Make people feel comfortable expressing their opinions. It’s always a challenge. As you get bigger, it’s more of a challenge. The people who have been here the longest say you can be open, and there is no retaliation.
If there were some concerns, or if I become aware, I try to bring everyone in together and try to diffuse any feelings that are being misinterpreted right away. Some people are conditioned to follow the chain of command, which is important because I can’t fix tires on the side of the road.
If it’s something people feel strongly about, they voice their opinion. They also know they can make an appointment with me. It’s not the easiest way to get a hold of me, but, if it’s urgent, I will make sure I make the time.
It’s important you always encourage your people to take risks. The more people have little wins, the more comfortable they feel. You could have 1,000 good wins and one bad experience, and you create a little bit of gun-shyness. If we have that awareness, we address it right away.
Constantly pursue excellence. It’s never good enough, which can be frustrating for people. It’s constantly striving to be better, competitive and profitable.
A lot of the people who work with me are driven by measurable goals, so they know what they have to achieve. I don’t micromanage. I try to set the direction, pick great people, follow up and be a consultant or a coach. Some days it’s not easy.
Balance work and home life. Sometimes you are 80 percent too much into the business, and you see signs you aren’t addressing personal or family needs. Then you give 80 percent to the family and miss a few meetings. I balance it by trying to have understanding children. Trying to bring them to some events I attend. Try to make sure I am home at night is the key thing.
Or, if I’m at a function at night, then I schedule time during the day, say from 3 p.m. to 6 p.m. to see my kids and spend quality time with them.
Have people around you who buy in to the vision. I like the people around me to be able to communicate well orally and written.
More importantly, be service-driven, focused on their specific job qualifications, be organized and be able to help communicate to the people that work with them the key goals. They have to be focused and disciplined in their job elements. I’ve been fortunate enough to find good people based on interviews and being in the business. A lot of them come from recommendations.
Since I have other facilities, I’ve been trying to develop a common hiring approach so we can have common cultures. It may involve a clinical psychologist and certain tests and certain interview questions that help pre-screen and help get us the top five to 10 candidates, depending on the job.
I’m shooting for 80 percent success. Rapid growth certainly does challenge that.
Persevere and care. Someone said something and I wish I knew who said it; the only time success comes before work is in the dictionary.
If you are very passionate at what you believe and are strongly committed to it, you are going to be successful in whatever you pursue. But success isn’t permanent, and neither is failure. It’s easier to manage life through successes, but your biggest learning is through failures. You grow that way.
Once you get over the hurtful feeling of not getting what you were pursuing at that moment, sometimes you look back and say, ‘There was a good reason why.’ It’s not that it’s never disappointing, but you just have to say, ‘There are some things in here where I have to look for the good.’ It’s all where you shift your focus.
Seek advice. Being in the business 25 years, sometimes you get duped. Even Donald Trump does.
I call a lot of other executives and we talk about it. They tell me what they think and why. I’ll say, ‘What would make you believe this?’ Usually, I’m calling someone who has been around 50 years, so they’ve had more experience. They’ll say, ‘Have you asked these four questions?’ Maybe I’ve asked one.
Then you start asking those questions and you get down to the person saying, ‘I can’t put that in writing, I can’t guarantee that, or if that would happen, then it would be your own problem.’ Then you say, ‘I’m not pursuing this.’ I use a variety of people and their expertise and opinions.
Let employees grow, even if it’s at another company. In some instances, I encourage them to take an opportunity because it helps them grow into an area I’m not in yet.
I’ve been fortunate to have a couple return, and they return with that knowledge and that skill set that may have taken two to four years with me. They were able to get it in a year-and-a-half. I want people to be their best and pursue what makes them happy.
If I can provide challenging work, a great opportunity to grow and commensurate compensation, then hopefully they’ll stay. But if someone offers them double their salary, then I say, ‘Go. That’s great.’
HOW TO REACH: Rush Trucking Corp., (800) 526-7874 or trucom2.rushtrucking.com
In 2000, Rich Schwabauer, president of Navigating Business Space Inc. (NBS), purchased one of its competitors, significantly growing the company from about $20 million in sales and 50 employees to about $40 million in sales and 80 employees.
With that growth, Schwabauer knew it was time to change his role within the company and allow his employees to tackle some of the more important issues. “It was that year, I just had to let go,” Schwabauer says. “It was kind of a defining moment where you just know it’s about the team. As we started to grow and see people develop, it became much easier.”
The workspace designer now employs more than 100 employees and had 2005 revenue of about $50 million.
Smart Business spoke with Schwabauer about how to create a fun work environment for employees.
Q: What does it take to be a successful leader?
