Lindsey Grant

Tuesday, 22 November 2005 09:52

Franchise frenzy

Combine the sports knowledge of a former Olympic coach with the expertise of two successful businessmen and you get a thriving business that provides athletes with advanced sports training.

Velocity Sports Performance, created by David Walmsley, Richard Kissane and former Olympic track and field coach Loren Seagrave, helps athletes of all ages reach their athletic potential through training programs scientifically designed to maximize sports performance.

“It’s been a great business to be involved in, where you can do something that is really new and also do something that is really beneficial to people,” says Walmsley.

The company began franchising in 2002 and now has 54 centers throughout the United States. Walmsley, CEO of Velocity Sports Performance, expects that they will continue to open franchises until there are as many as 500 nationwide. He also plans for the company to expand to develop and distribute products, as well as offer more services.

Smart Business talked with Walmsley about how he manages the fast growth of his one-of-a-kind business that is changing the way people exercise and athletes train.

How do you train franchisees?
We have a training program that takes them from the time they sign the franchise agreement all the way through grand opening and beyond. They also come into our offices for a two-week immersion course in our systems and our culture.

We divide the businesspeople and the coaches. On the coaching side, the folks who come in are really receiving almost like a master’s degree in exercise science or sports performance training. And then the business director and the franchisees come in and take two weeks of business training.

We also send our on-staff exercise scientists and field consultants out to continue training.

What are your business strategies, and how have they helped your company grow?
On the ground (level), our approach to sales and marketing is really grassroots. It’s a lot of time with sports leaders in the local community, youth league administrators, coaches, athletic directors, people who work in the schools and things like that.

We do a lot of sponsorships and local advertising and periodicals and publications that report on the local sports scene.

At the corporate level, our growth strategy is to continue to attract and sign up top-notch franchisees. We are now at a scale with 54 locations throughout the country; we are probably within an hour to an hour-and-a-half drive time of 50 (percent) or 60 percent of the U.S. population.

What that has enabled us to do is really start forging relationships with national brands and other national organizations for the benefit of our franchisees. Right now we are in discussion with two of the biggest sports brands here in the U.S.

What obstacles did you have to overcome as your company grew?
Real estate is very difficult for a company like ours. We are typically in spaces that average 12,000 square feet to 15,000 square feet. In order to keep rental rates down, we are often going to a mixed-used, kind of light industrial flat retail space, as opposed to putting our locations in strip malls or high-end retail that’s more expensive.

It probably takes us six months to get retail signed, whereas if we were a different kind of concept, like a sandwich shop, you could get retail signed in two weeks to 30 days.

Our concept is a new concept. Sometimes when we go into a new market, people don’t really understand what we do and how we are different from health clubs. There is decent amount of education that is required to help people understand that we are really in business to help people who play sports get better at playing sports.

Educating the market in some areas has been another challenge for us.

How do you educate people?
A lot of our marketing involves making presentations to high schools and middle schools and club teams. And getting out there in the community and hosting events.

We also have a lot of literature. Our literature and marketing materials we use tend to be pretty copy-heavy so we can really educate people about what we do.

What do you hope people say when they talk about Velocity Sports Performance?
Two companies that I strive to emulate are Sylvan Learning Center and Starbucks. Sylvan because we would like to do to physical education what Sylvan has done for math and English.

Sylvan started off just offering math and English programs. Now they are a billion-dollar publicly traded company that has a worldwide presence. We want to have a similar kind of growth pattern.

The other one is Starbucks, because we are a new concept and we are trying to really transform people’s perceptions of what coaching is all about. We want to change people’s perceptions of what it means to have functional training that will keep you healthy, help you enjoy sports more, help you play longer and help you achieve your personal goals.

We are really trying to raise the bar in terms of quality of what is available to people when it comes to sports training and physical fitness.

HOW TO REACH: Velocity Sports Performance, (678) 990-2555 or www.velocitysp.com

Monday, 26 September 2005 12:58

Road to success

Earl Scott spent 18 years working for companies in the environmental industry before venturing out his own.

Scott, president of Premier Environmental Services Inc., founded his company in 1998 to provide strategic environmental and consulting services. Today, Premier has grown from a one-man business to one with more than 100 employees in 10 offices across the United States and Canada. In 2003, it posted revenue of $7.7 million; in 2004, that grew to $11 million.

Smart Business spoke with Scott about the challenges of running a fast-growth company, attracting the best employees and the importance of communication.

How do you attract and retain the right employees as your company grows?

Initially, most of the growth that we experienced was relatively easy to deal with. People we knew in the industry, people we worked with in the past, usually colleagues and sometimes competitors, came to work for us, what I would describe as the low-hanging fruit. We attracted people we already knew and trusted and had a good relationship with.

