When Nancy Diller-Shively founded Cambridge Home Health Care back in 1994, the company was operating out of two offices, with employees working toward the goal of helping more and more people improve their health by using in-home health care services. In the past 17 years, Diller-Shively and her employees have still not lost sight of that goal, and the result is a company that has grown to 37 offices and employs more than 2,000 people across Ohio and Pennsylvania.
From 2005 to 2010 alone, Cambridge added 15 new offices to expand its reach of services and provide more comprehensive care for patients. In this time period, the company has experienced business growth of more than $12 million in revenue, added more than 600 jobs and made numerous contributions to its local charities. Today, its staff provides care to more than 3,000 people each week, whether it’s through one-on-one nursing care, personal care, homemaking services or companionship.
At Cambridge, employee recognition is paramount. Because the company knows how dedicated its employees are to making a positive impact on its patients’ lives, it makes numerous efforts to recognize staff members for their hard work and commitment. An example is the company’s PERC Award, given out quarterly to six employees who are nominated by co-workers for having a positive attitude. The award includes a certificate of recognition and $100. Other recognition includes annual awards for RN of the Year, LPN of the Year and the Home Health of the Year Awards, which honors selected nurses and aides for excellence in caring for patients.
The company also looks out for its patients, not just with the care it provides but by always seeking to serve their best interests. Since Cambridge understands that many of its patients receive services through federal and state funding, it also works to educate state legislators about the home care industry so that they can make decisions that positively affect patients.
How to reach: Cambridge Home Health Care, (800) 772-2929 or www.cambridgehomehealth.com
Larry Lawson, president and CEO of eCardio Diagnostics LLC, a provider of cardiac monitoring products and services, has had to check his own pulse once or twice because of the rapid growth his company has seen in the past few years. ECardio has been one of the fastest-growing companies in Houston and has no plans to slow down.
“We’ve continued to experience solid growth,” Lawson says of the $44.8 million, 350-employee company. “That growth has come from our ability to continue to meet the needs of our customer base through the suite of products and services that we offer. We are rapidly becoming the No. 1 company in the world doing what we do.”
From excellent customer relationships to innovative products and a drive to be the best, eCardio is positioned to achieve great things.
Smart Business spoke to Lawson about how he keeps growing a company that’s already at the top of its game.
Develop a vision. You have to provide a vision. You have to listen to your senior leadership team on how to carry out the vision and listen to each of the teams about their daily implementation and what it takes to meet the needs of the customer. Sometimes the things that you hear back will provide you with an opportunity to expand your vision, which will further enhance your strategies. It not only gives employees a sense of contribution, but it also can be an important element to future success.
Once you provide the vision of your company, you need to listen to your senior leadership on how to carry out that vision. Many times, that senior leadership will bring things to the table from previous employment and previous opportunities they’ve had in the past. It’s very important for a CEO to listen to his senior team about these opportunities. A lot of CEOs think they have all the answers and they don’t do a lot of listening and I think that’s a huge mistake. The more successful CEOs do exactly that. They have the initial vision, but they rely upon their executive team and their senior leadership teams to carry out that vision and to come up with the incentivizing programs that will give them the results they are looking for.
Look to other industries. I think it’s important for every CEO out there to see beyond their industry that they’re in today. Even though our primary focus is in remote cardiac monitoring, we see technology trends in other companies that have been helpful for us to work with as we develop our technology. All CEOs need to look beyond their industry and look at all technologies beyond their industry.
You have to go to seminars outside of your own industry. Attend seminars that deal with the financial culture of their business and learn from other industry leaders, other key opinion leaders of other industries. I think that’s really beneficial to CEOs to get outside of their own forest so they can see how other trees are grown. CEOs need to look to other areas of high growth where they could extrapolate from.
Communicate with customers. We listen to our customers. That’s how we started our company, by listening to our customers, what they wanted and needed most. The cardiologists and electro-physiologists who are ordering our monitoring diagnostic tests for their patients know what tools they need to provide to get the best diagnosis possible. That technology stems from our ability to work with and understand our clients’ needs and our physicians’ needs.
One thing that we do that our competition doesn’t do is that we have very close conversations with our customers and clients. How we know that we are going above and beyond what our competition is doing is the physicians are telling us that we are. They’re collaborating with us and helping us develop processes and controls. That’s how we know we are exceeding our competition. We are continuing to grow and exceed year after year in our business where our competition isn’t.
You have to stay in constant contact with your customers and listen to your customers. You have to stay in touch with all those clients who are ordering your products. They know the tools that are needed and you have to listen to them and give them the tools. That’s how you know whether you’re keeping up with the change needed by adapting and innovating.
HOW TO REACH: eCardio Diagnostics, (888) 747-1442 or www.ecardio.com
Kings and presidents alike have depended on experienced advisers to help them make difficult political decisions for centuries, and CEOs of the world’s leading public companies trust their boards of directors to help them run their businesses. So why do CEOs and owners of smaller, private companies often go it alone?
Business owners often have trusted management teams that they rely on to make important day-to-day decisions that keep operations running smoothly, but when it comes to making tough decisions about growth strategies, organizational changes or succession plans, those same managers may be inexperienced or less than objective. When the outcome of a decision may mean abandoning a favorite business line or impact their own positions within the company, the best, most-trusted managers can struggle with objectivity. But even if they can remain objective, some managers are too isolated from shifting market environments and changing customer preferences to provide truly valuable counsel.
That explains why so many business owners can feel lonely when faced with the most complicated, business-altering decisions, but it doesn’t have to be that way. More and more business owners are looking outside their companies for expert advice. Small companies and family-owned businesses are finding that advisory boards can be helpful in assisting owners, CEOs and executives as they work through complex issues.
Outside advisers can bring a variety of skills and experience that a small company may not be able to afford on a full-time basis to complement the knowledge and strengths of a company’s own management team. In addition to providing expertise that may not exist within the organization, outside advisers can also be counted on for objectivity. Because they have nothing to gain by paying compliments or delivering flattering but flawed reports, external advisers are likely to share honest feedback that can be especially valuable in making decisions.