Finding the right people to add to your team and putting them in the right spots. I spend a lot of time, part of my week and year, recruiting and coaching and mentoring. That’s what makes up a big part of my to-do list.
You really have to be willing to let go and empower once you have those right people. One of the skill sets you need is to be able to delegate, empower and trust that things will get done. If you aren’t inclined that way, then (it) will be a challenge to let go.
You need to reward and recognize and celebrate success. You need to acknowledge those and make them a part of your day-to-day activities.
Q: How do you find good employees?
I put an ear to suppliers we work with and other customers we work with. I’m looking for who they feel is a bright, energetic person that fits the profile I’m looking for.
I personally ask for who is out there. Not who is available, but who is good. I just cold call them. I call them, prospect them and mention I heard a lot of good things about them. I meet with them and pursue them.
Q: How do you retain employees?
I would put that into three buckets. One, we share a lot of information. We share how we are doing as a company. Even though we are privately held, we are committed to [being an] open book. Nobody is without information.
Two, we put fun into the workplace. Our business is to design productive workspaces for our customers, so we work in one. We always have something going on that brings people together socially. They can take some steam off of their day and relax.
Three, we make it personal. I try to make sure I spend time with all our people and play a role that I can in making sure they are successful and feel good about what they do.
Q: What fun things do you do for employees?
We have margarita days. At 2 in the afternoon, we’ll bring pretzels and chips and we’ll let loose a little bit in the late afternoon. We take an afternoon and have a bocce ball tournament.
In 2003, we took the entire company to Disney. We set a company goal and we worked with this book called ‘Inside the Magic Kingdom.’ It’s a book on who Disney is, who they are and why they are successful. I have all the employees read the book and we talk about the concepts and try to apply them to our business.
Half the company left on Thursday and came back on Sunday. The other half left on Saturday and came back on Tuesday so we were able to keep business as usual. We just want this to be a place that people enjoy coming to.
We also have two teams that reward and recognize. One team is called the traditions team. They are responsible for the informal rewards and recognitions we do throughout the month. They are little ‘Way to go’ cards that have really hung on here without losing momentum. They are little cards you grab if somebody helped you out. It’s a way for you to recognize their efforts. At the end of the month, we pull certain names out and give them little gifts and certificates.
The other team is called the mentor team. We felt it was important to establish a mentor team so when we do hire a person or several new people, that they have some go-to people on everything from our business practices to the culture to, really, how work gets done.
HOW TO REACH: Navigating Business Space Inc., (248) 823-5400 or www.navbus.com
When he bought Jones the Florist LLC in 2003, David Fisher wanted to change the culture and direction of the business. The only problem was, the president and principal owner had to lead the process alone because he entered the company operationally on his own.
“I was the only new team member on Day One, trying to begin that process of change alone, not without the people who were here but as an outsider,” Fisher says. “If I were to ever pursue coming into another business as an operator, I would want to do that with someone alongside me.”
Fisher went through the process one day at a time and kept a positive outlook. He also held on to talent already working at the company. “We recognized that there were some very capable and talented people here, many of whom are still here today, some of whom were capable for the job they were doing under my predecessor, but maybe not quite right for where we wanted to take the company,” he says. “You sort through that and see where your gaps are and go out and look for the best people you can.”
In three years, the company of 55 employees grew 25 percent to more than $5 million in 2005 revenue.
Smart Business spoke with Fisher about what he looks for in employees and how he shapes his staff.
Q: How do you build a solid team?
You need to understand what your own weaknesses and deficiencies are. If you have a sense of that and are honest about that, then you need to make sure you have a close confidant in the business that can help complement your skills.
From there, it just goes from one area of the business to a department in terms of building the team. You have to assess what you have and see what the holes are and see if you can fill them from within. If you can’t, then come out with a game plan to get them filled and a timetable to do it.
Q: What qualities are you looking for in employees?
Common traits would certainly be people who have demonstrated a track record of success in some previous form or time in their career. That could be in an academic career, or it could be demonstrated success for what their chosen field had been previously. People who are self-motivated, self-starters and able to make decisions on their own. People who have come through some challenge or adversity. What did they learn from it? How have they overcome it? Have they been tenacious in accomplishing something they had set out to accomplish?
Probe for those kind of experiences or questions.
Q: How do you handle the interview process?
Depends on the level of the hire. Sometimes they will meet with me initially and work through some other folks on our management team and certainly direct managers or supervisors. I tend to be more involved in the hiring on our outside sales team or certainly our marketing and our senior management team, but less so when it would come to somebody in accounting or delivery or areas where I may not have the expertise myself.
