The customer is always right. For Maura Clark, this old adage has never been truer than in today’s business environment. Clark leads a business in an industry that is known for its tough competition and pressures to be at the top.
She is president of Direct Energy Business, a $4.5 billion division of Direct Energy, which provides electricity and natural gas solutions to businesses across North America. To overcome the economic conditions, remain on top of the energy industry, defeat the competition and answer the pressures of the market, she has had to keep the company focused on customer needs.
“All of our customers are feeling the pressure, and it just calls upon you to be a stronger leader through difficult external market conditions,” Clark says. “This kind of external environment and a very competitive landscape just really calls upon you to be extremely sharp, and it doesn’t leave much cushion for missteps.”
Clark’s leadership and the company’s ability to understand the customer and find opportunities have allowed the business to be a growth division within Direct Energy. The key moving forward will be to continue to listen to the customer and continue to differentiate the business from its fierce competition.
Here’s how Maura Clark has used the voice of the customer to continue growing in a tough industry and economy.
Differentiate your business
In any line of business, it’s good to have something that customers can identify as a differentiator. In today’s economy, everybody is experiencing similar challenges and obstacles and it will be those who rise to the top that will win.
“I’m not sure that our experience is really all that different from what many other business leaders would face and in fact, from our perspective, what we’re going through is probably no different than what many of our customers are experiencing,” Clark says. “I think it’s simply just a really difficult time to be in business.”
When you operate in an industry where there isn’t much difference between your company and your competition, you have to look for anything you can that will help make your business stand out among the rest.
“We’ve actually had tremendous financial success and we’ve managed to grow our business through the environment, so I think the overarching challenge is how to continue to grow a business in a very competitive environment,” Clark says. “In a commodity-based business, it’s hard to differentiate ourselves from the competition. It’s very hard to differentiate through products and it’s very hard to differentiate the end-user experience. You really have to think about the things you can do to set you apart from the competition and that usually has to do with the customer interface.”
How customers view your business, your products, or your services is what sells them on your company. You have to make sure you are doing what you can to make them happy and coming back for more.
“Increasingly, I think it’s all about how you differentiate yourself through the customer experience,” she says. “Its how that initial sales encounter goes when you’re trying to advise your customers around the choices they have and managing their energy needs. Then it comes up again in how easy it is for them to actually do business with you, whether that’s on the front end of signing up and executing the contract or whether it’s months down the road where they might have a question or a problem and how well we do in those sorts of encounters. Customers are getting way more discerning too, because it is so competitive and because so many other industries have really broken new ground in terms of defining the customer experience; you have to work that much harder to get people excited.”
Listen to the customer
If it’s the customer who will help bring your business to the top, then you have to be willing to listen to what they have to say. Set up ways to allow them to voice their opinions.
“We try hard to listen to the customer, and I think the things that we have done in the last couple of years that have really allowed us to really think about that customer experience are we’ve held a series of customer listening sessions as well as business partner and channel partner listening sessions,” Clark says. “We’ve taken quite a bit of time as a leadership team and throughout the organization to really listen to what the customer experience is like for our customers and what needs and requirements they have that we could do a better job of meeting.”
In order to make these sessions worth your company’s while, you have to make sure you get people involved in that process who can take what customers say and really make a difference in how your company operates.
“My entire leadership team is required to attend these sessions and we often have folks from all of the different functional areas, not just sales, but people who would be responsible for operations and so on attend these sessions,” Clark says. “They can hear from the horse’s mouth as it were, just what it’s like to be a customer and what things are important to them, how we’ve done well, times where we could have done better and it’s always a mixture of good feedback and sometimes not so good feedback. It’s unbelievably helpful to us as we think about making decisions around how we invest in our business to understand and really partner with our customers to understand what’s important to them.”
While the customer certainly has a big effect on how you could improve your product or services that they use, you can’t rely on them alone. It is very helpful to have some other way of measuring your customer satisfaction.
“We also use net promoter score,” she says. “It’s a measure of customer satisfaction that is actually one of our annual bonus targets. We’ve worked very hard to really institutionalize the thinking around this metric. We have lots of communications around how we’re doing. We share the results of our monthly metric and we share the things that our customers are saying so the voice of the customer is quite audible to our people.”
Getting this type of feedback and measurement is very valuable, but you can’t keep doing the same old thing once you have that information.
“Everybody can always challenge themselves around are you getting the basics right,” she says. “Just getting the basics right can be challenging, but you really have to understand the customer needs as deeply as you possibly can. We’ve historically thought about our customers according to the volume of consumption, but within those categories there are different needs and wants. It’s really taking that understanding of customer needs and customer requirements to a much deeper level and thinking about it almost like a consumer product as opposed to a commodity or a necessary evil.”
