrong,” says Jessica Germain, general manager of Germain Honda of Dublin, who attends her committee’s meetings.
“These things are issues that you can’t change, but working with what you have, what you can do ? that will have a positive impact on the community of employees.”
Once she found that issues such as trust among departments, accountability and teamwork were initial concerns in regard to improving employee engagement, employees were able to put the concerns in the context of having all departments’ best interests in mind.
When it comes to specific solutions, employees will decide what they think is the best manner to improve employee engagement.
“If you allow the employees to decide what they think is the best way to increase engagement, you’re going to end up increasing engagement even more,” Pekarcik says. “That is going to earn them money. That is going to end up making the company money.”
While employee engagement may be measured more in intangible results rather than sales volumes, Germain thinks that having the employee committees says that management does care, and that he and the dealership general managers are willing to listen.
“I really feel that having the employee committees has sent the right message and created more of a teamwork-type atmosphere,” Jessica Germain says.
As Steve Germain began the engagement efforts, he was willing to allow that it would take some time to see results of the initiatives.
“It’s a long-term strategy,” he says. “We’re not going to see our score go from 3.83 to 4.2 overnight. It’s going to take years.”
The initiatives, after all, are for the long-term survival of the company, and Germain hopes to turn it over to the fourth generation some day.
“You start that now, and 10 years from now, you will be a highly engaged company, and your margins will be greater than your competition,” he says. “You will have more sales than your competition, you will be able to attract and find the best people in the industry and they will be willing to stay longer.”
How to reach: Germain Motor Co., (614) 416-3377 or www.germain.com
The Germain File
Born: Columbus, Ohio
Education: Denison University. A good school and a good experience. I was a physical education major and got my teaching degree and thought maybe I might want to teach history and football. But I got into the car business. I never taught. I felt that there was more opportunity at that time to support a wife and perhaps children down the road by getting into the family business.
What was your first job?
My first job was a salesman down at my grandfather’s Fort Lauderdale Lincoln-Mercury dealership in 1978. That was a lot of fun for 22-year-old kid. I had a great time and learned how to sell cars. If I didn’t sell anything, I didn’t make any money. It was straight commission. I did that for a year. I finally talked my dad into hiring me into the family business and coming up here. The rest is history.
What was the best business advice you ever received?
My dad, Bob Germain, made it very clear that our employees are our greatest asset. He told me that early on, and he believed that. I’ve communicated that to our employees for the last 30 years. Every time I have a meeting, I would say that our employees are our greatest asset. Regardless of the franchises that we have, the buildings or the facilities that we utilize, our employees are our greatest asset.
What is your definition of business success?
Obviously, revenue over expenses. But it’s more than just that. It’s about running a good business, and a good business is not all about the bottom line, bottom-line sales, bottom -line profits. It’s about improving the lives of not only the family but of your associates. It gives me great pride when I see employees get married, have children, buy houses and invest in real estate or college education. I feel some sense of being a part of that. It’s a good feeling because as they are successful, I know that I’m successful financially and personally.
What are the ingredients to help you grow your business? I recently discussed hyper-growth with Michael Holthouse. He founded Paranet, grew it rapidly and sold it to Sprint for $375 million. He is now exponentially growing Lemonade Day, the flagship program at his nonprofit, Prepared 4 Life. Here is what you need to do to achieve hyper-growth within your own company.
Passion and purpose
Passion and purpose are the foundation of your business. Ask yourself and your team, why are you in that specific business? If your primary answer is making money, then you may grow in the short term but long-term, sustainable growth will be a challenge. Find your passion or find another business.
“Our passion at Paranet was to invent a new paradigm in the computer-networking world. It drove us,” Holthouse says. “And, our purpose at Prepared 4 Life is to help America’s youth develop business and entrepreneurial skills.”
Clarity of the business model
Understand and articulate with absolute clarity your core management philosophies that detail your business model and approach. If your core philosophies are ambiguous, achieving hyper-growth will be excruciatingly difficult.
“I strongly believe in a decentralized organization,” Holthouse says. “It is a business model that allowed us to produce rapid growth.”
Big, audacious vision
While your passion and purpose must create a sense of commitment, your vision must create excitement.
“I like fast-growing, high-impact organizations,” he says. “We set an audacious but achievable goal of reaching $100 million in revenue in five years. We needed a vision that inspired people. Everyone wants to be part of something bigger than them.”
Hyper-growth is rarely a linear path. You will have to be opportunistic and nimble. Your strategy must dynamically respond to ground realities and execution data. A stale strategy will kill hyper-growth. If you are clear about the business model and are nimble in your strategy then you can bring the right products to the market at the right time.
“Our strategy to find an intersection of interests with other entities such as schools, community and religious organizations has allowed us to grow LemonadeDay rapidly,” he says.
Scalable work processes
Hyper-growth involves rapidly scaling up your business. Small cracks turn into gaping holes as the organization grows. Therefore, you must ensure your work processes are well designed and consistent with your mission and vision. The interactions and handshakes between the teams, the roles and responsibilities, the expectations and accountabilities must be crystal clear.
“We held everyone accountable to predefined goals and gave them the authority to achieve the goals based on their talents and drive,” Holthouse says.