With anyone I interview, I say, ‘This is where we are trying to go and this is what we are trying to do. Here’s how we see ourselves in the marketplace. Here’s how we are different.’
I basically would walk a potential hire through a sales presentation so they know, if we are talking to some corporation, they are hearing from me what it is I would be saying to that customer so they know what we are trying to accomplish. That consistent repetition and re-enforcement is helpful.
The recruitment thing is a two-way street. You have to find people who you like and you want to bring into the business and are a good fit. Sometimes you have to sell them that this is the right environment for them.
Q: How do you retain employees?
For some, it’s purely financial, and for some, it’s some financial but also creating an environment for them to grow and develop and hone new skills. In some cases, it’s, ‘Am I made to feel good about the contributions I am making?’
Some people need to be reminded and reinforced that, ‘Hey, you are doing great, and I really appreciate what you are doing.’ For some, that’s enough. For some, it comes from within and some people just take satisfaction in doing their jobs well.
Q: How do you find out what employees want?
It is getting to know the employee and having a relationship with them, whether it’s me directly or through the management team and our leadership group. I would have the same expectations of all of our managers in having those kinds of relations ships and conversations with their respective employees so they know what makes one tick versus the other tick.
HOW TO REACH: Jones the Florist, (800) 755-6622 or www.jonestheflorist.com
Joseph A. DeMaria Jr., a University of Michigan graduate, wasn’t happy his son was attending basketball camp at rival Michigan State University. But while at the camp, the president of DeMaria Building Co. Inc. heard the coaches giving advice that DeMaria has used in both his personal and professional lives learn to listen and listen to learn. DeMaria’s listening skills have paid off; the company has more than 150 employees had 2005 revenue of $114 million. Smart Business spoke with DeMaria about how to treat employees so that they want to stay and the importance of listening.
Listen. Learn to listen. Listen to learn. It’s amazing that if you just sit back and let someone talk, you can make a good judgment on what to do. So many people want to react and be the person who will shout the loudest or be the biggest talker, and they are missing everything.
Recognize good ideas. We have a program called Opportunity for Improvement. Basically, anyone in the company, down to our lowest level of labor in the field, can submit a formal idea. We have categories such as, does it improve the company, does it save money or does it improve safety or morale?
They get DeMaria points for submitting these ideas. The better the idea, the more points they get, and they convert these points into gift cards.
It’s amazing some of the ideas we got. What we try to preach is we aren’t looking for the idea that saves us $100,000. We are looking for a small idea that makes us a little bit better.
We just want to slowly get better with these small ideas, instead of everyone looking for that grand idea that’s going to save the company all kinds of money. That never happens, and if it does, it’s rare.
It could be as simple as, ‘We have three forms to do this, and I feel we can use one form. Those other two forms are useless, yet it takes me an hour a week to do those two forms.’ We have a formal process where we have a team that implements those ideas. We’ve had this since about 1997.
Before that, someone had an idea and they’d tell their supervisor. Then, it would depend on who he would tell, and it just got nowhere. We’ll also publish the ideas [in the company newsletter]. ‘John Doe, laborer out in the field, has this great idea. Congratulations. Thanks for the idea. It really helped.’
Stop yelling. If we have the right people, we don’t have to motivate them. Our biggest challenge is how not to demotivate them. There is nothing more demotivating than to chew somebody out or call them out on the carpet.
When you’re in a team meeting, you don’t single someone out when something went wrong. We take our success and failures as a team. It’s kind of like being a coach. When they do good, they did good. When it went bad, management made a bad decision.
We also have a lessons learned e-mail. We send out e-mails without names and say, ‘This happened and was a problem, and we want everyone to learn from it.’
If you chastise or beat up someone, they aren’t going to want to stay around, or, next time, when something happens, they are going to hide it. We want to know if there is a problem so we can fix it.
Listen to employees, then act. If someone has a great idea and you take two years to implement, then next time, the guy says, ‘What’s the sense? I sent it in, and for two years I didn’t hear about it.’
When we have these ideas, some of them are not very good ideas. But, we always try to find some little piece of it that is a good idea and say, ‘Even though we can’t do this, we will do this. Thanks a lot for submitting the idea.’
We’re conscious of not saying, ‘No, that’s a bad idea.’ He’s going to say, ‘Well, I’ve submitted two ideas, and both times they gave me the thumbs down. I’m not submitting any more ideas.’
We also preach that you can’t submit a piece of paper that says, ‘I think everyone should get new desk chairs.’ Well, why? We have a whole form of what is the benefit, what will it cost the company and why is this a good idea? They have to put some thought and research into it.
Concentrate on opportunities rather than on problems. We’ve made the mistake of putting our best people on our biggest problem. Put your best people on your biggest opportunities.