We offer competitive salary and benefits. More importantly, we also have a very innovative incentive bonus program that really awards people for their contribution to revenue rather than makes them dependent on the success of others in the organization.

I do think that as we have grown, recruiting has become more difficult, because now we are attracting people that we don’t necessarily have a past relationship with.

How do you communicate your vision and message as you keep adding employees?

It is one on one. We’re big believers in face time, particularly with our senior personnel. If you think about it and you want to try to disseminate your vision, the best way is to effectively communicate it to your internal leaders.

They, in turn, will communicate that information to those people that they reach. It’s important to do it face-to-face. I and our senior management team spend a lot of time in all of our branch offices meeting with people and talking.

What skills and qualities are important as you lead a fast-growing company?

I think that an important skill is the ability to listen and to understand the needs of our employees and customers. An important quality is the ability to adapt to change, to not always look at a problem in the same way you always looked at in the past.

Be innovative, creative and flexible. And always work really, really hard. People see and respect you for being willing to roll up your sleeves and dive in.

What challenges do you face as the company continues to grow?

By far the biggest challenge is capital, making sure you have adequate financial resources to not only fund your ongoing operation but also to fund your growth.

In our industry, it costs us $25,000 in cash for every person that we add. When we hire somebody, we have to cover their costs for about three months. Plus you have all of the start-up costs. It is very important to have strong cash management protocols and follow them so that we can grow profitably. Our profit provides the fuel for future growth. So I think cash management is No. 1. No. 2 is to make sure you have the proper infrastructure so that the personnel that you have out there working every day to solve clients’ problems have all the tools and resources that they need to be successful.

Where do you see Premier Environmental Services in the future?

Our objective is to continue to grow the company to a point where it has critical mass, and what I mean by that is a company that is self-sustaining. Included in the process is having a diverse clientele.

We don’t want to have too high a percentage of our revenue concentrated with any one client. I really would like to see no more than 7 percent of our total revenue be with one client. So objectives are to continue to grow the company, add new clients and to diversify our revenue. At the same time, we also want to create a positive environment for people to work. If we do that, we will continue to add quality people with their clients, which fuels our growth and revenue diversification.

What advice do you have for presidents of other fast-growing companies?

Although it may seem trite, I think my main advice is to establish very specific goals and objectives for your business, develop a plan to achieve these goals and objectives, and execute. All too often, I have seen firms start strong in one direction and then get totally distracted, lose their focus on the fundamentals which brought them early success, and then they crash and burn.

Another problem is a lack of a definite exit strategy and a willingness to exit when the external factors make it attractive to do so. There is a strong emotional attachment to what was built that sometimes results in an irrational response to change.

Finally and probably most importantly, business is just business. Don’t let it destroy your family, your health or your faith. The more successful you become, the greater the likelihood that you will become attached to the financial rewards.

They are nothing if you don’t maintain your relationship with God and your family. HOW TO REACH: Premier Environmental Services Inc., (770) 973-2100 or www.premiercorp-usa.com

Wednesday, 31 August 2005 13:46

Innovative ideas

Without medical innovations, people could not have the quality of life or longevity they enjoy today. Leading medical innovation is CCF Innovations, a technology commercialization section of the Cleveland Clinic Foundation.

CCF Innovations was established in 2000 to promote innovation and expand treatment options for the sick.

“These inventions reflect the most creative thoughts of the most creative people in the system. The technology that we are working on has the ability to change people’s lives,” says Christopher M. Coburn, executive director of CCF Innovations.

To foster a creative environment, CCF hosts a Medical Innovation Summit. The third annual summit is in Cleveland this October, and in the previous two years, two-thirds of the CEOs of the top 20 medical product companies, as well as top venture capitalists and clinical entrepreneurs, attended the summit.

CCF is also implementing a structured invention process that will provide an organized and output-oriented approach to innovation, as well as promote collaborative thinking and team building. “Instead of waiting for a clinician to have an idea, why not take a problem that already exists and get the clinicians, scientists, engineers and everybody into one room and brainstorm?” says Joseph Hahn, M.D., chairman of CCF Innovations.

Other CCF accomplishments include cutting the cost on art searches — searches for new inventions — by utilizing more cost-effective resources, such as having students do the work. Also, CCF developed an Industrial Advisory Board (IAB) that includes national venture capitalists, medical industry leaders, entrepreneurs and peers. IAB provides strategic business advice and links to financial and management resources.

“Our philosophy is, no matter how good our team is, and we think it is outstanding, you will never have all the capabilities you want,” says Coburn. “A board like this allows us to greatly extend the network that we would have in terms of making connections with potential investors or partners.”

CCF averages 140 new inventions each year. In 2004, CCF had 144 inventions — the most output from an invention organization in Ohio and among the top in the United States.