Hyper-growth is not for everyone. It takes a different mindset. The willingness to not just survive but thrive on change. You must hire the right people who understand hyper-growth, want to excel in that environment and have the desire and the wherewithal to succeed. The right culture provides the energy to help the organization self-propel itself to great heights.
“If you are going to reinvent an industry, hire the leaders in the industry — the eagles. Eagles fly one at a time, they are majestic, they soar; ducks you will find a dime a dozen,” he says. “Eagles are A players. They will help create the right culture.”
The focus on making it happen makes all the difference. Fighting the distractions, the ambiguities and the confusion and making relentless progress toward their vision are the hallmarks of companies who achieve hyper-growth.
“To be successful say what you are going to do, do it when you say it will be done, do it for the price you said, and if you do that consistently, your customer will never leave you,” Holthouse says.
Ravi Kathuria is president of Cohegic Corp., a management consulting, executive coaching and sales coaching firm, and he is president of the Houston Strategy Forum. He has been quoted in the Wall Street Journal, Barron’s, WorldNews, and featured on CBS Radio and the BusinessMakers Show. He is the author of the highly acclaimed book, “The Coherent Company, The Struggle for the Next Level.”
The co-founders of CHR Solutions Inc., a provider of technology and business solutions to communication services companies, come from very different backgrounds. James Taylor, chairman and CEO, grew up in Missouri and Arun Pasrija, president and COO, grew up in India. Regardless of their varied backgrounds, they run their 550-employee company in absolute agreement.
“You’ve got to go through and clearly agree on the core spirit of the
organization, the mission, values and philosophies,” Pasrija says.
It is through collaboration on the culture of the organization, the growth of the company and treating people with dignity and respect that they have built the company into a $50 million business.
“As part of being process-driven or process-centric, you need it to be part of the culture of the organization as you grow to be able to create size and scale,” Taylor says.
Smart Business spoke to Taylor and Pasrija about what has been crucial to the growth of their company.
Make mergers and acquisitions.
Taylor: We began to acquire technology services companies that had a common vision and mission and shared our philosophy of the world and were looking to be part of a bigger team to help us execute in this marketplace. We viewed it as a mosaic.
We recognized that to create this beautiful picture we needed to fill in certain pieces, whether they were clients, technology, locations or talented people that would help us execute. When we made acquisitions, we were simply looking at things to help us fill in part of that mosaic and create that size and dominance in that marketplace.
Pasrija: We ask two fundamental questions as we look at a merger or acquisition and we need to answer with a definite positive. One is what’s in it for our customers. Is this going to add additional benefit to our client base? If we can’t answer that with an immediate yes, then we’re going to pass. The second is what’s in it for the employees on both sides. It has to come across as this is better from a professional growth perspective. Those two questions … have to be answered in a resounding, ‘Yes, there is benefit.’
Taylor: If it’s good for the clients and it’s good for the employees, it will be good for the shareholders. There are a lot of deals that are focused on the shareholders and not the employees and the clients.
Align your culture.
Taylor: The first thing you have to do is write it down. You have to have agreement on it. It is so important to get people together. If you don’t communicate, people will create their own communication. You can’t communicate too much and you have to write it down and articulate it.
Pasrija: When you look at the whole integration, there are things that you look to do right away, but there are other things that might take nine months. Those are the things you can’t force to go any faster. The actual culture will require time to get gelled. Part of the cultural integration is that we have certain core philosophies which are nonnegotiable. There are certain core values of the organization and a core mission and all of those we share. You have to create the clarity of purpose, the clarity of accountability and the clarity of the core values.
Taylor: We spend a lot of time on culture and organization. Every month, we do either a company chat with all of the employees in the company or a ‘lunch and learn’ to educate them. Every meeting we start off with our basic sheet that talks about why we’re here to help our clients succeed, our mission, our vision and our goals. We do that so we can make sure people align with them.
Pasrija: You have to make sure you collectively come up with what are the right performance measurements. As long as you can make it analytical and where you can actually measure that’s going to help you make decisions. There are two kinds of measurements. One is your financial results. When you look at financial results for a month, the month’s already gone and all you can do is learn from that history. There are other indicators called leading indicators, for example, the sales pipeline. That’s a leading indicator of what the sales might look like in the next quarter. You have to make sure you can focus on a few critical indicators.
Taylor: Pick three [indicators] in every area and keep it simple. If I give you 53 indicators, you can’t track 53. What are the three most important? Could there be some places in business that have five? Absolutely. Could there be some places that have one? There is a general rule that if you’re in the three-to-five range you’ve got a pretty good feel for what that activity is.
We all have visions of grandeur and visions of what we want to create and build and do, but you’ve got to be careful that there’s reality set into how you’re going to get there. That doesn’t mean don’t dream big. It doesn’t mean dream audacious, but you’ve got to figure out what the dots are to connect to that point.
HOW TO REACH: CHR Solutions Inc., (713) 995-4778 or www.chrsolutions.com
When Douglas Ewert first joined The Men’s Wearhouse Inc. in 1995, the specialty retailer of men’s apparel only had 200 stores and just the Men’s Wearhouse division. More than 15 years later, the company has 1,200 retail locations, six divisions, 17,000 employees and had 2010 revenue of $2.1 billion.