Once we started doing it, we had success. We, in the past, would have a problem and throw the best people to fix that problem, and all the opportunities were suffering because of that.
If you’re losing 20 grand on a project and put your best person on it, but you have an opportunity to make $100,000 and you aren’t putting him over there, then you aren’t doing yourself justice.
You’re going to want a good problem-solver and management to get involved [on your biggest problem].
Groom for the future. Have someone behind you that is going to be good, if not better, than you when you move up. It does the company a big injustice if you are so great and you pound everybody below you down.
If you leave, get promoted or move to a different area, then have someone behind you that is going to do just as good or a better job.
Know when to say ‘no.’ I had the mentality coming out of college of bigger and bigger. If they can do it, we can do it. It’s hard to say no, but you have to say no. You have to be disciplined enough to know there are things we are just not good at and would just get ourselves in trouble.
This is our third five-year strategic planning session we are going through, and, in each one of those, we spent a lot of time focusing in on what we do best, and that’s all we are going to do. The things we aren’t good at we are staying away from.
I don’t care how great the opportunity sounds. You have to be able to say the word ‘no,’ and it’s a hard thing to do.
HOW TO REACH: DeMaria Building Co. Inc., (313) 870-2800 or www.demariabldgco.com
Doing something wrong isn’t always something someone wants to admit. Yet Perry Daneshgari, owner, president and CEO of Computer Builders Warehouse, wants his employees to come clean when they make a mistake. “’Fessing up is celebrated and not punished,” he says. “We are educating managers to be small business owners and not followers.” Coming clean is also the way Daneshgari, who follows the business approach of Toyota and Microsoft, deals with failure. “We admit it,” he says. “Then we change course again. It doesn’t matter if it’s me or one of the managers.”
Daneshgari is also president and CEO of MCA Inc., which acquired Computer Builders Warehouse. CBW posted 2005 revenue of about $20 million and estimates 2006 revenue of about $25 million.
Smart Business spoke with Daneshgari about how he implements his collaborative leadership style and lets employees know he’s listening.
Q: What causes a company to fail?
Primarily lack of business knowledge of top managers. Management’s lack of understanding of business principles. They try to be profitable by increasing their prices, and they can’t compete.
Second, management thinking people working for them would be able to think like them. That is the biggest fallacy of all management gurus. They have all their theories and they think the people standing on line are going to think like their executives. If they were going to think like their managers, they would have their jobs.
Third, managers don’t understand how workers think because they have thought that way all their life and they have gone though the ranks. What makes workers tick might be different in manufacturing than in sales or the office. You can’t have one-model-fits-all. Managers have to understand how people think.
Fourth, the fact managers try to put in untested and unvalidated managerial theories. All these fads that come and go. They are all theories of some professors and nothing against professors, I’m one myself at the universities sitting there and creating theories. It worked in the ’60s and ’70s because we bombed the hell out of the rest of the world and no one could compete with us. Any management theory would have worked.
Fifth, the commitment of the management to change. Durability and the management actually stays behind the change. That usually kills implementation, if they don’t stay behind the change.
Q: How do you implement your collaborative leadership style?
We create implementation teams. First of all, we set the direction. Implementation teams go all the way down to the lowest level of the company. They are given direction. They are not self-driven teams; they are mission-driven teams.
The people who do the work know the environment the best. They are only lacking the bird’s-eye view, which the management brings in. We give them enough authority to come up with implementation and to do the actual implementation.
We assign an executive to the implementation team. It’s a very surgical, cross-functional team. Let’s say on a manufacturing team we have people who are involved in sales, as well as procurement, as well as manufacturing. There are multitudes of inputs. Manufacturing just does-n’t dance to their own drum. They take inputs from the users upstream and downstream.
Q: How do you make decisions?
That’s sort of an open door. I may have ideas I may put on the table; because I am the owner, they may think I have a higher weight on the ideas.
But I have to educate them if my idea is correct or not. Very often, they may have opposition to that. If the opposition is valid, we have a methodology we will test first before we put it across the company.
We take the input, and sometimes the decisions are just made by notifying me.
Q: How do you let employees know your door is open and you won’t ignore the suggestions?
I call that ‘open door, but closed mind’ policy. The doors are open, but the mind is not. It’s the action. We can talk about things, but, if you don’t act on them, you lose their trust.
We have the open issue list. We call it O.I.L. Every manager and every employee has an O.I.L. If they have any issues, they track on it and we review that religiously. If the items on O.I.L. are not resolved in a certain time, we assign a task force to go resolve it.