When compiling an advisory board, companies should try to identify representatives from various stakeholder groups, such as customers, vendors, investors and strategic partners. It also makes sense to consider appointing professionals, such as accountants or lawyers, who can weigh the financial, legal or regulatory implications of business decisions. Another worthy appointee may include someone who can perhaps open doors in a new market or fortify existing relationships. There is no such thing as Match.com to help business owners identify the perfect advisers. Chances are that the best candidates are people who are already involved with the company in some way.
As for how and when to convene an advisory board, some groups meet quarterly for retreats while others meet monthly over lunch, e-mailing or texting regularly between face-to-face meetings. Regardless of the venue, it is generally agreed that advisory boards are most effective when they are focused on high-level strategic and tactical issues. In other words, make it meaningful. While it may be fascinating to sit around with industry experts pontificating business theory, your most valuable advisers are more likely to attend meetings where pertinent and timely business issues are being discussed and relevant decisions are being made. After all, most advisory positions are pro bono, so other than the occasional free lunch, their reward comes from seeing a business they are involved in grow and flourish. At the end of the day, an effective advisory board can provide much-needed support for business owners and CEOs, so they no longer have to feel so lonely at the top.
John Allen is president and COO of G&A Partners, a Texas-based HR and administrative services company that manages human resources, benefits, payroll, accounting and risk management for growing businesses. For more information about the company, visit www.gnapartners.com.
CEO Dennis Allen has grown Hattie Larlham from a small operation to a large, multifaceted organization, meeting new challenges with innovative, entrepreneurial solutions to expand the company’s mission of caring for people with developmental disabilities.
As care improves, people with developmental disabilities are living longer, healthier lives, resulting in additional educational and socialization needs. Allen has led Hattie Larlham in creating social enterprises to employee people with developmental disabilities, providing them with skills, job experience and confidence to succeed in the work force. The latest social enterprise undertaken by the company is Hattie’s Garden, launched in January of this year. The gardening vocational program expands Hattie Larlham’s vocational training options into the realm of sustainable agriculture and also expands its services to people with autism.
Among the other social enterprises started under Allen’s leadership to employ and train people with developmental disabilities are Hattie Larlham Doggie Day Care & Boarding, a cage-free pet boarding operation offering training in animal care; Hattie’s Café & Gifts, a chain of nine local coffee shops; Creative Arts, a program facilitating artistic expression; and Hattie’s Vending Co., a vending company that services 79 machines in Akron and surrounding areas.
Allen’s dedication of vision has propelled Hattie Larlham to new heights. He has helped substantially grow the operating budget and scope of services of the organization in the last 23 years, taking the organization from a $7 million annual budget to a $32 million budget. The number of people Hattie Larlham can extend care to has also expanded under Allen’s direction, from 180 families receiving care when he started to more than 1,500 children and adults currently. Allen has significantly enhanced the organization’s ability to innovatively improve the lives of people with developmental disabilities.
How to reach: Hattie Larlham, (330) 274-2272 or www.hattielarlham.org
When Stacey Gillman Wimbish was named president of The Gillman Cos. in 2008, she didn’t have much time to enjoy being named to her new position. She took over right at the height of the economic recession, and in just one day in November, she had to let go of 150 of the company’s then 900 employees. The recession’s full force had fallen on the automotive industry. The Big Three, Ford, GM and Chrysler, were all in financial trouble and that meant that dealerships would suffer, too.
“That’s what faced us during the recession and our reaction was to cut expenses, and that meant employee count, and it was really, really hard rebuilding,” Gillman Wimbish says. “There was nothing we could do about it.”
Although it seemed like nothing was going right in the auto industry, Gillman Wimbish remained focused and rallied her employees to adapt to changes in order to push forward and leave the past in the past.
The $500 million 760-employee owner and operator of 14 car dealerships has had to fight through unprecedented recessionary times as well as inventory setbacks due to the earthquake and tsunami that hit Japan earlier this year.
Here’s how Gillman Wimbish pushed through the recession and an uncertain industry to keep The Gillman Cos. performing as one of the top car dealerships in Texas.
Brace for change
To say the condition of the auto industry wasn’t good in 2008 and 2009 is an understatement. The industry was severely underperforming and the companies at the forefront were in the midst of federal bailouts. In an industry that is hot one minute and cold the next, you have to be ready for change.
“During the recession here in Texas, we had two direct-hit hurricanes on our business, we had $4 gas, at least 70 to 80 percent of all customers financed their cars and lenders stopped lending,” Gillman Wimbish says. “General Motors went bankrupt, and we have two General Motors stores. Pontiac dissolved. Dealers were getting letters in the mail saying we’re not going to renew your sales and service agreements. Thankfully, Gillman didn’t get one of those letters, but it was a very high-stress time.”
When chaos is happening all around you, you have to have a plan ready to move forward and be able to communicate that plan throughout your organization.
“Today, we say, ‘Let’s work; don’t worry,’” she says. “These times demand change. You have change whether it’s natural disasters or poor economic conditions or internal management restructuring; change is hard on your employees. The best way to approach it is to have a plan. You can make mistakes along the way but have a plan [and] communicate the plan: ‘This is what we’re going to do to get through this.’ Lay out expectations and be consistent with your message. Make sure you stay the course and don’t bounce around with your plan. If you can do that, then the best part is at the end when you can thank your team for making it through.”
A plan is only good if it accomplishes the goals you have set to achieve. Make sure that what you plan to do can be measured and improved upon year after year.
“It’s always best to keep it simple,” she says. “Whatever you decide to do, whatever plan you come up with, you have to make sure you measure it so you can tell if the plan is working. When you ask folks to change their routine, it is a matter of presenting your plan and training them on how you want it done, defining expectations and then constantly measuring. My weapon of choice is hard facts. We measure ourselves against everything — against other car dealers, other name plates and, of course, fierce and fun internal rankings. If you can measure it, then you can improve it. That’s how you can monitor what changes you’re trying to instill.”
Change is an ongoing process that your entire organization has to be on board with in order for your company to be able to ride the fluctuations of an uncertain industry.