Ewert has seen the business grow quite a bit over the years, and as part of a succession plan, on July 15, 2011, he became the company’s new president and CEO. Previously serving as president and COO, he knows it will be a tough task to fill the shoes of founder George Zimmer, who will continue to serve as executive chairman of the board.
“I’ve learned a lot from George,” Ewert says. “Probably the two biggest are if you take good care of the employees, they’ll take good care of the customers, and secondly to listen to my instincts.”
Armed with years of knowledge in the retail industry and some guidance from Zimmer, Ewert is continuing to focus the company on a strong culture, customer satisfaction and retaining a No. 1 market share.
Since Ewert had a senior leadership history with the company and the management didn’t change much when he took the CEO role, Ewert had to focus on the strong aspects and initiatives of the company.
“Because I’ve been here for 16 years and George is going to be here for another 16 years at least, this has really been a succession story of continuity not of change,” he says. “One of the first things that I did do was reorganize the organization chart a little bit so I would have fewer direct reports to allow myself to fly at a higher altitude and spend more of my time focused on strategy rather than tactics.”
Part of that focus on strategy was aimed at getting more familiar with the investment community surrounding the company.
“I’ve met with a number of our shareholders, potential investors and analysts that cover our stock,” he says. “So I’ve spent time in the investment community more so than I have in the past. I think it is important for a CEO to understand the needs and motivations of all of their stakeholders: employees, customers and investors.”
The Men’s Wearhouse has always made sure that it pays attention to its stakeholders and most importantly its employees.
“If you had to rank all of our different stakeholders, we put our employees at the top of the list,” Ewert says. “We believe that if you take good care of the employees then all of the other stakeholders will get taken care of. It’s always been a focus in this company and I look forward to continuing that style of leadership.”
Ewert and the other executives in the company make sure that they are accessible to every employee in the organization. They want to know employees’ opinions and concerns.
“Every employee can contact me,” he says. “They have my phone number and my e-mail address and they have George’s. We hear from people throughout the organization every week, because we want to know what we can be doing better. Some of the best ideas that we’ve ever had have come out of the field. For example, our tuxedo rental business, which is something that we’re very proud of and is driving a lot of nice top and bottom line results for us, came from a suggestion from one of our store employees. So keeping those lines of communication open, remembering that our employees come first is just part of our heritage. We have a rich company culture that has always valued that.”
To get employees to voice their individual ideas, opinions and concerns, you have to be available and you have to be willing to listen.
“One of the keys is to spend more time listening than talking,” he says. “You have to be accessible. You have to be open to changing your mind with new information. It’s important to not to fall in love with your own opinions. You have to be open especially in retail and especially in this economy. Our company, just like most, has had to reinvent itself somewhat in the last couple of years. That took input from the entire organization and then winning the hearts and minds of the entire organization.”
Opportunities are all around you and as a CEO you have to make sure you utilize every avenue available in order to foster those creative ideas.
“If you hang on to your opinion on what the business requires too firmly, you may miss an opportunity or an emerging opportunity,” Ewert says. “A number of things need to be present for an organization to foster creativity. First, the CEO needs to believe that they don’t have to have the best ideas, but rather have to recognize the best ideas. Then you need to foster an environment that encourages creativity. Trust needs to exist throughout the organization. Trust that the ideas will be heard. Trust that they won’t be criticized and trust that employees will be recognized for their creative contributions. Finally, leaders have to create the space for people to share their ideas.”
To run a company as big as Men’s Wearhouse takes a lot of commitment and a lot of travel. If you meet those needs, employees will see that they have access to you.
“We do a lot of training and cultural events in our company and George and I both attend as many of them as we possibly can,” he says. “Every spring, we bring every store manager and assistant store manager out in California for three-day meetings and George and I make presentations at each of those meetings and spend the evenings socializing with all of our employees, giving them our perspective on the business and giving them an opportunity to share their perspectives. We have 55 holiday parties throughout North America every fourth quarter and George and I attend as many of them as we can. We visit a lot of stores and that just gets back to that access. I think most of our employees feel comfortable with us and feel comfortable talking to us.
“You have to be accessible. I wander through the office every day. I pop into offices and ask questions. They come into my office and ask questions — the door is open all the time. I visit stores and spend a lot of time talking to employees in the stores. With e-mail now and BlackBerrys, access is 24/7.”
Maintain market dominance
Having a No. 1 market share doesn’t mean you’re safe and have time to relax. You have to constantly be looking at ways to continually improve and protect that spot.
“One of the things that we did as a company about a year and a half ago was we changed our business model from being an every day value retailer to being a promotional retailer,” Ewert says. “We found that in this economy our customers weren’t responding to every day value pricing, so we adjusted our model to be much more promotional and the customers responded nicely. Our business is strong right now and we’re having a great year. We reinvented our company to figure out how to maximize our opportunity in what everybody’s defining as the new normal — this sluggish economy.”
To mitigate the challenges that the company is facing, Ewert has had to lean on his team to help find the best solutions.