Let’s say the employee says we need to advertise in XYZ magazine. They literally have to go investigate what the cost is, what the read-ership is and then bring in the facts. We aren’t going to pass it to somebody who doesn’t have the same passion about it.
That person has to convince other people. Once it is approved by the management group, then we put resources behind it for implementation.
HOW TO REACH: Computer Builders Warehouse, (586) 756-2600 or www.cbwstores.com
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
The problem with rubbing elbows with the rich and famous is that sometimes an elbow is as close as you get.
Marty Schaffel sat at the same table as some of poker’s best players at the World Series of Poker but didn’t get much exposure out of it. “I just got mad at the cameraman because if I was in the hand with them, and they would be videotaping it, they would only videotape the other guy and not me,” he says. “The closest I could do is maybe look for my elbow on the screen.”
While he may have missed the opportunity for television face time, Schaffel hasn’t missed many chances in the business world. The owner and managing chairman of Audio Visual Innovations Inc., a provider of presentation technology, started the company in 1979 in Lakeland, Fla., and watched it grow to a $200 million, 800-employee company by 2005, with projected 2006 revenue of $225 million.
Schaffel sums up the key to growth in one statement: “Seeing opportunity and jumping on it with 220 pounds with both feet,” he says.
Here’s how Schaffel keeps AVI on top.
Don’t get complacent
In 1988, a man walked in the door with a piece of glass inside a picture frame and an 8-bit Apple computer. “He put it on a standard overhead projector and plugged everything in, and I looked up on the screen and there was black text on an illuminated, projected image on the screen,” he says. Schaffel knew at that moment that he was looking at the future and shifted his company’s focus toward display technology, something that’s helped make Audio Visual Innovations a dominant player in its industry. “That was a huge rocketship for us,” he says.
Though the shift toward display technology resulted in great success, Schaffel had to be careful not to take anything for granted. He is quick to realize there are smaller companies climbing up the ranks, hoping to give him a taste of his own medicine. “When I started the company, I was the littlest guy out there and went out trying to take swings at big giants,” he says. “Now that we are the biggest in the industry, the problem we have is the people who are more nimble than us can do what I did when we were a guerrilla street fighter. The challenge for this company is to still be a guerrilla street fighter and still be a large company at the same time.”
When the company was smaller, Schaffel could do that fighting himself by reaching out and touching many customers, giving the customer the feeling that he is looking after them. “Well, that was fine when we had 500 customers, but now we have tens of thousands of customers, and I can’t quite extend that same personal trust,” he says.
Schaffel recalls a time when he was still working out of his apartment, and wanted to do business with a huge engineering company. Every time he would call the target company, he was told his services were not needed because the business was already working with a much larger company.
Schaffel eventually received a frantic phone call from the target Schaffel’s competitor wasn’t responding, and the company needed service.
Never one to miss an opportunity, Schaffel hopped in his car and made the hour-and-a-half trip from Lakeland to Orlando to put a 10-cent part in a machine. “As a result, she sent a memo to every office in their company emphasizing how they needed to do business with me and my company because we were willing to go the extra mile, and this other company had become complacent,” he says.
Schaffel says the key to winning the fight is making sure good customers feel that they have a personal, attentive relationship with his company.
Recently, Schaffel got wind that a very large customer of AVI indicated it was going to stop doing business with the company because a smaller competitor was being much more attentive. “I said to our folks, ‘Stop what you’re doing and go see this person,’” he says. “Understand what is going through her mind and what she is hearing from this other company. Let’s make sure that we do what it takes to understand the situation and to help retain her as a customer. The meeting took place, and we did. But it could have been where we stayed on our path and lost a very visible customer.”
Adjust your management style
Schaffel says he continuously faces the challenges of having to let go of responsibilities.
As the company grew, Schaffel would ask himself, “If I stay back here and fix things, as opposed to go sell, I’m going to sacrifice the potential revenue because I am helping in the repair area, or the accounting area, or I’m helping in some other area. It became obvious to me the things I was doing, I could pay someone to do and (I could) go out and generate revenue.”
Schaffel previously carried the titles of CEO and president but is now managing chairman. The process of letting go was so tough on him that he remembers the exact date Dec. 7, 2005 when he decreased the number of direct reports he received from about 15 to two. “From the day I knew I needed to do it, it took me a year to mentally position myself to do it,” he says. “I drive people crazy on occasion when I stick my nose back in. There are certain areas I feel I’m offering input, and they feel, ‘You don’t think I’m competent.’”
Schaffel says that on good days, he catches himself and keeps his opinion to himself, but on the bad days he takes his lumps. “Most people that I interact with know they can be pretty blunt with me,” he says. “I have a personal philosophy that if somebody tells me what they think I want to hear, I have absolutely no use for them. I need people telling me what’s on their mind and what is reality.”