“You can never stop changing,” she says. “The times are moving too fast to relax. If it’s not hurricane readiness or economic meltdowns or $4 gas coming back or a tsunami on the other side of the world, you have to react and go faster. You have to have folks that will change. If you have employees too set in their ways, then they need to go. We don’t do anything the old way. Old wisdom serves you well, but new technology will make you better and stronger and faster. You can never stop changing and looking for ways to go faster. At the same time, you have to be able to keep calm and carry on. You have to breathe when these curveballs come up. Don’t lose control and don’t give up.”
Learn from experiences
Over the past year and a half, the auto industry has made a big comeback. However, it wasn’t long until some car dealers had to withstand inventory shortages due to the natural disasters that struck Japan in early 2011.
“In this environment, it’s been very nice to have some diversity,” Gillman Wimbish says of having both domestic and import dealerships. “The recession is over so the most recent challenge has been the tsunami and the earthquake that happened on the other side of the world. The ripple effect is production of these cars and that means that our summer inventories are going to be very low. Instead of selling 1,300 new cars, we’ll probably be down to 1,000. So we’re going to be down 30 percent. Through the first four months of 2011, we’ve been on a post-recession high. It’s been an exciting 25 percent increase over last year, but now we have another setback to last year’s sales levels, and sadly, that’s going to rob us of the best-selling months of the year.”
What The Gillman Cos. endured three years ago will play a big role in how the company gets through any future tough times. Just realizing that change is a crucial part of your business can make adaptation easier.
“We’re not planning to just turn off our marketing or suffer through the lack of sales volume,” she says. “We did that during the recession, but we’re not doing that now. In fact, we’re going to do exactly the opposite. We’re going to press on, and we are going to have to change a little bit and sell both new and used cars. We’re going to provide a clear path, stay the course, and offer a lot of reassurance that the dealership is financially strong, and together, we can handle all these curveballs.”
That mentality in a leader is critical in order to be resilient. However, that mentality has to carry throughout the company in order for employees to know they can help.
“I have a great team at the top, but I can’t do it all,” she says. “If you involve more people and you involve them in your recovery plan, that will help make you more efficient. If you tell your employees and managers the challenges that you’re facing, they can be part of the solution. They will offer to step up and help and that will bring you closer together. When you all pull together, it becomes that much easier to pull through.”
Part of pulling together and getting help from the employees around you is being honest and open with them about what is happening in the company.
“One of the things that we have done really well through these hardships is we disclose,” Gillman Wimbish says. “There are a lot of companies out there that hide a lot of their financial statements. We disclose our financial statements and encourage department managers to dig in and find ways that we can be more efficient. There’s not an account within Gillman Cos. that’s a secret. If you create a culture of, ‘They don’t need to know,’ that’s not using the tools you have at your disposal. You need as many eyeballs helping you as you can or else you’re limiting your success. You’re limiting yourself if you don’t disclose your hardships, successes and challenges.
“You should also tell the truth. Employees get worried and they don’t want to hear what’s happening from the ‘Today Show,’ they’d rather hear it from you. Tell the truth, whether it’s good or bad, don’t cover anything up. It’s important, and it’s actually reassuring to them. I’m amazed at how many team members step up and help us through something because they want to feel like they are part of the solution.”
Look through the customer’s lens
Change is not and cannot be the only way a company gets past tough times. A company has to also look at what it is best at and continue to do that and improve it. For Gillman, that meant customer service.
“You have to look at things through the customer’s lens,” Gillman Wimbish says. “I want to treat every customer as if they were my neighbor. They need to get a quality product that you stand behind, sold with honesty and integrity, follow up after the sale and have sincere appreciation for their business. There is a ton of competition out there and the only thing that sets you apart is the service you provide.”
Gillman not only wants to make new customers, but prides itself on having repeat business. If your company doesn’t emphasize customer service and process improvement, you will lose out to companies that do.
“If you treat everyone as if they were your neighbor that you’re going to see everyday … and your neighbor is happy with you, then they will send you more customers,” she says. “You can’t be hiding behind the bushes trying to avoid things. You need to see your processes and customer touch points through the customer’s eyes. You can always do a much, much better job of this. Have customer touch point meetings within your management. You may think your website is clear and full of all the data that is relevant, but is that what the customer is looking for? You need to do more think tanks about the customers’ needs and wants.”
While putting yourself in the shoes of your customers is a crucial part of improving service, you have to also make sure that employees are enjoying the work that they do.
“Another thing that CEOs have to understand is that employee satisfaction equals customer satisfaction,” she says. “We have 760 employees, and if the one employee that you encounter has a bad attitude that day, then you translate that as a poor reflection on the whole face of Gillman. So you need to sincerely have solid employee satisfaction in order to provide a good reflection and a good impression on your customers. You want your employees to be proud of where they work and you want them to have clear direction in their job and confidence in management. If your employees take pride in where they work, they will perform there jobs with confidence.”
Improving the levels of satisfaction among customers and employees takes measuring and monitoring. Competition is what will let you know whether improvement is needed.
“We love competition,” she says. “We love to win, and we’re not afraid of our results, even if we’re in last place in a certain ranking. I won’t ever hide from that, and through awareness of that and getting my teams input, we’ll climb the ladder and improve. In order to monitor, you have to measure. No matter where you are, if you can measure it and keep the awareness in front of folks, you can improve. Don’t try and do too much all at once. Break it up into pieces.”
Climbing the ranking ladder comes back to the satisfaction of your customers and employees. It has to be your top priority to stay out in front of your competitors.
“It’s a fun, happy environment that you have to try and create, because happy employees will equal happy customers,” she says. “Don’t be afraid to ask the customers. Ask them where they’re having problems or where the clogs are and then try to modify based on that feedback. You may think you have the greatest processes in place. You need to have a few meetings specifically pretending to be a customer and try to gauge how they feel about that. You have to challenge yourself to think through their lens.”
HOW TO REACH: The Gillman Cos., (713) 776-7000 or www.gillmanauto.com
The Gillman Wimbish File
Stacey Gillman Wimbish
The Gillman Cos.