“You need to surround yourself with very competent people and listen to their ideas and suggestions and trust your own instincts,” he says. “When it comes to reinventing your business those are pretty big decisions. You’ve got to be careful and you can’t do it all yourself. You need a strong team to reinvent the company and you’ve got to keep the lines of communication open so that everybody understands the direction you’re going and everybody is pulling on the oars at the same pace to move the ship, so-to-speak.”
The company had to leverage its suppliers to combat rising commodity prices, which helped increase its buying power. It also hedged certain materials like wool to help absorb cost increases.
“Most of the changes that we had to make we were able to test the change before we implemented it throughout the entire network,” he says. “We moved cautiously, and we didn’t make any dramatic changes without some assurance that we thought it was the right move and was going to work. You have to utilize the people around you and listen to their advice. You have to try and prioritize the areas where you think you can make the biggest impact.”
If you think protecting one No. 1 market share is tough work, Men’s Wearhouse has to look after five No. 1 market shares.
“We’re the largest seller of suits in America and the largest seller of suits in Canada and the largest tuxedo rental operator in both the U.S. and Canada,” Ewert says. “We’re the largest corporate uniform company in the UK and the largest retail dry cleaning operator in Houston. Our opportunity is to continue to drive our business with that strong dominant market share.”
The company’s biggest focus is on its prominent tuxedo rental business and its blooming Big & Tall stores.
“I think there is a lot of opportunity for us to continue to take more market share in tuxedo rental,” he says. “We believe that we have a compelling strategy. As a national retailer, we believe that we have market dominance throughout the country. Our competitors are primarily small independent regional players. For an out-of-town wedding where the wedding party is spread out around the country, we’re the logical place for that type of event, because you can go into any one of our stores and get measured and get fitted and pick up your tuxedo in one store and drop it off in another or pick-up your tuxedo in the city where the wedding will be held so you don’t have to travel with it.”
The company’s Big & Tall stores also continue to do well.
“Our Big & Tall business is growing at a double-digit pace and we are aggressively growing that business in all three of our retail divisions,” Ewert says. “In Big & Tall, we are increasing the amount of inventory that we carry and we’re also testing three free-standing Big & Tall stores — one in Houston, Manhattan and Dallas.”
By focusing on two of the company’s strongest markets, the company is doing what it can to remain on top.
“You need to evaluate the strengths of your brands,” he says. “You need to keep a close eye on the macro-economic conditions and the outlook. You need to keep an eye on the strengths and leveragability of your management team and the needs of all of your stakeholders.”
Ewert isn’t just reinventing areas of the company to beat business challenges. He is making these moves to also beat the competition.
“The pitfalls of being the No. 1 market share leader in a category is that everybody is trying to take that away from you,” he says. “In order to protect and preserve your position, you need to continually reinvent yourself, because whatever you’re doing this year, your competitors will be doing next year. You need to focus on constant reinvention and paying attention to your customers as the best ways to make sure you can retain that dominance.
“We have 1,200 stores and our employees are facing customers every day and getting feedback every day from those customers. We get hundreds of phone calls and e-mails from customers every week. We have a customer service call-in center where if somebody has a question or suggestion or compliment or concern, they can reach us. If you’re not satisfying the needs of your customers, you’re not going to have customers for very long.”
HOW TO REACH: The Men’s Wearhouse Inc., (800) 851-6744 or www.menswearhouse.com
- Lookout for employees and be accessible to hear their ideas
- Trust your instincts and ideas from your management team
- Reinvent areas of your business to keep market share
The Ewert File
President and CEO
The Men’s Wearhouse Inc.
Born: Riverside, Calif.
Education: Graduated from San Jose State with a bachelor’s degree in business
What was your first job and what did you take away from that experience?
My first job was as a bus boy in a restaurant. The only job I ever got fired from was as a disc jockey in a roller rink. I got fired because I wasn’t playing the kind of music the audience wanted to hear. I guess 7- and 8-year-old girls don’t like Van Halen. The lesson there was to listen to your customers.
What is the best business advice you’ve ever received?
I would go back to the things that I focus on most from George: listening to my own instincts. Don’t let self-doubt creep in too much.
How would you define success?
It’s always been important to me to be in a job that I enjoyed and I’ve been fortunate that, for 26 years, I’ve looked forward to coming to work every day, and I think that’s pretty rare. If you’re doing something you love, you’ve got to consider yourself successful.
In the corporate world, the suit-and-tie style is no longer the typical attire, how have you seen it change?
I think we’ve seen the suit transform itself from being a Monday through Friday, 9 a.m. to 5 p.m. uniform to being an element of your wardrobe that has a reason for being at times in the evenings and on the weekends. We’ve seen the suit jacket become an important piece to be worn with a pair of jeans and an open-collar shirt. You go back 10 years and you never would have seen something like that. The suit has become less of a uniform and more of a utility piece.
Do you have any plans to film your own Men’s Wearhouse commercial?
No. I promised my wife that I would not become our spokesman on TV. That was actually a condition of me accepting this job.
A while back, there was a problem with the chicken breast at Johnny Rockets.
