Wide open spaces Featured

7:00pm EDT December 31, 2006
Even before he converted LPK (Libby Perszyk Kathman) into an ESOP in 1994, Jerry Kathman had adopted an open-book management style.

Bill Kagler, former president of Kroger, was on the international design agency’s board at the time and encouraged Kathman to be much more inclusive and to share virtually everything. “The salaries and personal development plans are private matters between an employee and his or her manager,” says Kathman, president and CEO of LPK. “But a lot of the other stuff that companies tend to keep closely held, we think it’s wise not to hold that stuff tightly.”

By sharing targets and goals, Kathman has guided his company of 400 employees to 2005 revenue of $50 million.

Smart Business spoke with Kathman about how to find employees, his leadership style and how he handles mistakes.

Q: How would you describe your leadership style?

The leadership style grows out of the company culture. Our culture is best demonstrated by virtue of the fact we are an employee-owned company. We have made a choice to ensure stakeholders are stockholders.

We are a company that has a lot of relational authority to support our positional authority. People are in charge of units or operations. We coach our management group to understand the importance of relational authority.

The behavior is everything; you need to model the behavior. The leader-servant idea guides us. Doors are open. We are all about nurturing career development. We are an idea resource for our clients, and ideas need to be nurtured in a safe and supportive environment.

We celebrate successes. Moving knowledge around a company is a big challenge. For us, one of the mechanisms that people enjoy here are “Knowledge Noshes.” It’s a regular way you gather to learn about a trend or a project, and we provide a free lunch.

We gather once a week and we’ll share a case study, which is a great opportunity for a team to celebrate their success in front of the company. There are also announcements via e-mail of big business success and recognitions.

Praise in public, coach in private is something we do very well here.

Q: How do you find the best employees?

The pedigree of their education. Work experience is sort of the filter that gets us to an interview. We talk about the importance of leadership, creativity and innovation and fictional mastery. That’s the technical aspects of computer programs or writing skills.

We look for people who are good at priority-setting because in a service business, multitasking and redirecting your efforts regularly is sort of a core competency that we require. Most importantly are the two issues that are inner-related. That is communication and working effectively with others.

If you can’t communicate well, you won’t be a good player. Communication is about seeking to understand another point of view and then articulating your own point of view well.

Working effectively is where we recognize and respect diversity. Diversity isn’t limited to very important issues like gender and race, but style, and the passive, quiet person versus the very vocal person.

Getting those teams to make sure everyone’s point of view is being heard is what we think constitutes long-term success. We don’t fit the mold of the creative resource with the angry genius that is so brilliant you can’t live without them. We can live without them.

Q: How do you retain employees?

Fundamentally, delivering on your commitment. If employee engagement is your No. 1 challenge, then creating a culture that is fair, supportive and good at valuing is fundamental.

A lot of companies say that stuff, but we prove it by turning the equity in the company to the employees. We deliver on our promise on our commitment to employee ownership.

Q: How do you handle mistakes?

We recognize that we are risk-takers and, if we develop a plan and it’s vetted and thoughtful and we execute it and it fails, then we are disappointed, but we are accepting.

What we don’t want is where we are a victim of poor planning or a victim of indecision. The only thing you can do that comes closest to guaranteeing success is to be thoughtful and strategic in your decision patterns. That doesn’t mean you are going to win every time.

Q: How do you approach taking risks?

You look at it in terms of anticipating what the market values. What will customers want, not what do customers want. You recognize emerging issues and you invest people and resources in delivering against those and you give yourself permission to fail and some flexibility. The front end of innovation is never clear. You can’t use data points and those sorts of numeric measurements when you are in the business of innovating.

HOW TO REACH: LPK (Libby Perszyk Kathman), (513) 241-6401 or www.lpk.com