Education: Attended the University of Texas
What is the first car you ever had?
A red 1981 Pontiac Firebird Trans-Am.
If you could choose one car on your lot to drive, what would you choose?
I’m driving a Nissan Armada because it holds kids and dogs.
Who is somebody that you admire in business?
My dad, Ramsay Gillman, and my former boss and former COO, Jay Gould. Both of them allowed me to make a lot of mistakes and learn from them.
Remembering Ramsay Gillman: It is with deep sadness and regret that I must announce the death of Ramsay Gillman, my father and our board chairman. Ramsay died at age 67 at his home on Friday, June 3. We miss his guidance, wisdom, affection and humor. He was an inspiration to me, my brothers and my co-workers.
Ramsay followed his father into the car business starting at Frank Gillman Pontiac GMC in downtown Houston. He grew our company from one dealership to 14 in five different cities across our great state. His vision and determination will be hard to match.
My dad’s strong discipline and customer service excellence has been instilled in our dealerships and will continue to guide us in the future. His principles of honesty and integrity will continue to lead us as we move forward.
One card I received read, ‘We will never be the same as we were before this loss, but we are ever so much better for having had something so great to lose.
When A.G. Lafley became Procter & Gamble’s president and CEO in 2000, the company had 10 billion-dollar brands. When he retired from his position as chairman, president and CEO in 2009, the company had 23 billion-dollar brands. Viewed as one of the best chairmen and CEOs in P&G history, Lafley accomplished what he did through a focus on innovation and the consumer.
Four billion times a day, P&G brands like Gillette, Old Spice, Tide, Charmin, Pampers, and Duracell touch the lives
of people around the world. Lafley and Chris Thoen, former director of innovation and knowledge management at Procter & Gamble, spoke last November at the Ernst & Young Strategic Growth Forum in Palm Springs, Fla., to share their insights into how innovation and consumer focus has been the key to P&G’s success.
“The biggest decision we made was to move to an open innovation platform,” Lafley says. “The problem at P&G in 2000 was not that we weren’t inventive. The problem with us was that we weren’t turning that invention into innovation that created customers, that benefitted customers, that created value for customers or a better experience for customers, and that’s all I wanted to do.”
The drive and focus on innovation Lafley instilled in the company during his time there is now one of the most important aspects of the organization’s business.
“Our belief is that innovation is the way for a sustainable competitive advantage and business growth,” Thoen says. “Everyone in the organization breathes it in and out every day. At Procter & Gamble, we see it as the cornerstone to develop the best possible products for consumers everywhere in the world. Innovation has been a great game changer at P&G, especially over the past 10 years.”
P&G had net sales of $78.9 billion in fiscal 2010. Here is what Lafley and Thoen had to say about how the company’s biggest advantage is its ability to innovate.
Innovate for the consumer
P&G innovations have become so successful and a part of people’s daily lives because the company innovates its brands with the customer in mind 100 percent of the time.
“I’m a big believer in pushing the idea, the innovation and the technology in front of the prospective customer very early in the process,” Lafley says. “I learned this working with a lot of very good design shops. We used to spend way too much time and way too much money designing and engineering pretty ornate prototypes. I pushed us to prototype very quickly and prototype very crudely. Consumers are smart. … You just want them to get the idea.”
Not only does P&G innovate with the customer in mind, but it strives to understand its customer base for new products.
“For us, the consumer is the boss,” Thoen says. “It’s the consumer that hands over the money to the cashier and makes a choice to buy a product of P&G or a competitor’s products. So for us, it’s really important to understand what the consumer wants and to be able to deliver that experience. That means understanding the consumer fully. To go forward with that, it’s finding the best possible innovations to put those into the products.”
Once consumers grasp a concept for a product, you have to test it to see if the product holds true to its purpose in a real situation.
“I also believe in getting into some kind of transaction test,” Lafley says. “You don’t know if you have something until somebody will part with some money. You can run all kinds of research and people will say that they are going to do something, but you can’t believe any of it until you actually have to reach into their pocket and pull out hard-earned money, hand it to somebody else who is going to take it away from them and then get that product to try it.”
Innovating products that customers can’t live without doesn’t come without trial and error. You have to be willing to fail and work until you get a product that consumers want.
“The failure rate is high; that’s part of the game,” Lafley says. “Many fail multiple times. We just introduced a new chemistry foam-based feminine hygiene product that we worked on for 13 years. We failed so many times with that technology I can’t even tell you. But we stuck with it because we knew if we delivered it, it was going to deliver protection and security that no other existing technology could come close to. You’re going to fail and you’re going to fail multiple times. I always encouraged fast failure and I preferred cheap failure. I didn’t want to drop $50 million or $60 million. That’s a high price to fail even for a company with deep pockets.”
You can’t underestimate the importance of being able to innovate. You have to identify innovations that will help your business keep growing well into the future.
“As I’ve looked at a number of other industries, virtually all the value gets created by innovation,” Lafley says. “At our company, all of our revenue growth was either organic innovation — serving new brands or new products or better products and improvements in existing brands — or it was acquiring. In our view, an acquisition was a platform for future innovation. We didn’t buy Gillette because we wanted their male shaving business. We bought Gillette because we thought Gillette would be a fabulous platform for male personal care innovation for the next 50 or 100 years. Innovation drove everything.”
Hunt for innovation
Innovation isn’t always easy to come by. You have to be willing to ask for help and let partners in business know that you are innovating.
“For us, it’s tapping into a network of partners, ecosystems, and they range from the individual, the innovator, inventor, to small and medium enterprises, to big enterprises,” Thoen says. “Where the innovation comes from is not important. It’s finding it, doing the right thing with it in our context, putting it in the right products, and then delivering that innovation to the consumer.”
Even if your business is a known leader in innovation, you have to let it be known that you are looking for assistance with new innovations.