“It didn’t cover the whole bun correctly,” says John Fuller, president and CEO of The Johnny Rockets Group Inc.
It’s not unusual for a restaurant chain that specializes in burgers and sandwiches to have some issues like that. With nearly 300 locations around the world, Fuller and his staff are constantly tinkering and adjusting in an effort to keep the food, service and atmosphere at every Johnny Rockets consistent.
The real story is how Fuller achieves that consistency. It’s not through top-down mandates. It’s from the restaurant level, as Fuller frequently seeks input from franchisees and company-owned store operators on how the entire chain can do things just a little better.
To improve the chicken breast, Fuller went into the field — as he does once every few weeks — and started talking to the people on the front lines.
“We talked about different ways to cook it, or the possibility of going with a different product,” Fuller says. “Do we change the cooking style or try some other things? Through that process, we’re going out and asking our franchisees for input. Certain franchisees will test some different things. Then we’ll come back and look at what had a positive reception, we’ll work it through other restaurants, and we’ll come back and share the data. Based on that feedback, we’ll come back and try to make a final decision.”
In some ways, it might be easier for Fuller to simply tell store operators what to do and how problems should be solved. But Fuller believes the best ideas often come from the people who interact with customers each day. He believes that, as a company leader, you should leverage the brainpower and experience of your people to drive the company forward.
Fuller — who has a finance background and also serves as the company’s CFO — views his job as one of support. If you want to adequately support your employees, you should be prepared to enforce standards, coordinate resources and ensure that the people who have expertise in your field have whatever they need to perform their jobs at an optimum level, no matter where they are in the system. It’s an approach that helped Johnny Rockets generate approximately $300 million in revenue last year.
Focus on people
With a background in finance, Fuller is used to managing by the numbers. Numbers are important. You can’t lead a business without knowing where you stand in regard to your key metrics. But in his time at the top of Johnny Rockets, Fuller has learned that you can’t afford to let metrics get in the way of people.
“I have worked at other companies in the past where a lot of the systems the people in the field used to report information to the accounting department were done to make the accounting department’s job easier but were kind of onerous to implement in the field,” Fuller says. “It was kind of the accounting tail wagging the operations dog. That’s why I think it’s important that everyone understands who their customer is and how to provide service to them.”
Fuller has long held a belief that the more that leaders are able to talk to the people they lead, the better the result for the entire organization. If you deal with reports and spreadsheets first and your people second, your business will suffer.
“More district manager and general manager time on the floor is what we should be striving for,” Fuller says. “If they’re spending more time doing administrative stuff, more time crunching numbers and generating reports, then we in corporate have failed them as a support center. Because the more time they’re on the floor interacting with guests, you can’t help but improve the experience that way. Providing a great customer-guest experience and giving customers a reason to come back, is our whole reason for being.”
That’s why Fuller gets new members of management in a customer-focused frame of mind from the get-go. Each new management-level team member at Johnny Rockets has to spend a week in a restaurant, serving in various capacities. The assignment allows new managers and executives the opportunity to see operations through the eyes of their new subordinates. It also allows them to have direct contact with customers and gain a feel for what they expect from a trip to Johnny Rockets.
“If you’re going to provide support to employees, you have to see what their needs are,” Fuller says. “Don’t guess what their needs are, go out there, talk to them and ask them. Feel it and live it. Don’t lose sight of the fact that, in business, it comes down to the customer interaction. So you always have to know what it is you do, and what you can do better in terms of providing guidance and support.”
Be the culture
Fuller has a few other reasons why he wants new ideas, policies and procedures to well up from within the Johnny Rockets organization — namely, what and where. As in, what are the circumstances surrounding a particular location, and where is the restaurant located?
With several hundred locations and untold miles separating all of them, not every restaurant has the same local resources or the same needs. That means in order to maintain consistency, Fuller has to relate the Johnny Rockets culture in a way that makes sense for each audience in each location.
It could be in words or it could be in actions, such as finding common solutions to the same problem.
“One current issue we have is that we’re changing our music,” Fuller says. “Depending on what music system you have, we have to provide three different solutions. It’s knowing what each of our restaurants have and what that particular item is. Each restaurant is not set up the same way, so you can’t be foolish enough to start mandating things without understanding the implications on all sides.”
Fuller wants to hear about what matters to each restaurant operator, what would allow them and their staffs to work at an optimum level. But he still has to maintain standards that allow all locations to stay true to the Johnny Rockets brand.
It’s a fence Fuller has to walk between brand recognition and embracing a culture that allows a certain degree of flexibility so that store operators can tailor their offerings to meet the needs of the specific market.
“I’m not necessarily interested if they all want to serve pizza and wraps, things that are inconsistent with what we want to be as a restaurant,” he says. “We’re burgers, shakes and fries. If you want to move into something that is radically different, go open your own restaurant. However, if someone wants to try serving different kinds of soups at a location in the Northeast during the winter, go ahead and try it and see what you have. Come back and let me know if it’s something that we could leverage throughout the rest of the chain. Ultimately, you just have to make sure they’re focusing on things that are consistent with the brand and the company. We do it on a case-by-case basis.”