To get that customer interface to a deeper level you have to share what feedback you are getting from your customers.
“You have to try and bring this to life,” Clark says. “When you leave something in a spreadsheet or even if you leave something in a metric, it’s good to have everybody focused on the metric that ends up impacting your bonus, but to me the thing that brings it to life is to read the verbatims and read what customers have to say about you or what they experienced when they sat down with a sales person. It’s even better to hear straight from the horse’s mouth. People should be trying to get right to that customer interface as best they can to really not lose sight of how important that is.”
Turn feedback into growth
With the valuable information you can gain from your customers and your other satisfaction measurements, you have to use that to help your business grow.
“In terms of growth in the past, we’ve done a pretty good job of being in the right markets and having really good products to sell to our customers and we’ve got a fantastic front-end sales force and we’ve not gotten complacent around fixing the basics and making the customer experience a good one,” Clark says. “Ours is a business where you don’t necessarily have to be the first mover, but you definitely need to be where the action is and you need to be nimble enough to be able to capture some of those opportunities. We’ve managed to get to the right markets and get to the right customers with good products.”
In order to grow your business, you have to look for those opportunities to get into new markets or reach a new consumer.
“The area that we’ve really been focusing on quite recently is creating an offer or a value proposition to the small business customer,” she says. “In our space, the poor small business customer has really been ill-served, because most competitive retailers have kind of a plain vanilla offer that would go to a residential customer. The small business customer is really being neglected because some of the products and services you might offer to a larger customer would also not really resonate necessarily with a small business customer, so they’ve been lost in the middle. We have put quite a bit of effort into basically creating an offer and a customer experience that will meet the distinct needs of the small business customer.”
It’s these types of products or services that reach a demographic or customer that others haven’t paid any attention to that will help your business grow and get an edge on competition. You have to make sure you balance what you’ve always done with new initiatives.
“Balance is the right word,” Clark says. “You can’t get complacent just focusing on the basics. This is a really dynamic, competitive part of the energy world so you can’t just be inwardly focused and focused on the issues of today. We carve out time to think and explore ideas that might take off in the future rather than what’s relevant today. You have to make sure that you’re focused on the present and the future.”
As with products or services you develop today, what you are looking to in the future has to also have a customer focus.
“You’ve got to really be understanding of how your customer is thinking and really understand what’s important to them and try to proactively determine a product or a service that can really add value to that customer,” she says. “It has to be customer led because if it’s just something that we think is kind of nifty and doesn’t resonate with the customer, it’s not going to do any good.”
HOW TO REACH: Direct Energy Business, (412) 667-5100 or www.directenergybusiness.com
- Differentiate your business from your competition.
- Create ways for customers to give you feedback.
- Use feedback to help grow your business and create opportunity.
The Clark File
Direct Energy Business
Born: Ottawa, Canada
Education: Attended Queens University in Kingston and earned a bachelors degree in economics.
What was your very first job, and what did you learn from that experience?
My first job was as a bank teller. What that taught me was that I was not very good at repetitive tasks.
Who is somebody that you admire in business?
Howard Shultz from Starbucks. He is a guy who obviously had tremendous success in a business that’s gone off the rails and he had to really challenge what was important to the business and important to the company that he was building. He seems to be quite humble about his learnings and he’s also given back a fair amount to his communities. He’s been successful in a multifaceted kind of way.
What are you looking forward to in the energy industry?
One of the things about this space is it’s gotten sexy all of a sudden, which I think is fantastic. It’s got tentacles into climate change, innovation, technology, transportation, so I like the fact that it’s complex, dynamic, and a global business.
What do you miss about Canada that you don’t have in Pittsburgh?
I miss Tim Horton’s and peameal bacon sandwiches, but we do have pretty good hockey though, so that makes up for it.
Darrin Grove is happy that his growing innovation firm is located in Pittsburgh. Grove is the founder and CEO of TrueFit Solutions Inc., a 42-employee innovation firm that helps entrepreneurial start-ups and large enterprises bring new mobile, Web and social apps product ideas to market.
“We’re very proud to be a Pittsburgh-based company,” Grove says. “Pittsburgh’s a great place for us to be because Pittsburgh is a very innovative city and the innovation in Pittsburgh dates very, very far back. Pittsburgh has innovation in its DNA.”
Grove and his team at TrueFit work hard to collaborate with entrepreneurs, start-ups and large enterprise companies to develop innovation.
“In many ways we ourselves are very entrepreneurial,” Grove says. “We ourselves still have a start-up style to us. It’s kind of who we are, and it’s a group of people we love to work with to bring new ideas to market.”