“I think we are still trying to get the word out,” Lafley says. “We did all kinds of things. We got a lot closer to our customers and I mean our retail customers, our distributors. We reached out to universities and research laboratories and we tried to get the word out to individual entrepreneurs. One of the things we did was we ran these big innovation fairs. We would run it for two or three days and it was sort of, you had to give if you wanted to receive. So we would show off some of our technologies that we were looking for partners on. Then we would invite people in to show off theirs. It starts out with making a couple of connections, ‘Gee, maybe I have an idea you might be interested in’ and you talk to a third party.”
P&G has a huge network of past and present employees, and it puts that network to good use.
“An amazing source for us was the thousands of people who had worked for P&G that had moved on and I reconnected with them,” Lafley says. “Believe it or not, former P&Ger’s around the world get together and they have these big events. They created a community where they connect on business ideas, they connect on entrepreneurial ideas and they connect on innovation and we started getting a lot of leads from former P&Ger’s, colleagues of former P&Ger’s, and friends of former P&Ger’s.”
The company also utilizes its websites to gain ideas. You have to use all your resources if you want to find the best innovations and ideas.
“We pose those same needs on our PGConnectDevelop.com website,” Thoen says. “A lot of people can go and visit that web site and say, ‘I think I have a solution for you.’ They then submit their idea onto the website. Within P&G, we have a back store process to go in and evaluate those ideas and see if they fit with our strategy and what we want to do. Once those ideas come in, we also have a commitment to those partners that have submitted those ideas to come back to them within a very reasonable time frame, four to six weeks, on whether or not this is an idea that has traction within the company and we want to move forward with it.”
To find or develop products or services that will become true game-changers, you have to be able to get different view points on that innovation.
“All innovation comes from people and you have to open them up and you have to open up to the world around you,” Lafley says. “All innovation comes from either a person or a small group of people making unlikely associations or connections that others don’t make. Everybody’s going to be looking at it, but you have to see it in a way that’s slightly different.”
Find what consumers want
To build upon your innovation, you have to know what consumers are looking for and what you can do to give them what they want. You have to know what products are and aren’t the right fit for your business.
“It’s clearly important to define what are the areas where we want to play and the areas where we don’t want to play,” Thoen says. “For many years, this was all about physical products, consumables. Those will continue to be important, and we have significant business units where we have developed a strong portfolio of products and will continue to strengthen the performance of those products and make sure they have the right value. But what we’ve found is that the consumer is not only looking for products, they’re looking for services. So as we set ourselves up for success in the future, we need to make sure that we follow that trend into the market and make sure that we don’t only have consumables but also have the right services.”
As you try to develop future endeavors you have to devote the time to those projects to make sure they fit.
“One thing you have to keep in mind is how do you balance the return from the present with the investment of the future?” Lafley says. “The other is what business are you in and what businesses do you want to be in and what businesses should you not be in and they are kind of related. I spent a lot of time with what businesses do we want to be in. And I spent a lot of time on making sure that we were putting enough resources, not just financial resources but human resources, in partner investment and acquisition investment for creating the future. I probably spent a third of my time on people development and talent allocation. I easily spent a third to a half of my time on innovation for the future and creating a strategy and a platform for the future.”
A big part of what an innovator does is create something that builds a relationship, creates a better experience, delivers some value and creates trust over time.
“We have a very simple business model in most of our businesses,” Lafley says. “We try to create a brand that makes a promise that you’re interested in and a promise that will make your life a little bit better. We try to deliver a product that delivers better value and a better experience in performance value. Then we try to generate some trial. We try to get some people who we think are most interested or most in need of the brand or product to try it. Then we hope that you like it enough and you come back and try again and will use it on a regular basis. That frankly, is our game and that’s the secret of success to our brands. They have higher trial rates and they have higher usage and loyalty rates and that’s what makes it go.
“At least with consumers, a successful brand is a promise that’s kept. A successful product is a promise that’s kept. If you can take it one more step and add some delight, I not only kept the promise, but I delighted you in some unexpected way then you’re off to the races. That’s what you’re trying to create.”
HOW TO REACH: Procter & Gamble, (513) 983-1100 or www.pg.com
The Lafley File
Former chairman, president and CEO, Procter & Gamble
Born: New Hampshire
Education: Bachelors degree from Hamilton College; MBA from Harvard University
Experience: He joined Procter & Gamble in 1977. He was named a group vice president in 1992, an executive vice president in 1995 and president of global beauty care and North America in 1999. He served as president and CEO from 2000 to 2009 and was elected chairman of the board in 2002.
Accolades: During his leadership, sales doubled, profits quadrupled, and P&G’s market value increased by more than $100 billion dollars.
He was named “CEO of the Year 2006” by Chief Executive Magazine. He received the 2010 Edison Achievement Award, an annual award recognizing leaders that have made significant and lasting contributions to innovation, marketing and human-centered design throughout their careers.
The Thoen File
Former director of innovation and knowledge management, Procter & Gamble
Education: Masters degree in science and chemistry and a Ph.D. in biochemistry from Universiteit Antwerpen
Experience: He joined P&G in 1988 as an R&D scientist for Fabric and Home Care. In 1993, he became section head of R&D for Fabric and Home Care. In 1997, he was named associate director of R&D for Fabric and Home Care. In 2003, he was promoted to R&D director of technology for Fabric and Home Care. In 2007, he was named Personal Health R&D director. In 2009, he became the director of innovation and knowledge management.
Albert Pujols is one of 1,600 employees who work for St. Louis Cardinals LLC, but it’s safe to say he’s quite a bit more famous than just about any of the others. And while his colleagues with the ballclub understand that professional baseball players, like other pro athletes, make a lot more money than the average American worker, it can still lead to occasional feelings of envy.
“Most people in the front office are aware that it’s two different economies under the same roof,” says William O. DeWitt III, president of the Cardinals. “But some people have a hard time with that. Some employees have a hard time with that. They see millions going to players, but then in the front office, it’s the real world as to how people are incentivized and compensated and things of that nature. I would say that would be one of the key leadership challenges of my job.”
And before you turn the page because you think this story does not apply to you, you should realize it’s an issue that can crop up in pretty much any kind of business.