Fuller views a CEO’s role as someone who sets firm boundaries, but leaves enough space between the boundaries to allow for ideas and innovation — and encourages team members to move freely within the boundary space.
“You have to give your people opportunities and enable them,” he says. “I’m not going to micromanage someone who is doing their job right. I’m going to enable them and allow them to do things within the guidelines and mandates that have been laid out. We have a very good flow of communication going back to our franchise support center, and try to be very transparent within the organization as far as where we’re at, where we need to be better and where our challenges are.”
As the head of the company, the key to promoting the culture is to relate it to each employee. You need to show employees how their daily tasks allow the company to strengthen its brand, reach for its goals and remain profitable.
“You have to emphasize to everyone how they can be a key member of the organization,” Fuller says. “You have to show them what role they play and how they play it. To me, it’s reporting back through financial results and tying those results to their specific role, showing how they impact those results. You emphasize how they have made a difference, and how they can make more of a difference.”
Find the right people
In order to build a solid support system for your organization, the responsibility lies not just with the corporate management providing the support. It is also the responsibility of the employees to take the logistical, financial and cultural support that you offer and turn it into something that advances the company. You need team members who are willing and able to take advantage of the support system to better themselves and the company.
That means finding the right people who not only bring the talents and skills to the table for the position but also have an attitude and values that match the culture.
If you want accountants who do more than just crunch numbers, you need to hire for that, because you can’t teach personality traits and personal values.
At Johnny Rockets, Fuller wants team players who meet management in the middle on the communication front. Management provides resources, and people throughout the organization are willing to take a wide-angle view and understand how their utilization of those resources affects the company as a whole. The mutual understanding of the big picture helps create dialogue throughout the various levels of the Johnny Rockets system.
“Whatever role they play in the organization, I want them to know the endgame in that role,” Fuller says. “You can be an accountant and just kick out numbers and put them in a pile. But tell me how you use those. How have business decisions been made off of the deliverables you provide? I want to get everyone thinking about the deliverable that their department provides, what decisions are made from that, and what cog you are in the overall organizational structure of the company.”
In the end, Fuller says it is a service-oriented mentality that will enable your company to continuing growing and achieving. Management feels the need to serve employees, employees feel the responsibility to serve the company, and everyone wants to serve the customer.
“Go out and meet your customers, talk to your customers, and don’t just sit in the office,” Fuller says. “Go and find out what is happening in the department, go and ask what you can do to help. Go and see if there is anything your department can do to help others. It’s a mindset, and over time, you can spot pretty quickly who has it and who doesn’t. You can see who would rather stay in their office, and who wants to go out and help others.”
How to reach: The Johnny Rockets Group Inc., (949) 643-6100 or www.johnnyrockets.com
Last December, John Fuller, president and CEO of The Johnny Rockets Group Inc., was the subject of an episode of the CBS reality TV series “Undercover Boss,” in which the chief executive of a large company volunteers to work undercover as a low-ranking employee. Filming took place in October 2010, at several Johnny Rockets locations in the New York and Washington, D.C., areas, as well as a day filming at Fuller’s house. Smart Business spoke with Fuller about his reality television experience.
It was great for me, because I had really not worked in a restaurant. Getting out there and being able to see things without people knowing who I was, it was perfect for what I wanted. The show worked quite well and I got a lot of great experience that I wouldn’t have gotten otherwise.
That worked well for me. It also taught me — because I’m very analytical in how I think — how to simplify things. All that really matters is improving the process of the guest-server interaction. Develop a rapport, make eye contact, trying to make them smile once in a while. You build a relationship for the 20 minutes or so that you’re going to be with them, and if you can do that, you’ve kind of won the battle. If you build that relationship, people are more forgiving if things don’t go right and more excited if things go great.
I also learned about the passion that these people working in our restaurants have, and how excited they are to be a part of the Johnny Rockets family. It shows how each location that shows up as a line on a spreadsheet here is really a living, breathing collection of people who have a passion for what we do.
It was really good and it really emphasized the importance of being in the field. That’s why I have made it part of the training for anyone we hire at the manager level or above, so everyone can experience enough of what it is like to work in that environment, to cook during a lunch rush, to serve eight tables at once and all of that. It is important for management to have some kind of empathy with the people working on the front lines.
Jim Hallett sees his termination as a CEO in a 2005 corporate shakeup as a very humbling experience.
“It was a good thing,” he says. “I needed to leave the company because the culture was getting so bad, and I needed to go away, but from the day I went away, I always knew I was going to try to raise the money and be able to come back.”
But that goal was not out of vengeance.
“There was no retribution whatsoever,” he says. “I was not interested in retribution; I was not interested in getting even. I was interested in getting the company back, getting my job back and putting people in place with the passion, experience and energy to run this company.”
The company, ADESA vehicle auction and its finance division, was doing well financially when Hallett was fired, but by 2007, times had changed, particularly with its culture. Unbeknownst to Hallett, the company had put itself up for sale while he was looking for backers.
“The building was not a very happy building,” Hallett says. “I would be taking over a company that was floundering ? a company that was not performing, a company that was bureaucratic, political, stale. People didn’t enjoy their jobs, people didn’t like to come to work, people didn’t talk to each other. They didn’t interact with each other.”