Smart Business spoke to Grove about how he grows his business through innovative collaboration.
What have been the biggest success factors for TrueFit?
Understanding who you are and understanding the value that you bring to your clients sounds really obvious but is very, very critical. It’s more important to be different than it is to be better. Everybody’s organizational DNA is what makes them different not just better. You really have to understand that. The message has to be apparent, so part of what has helped us is that with our partners we have really tried to be clear so that not just the company knows who we are.
There is an ecosystem of partners that is essential for the growth of any organization. It’s not just up to us. It needs to be an ecosystem of collaborative partners. You have to think outside yourself to understand your ecosystem. What is the network of other people or partner organizations that are going to complement each other and contribute to where it’s a two-way street?
How do you understand your organization’s DNA and where you fit?
It starts with a process of getting really clear about who you are and then learning how to live into that and explain it to other people. Understanding that our reason for being was enabling innovation was a very important step, but articulating it in a way that is understandable was another important step.
You have to become very clear as an organization around what your DNA is, what your mission is and what your values are. I strongly suggest that people write that down. For a lot of people, it’s implicit, but make it explicit. Then really take a hard look at your organization alignment and do some organizational assessment work to ask, ‘How well am I doing?’ If that represents true north, how close am I navigating to true north?
How do you go about helping companies be innovative?
Innovation begins with collaboration. It begins for us by involving all the major stakeholders around an innovation. It could be company leadership. It could be end users. It could be subject matter experts. We involve a broad cross-section of people in a conversation about the innovation and we focus on three core things that define a relationship.
One is the matter of creating value — understanding the value that is needed in the market, understanding the value that a certain idea will deliver to the market. We have a methodology that helps people not only identify the value that they are creating, but also dial up, strengthen and optimize the value that they are creating. Value creation is a core part of the conversation that you have to have in collaboration.
The second pillar involves user-centered design, which basically says as we work with new ideas, we want to be focused on the user experience. You want to be very focused on adding value to the end user. You don’t want to create anything that people are not going to use.
The third pillar of engagement is an agile process. This flows out of the core tenets of agile development, which suggests that you’re working on a project in small increments and you’re constantly delivering real working software to the market. Then you’re listening to how the market reacts to that. Then you’re pivoting and repeating.
How do you develop relationships and understand value creation?
You have to ask and listen. Listen to the concepts and ideas. Listen to what the market is telling you about those ideas and then be creative. It’s a combination of listening and creativity that should fuel those client relationships. You’re constantly listening to objectives, business objectives combined with product objectives, combined with new ideas, combined with user-client feedback, and then you’re thinking creatively about how to respond to that. You have to approach the market with a certain amount of humility.
HOW TO REACH: TrueFit Solutions Inc., (724) 772-5959 or www.truefitsolutions.com
The Davey Tree Expert Co. recently announced that Pat Covey has been named the new COO for all U.S. operations and Jim Stief has been promoted to executive vice president, operations.
Karl Warnke, Davey’s chairman, president and CEO, said the changes are part of an effort to recognize factors that have been critical to Davey’s success during this unstable economic period.
A long-time employee of Davey, Covey has served in various capacities with increasing responsibility in both the operations and administrative/support segments of the company. His most recent position was executive vice president, operations, a title he has held since 2007.
Jim Stief will be responsible for all U.S. residential and commercial operations, in addition to the Davey Resource Group. A 33-year employee of Davey, Stief began his career in the Atlanta residential territory. Over the years, he has served in a variety of capacities within the service line, including as operations manager of the western region.
NCA Financial Planners and its President and CEO, Kevin Myeroff, has been ranked by Barron’s magazine as the second best financial adviser in the state of Ohio, and the No. 1 adviser in northern Ohio.
NCA Financial Planners, an independent, full-service financial planning firm, has been on the “Top 1,000 Financial Advisers” list for the past seven years. It was also recently named a Weatherhead 100 company, making it one of the 100 fastest growing companies in Northeast Ohio. On a national level, Myeroff has been recognized as one of ‘America’s 100 Top Advisors’ by Barron’s for the past seven years.
Positively Cleveland has announced that Michael Burns joined the organization as senior vice president of convention sales and services.
Burns has 30 years of experience within the hospitality industry, particularly in hotel operations, national sales and meeting planning. He spent 22 years with Conferon (now Experient), a nationally known meeting planning company in a variety of account management and leadership roles.
As the senior vice president of convention sales and services for Positively Cleveland, Burns is overseeing a sales team that is responsible for engaging stakeholders and soliciting companies interested in bringing their meetings and conventions to Cleveland, and a services team responsible for ensuring the best convention experience possible.