“You see it particularly flare up as it pertains to sales folks versus nonsales folks,” DeWitt says. “Typically, in most businesses, the sales function has a different set of incentives and compensation features than non-salespeople. We call them revenue generators versus non-revenue generators in our business. I mentioned the difference [between] front office and players. Probably the more appropriate distinction is between sales and nonsales.”
You don’t have to be an expert in human relations or business culture to recognize that when you have a divide between groups of employees, it’s not healthy for your company. Here are a few things DeWitt does to bridge these gaps and keep everyone working toward the same goal of providing winning baseball on the field and exemplary customer service off of it.
Even the novice baseball fan understands that if it’s a tie game and there is a runner on third in the bottom of the ninth inning, it’s the batter’s job to get that runner home and end the game. Unfortunately, it’s not always as easy to identify job descriptions in other lines of work.
This includes the business side of the St. Louis Cardinals.
“We brought in a consultant to help us really understand our salary structure and our benefit structure and really just benchmark where we were with our front office,” DeWitt says. “It’s been a nice tool to be able to more clearly articulate what our structure is, why it is that way and what sort of changes we may need to make in that structure to give people confidence that there is rhyme and reason to the approach.”
The problem for DeWitt was the team couldn’t always give good reasons for making one compensation decision or another because no one had really spent a lot of time studying what the Cardinals’ peers were doing.
“We were having a hard time explaining our structure to people, because we weren’t 100 percent sure what the true marketplace was,” DeWitt says. “So that was something that bubbled up through the HR department.”
DeWitt wanted to know that the way the Cardinals were compensating people was consistent with his peers in terms of what employees were doing and what they were receiving for that work.
In addition to gathering data through a series of surveys and benchmarking studies done by Major League Baseball and other firms in St. Louis and across the country, DeWitt launched an effort to get everyone to compose a personal job description.
“We had everybody think about that and had their managers approve their job description,” DeWitt says. “So it gave everybody in the organization a chance to write down what they were doing and what their functions are in the company and the managers signed off on it. That provided the foundation for this benchmarking.”
DeWitt’s goal was to take an honest look at where the Cardinals ranked in terms of salary and benefit structures with its peers. So that’s exactly what he told employees when introducing this idea of composing job descriptions.
“We were just honest about it,” DeWitt says. “We said we want to understand the salary structure and where we fit in. There’s a level of trust between employee and management that goes back a number of years in that we’ve had some success on the field as well as off the field in growing the brand and growing the business.
“I could see where in a struggling business, employees might be skeptical of that figuring there is a right-sizing type of exercise going on. We were clear that that was not what this exercise was all about. We were just honest and upfront and that worked out well.”
DeWitt and his team took the job descriptions that had been composed and the data gathered about other organizations in terms of salaries, benefits and bonus compensation plans and began to get a better sense of where the Cardinals fit in when compared with its peers.
The project is ongoing, but DeWitt says he likes the direction it is heading.
“Between salary, bonus and benefits, you’ve got a full picture of how front office people are compensated,” DeWitt says. “It’s a much better way of having that conversation with employees than just having to be defensive about what Albert Pujols makes.”
When he does face more questions about perceived compensation inequities, DeWitt says he will often give people the option to try something new.
“Let’s say they are not in sales and they are probing about what is different about the compensation structure,” DeWitt says. “You just say, ‘If you want to be in sales, you’re welcome to try it.’ I think that’s one of the things we’ve tried on a few occasions. Some people have said, ‘Maybe I will give it a shot,’ or, ‘No, that’s not for me.’ They understand that there is no prejudicial approach, it’s just form following function in the way we set up compensation structures.”
Recognize all the parts
You could have the greatest starting pitcher in all of baseball on your staff, but if the rest of the rotation is terrible, you’re not going too far with your team. It’s the same way in business when it comes to completing projects.
“We have a number of people that are on the sales side, for example in corporate sales, that try to land a deal,” DeWitt says. “But there is also a servicing aspect. Once you’ve done a deal, that’s great. But we need to deliver all these assets to people as part of these agreements.”
So before you offer up a gold watch or use of the company jet to your top salesman who sold a major deal with a client, take a moment to look at the work others do to give that client the most bang for their buck.
“A company might have a sponsoring package with us, a day at the ballpark where all their employees come and get a breakout session where they might have a batting practice on the field,” DeWitt says. “That requires execution from our staff. You have operations people that work with the facility vice president and they need to help with prepping the field and bringing out the equipment and doing all that. The servicing people on the corporate sales side have to be there and walk the customer through the event. Obviously, the salesperson is going to be part of that. But it’s a team effort, not so much in closing a deal but in delivering the assets. A lot of things require a lot of teamwork around here. That helps foster that and breaks down some of those walls that would otherwise exist.”
The answer is pretty simple: Show appreciation to those unsung people who aren’t on the front lines of closing the deal but still play an integral part in getting the client what they paid for.
“Just acknowledging it is a big step in the right direction for that issue,” DeWitt says. “Telling an employee that they are giving the extra effort and it’s appreciated. That’s half the battle in terms of employee relations. … We try to give everybody in the organization a sense they are part of the overall goal of servicing the customers and getting more fans to the ballpark.”
Know your role
DeWitt does not turn away employees who have concerns, even if those concerns seem pretty minor at first glance. At the same time, he doesn’t always launch an immediate investigation into every problem that gets brought to his door.
“Generally speaking, you want employees to solve their problems themselves,” DeWitt says. “If they are running into a problem getting that done, even if it’s somewhat trivial, I’m not going to just send them back out to solve it. I’ll work with them. But you want that bar to be reasonably high for them to come in to see you. Otherwise, you get a lot of little issues that might otherwise have been dealt with at a lower level.”
DeWitt makes it known that he is available to anyone in the Cardinals organization at any level.
“Make sure the people who report directly to you understand that you’re always going to take a phone call from someone within the organization at any level,” DeWitt says. “Then you’re not undercutting them, because it’s always been your policy. That’s important.”
One technique you can use to make that kind of undercutting less likely to occur is to put the person who is complaining in your shoes.