Hallett solidified a $3.7 billion deal with the help of private equity investors for ADESA, a finance division and a salvage auction division, named it KAR Auction Services Inc. and as CEO, set out to transform the culture in 60 days.
Here’s how he accomplished it in 30.
Lay the groundwork
Turning around a company culture takes analysis and effort. But Hallett had a position of advantage with his firsthand experience. He was familiar with the players in the organization, and even after his termination, he followed the company, tracked the stock and anecdotal information on the street.
He was faced with the realization that turning around the dysfunctional situation would be his biggest challenge.
Hallett would be the CEO, the cheerleader as it were, and he envisioned a loyal and passionate work force listening to his encouragement.
“A cheerleader is what companies sometimes lack,” he says. “They need that guy who can rally people, who can create a culture, create a vision, and then get everybody to line up and march in the same direction.”
Hallett told his new management team he would have the company marching in lock step in 60 days. By using his skill at getting people to line up and buy in to a common vision, it took half that time.
Evaluating the senior management was a critical experience, and it led Hallett to decide to clean house.
“I looked at everybody,” he says. “Every one from the old guard left. I brought some people back into the organization. I recruited some people into the organization. The most senior management completely exited the building. They did an ‘exit left’ and I entered right.”
The evaluation process was straightforward and involved a simple formula.
“I was really identifying people who knew and understood this business, who had experience, who were passionate about this business and loved what they do every day and then who were relationship-driven with our employees internally and our customers externally and with the industry,” Hallett says.
“Anybody who had any of those qualities was shoved aside when I got fired because the new chairman didn’t want to have anything to do with anybody who had dealt with me. If he thought they were somehow still speaking with me, they were history.”
The procedure requires a bit of intestinal instinct as well.
“You use your gut,” Hallett says. “Use your uncommon common sense, street sense, people sense and knowledge, passion and drive for the business. Know what the company needs and know what the industry wants.”
About three to four months in advance of the takeover, Hallett had the plan for his team in place.
“Know exactly who you want, know exactly what you want the organizational chart to look like,” he says. “Quietly and confidentially put the chart in place and have everyone show up on the first day.”
Spread the culture
Sharing the message among employees that a new culture is entering the building takes the skill of a negotiator and the charisma of a leader. Sometimes a bold statement at the beginning of the transformation shows it’s not business as usual anymore.
Hallett removed the main entrance reserved parking spaces for management executives on the first day, and the message was clear ? all employees were going to be treated equally.
“So if you get there first, you should pick your parking spot,” Hallet says. “That in itself says more about the culture without saying a word. You’ll hear, ‘Oh, my God. All this reserved parking’s gone. We don’t have to look at the expensive cars. We don’t have to go by these things when we walk into the building.’”
Next on the agenda was setting the frame of mind for management. Much as military forces have rules of engagement in dealing with the enemy, management alignment spells out standard operating procedures and rules.
“Then hold a management alignment meeting; it could take a couple of days,” Hallett says. “What you’re doing is aligning management and establishing the rules of engagement with your senior management team saying, ‘This is the way we are going to behave. This is the way we are going to talk to each other. This is how we are going to conduct ourselves, how we will handle conflict, how we will handle these different situations. This is how we are going to act with each other.’”
Management needs to commit to the program.
“If you can’t sign up, then walk out,” Hallett says. “Because you know what? The biggest thing we do as human beings is we need to know how to talk to each other.”
It’s important that the CEO and senior managers need to be secure.
“They need to understand what they do well,” Hallett says. “They need to understand what they don’t do well. They need to give everybody the opportunity to be able to express themselves and bring a good idea to you.
“Sometimes the best ideas come from the most unlikely sources. We just need to give them an opportunity to tell us. And I have to be willing to talk about it without feeling threatened or without feeling somebody’s overstepped their bounds or that someone’s taken over my job.”
Being direct needs to be the standard approach.
“When I want to say no, I need to say, ‘No, we’re not going to do that,’” Hallett says. “On the other hand, people have a hard time doing that. They want to beat around the bush, and they want to hem and haw, and they want to take days to do something that you can do in 10 seconds.”
Establishing the rules of engagement allows you to create a culture where employees feel that the door is open.
“They can walk in and we can agree to disagree, but we are always going to be respectful of one another,” Hallett says. “Have the rule in writing. So when senior management agrees to that, make sure you take that a level down, to your direct reports, and make sure your direct reports take it to their direct reports and all of a sudden, it filters through the entire company, and you’ve really created a culture.”
Along with the rules of engagement, Hallett created a mission statement and core values. “The first thing is, somebody said, ‘If you don’t stand for something, you stand for nothing,’” Hallett says. “So you’d better stand for something. We created our core values, such as honesty, integrity, customer service. So what do those core values do? You need to reference those whenever you’re making decisions. That’s how simple it is.
“When you have to think about whether you’re going to do something or not, whether something is within integrity or whether it has to do with employee relations or customer service, or if it has to do with one of the values of the company, you reference your values, and they’ll pretty much guide you as to what decision you ought to make.”