“We’ve had a lot of success,” says Hahn. “We need to get the word out about all the exciting things happening in Northeast Ohio.”

How to reach: CCF Innovations, www.clevelandclinic.org

Wednesday, 31 August 2005 13:29

Making a difference

Five years ago, Barb Brown and Margie Flynn, principals and co-owners of BrownFlynn Communications Ltd., decided to change their company from a marketing communications firm to a community relationship management firm.

Brown and Flynn wanted to do well by doing good. And they were not just talking about themselves. They wanted to help other organizations do well by becoming better corporate citizens and giving back to their community.

“If you are going to spend all this time in your life building a business, Barb Brown and I felt that it had to be something that was truly going to make a difference in our community,” says Flynn. “Seeing an untapped need, as well as recognizing that we could actually build a business around helping companies do well by doing good in the community, and doing it strategically, was something that was appealing to us.”

BrownFlynn counsels companies and organizations through Community Relationship Management Assessment (CRMA). The goal of CRMA is to increase companies’ community engagement efforts to create the greatest reward for both the company and the community.

To do this, BrownFlynn does extensive research on a company’s core values, core competencies and social investment/employee volunteerism programs. Based on that information, they create a community-engagement strategy.

There are myriad reasons BrownFlynn thinks it is so important for companies to be engaged in their community. For example, community engagement attracts and retains employees, develops employees into leaders in the work force and the community, enhances a company’s brand and increases company sales. According to Flynn, people are really influenced by what a company stands for and how it gives back to the community.

BrownFlynn, in conjunction with the Cleveland Initiative for Education, gives back to the community through a literacy program known as the BrownFlynn Book Club. To date, the program has delivered more than 7,000 new curriculum-oriented books to 14 elementary schools in the Cleveland Municipal School District. The firm’s employees also invest more than 40 hours each month in developing and implementing the plan.

Now, the book club is also beginning to focus on older students in middle school and high school.

The result is a company that rewards itself through rewarding the community and helping other companies do the same.

How to reach: BrownFlynn, (440) 484-0100 or www.brownflynn.com

Wednesday, 24 August 2005 10:53

Catering to consumer need

Starting a successful company is a difficult endeavor. Starting two successful companies only a month apart seems not only difficult, but nearly impossible. However, Dave Dickerson did just that when he founded Sauna Warehouse Inc. and Accurate Background Inc. in 1997.

What do these companies have in common? Nothing, really, besides the fact that they are both growing rapidly. Sauna Warehouse, an Inc. 500 company with 2003 revenue of more than $4 million, provides online shoppers with a variety of sauna options. Accurate Background is a background screening company that specializes in pre-employment screening.

Smart Business talked with Dickerson about the excitement of being part of a fast-growing company, or, in his case, companies.

What business strategies have helped you grow?

I think we basically stick to our plan, even when there are bumps in the road. We stick with what we think is the right thing to do. When we started Sauna Warehouse, we got, and actually we still get, a little backlash from the industry, because they just swore it would never work on the Internet.

They thought that people would never buy this sort of product over the Internet. It is kind of a niche market. We kept pursuing it and kept expanding the line, and eventually, we ended up being the largest distributor of the product in the United States.

How do you recognize business opportunities?

Demand — basically talking to your customers. You look for need. In all of the years that I have done this, I have never seen a business where someone thinks of an idea and people just gravitate toward it.

It is always because there is a need. If you can recognize a need in a customer, there is a lot of opportunity there.

How did you think of these two ideas?

I was in the sauna business and got out in the early 90s. I started doing consulting work and I started working for a company that sold database information to private investigators. One of the needs that the customers had was that they were looking for county criminal searches. I presented that as a wholesale business to the people I was working for. They weren’t interested, because they were interested in more database-type products. I decided that since there was a need I would just go ahead and do it on my own. It basically had a customer base already built in. That’s how the background business got started.

Right around the same time, I came across someone who has the URL, saunas.com, and my thought process was to go ahead and buy it from them. It’s a product that people are looking for, but there’s not a lot of branding in the sauna business. It’s not like when you go to buy a stove and say you want a GE. People want a sauna, but they don’t know any brand.

The thought process was to build a Web site and put the different manufacturers on this Web site and people could come to it to become educated. We started that process and then started building products according to what the customer wanted. We started expanding the line. The whole point was to give the customers a choice. A lot of the manufacturers wanted us to carry their products exclusively. We said, “No, we are going to give the customers a choice. We’re going to be completely unbiased.”

What challenges have you faced as CEO of two fast-growing companies?

You have to find good people. The challenge is always finding good people. It is hard to find people who share your vision and have a vested interest in your company. I’ve been very fortunate because I have surrounded myself with really great people who have allowed me to do different things.