“You say to them, ‘If you were me, what would you do with this problem?’” DeWitt says. “That gets people to think in a different way about the problem they are part of. ‘Do you want me to address this with your supervisor or do you want to see if it gets better before I get involved? Do you want to try a different approach before I get involved first?’
“Those are the kinds of things that when employees have raised problems with me, hopefully that’s a fresh way to think about it. Sometimes it leads to resolution; sometimes it doesn’t. But it’s a good start in terms of looking at it and maybe getting it solved before you have to address things head on.”
Posing questions is also a good way to make sure that you’re not missing problems that may be festering in your company without your knowledge. Instead of asking these questions to people who are bringing you a complaint, sit down with someone who you trust to give you good feedback and honest answers.
“Particularly your most trusted employees that you don’t have performance issues with at all,” DeWitt says. “Getting advice from those employees about how you could communicate better or get better feedback from others, that’s an important thing to do. Sometimes you need to put your ego aside in that instance. If you’re the president of the club, people aren’t just going to serve up advice. But if you’re open to pulling it out of people a bit, you can learn a lot about how effective you’re being.”
How to reach: St. Louis Cardinals LLC, (314) 345-9600 or stlouis.cardinals.mlb.com
The DeWitt File
Education: History of art, Yale University; Harvard Business School
Talk about the connection between your family, baseball and the cities of St. Louis and Cincinnati: My grandfather was in baseball here in St. Louis his whole life. He grew up as a treasurer for the Cardinals and worked for the Browns and moved on to a bunch of different things in baseball. One of which was he got involved with the Reds as a general manager and owner in the early 1960s. So my family moved to Cincinnati from St. Louis. Then when my father got involved as chairman and led the ownership group in 1996 in St. Louis — it was sort of a homecoming.
What is your best memory with the Cardinals?
It would have to be the World Series victory in 2006. That was just a great moment for us.
Who has been the most influential person in your life?
I would say definitely my father in terms of that direct relationship and the fact that he has a certain personality and style that I’ve emulated to some extent. He’s very much a leader by example, sort of quiet, but prepared and very passionate. Those are the qualities I try to emulate with a slightly different style.
Whom would you like to meet?
It would probably be Branch Rickey, who gave my grandfather his first job. He was a legendary figure in the Cardinals organization and the times were so different back then in terms of what baseball was all about. And yet he was trying to win the same game. To compare and contrast what we deal with versus what he was dealing with that many years ago would have been a neat thing to probe.
Michael Fischer wasn’t expecting utopia when he took the helm at Swan Corp.
“Companies rarely bring in a new leader because everything is going perfectly,” says Fischer, president and CEO at the kitchen and bath product manufacturer. “So you normally are thrust into an environment where you can see right away more opportunities than you have the time or resources to tackle.”
Fischer took over the 300-employee company in April. At least in the early days, he resisted the urge to make immediate changes.
“You get tempted to go to your playbook and execute against things you’ve done,” Fischer says. “But unless you really understand what the needs are of the business, that may not be the right solution.”
Smart Business spoke to Fischer about establishing the right tone to lead effectively.
Get familiar. For me, the first 90 days is getting to know the organization inside and out. I normally start outside and work my way back in, which involves meeting with customers and listening to what they think of the company and where they think the opportunities are. As you make enough of those rounds internally and externally, the pieces start to come together. Usually for me, it’s at about the 90-day point.
You may not figure out right away what the biggest levers are to move the business. But the first week I was here, we started meeting as a team across all functions. To me, it’s all about teamwork and breaking down the functional silos. I wanted to send that message from the first day I was here that that was the way I wanted to run the business. Whether we solve anything or not, you can send those kinds of messages.
Ask questions. I met with everybody in the organization in the first two weeks. By the time you get to the 30th or 40th person, you start to see trends or some things that keep popping up. So I try to direct questions. ‘If you were the CEO for a day, what would be the one thing you would do to improve the company? If you could change one thing in your job, what would it be? If a customer could change one thing about our company, what would it be?’ Try to direct the conversation a little bit to idea generation and not, ‘I don’t like the lunch in the lunchroom.’
Back up your words. You have to remember that you’re the CEO or president and people are observing everything you do to see if you really are walking the talk, even more so when you’re new. If you say, “I’m going to run this as a team, and it’s all about teamwork and accountability and being customer-focused,” you have to try to find opportunities very quickly to exhibit that behavior. People tend to play chameleon in a new situation watching the CEO. What does the CEO value? What does it take to be successful in the organization? I’ve tried to communicate that.
Don’t be afraid to change things. The one thing that will get me upset or agitated is somebody saying, ‘We’ve always done it that way.’ I read one time those are the last words of a dying company. Even if you’re doing something well and it’s working today, it doesn’t mean you can’t keep challenging it and keep trying to get better each and every day. That goes with the attitude that if you’re not trying to challenge the status quo, you’re not trying to get better. You can learn from the past, but let’s not dwell on it. What are we going to do positively going forward?
City: St. Louis
Size: About 300 employees. Swan Corp.’s products are available through about 8,000 wholesale and retail outlets nationwide, as well as in the United Kingdom and Europe.
How to reach: Swan Corp., (800) 325-7008 or www.theswancorp.com
Jim McCarthy was frustrated. He worked hard to hide the fact that his employees at Goldstar Events Inc. were one of the biggest reasons for his frustration. They just didn’t get it.
They were worried that a sudden surge in the number of competitors offering half-price tickets to live events was going to be too much for Goldstar to handle.
“Our employees and other people started thinking, ‘Are we going to be overwhelmed? Are we going to be ignored because of this massive wave of discounting everywhere?’” says McCarthy, co-founder and CEO at the 50-employee company. “I’ll confess it was mildly annoying to me that my employees just didn’t get it.”
What they didn’t seem to understand is that Goldstar had gotten pretty good at what it did and was well-positioned to deal with some competition.
“I realized I wasn’t doing enough to help them understand the picture,” McCarthy says. “My approach to that and the approach of our management team as a whole was to really center people back on a couple of things.”