Great Lakes Integrated, a Cleveland-based graphic communications and printing company, is pleased to announce the appointment of a new CFO and two changes to the company’s executive leadership team.
David Eckhardt, CPA has joined the company as CFO. Eckhardt brings more than 25 years of experience in both private and public accounting, specializing in the manufacturing industry. Before joining Great Lakes Integrated, he served as CFO and controller at Advanced Polymer Coatings in Avon Lake and controller at Q-Lab Corp. in Westlake.
Kostika Radivoj has been named executive vice president of sales. Radivoj has worked at Great Lakes Integrated for over 34 years in a variety of areas, including: estimating, customer service, production planning, purchasing, scheduling and most recently held the position of executive vice president of operations. In his new position, he will be responsible for the day-to-day management and business development of the entire Great Lakes Integrated sales’ operations.
Additionally, Robert Schultz has been named executive vice president of operations. Schultz has worked at Great Lakes Integrated for more than 35 years. He has served in positions including: estimating, accounting, CFO and executive vice president. In this new position, he will be responsible for the day-to-day operations, including overseeing processes, procedures and standards, as well as leading the continuous improvement initiatives within the company.
Since the 1930s, the excitement of gambling has offered millions of people the thrills of the uncertain outcome. However, if you’ve lived in Ohio, you have had to travel out of state for the past 80 years to indulge in gaming entertainment. This May, that all changes with the opening of the new Horseshoe Casino in downtown Cleveland’s historic Higbee Building.
Expected to bring more than five million annual visitors to the Cleveland area and have a large economic impact, the Horseshoe Cleveland brings needed growth and attention to Northeast Ohio.
This past March at the Greater Cleveland Partnership’s 2012 annual meeting, Gary Loveman, chairman, president and CEO of Caesars Entertainment Corp., the company that manages the Horseshoe brand and 54 other casinos around the world, spoke to the crowd about the casino experience and impact the new Horseshoe facility would have on the Cleveland area.
“We are very excited about the opening of what will be the most dynamic event in the gaming world here in Cleveland on the 14th of May,” Loveman says. “We have a $450 million investment that we have done with our partners at Rock, a partnership that was formed around the opportunity to develop casinos here in Ohio, the first in Cleveland and then in Cincinnati.”
The Cleveland casino will feature some 2,500 gaming positions and will serve about 700,000 meals to guests here in Cleveland on an annual basis. Guests will primarily stay at the Ritz Carlton Hotel, which is now owned by the partnership, but an additional 70,000 or so room nights will be used by guests in a number of the other facilities in the area.
“We anticipate some 5 million visitors to the casino in the course of its first year of operation, which will exceed by a considerable number the level of visitation that currently exists for many of the very attractive facilities or athletics and other entertainment in Cleveland today,” Loveman says.
Loveman, who joined Caesars in 1998 as COO and was named CEO in 2003, has since been named the gaming and lodging industry’s best CEO by Institutional Investor Magazine for four consecutive years. He is looking forward to a strong relationship between the Horseshoe casino and Cleveland.
“This experience will be Horseshoe, but it will also be Cleveland and it will reflect all of the things that this city has to offer,” he says. “It is our intention to build our experience through a network of collaborations with other fine providers of cuisine, lodging, transportation, and entertainment here in the area. Already, my colleagues have had discussions and entered into some levels of agreements with the athletic teams here in Cleveland, with Playhouse Square and the Rock and Roll Hall of Fame.”
The goal for Loveman and Caesars is to provide Cleveland with entertainment and customer service with few of the negatives that are often associated with gaming.
“We take our obligation in the communities in which we operate very seriously,” he says. “Our partners at Rock Gaming and we came together in large part because we share that commitment. We are in the business of making sure we provide that service at the highest possible level while being the most thoughtful and innovative company possible and looking after those that suffer adverse consequences from these services as well.”
All Caesars employees are trained in handling and helping people who show signs of addictive gambling and no one under 21 is permitted in the casino.
“We try to make sure that we have the tightest standards possible that would make it difficult for addictive gamblers to find our facilities attractive places to visit,” Loveman says. “We seek out such customers and ask them if they are having a problem and provide them access to clinical resources and everything we can to make sure that they find the help that they might need. We also started Project 21 to make sure no one under the legal age of 21 could enter our facilities or participate in gambling if they entered our facilities. We restrict where we advertise, with who we advertise, and the manner in which we advertise to make sure no vulnerable group is addressed from our business at all.”
For those who participate in a safe manner, the new casino will provide a level of entertainment and economic activity that Cleveland hasn’t seen before.