People always say, ‘You have two great companies, how can you do this and be one person?’ The answer is people. The joke around here is that more work gets done when I’m not around.

If you give people a lot of freedom, then they are going to rise to the occasion. We have a good group, and they’re all motivated.

How do you get employees to buy into your vision?

A lot of them get excited about the prospect of a fast-growing company. Here is a good story. I knew our EVP at Accurate Background from a previous company. Her name is Catherine, and she was a VP at another company I was with. I didn’t really know her, but when I left that company, it was making $40 million in annual revenue.

They sold that company for $100 million. She was with that company when they were only $800,000 in sales. I called her up and said, ‘Hey Catherine, when you were with this other company, you started out with an $800,000 company, and then you grew it to $40 million and sold it. That was a lot of fun, wasn’t it? Do you want to do it again?’ And she did.

She is someone who really enjoyed the process of growing a company. You have stability working for a large corporation, but there is also something that gets into your blood when you start off with a small company and grow it.

The company ends up having a life of its own and you see the growth of it. You get people who get real excited about that. It’s just finding the right chemistry of people to do that.

We have an incentive program that all employees participate in. It is called GRIP, which stands for Growth Retention Incentive Program. Growth is not only growing our company, but also growing our revenue, customer base and employees. The retention part is keeping our customers and employees.

We take a percentage of the growth over previous sales for last year for the same period. And they get a percentage of that and it is split equally among all employees. It’s a clean slate every month. What we did in June this year is compared to June 2004.

The employees really buy into that because they track the numbers and know when they are on track. Once they hit a certain number, they know that they are going to get their bonus next month. It is self-policing, too. If you have someone in operations who is working really hard in their cubicle trying to get the numbers to work, and then the person next to them is on the Internet and they know that person is going to get a bonus, too, you’re not very happy about that.

They end up weeding themselves out. It creates more efficiency. If management thinks that we need another person, the people inside say — and this has happened more than a couple times —‘We don’t really need another person. We’re just not working smart.’

Although at some point you do need to hire more people because you can’t keep up with the growth. This program has been the best program. We have had other companies talk to us about it. It’s great because employees get really excited about it, and it is all based on growth.

How to reach: Sauna Warehouse, (800) 906-2242; Accurate Background, (800) 216-8024

Monday, 28 August 2006 20:00

Sure thing

 At SurePayroll, employees win money for making mistakes.

Although this approach may seem a little backwards, Michael Alter, president of the payroll provider, says the only way to continue to grow is to change and try new things.

“We’re just not that good that everything we try is going to work,” says Alter. “We’re going to make mistakes. We’re trying to build a culture here where it is OK to make a mistake.”

Alter says the key to the company’s fast growth — SurePayroll has a three-year growth rate of 1,302 percent — is having a product and services that are simple for customers to use and empowering employees to go above and beyond what is expected of them.

Smart Business spoke with Alter about how he measures success and the one thing that can thwart a company’s growth.

How do you measure success?
We have a management dashboard that all of the mangers of the company meet every other week to go through and discuss. On that dashboard are the key metrics that drive how well we are doing in terms of our customers, so it has customer satisfaction scores, hold times, number of escalations anywhere else in the company.

If I am 99 percent correct in what I do, that’s not acceptable in our business, because that means that one in 100 paychecks is wrong. And you can’t have that.

To put that in another perspective, if you think about electricity, you walk in, you hit the switch and the lights go on. If the lights don’t go on, then you scream and yell and get upset.

But very rarely do people call the electric company and say, ‘I’m really impressed. The last 300 days my electricity has been on.’

We have to have metrics in place to give us a balanced perspective of what’s going on both with our customers and their satisfaction rates, their retention rates.

How has using metrics contributed to SurePayroll’s growth?
What the dashboards allow us to do is on a weekly basis — some we even use on a daily basis — get a clear sense of what’s going on in our operations and plan so we can staff accordingly and correct things before they happen.

As an example, one of the things that came out of our early dashboards is we sat back and said on those days that are the busiest days of the month for us ... it really matters to have more reps on the phone. So we created this thing we call money days. There are six days a month which are the money days, and those are the days when our customers are trying to move money and they need us the most.

We tell our customer care folks and our sales reps, if you have to be absent or you have to schedule a regular dentist cleaning or something, go ahead and do that, just don’t do it on a money day. That allows us to have more customers on the phone, which gives us lower hold times, which allows us to answer questions faster, which keeps customers happier, which gives us more revenue, which allows us to grow, which allows us to employ more people. It’s sort of a wheel.

To reinforce this, one of our senior managers walks around ... on money days with a silver tray that has mini Payday bars and 100 Grand bars. We give a candy bar to every single employee and look them in the eye and remind them it’s a money day.