McCarthy reminded his employees of the attributes that made Goldstar great and encouraged them to quit worrying about what other companies were doing.
“What I made very clear to people is, ‘Don’t be focused on the success or failure of other companies,’” McCarthy says. “It doesn’t help us for other companies to fail and it doesn’t hurt us if they succeed, unless we don’t do a good job. … You hear about the seven deadly sins. When you see a company growing like crazy and getting popular overnight and that kind of thing, one tends to be a little envious of that. But there is a reason why envy is one of the seven deadly sins. It’s not good, and it’s not helpful.”
McCarthy decided he needed to step up his game and unleash a barrage of communication through multiple mediums to convince his employees that as long as they continued to work hard, there was no reason to fear the competition.
“If you feel your communication is adequate or sufficient, you’re almost certainly undercommunicating,” McCarthy says. “I felt like if I was being a nuisance, it was probably just enough. Here’s what we represent, here’s why it’s good, here’s why it’s unique in the marketplace, and here’s why the success of others doesn’t necessarily make a difference to us one way or the other.”
Overcommunicating doesn’t just mean repeating the same message over and over again. Then you’re a nuisance that serves no purpose but to annoy your people.
“You have to show, not tell,” McCarthy says. “Don’t tell me we need to be distinct and stand on our own values. Show me an example of something we do that nobody else does. Show me that the feedback system we have on our events is unique. Show me that nobody has the ability to get as many venues on one site. If your strategy is coherent, you should be able to tie it all back to the same core ideas.”
Alignment is critical to getting employees to buy in to your message.
“If we’re saying our venue relationships are a critical part of our strategic success, but the group is understaffed and undertrained, the message is really hollow,” McCarthy says. “The objectives of the organization and the work that people are doing on a daily basis, it has to line up with what you’re telling them is important. If the things they’re being asked to do in their work don’t match up with it, it doesn’t work.”
Two years later, McCarthy’s strategic overcommunication onslaught has paid off and helped employees get their mojo back.
“Our growth has sped up and the organization is stronger than it’s ever been,” McCarthy says. “Now they get it.”
How to reach: Goldstar Events Inc., www.goldstar.com
Find your greatness
When an employee brings you a genuine concern, you need to resist the urge to blame that person or anyone else for the problem. It’s a lesson Jim McCarthy learned as he fielded employee worries about how competition might hurt business at Goldstar Events Inc.
“It didn’t take me long to realize that it was a me problem and not a them problem,” says McCarthy, the 50-employee company’s co-founder and CEO.
“It’s like when you take your kid to the ice cream place and they sing ‘Happy Birthday.’ The employees have probably sung ‘Happy Birthday’ 50 times that day. But to your kid, it’s the one and only time. It’s very important if you’re in the ‘Happy Birthday’ chorus, that you sing it like it’s the first time. I try very hard that if someone asks me a question, I’m giving the information as though it were the first time I’m delivering it with that kind of thoroughness.”
As much as you may embrace the glory when you make a wise decision, you also need to embrace and respond to your own imperfections when you make a mistake.
“I wasn’t frustrated from the sense that I was annoyed that they were asking questions,” McCarthy says. “It just took me a little while to recognize that what I had was a management problem of my own.”
The essence of loyalty is trust. To earn loyalty, leaders must first earn the trust of those they work with, whether it be colleagues, superiors or subordinates. Earning loyalty can only be done through positive actions. You must prove by what you do that you are worthy of it.
Everyone in a management position knows that to succeed they need to have the trust of their superiors, and without it, there will be no promotion or greater responsibility. However, too many neglect to gain the trust of their subordinates, thereby failing to earn the loyalty of those who can assist them to more quickly and easily achieve success. I would argue that managers who do not earn the loyalty of their subordinates are not fit for high promotion, however well they may do other parts of their jobs. They are squandering a critical resource — the company’s potentially highly motivated employees — which will mean any task will take longer and cost more to achieve.
Any organization has a right to expect a commensurate degree of loyalty from those it pays to do a job, and people will generally give their employer that. But if they distrust their superior or the general leadership of the company, then they will come to work, they will do what they need to do to get by but nothing more. In order to really thrive, a company must have a dedicated, enthusiastic and loyal staff.
I once worked for a COO who, when the smallest thing went wrong, would run about in a panic proclaiming, “It’s a disaster,” frantically conducting a witch hunt to find someone to blame. Earthquakes are disasters; tsunamis are disasters. The things that go awry in our work lives seldom merit the status of a “disaster” and leaders who exude an air of confidence and calm in the face of the unexpected will earn the trust of their subordinates. Those who panic at every minor crisis and take their anxieties out on their staff when under pressure will never gain their loyalty.
I had the misfortune of working for another superior who lacked any personal integrity. There are seldom any secrets in a company, everyone knows someone in the accounts department or picks up a forgotten spreadsheet left on the copier — and people always talk. However, he would lie as a matter of course, he would make promises he knew he couldn’t keep, say one thing to one person and something completely different to another, tell people things that he knew were untrue and that they knew were untrue. If he’d been any brighter or honest with himself, he would have realized that they were smart and perceptive enough to know he was a liar. Those without integrity are rightly despised and distrusted; they are unworthy of loyalty.
Leaders who are not loyal to their staff can never expect loyalty from their subordinates. Being loyal to them doesn’t mean being soft or being best friends or not demanding of the best. It does mean taking responsibility for the actions of subordinates when things go wrong and not distancing yourself by putting all the blame on them. It means being understanding of shortcomings, mistakes and failures — and being constructive in discussing how they can be avoided in the future. It means being open and upfront about what you want done, without any hidden agendas. It means never publicly criticizing your subordinates because it will undermine their self-confidence and trust in you. It means giving appropriate praise and credit where due. It means making a conscious effort to do the right thing by your subordinates because loyalty is always earned, it is never conferred.
Julian K. Hutton is president of Merlin Hospitality Management, where he oversees the company’s hotel management and distressed asset management operations, drawing on 20 years’ experience in the worldwide travel and hospitality industry. Reach him at firstname.lastname@example.org.