Schaffel was also heavily involved in purchasing, something else he needed to give up. “I was eventually able to work with somebody and train them to be able to approach it the same way I did it,” he says. “I worked with them for about six months before I had the confidence to turn them loose and not worry about whether we are efficiently doing business with our suppliers.”
Schaffel says letting go was very difficult, but it was necessary for the company to move forward. “It’s a two-step process,” he says. “You have to be able to define for yourself what you really want to do, what you’re good at and what you enjoy doing. And you have to be able to identify the people you can trust and have the confidence in them to do what it is you are going to relinquish.”
Schaffel views his role now as more of a psychologist for the organization. “Organizational behavior is somewhat of a psychological endeavor because the business has its own personality and personality disorders,” he says. “There is the constant challenge of 800 employees and the interaction that different managers or department heads have when their vested interests are at stake. I encourage everyone with a plan, program or project problem to come to me not asking for the answers, but laying out what they think and feel are possible options and the right ideas. “Hopefully, I can guide them to the selection they are most enthusiastic about and will take the greatest amount of ownership in.”
Keep turnover down
“Retention is everything because employees have memory,” Schaffel says. “You turn people over, you lose their memory and experience. That memory and experience have everything to do with success, in my opinion. You lose efficiency, you lose memory and you los e understanding of what’s important.”
At least initially, Schaffel wants employees who are a blank canvas but who are waiting to be painted. “Every day I would prefer to hire somebody with a great heart, great passion and great enthusiasm, but knows absolutely nothing about what I want them to do,” he says. Why? Because you can’t teach or train enthusiasm, passion or a great heart. But you can teach or train the skills and knowledge that you want somebody to have to do something. They can do that far past your greatest expectation if they have the passion and enthusiasm. “If I go into our industry and hire somebody who has great knowledge but doesn’t have great enthusiasm or passion, then their knowledge is totally useless to me.”
When those potential employees become available from other organizations, Schaffel makes his move. AVI had some very large competitors that went through consolidation or acquisitions, which led to disintegration from internal management issues, according to Schaffel. “In both cases, some wonderful employees and customers came to us, and that had a huge impact on our growth,” he says.
Yet, Schaffel realizes if all 800 of his employees won the lottery, chances are most would not show up for work the next morning. “Therefore, they want to feel like they are being paid fairly,” he says. “Now, do you lose people if someone offers them 25 cents more an hour or a thousand dollars more a year? Do they immediately jump ship? If they can’t find any other values in the organization, then the answer is probably.”
That’s where AVI’s incentive and reward program comes into play.
Schaffel has different recognition programs set up for employees. Along with monthly and yearly awards complete with bonuses and weekend trips to recognize exemplary employees, the company also has “Note to Take Note.” The program is an item on the company’s intranet that recognizes fellow workers with commendations of how they are helping AVI to achieve its strategic goals.
Anyone can submit a note, which is published on the company’s homepage. The company also has “People Praise,” allowing employees to send electronic cards through the intranet to other employees. “Everybody has a recognition quotient,” Schaffel says. “Some have a huge one where they constantly have to feel like they are recognized for what they do. Some have a lesser one where they appreciate it if they are recognized, but if a day or a week goes by and they aren’t, they still get up every day and there is an internal drive that causes them to want to be good at what they do. But, it all has to be fed. When people feel like they are being recognized for what they do, it can counterbalance any other frustration that can surface on a given day.”
HOW TO REACH: Audio Visual Innovations Inc., (800) 282-6733 or www.aviinc.com
Jon E. Barfield likens business to a game of cards: Even when a player is down to his last chip, he’s willing to risk it for a chance to win the game. And during difficult times, a company likewise must be willing to take risks to stay ahead of the curve and take advantage of potential growth opportunities, says Barfield, chairman and CEO of the Bartech Group Inc. Barfield, whose father started the staffing firm in 1977, says that many of his largest customers are in the automotive industry, which has seen better days, so his company has been planning new services and products to build on its 2005 revenue of about $200 million. Smart Business spoke with Barfield about how to find motivated employees and rebound from mistakes.
Play for the long haul. If you participate in a business and have never had a failure, you probably have not taken enough risks. Entrepreneurs risk their own capital and past successes for future success. For every disappointment we have had over the past 30 years, we’ve had 10 successes.
The way you rebound is you inspect and try to understand as best you can why you were not successful. You learn from your mistakes. You let people go if there was an accountability issue or a performance issue without delay.
You counsel people who have made honest mistakes, and you give them additional training so they are successful in the next venture. You treat the history as a learning process for the future. You can never look a management team in the eye and say, ‘We will never make a mistake.’