It may seem like a silly little gimmick, but our dashboards show that the days we walk around and hand out the candy, we have better results in our metrics —in our hold times, in our customer response, etc. — than the days we don’t if it’s a money day. It’s all about awareness and focus.

What one thing can prevent growth or bring a company down?
Getting too comfortable. Whatever we’re doing today that is making us successful, we are going to need to have a different variation on that a year from now, three years from now and five years from now because the world will change.

Our competitors are smart. They are going to keep making their businesses better. Customers’ needs and desires and technology change.

One of the things that will kill a company is an inward focus. The minute you get fat and happy and start focusing internally is when you’re going to lose the lead. You need to look externally and use the external world as your benchmark.

The fact that we have the best service and the most satisfied customers in the payroll industry is nice, but there are service organizations out there that serve consumers and are better at it than we are. We need to benchmark ourselves against them and get as good as them.

HOW TO REACH: SurePayroll, www.surepayroll.com

Monday, 31 October 2005 12:04

Capitalizing on coffee

Steve Shoeman was already considering franchising a coffee company when he was introduced in 2000 to Marty Cox, founder of It’s A Grind coffee houses.

Cox took Shoeman on a tour in Long Beach of his unique coffee houses, which offer a more relaxing atmosphere than hectic competitors. They talked about opportunities for franchising, and by the end of the day, the two decided to partner to form IAG Coffee Franchise LLC.

Coffee drinkers welcomed the change in atmosphere the coffee houses offered, and that’s reflected in the company’s growth — It’s A Grind has nearly doubled in size each year for the past three years. It has 75 locations today, and Shoeman, CEO, expects that in five years, the company will have nearly 600 stores across the United States.

Smart Business spoke with Shoeman about the challenges of running a fast-growing franchise company and the importance of It’s A Grind’s core ideology.

What challenges accompany the fast growth of a franchise company, and how have you faced them?
Naturally, it’s always finding the right people as we grow so quickly — more particularly from an operational standpoint — because we need to be able to support the franchisees through their training, through their opening and through ongoing support.

That has been a challenge of ours. I think we have done a good job, but it’s something that we think of every day of every week as we grow.

We like to be six months ahead of the curve. With a franchise company ... stores don’t open for about 12 to 18 months from the time the franchisee signs the agreement. We can plan out how many stores we are going to have open and we can adjust accordingly as far as hires in the real estate department, the development department and the operational department.

The other challenge we have as we grow is we try to make a rapidly growing company feel small, personal and connected, and align behind what our core ideology is — creating exceptional experiences that enrich the lives of everyone we meet. It’s really important that as we get new franchisees and new employees that everyone is in philosophical alignment behind our core ideology.

How do you find new franchisees as you grow?
As we open stores in new markets, a lot of customers come in and are interested in becoming It’s A Grind franchisees. We also have some collateral material and put little brochures in the stores about franchises and direct them to our Web site if they want to get more information.

We also advertise on some Internet sites that are franchise related. I get a lot of inquiries from there.

And then we have an association with some franchise broker networks throughout the United States that send us qualified candidates that sort of fit our philosophical alignment as to what kind of individual we want as a franchisee.

What are some of your strategies for getting employees and franchisees to buy into you core ideology?
Prior to even hiring anyone, we have a personality survey that everyone takes. We use this not just for employees, but also for franchisees. We have put together over the years what our model franchisee would be, as well as what our model employees would be for the specific job that we are hiring.

Then in the interviewing process we stress that and try to get a feel of what the individual is like and where their passions lie. We are in the hospitality business so it is all about helping others and pleasing others. We want to make sure that we have like-minded people.

Then we also do that once we’ve hired the individual. When they come onboard and have their initial training program its all identified and lay out. It’s reinforced throughout the whole training program and really on a daily basis with us at corporate.

What makes It’s A Grind Coffee Houses stand out from the competition, such as Starbucks?
Some of the differences are purely aesthetic. We have a blues and jazz motif. We have high wingback chairs. So the ambiance is a little different. We like to say that our stores are a little bit more inviting and a little bit more comfortable.

Aside from that, one of the big differences is that we have franchisees in the store, where a lot of the other coffee houses have a manager in the store, for instance Starbucks.

We like to think the franchisee has a vested interest in the franchise. They live in the community, they grew up in the community and it is their store. They spend more time there and put a little more effort and energy into it.

We are very heavily involved in each community that our franchise stores are in. Each franchisee does a lot of charitable work in their community in their own neighborhood.

We would really like to see it be known as the local neighborhood coffee house. We have franchise owners who have a vested interest and really get involved in the community. They know the customers on a first name basis. They serve coffee at the PTA, at the chamber of commerce, at kids’ soccer games and they do a lot of charitable events at churches and other organizations.