Build the success
Getting employees to engage in the new culture is a process that is accomplished a little bit at a time. It requires coaching, with frequent huddles to make sure everyone is on the same playbook.
By holding breakfast meetings every Friday with 20 employees from different areas of the company, Hallett got the chance to meet the entire company over a year and a half.
“I told them about me, the history of the company, the vision for the company and some of the things we wanted to do and where we’re going ? however we are going to get there ? and got them to tell me something about them,” Hallett says.
“I’d start those meetings with, ‘OK, let’s go around the room, and let’s tell the group something that nobody in the room would know about you.’ It’s amazing how people engage. Then tell them something they didn’t know about you.”
Gestures like that established employee willingness to buy in to the culture. To make the transformation less intimidating, managers should be aware that cultural learning experiences will be many, and at many locations.
“Culture happens in the hallways, culture happens in meetings, culture happens in the parking lot, in the coffee shop,” Hallett says. “Culture happens everywhere around you.”
Watch for red flags that could derail the infusion of company culture ? gossiping is a sign that there could be a problem.
“Nobody would ever walk into my office and complain about somebody else without bringing the other person with them,” he says. “When you feel people being political, people might be saying something but meaning something else and that’s just street sense — you know the guy’s full of it. He’s really making a statement about something else but he’s really trying to make a statement about himself. That just comes to bad street sense, right? It’s pretty hard to get that stuff past me.”
Hallett says that he must not only set an example for employees but set the pace.
“The speed of the boss is the speed of the game,” he says. “I know that everybody watches what I do, what I say, how I behave. I think that rubs off very quickly. I’ve gone to people and said, ‘Hey, you know what? I think you maybe need to not have sharp elbows — maybe you need to be a little more careful with the way you handled that situation or the way you spoke to that person.’ I’m not afraid to tell someone, ‘You know what? That probably wasn’t the best way to handle that situation.’ We are really a company that tries to focus on these values.”
Aside from the intangible aspects, tangible improvements such as upgrading technology go far in enhancing company culture.
Hallett realized that employees were becoming disenchanted with outdated computer systems and had to address the situation and those feelings. It meant spending enough to bring office technology up to speed.
“First of all, it really reinforces to your employees that you are committed to the industry, and you’re committed to them,” Hallett says. “Secondly, the customers absolutely feel it in the way that they do business and transact with you. If they’re not feeling the technology spend and the investment in technology, quite frankly, they’re not going to trust you to do business with you.”
The results of the culture change were dramatic, and business exploded at KAR Auction Services for its 13,000 employees. Revenue topped $1.8 billion in 2010.
“It was like hitting a light switch,” he says. “Customers were basically saying, ‘Where do you want me to send cars?’ ‘How can I help you?’ I mean, not every single customer, but our business took off like a rocket.”
If management is committed to employees, that fact will encourage a harmonious working relationship that leads to longevity — and low turnover.
“Make everybody feel like they’re loved, and they’re well-compensated and they’re fairly taken care of ? and yes, there will be challenges, like everybody else,” Hallett says. “But at the end of the day, nobody will be looking to get out the door.”
The Hallett File
Born: Kingston, Ontario, Canada, on the beautiful St. Lawrence River. My father was a railroader and my mother was a stay-at-home mom with three little babies. My dad died when I was 8 months old. So I never knew my dad and my mom never remarried. We were dirt poor. I lived in a house that burnt coal in the winter and had an outdoor toilet.
Education: I went to Algonquin College in Ottawa, Canada. I got a degree in recreation management. I was going to college because all my friends were going to go, and I didn’t want to have to study anything really hard.
What was your first job?
I mowed lawns and shoveled snow. Then I became a newspaper boy. If you’ve ever had a newspaper route in the country ? in the city, you can deliver 100 newspapers in 20 minutes ? in the country, it would take you an hour and a half.
What is the best business advice you’ve ever received?
A guy once told me, a great mentor, a great friend of mine, ‘You know what, Jim? There’s nobody better than you.’ And he elaborated, saying, “You’re no better than anybody else, but there’s nobody better than you.’ The same guy also told me, ‘You know what is the difference between you and the guy you admire or the guy that you look up to or the guy that you want to be?’ And his answer was, ‘One good year.’ And that’s the truest thing that’s ever happened in my life. It took me one good year. That’s all it took.
Whom do you admire in business and why?
I admire a guy by the name of Pat Butler. He owns multiple car dealerships and multiple RV dealerships in Canada. I admire him because, first of all, of his entrepreneurialism. He is very quick, very fast, very decisive, very agile — all those words that go with an entrepreneur. I’ve kind of modeled myself after that. I like the fact that on the outside he’s a crusty, rugged old character and on the inside he’s the most compassionate man I’ve ever met in my life. We talk every week.
What’s your definition of success?
Professionally, when everybody wins. Employees, customers, shareholders. And you know, that was really the big thing. When that management team was here for two years, there were some that took care of themselves and ran off with a pot of gold. When I’m done, there will be hundreds, thousands of people that will be taken care of. I think I can say that with a great deal of clarity.
How to reach: KAR Auction Services Inc., (800) 923-3725 or www.karauctionservices.com