If you never make a mistake, then you probably aren’t taking enough risks. If you aren’t taking enough risks, then you will probably have a limited life in terms of the longevity of the business.
Know when you need help. You need to know when in the life cycle of a business you need outside expertise. We have managed that very well. We brought in our first team of professional managers in 1995 because the family wanted to take the business to the next level, and we knew we needed additional expertise and thinking.
We also created an outside board of directors. We have an independent board, individual audit committee, a personnel and compensation committee, and a strategic planning committee. We did that to bring in experienced and qualified business leaders to help our family make strategic business decisions.
We, as a family, hold our senior management leadership team, of which I am a part, strictly accountable for results. Through that strategy of bringing in professional managers to supplement our in-family talent, along with creating our offsite, independent board, it has served
us well. We have grown in terms of revenue, profitability and maturity because of those two moves.
You need new thinking, new strategies and new experiences, which, added to your own, spell business success. It’s like the whole notion of diversity and why that is so important in corporate America.
If you take 10 people in a boardroom and they all look the same and have the same experiences and the same view on life, then you can reach a decision very quickly. But it will likely not be the right decision.
Find employees on the fast track. We seek to run a good company and be good corporate citizens first and foremost. We are looking for credentials and a track record of success. We look for people who come out of successful companies and who moved rapidly into more and more responsible positions over their careers, who have had unique experiences in areas we tend to grow in.
Our senior-most hires we recruit with the assistance of outside search consultants. Our process involves me conducting an initial screening of the premier candidates. For the senior-most offices that we
recruit, that involves our board of directors and the approval of that body.
It’s a pretty rigorous regimen that we employ to select great leaders in our business. We take sort of a scientific approach to doing it.
Be passionate about what you do. Everyone goes through periods when they are discouraged or down about an event or personal life crisis, because we are all human. The light flickers on and off on occasion.
It’s just like investing in the stock market. It’s investment over time that matters versus anecdotal, one-time events along the path.
But the moment you lose the passion that causes you to run up the stairs to the office each morning, stay late if you need to and work weekends if you need to, the minute that candle starts burning out, that’s when you should move on.
Communication is the key to every endeavor. It’s always best to be honest and candid with people. When you’re not being straightforward with people, they tend to know it. People are very intuitive and smart, and they tend to know what the answers are. They want you to ask them for their input.
If you communicate well and people understand what they are doing is important to the entire enterprise, you will have the team pulling in the right direction and typically be successful.
We communicate change through a review process here. We sit down twice a year with our leadership and their departments and we communicate to them, and hopefully every job in the business, what our company is about and what we’re doing. Also, successes that we’ve had and disappointments that we’ve had.
More importantly, how we need to enlist the success of every associate in the company to achieve our objectives.
HOW TO REACH: Bartech Group, (800) 828-4410 or www.thebartechgroup.com
With the company heading toward Chapter 11, it was Michaels’ job to put together a financial book and try to find a buyer for the struggling company. After successfully hurdling that challenge, he took on the mission of engineering a comeback for the restaurant chain.
Six years later, the company is signing franchise contracts in Florida, California and Las Vegas, and has reached revenue, not including franchisees, of $60 million.
Smart Business spoke with Michaels about how he handle challenges, empowers employees and forms a team.
How do you face challenges?
Be real with the team. Let them know you are part of a team. There’s no throne. They have to feel they are part of the decision-making process.
I try to make myself fully accessible and make sure we meet on a regular basis. If we are not hitting our numbers, why are we not hitting those numbers? We go through those things and figure out how we get to that so we can change in midstream if need be.
You have to remain somewhat flexible. You’ve got to listen to the issues that come up. Are sales up, are sales down, or are costs up? You are hit with so many issues, you have to be able to trust the people running the department, and everyone has to be on the same page.
What is your decision-making process?
I welcome input from all areas. I make sure I bring in all the people involved and literally go around and let everyone give their thoughts, their input, their reasoning and what decisions they would go with.
But you can’t get caught up and you can’t get mind melted. Some major decisions call for some more major thought. But I refuse to sit and make a decision on my own without input from the people involved.
Everything I do, I try to go full circle, the highs and the lows, and then come to a decision.
What do you do when the decision is wrong?
We move on. We figure out how to fix it and realize that it wasn’t the right way to go. We pull everyone in and tell them we made this decision to go this way, and it didn’t turn out to be the right way.
Now, let’s make a decision on where we go from here. Don’t let it bog you down. Don’t let it kill you.
Because every decision affects maybe two or four or five different parties, you’ve got to stretch that major decision out and see how far it’s going and how many groups are really affected.