HOW TO REACH: It’s A Grind, www.itsagrind.com

Thursday, 27 October 2005 20:00

Finding your niche

In 2002, Brian Carpizo, Chris Hafenscher and Jeff Grell started their second company together, Junction Solutions, an enterprise software and services provider.

“We saw an opportunity to work with Microsoft in the enterprise applications area because Microsoft had made a couple of large acquisitions in this space,” says Carpizo, CEO and president. “And we saw an opportunity to build a software company and services company on top of what Microsoft was doing.”

However, Carpizo soon realized that just because there is an opportunity in the marketplace doesn’t mean you will succeed.

“When we first started this company, we had a much broader line of service offerings,” says Carpizo. “What we found was due to the breadth of what we were trying to offer to the market, our message got drowned out because it wasn’t succinct enough.”

The founders then decided to focus their business around Microsoft Axapta, a multilanguage, multicurrency enterprise resource planning solution. They also decided to focus on two specific industries, multichannel retail, and food and beverage. Once the company became more focused, it began to grow.

Junction Solutions’ revenue increased from $1 million in 2003 to $4 million in 2004, and it expects an even larger jump to $16 million in 2005.

Smart Business spoke with Carpizo about how he manages the challenges of constantly adding employees to a fast-growing company.

What challenges have you encountered as a fast-growing firm?
As we grow and add new business and clients, we are constantly needing to add people. It is a constant challenge to find good people and train them and get them up to speed on the technologies that we are utilizing.

How have you overcome this challenge?
Typically, we will bring in senior people with a lot of experience and we will have them work in a wide area and handle a wide area of responsibilities. As we get larger, we will bring in people and let them build their own teams underneath them and do what they need to do as we get bigger.

For example, if you have someone running consulting, they are going to be a consultant for awhile. As the organization gets bigger, they are going to hire more consulting managers and that person is going to build his team under him. We tend to bring in more senior people at the beginning and then let them build their own organization.

How do you train new employees?
We have some formal training that we have developed. We use training from outside vendors, like Microsoft. We also do some industry training.

Mostly what we do is we have our inexperienced people really learn from our experienced people. Every new person that comes into our company and is given an assignment is going to be working with a senior person who is really experienced and is there to show them the ropes.

The organization is really centered around the constant influx of new people and the fact that those new people need to be mentored and trained and explained to about how things work. It is a daily and normal thing to keep bringing new people in.

How do you maintain your corporate culture while your company is constantly adding new people?
The one thing that isn’t changing is the corporate culture. The corporate culture was really set by the first five or six people in the company. The way we maintain the culture we originally developed is by continuing to hire people that fit in to our corporate culture. Once you find them, you don’t have to do much work.

Even though we’re changing, it really doesn’t feel any different to me that it did when it was just four people.

How do you find those people?
We tend to attract people who like a growing, dynamic smaller company type of atmosphere. The types of people we bring into our company are very bright and very resourceful.

They’re able to handle all the different challenges that we throw at them without as much structure as you would have in a large company.

What are you growth goals for the future, and how do you plan to achieve them?
We’re looking at doubling our revenue every year for the next four years or so.

What we’re really looking at here is a phenomenon under which we believe that Microsoft is helping change the way software is developed for enterprise software companies. We feel that we are on the tip of that trend.

There is a large amount of opportunity for us to do that. There is an extreme amount of opportunity for us to succeed with our vertical strategy.

Our two vertical industries are food and beverage, and multichannel retail. Eventually, we are going to branch out to support all retail types of application software.

Because of some things that we are doing with Microsoft and our partnership with Microsoft, we are part of this thing called the Industry Builder Initiative, and that is taking us global. We not only have the opportunity to expand right here in the States, but we are looking at expanding globally as soon as this year.

That’s going to expand markets for us and make the opportunities for us that much larger.

How to reach: Junction Solutions, www.junctionsolutions.com

Friday, 28 July 2006 20:00

Gary E. Holdren

 Inspired by his father, who built a business out of the back of a station wagon, Gary E. Holdren always wanted to be an entrepreneur. And in a strange stroke of luck, he got that opportunity when he was left jobless after the implosion of Arthur Andersen in 2002. Many of his colleagues — unemployed and reluctant to work for the competition — suggested that they form a new consulting company, with Holdren as CEO, and Huron Consulting Group was born. The financial and operational consulting company has been growing rapidly ever since, with 2005 revenue of $200 million and staff levels 31 percent higher over the previous year. Smart Business spoke with Holdren about the importance of establishing solid relationships and finding loyal employees when growing a business.

Create a notable culture.
I believe that our most significant accomplishments aren’t measured in percentages or documented on spreadsheets. From my perspective, our greatest achievements are the culture we have created at Huron and the depth of our relationships with our clients.

Huron’s future growth plan is based on a simple formula: Continue building a company comprised of people who are energized by our culture, and support them as they build legendary client relationships that transcend any one engagement or issue.

Build relationships.
Relationships start a lot of ways. Relationships start from people who have been friends, from people who have been prior clients.

They can start from a work relationship. They can start from a social relationship. They can start from a community relationship.

So what I can encourage all of our young people to do is to be actively involved in their community. Be on charities and get to know people. Be actively involved in schools and, at the same time, professional organizations. Be members of golf clubs, do things for fun.

Get people to know you, get people to like you, get people to trust you.

Expand on work relationships.
Do client entertainment. Entertain clients and potential clients at a ball game. Take them to play golf, take them to the opera, have them to your home for dinner, go on a trip with them.

I was just on a fishing trip with three CEOs. People buy work from people they trust. You can’t have a trusting relationship unless you get to know someone.

Surround yourself with the best.
My success is all based on people I surround myself with. It’s the result of direction.

It is the result of some leadership by myself, but it’s also the result of just surrounding yourself with the best possible people that you can surround yourself with in every aspect of the company, whether it be serving clients, whether it be my assistant who answers my phone or the accounting department or HR. You just can’t have success without having good, competent people in every job of the company.

We have been able to sustain our incredible growth by having an unbelievable corporate staff to support our consultants. We don’t try to do anything on the skinny. Surround yourself with the best people, build great infrastructures, always deliver high value to clients, and just go as fast as you can.

Find team players.
We’ve got several different businesses now that serve different clients, so we need to see what the business needs are of the various practices. Our people that we hire ... have to be outgoing.

We look for people with a math background. We look to see if they can be a part of a team and work in a team environment. Brain power clearly is one of the key ingredients, but if you have brains and you have nothing else, then that does not mean much.

Integrate employees.
Each team has different ways in which they will incorporate their team members under their team and into their practice. At the same time, Huron will have overall training that will tell them about our corporate culture, our corporate policies and what we expect out of them.

Then as they move through their years at Huron, they will get all different levels of training — internal and external training — to help them succeed in the marketplace.

Motivate your employees.
We provide the best training options to employees by combining interactive and traditional approaches to deepen skill and develop leadership abilities.

We also provide reimbursement for professional society memberships, support certifications and licensure renewal, tuition reimbursement options, work-life benefits and various other rewards for our people. Our superior work-life programs — such as a liberal vacation policy, travel benefits, flex-time work schedules, bonus and stock purchase programs — are above market, and we strive to offer competitive salaries.

That’s a win-win for our employees and for Huron.

Respect your employees.
First and foremost, you have to treat your people with respect. People want to work for a place where they are treated with respect (and where) they think they are given challenging opportunities that will help them learn and grow, and that they are adequately compensated for their efforts.

If you don’t do that, then you won’t have a very loyal work force.

Stick by your principles.
You need to know where you want to go. You need to know what your visions are, and you need to make sure that you have principles. If you know what you want to do and it’s principle-based and you stick with that, then over time, that will be fulfilling in a sustainable environment.

If you don’t have principles, I’m not sure you have a sustainable company. You have to stick with them in good times and bad times.

HOW TO REACH: Huron Consulting Group, www.huronconsultinggroup.com

Thursday, 27 July 2006 20:00

The perfect form

 The best advice Al Trujillo can give other CEOs is this — Don’t compare your company to the competition.

When Trujillo was named president and CEO of document management company Recall Corp. in 2002, customer surveys showed that Recall surpassed the competition and that customers were satisfied with the service they received.

“That gave us a certain amount of satisfaction and maybe too much comfort,” says Trujillo. “The real genius back then was when we decided not to ask our customers what our performance was relative to our competitors, or even what our performance was relative to their expectations, which is the definition of satisfaction.”

When customers were asked about their expectations, Trujillo was shocked to discover that they were extremely low, because no one in the industry was providing reliable, consistent and accurate service.

“You can be lulled into a false sense of security if customers’ expectations are, in fact, very low,” says Trujillo. “That means if you just do a little better than very low, you could still actually be quite poor, and yet your customers say they’re satisfied because you’ve basically met their expectations. That’s exactly where we were back in 2002.”

Trujillo decided that to accurately judge Recall’s performance, he needed to compare the company to a standard much higher than the competition or the expectations of customers, and that standard was perfection.

Trujillo had been with Recall, a subsidiary of Australia-based Brambles Corp., since 1997 and appreciated that it provided its services — the secure storage, organization, retrieval and destruction of documents — in a consistent way all over the world. But what wasn’t consistent was its commitment to service.

“We all kind of subscribed to the view that providing consistent, reliable and accurate service was an important characteristic, but we didn’t do it in a consistent way,” says Trujillo.

Outperforming the competition was no longer an acceptable goal, and from that point on, Trujillo would accept nothing less than perfection. A plan called the Perfect Order system was created to get everyone there.