How do you roll with the changes?
You have to understand what business you are in. You can’t get caught up in ‘every little thing is a disaster.’
Let’s say there is a big snowstorm in Michigan and stores are doing nothing because there’s 15 inches. Understand it’s happening. Deal with it. Get everyone to understand this happens and to keep your head up. ‘Hey the power went out at X units. OK, how quickly did we move to get generators in?’
Let’s always go from the positive side of downturns. I’m sure, at times, a different signal comes across, but you realize you did it and you pull back. If you don’t keep the team pumped, then it doesn’t trickle from the team right through the company.
What do you look for in employees?
The ability to be proactive and the ability to treat their area like they own it like it’s their business. They have to make certain decisions and work certain things out that wouldn’t even come to my desk. They are able to because they own it, they run it, they believe in it [so] that they can make things happen on a daily basis.
You have to get the people who believe that you believe in them. If you have fearful people worried all the time, then they are not striking on all cylinders.
They need to know they are on this team, and I travel the high and low roads with them. If somebody is not doing the job, then those things have to be dealt with.
What pitfalls should be avoided in business?
Listening to people’s opinions and not getting the hard facts. Everybody seems to have an opinion or grapevine information. Make your decision based on the facts.
Opinion, when it is asked for, is all right. But what are you basing that opinion on? Dig deeper and you are able to make better decisions.
Tell me why you made that statement and back it up. Then you are able to make better decisions.
HOW TO REACH: Big Boy Restaurants International LLC, (586) 759-6000 or www.bigboy.com
“We’ve done it by taking chances,” says the president of K4 Architecture LLC and K4 Construction Inc. “You have to step out there and take risks.”
The risks have paid off, as evidenced by the company’s revenue growth from $6.9 million in 2003, to $10.8 million in 2004 and $15.7 million in 2005.
Smart Business spoke with Klump about how to find and keep quality employees and how to rebound when risks don’t pan out.
What qualities do you look for in employees?
Good communication skills. We look for creative people, but we also look for people that offer something above and beyond what myself or the other principles can offer.
We have actually hired people when we did not have a position for them. We met them and we thought they might be a good fit. They could add some depth to the company, and it’s been a plus.
Typically, we’ll interview an architect who’s had experience in something myself or other partners have not had experience in. That is one way we’ve been able to grow this company. What I’ve done is brought on partners that had a more diverse background than I do.
How do you keep good employees?
We’re very open with our employees, but we also encourage them to be an active participant. A lot of people want to be challenged. They want to feel like they are a part of the company. We promote that.
I tell people, ‘We’ve grown this and have been very blessed. It’s our staff and employees that have put us there.’ Every one of them has to be involved in customer service. The way they answer the phone, that’s customer service.
So, we encourage and promote with them to be open and communicate and get involved.
How do you rebound from missing the mark?
I tell everyone they need to take ownership. Nobody has all the answers. We, as a company, we know there’s going to be mistakes made. You just have to step up to the plate and accept them and just go on.
I don’t dwell on them and I’m not going to belittle somebody over it. I do expect managers to step up to the plate and take some responsibility and ownership of their people. But once it’s done and over, don’t dwell on it. Get to the point, address the issue, resolve it and go on.
Don’t hold a grudge. There’s no benefit to continue belaboring an issue like that. You learn from your mistakes. I tell people in their reviews, ‘I want you to learn something new every day. If you’re not challenged and you’re not learning, then I don’t want you here.’ You have to have some sense of purpose, and that’s the fulfillment of a sense of purpose for people.
How do you create a corporate culture?
People today want to feel like they are a part of something. We give them the opportunity to truly express themselves. I tell people ‘You can lead a horse to water, but you can’t make them drink’
I let our people take responsibility, because people learn from their mistakes. People want the opportunity to prove how they are and what they can do. We encourage that.
We’ve had people that started with us right out of college that we have promoted two to three times into different positions. It’s important to give people that opportunity to prove themselves.
How do you get the most of out of someone not living up to potential?
We bring them in and talk to them. Again, communication is so important. I want to give everyone a chance to prove themselves. I force them to be creative, think outside the box and go that extra step.
When I was in college, a professor told me architecture, design and everything you do in life is like taking a sponge and dipping it in water. You take that sponge, and most people are happy taking it and ringing it once.
I am a believer to take that thing, ring it two to three additional times, and get those last drops because that’s what makes the difference. Everything about business is relationship. The more you can show people the relationship is important and the culture is important, that’s how we work with people.
We try to become part of their culture and integrate them into our culture and how we do business.
HOW TO REACH: K4 Architecture LLC and K4 Construction Inc., www.k4arch.com