Trujillo focuses on answering the questions what, how and why to drive commitment to the Perfect Order system. He uses these three elements to lead all of his 4,600 employees in 24 countries around the world.

“One is, you have to know what to do, so there’s a certain amount of planning and analysis that is required in any leadership role,” says Trujillo. “You have to be able to define what the objectives are and how you are going to achieve those objectives.”

To answer the first question — what — Trujillo needed to clearly explain Perfect Order so that there would be no confusion about what is perfect and what isn’t.

“We tried to quiet the opinions and fill them in with objectives, so it reduces any possibility of miscommunication,” says Trujillo. “We adopted a common language about how we would discuss and describe service delivery so that we were all talking the same language. I think that’s an important start. If you want someone to learn a different way, you have to all agree that you are going to communicate using the same set of definitions.”

From then on, all Recall employees knew that a perfect order was one that was on time, complete and secure. Now that there was a definition, Trujillo had to answer the second question — how. How would they determine if an order met those three components?

“We don’t think customer satisfaction or whether we provide good service should be defined as an opinion,” says Trujillo. “We believe it should be based on metrics — things that can be measured and improved upon. If you are a customer and you ask for 10 items and you want them delivered within two hours, we will measure ourselves against that standard objectively.

“Did we find all the items that you wanted? Did we deliver them to you and hand custody to you of those items? Did we do that within 120 minutes of you placing the order?”

If any of those conditions are not met, regardless of the reason, the order is imperfect. The company keeps a record of who was involved and the reason for the imperfection so that action can be taken to correct it.

Changing behaviors to decrease the number of imperfections was important to improving consistency of service, but it wasn’t easy. Whether it’s a veteran Recall employee or an employee gained through one of the company’s nearly 70 acquisitions in the past five years, Trujillo says the toughest part of changing the way something is done is answering the third question — why. It is essential to motivate employees to want to change, and that is something that many leaders overlook.

“I think that all individuals, regardless of culture or location, really want to understand the ‘why’ and what’s ultimately in it for them and why this is right for them to do and not just follow through on an edict,” says Trujillo.

All managers play a role in motivating employees at Recall. They stress the importance of improving their service through face-to-face conversations, video messages and in writing.

“The biggest challenge is to get into the hearts and minds of the organization, so they are clear that this is more than just following a new set of procedures,” says Trujillo. “It’s a different way of looking at service in terms of it being a commitment between Recall and its customers — one that’s based on facts, figures and metrics as opposed to an opinion that might be able to be swayed by a particular relationship.

“That’s the piece we work on. It’s the communication piece to make sure that they understand that while, from an activity point of view, it may seem very similar, there’s something behind the activities that they should subscribe to as well.”

Communication between employees and management has always been emphasized in Recall’s culture, and Trujillo says it is essential to being a good leader.

“You have to provide for the opportunity for feedback and open discussion about objectives,” says Trujillo. “We have institutionalized that at Recall since 1997 in what we call our recharge sessions.”

Twice a year, every Recall employee is entitled to two face-to-face sessions, where formal material such as financial performance, team member performance at a regional, country and global level and various other objectives are presented. By keeping the lines of communication open, Trujillo has kept his employees motivated, especially in their commitment to Perfect Order.

“We made Perfect Order and striving for the achievement of perfection a major theme of those recharge sessions,” says Trujillo. “I think that had a significant influence on the success of this program.”

By communicating with his employees, Trujillo found out that they really want to do a good job, and by measuring their performance, they could see if and by how much they’ve improved and how they compare to their peers.

“It appealed, in many cases, to their sense of pride in being able to deliver service at the highest level at the highest standards,” says Trujillo. “And that, I believe, was the magic ingredient in rolling out this program. ... It didn’t require a lot of carrot to motivate them. It really required the opportunity to give these team members around the world the opportunity to excel. And that opportunity to excel, I believe, is universal.”

And that is what has enabled the Perfect Order system to improve Recall’s global performance. When Trujillo first measured the company’s performance against perfection in 2002, it delivered perfect orders only 65 percent of the time. Now, that number is between 98.6 percent and 99.3 percent.

Today, the $600 million company is still the best in the industry, but Trujillo can now stake that claim with pride and proof. He says that it was not a hard transformation — it just took being a strong leader who is willing to openly communicate with his employees.

“From a leadership point of view, you can get the most out of people, the most out of an organization, the most out of a team, if you’ve got everybody understanding where you are going and then, hopefully, the majority of them subscribing,” says Trujillo. “It’s pretty simple stuff. I don’t think I’m inventing anything here, and there are probably a couple dozen books out there that tell you why this is logical. I can tell you from my experience that it has been.”

HOW TO REACH: Recall Corp., www.recall.com