“My hope is that when I have the opportunity to visit with you a year or two from now, you’ll tell me that you had the chance to visit with us, your friends have visited with us and found the experience appealing … and in every respect we and our partners at Rock have risen up to the incredible opportunity you’ve given us to join you here in Cleveland,” he says.
HOW TO REACH: Caesars Entertainment Corp., www.caesars.com
Tom Overdeck doesn’t have a crystal ball or any kind of secret tricks that are helping him lead Kost USA Inc. into the future. What he does have is a mission and a vision for what he wants his company to become.
A manufacturer of more than 100 chemicals, coolants and lubricants that has sales of $80 million, the company is poised for some impressive growth and to be positioned as a leader in its industry. Over the next 10 years, Overdeck, CEO, expects Kost USA to become a $250 million company.
“My biggest job as CEO is work toward providing the environment, the climate and the culture to support this but also to provide the infrastructure to support all of this,” Overdeck says. “Providing the infrastructure is a key element in a growing company. That is an important aspect of my role besides providing a vision and giving the organization the capability of executing.”
The key to achieving successful company growth is following the vision and sticking to a path that allows the company to remain true to its heritage.
“We’re a customer-focused company, so we need to continue to reinvest in our technologies to bring the best and most functional products to our customer base,” Overdeck says. “We have to do that within our own heritage and expertise. The vision says that we’re going to be a $250 million sales company while doubling our percent of EBITDA as a percent of sales. The vision in itself is not that complicated, but the pieces of how you get there are where all the work is.”
Here is how Overdeck keeps his company’s growth aligned with the mission and vision.
Communicate your mission and vision
When your company is in a growth mode, there are very few elements more important than the company culture, mission and vision. These elements are the foundation to guide the growth of the company and its employees.
“You have to ask yourself what kind of culture you need to be successful in your vision,” Overdeck says. “You have to have good leadership and everyone has to understand what their job is. The vision can be established by top management, or it can be the result of collaboration by a management team, but it is important to have a vision. What’s very important is the mission and mission statement. Whether you have five employees or 500, employees really needs to understand how their job delivers some piece of that mission and they have to be able to relate to that and understand it.”
Every employee should be encouraged to offer information about how to improve the process. By doing that you allow employees to understand the mission and how their job is related to accomplishing the mission.
“In all of that, you find it becomes easier to empower people if you’ve got the right culture, the right people and they understand what the mission and vision are,” he says. “The watch out is that you have to make sure that you’re recognizing their contribution and rewarding them in some manner. Once you get on that flywheel, the momentum builds.”
Kost USA’s mission states: “We are trusted entrepreneurial partners with our customers, creating joint growth by providing preferred liquid technologies and passionate service. It has been critical to the company’s success that employees are aware how they can contribute.”
“From that mission statement our people need to take away what they’re doing on their jobs that affects that mission,” he says. “It ends up being a cultural thing. You have to have employees that understand the importance of it and are committed to it. You have to stay focused. You have to have a two-way flow of information and communication with the management team being the conduit between the vision and the employee population. No idea is a bad idea, so all your employees need to be active participants in ideas.”
Manage growth opportunities
When following a mission and vision for growth it is important to have a person or team in charge of monitoring progress toward those goals. Without that oversight it is easy to get sidetracked.
“The key to our success is that we first created a management team, and this team works together in a cross-functional mode allowing for advanced planning, support and execution of new and improved technical product innovations,” Overdeck says. “The management team determines which opportunities best fit the heritage and the vision. We have predetermined criteria as to what constitutes success in a particular project before we spend a lot of time, energy, money and resources on it. It becomes data-based decision-making, and it becomes apparent fairly quickly if your project is on track or not.
“If your project is on track, then you keep supporting it and putting more resources behind it. In the event it’s not meeting the predetermined criteria, you have to take a step back and ask what you’re doing wrong. Do we need to modify our thought process or is this just a bad project? It’s not flying by the seat of your pants.”
Managing growth is about customers, employees and partnerships you have with suppliers. Those are the biggest drivers of growth and you have to balance the opportunities.
“You always have more to do than you have available time and resources so you have to make decisions early on about how many projects you can handle simultaneously,” Overdeck says. “That’s where you rely on some of the data you hear from your customers, suppliers or employees to get you pointed in the proper direction and what the expectations are. You have to be realistic and gauge your success against that predetermined criteria. That becomes critical because otherwise you’re going to get yourself saddled in a particular project that might suck up a lot of resources and it’s less attractive in the long run.”
Overdeck and his team at Kost USA are constantly trying to find new chemistry within the framework of a particular chemical compound. However, they realize it’s important not to spread themselves too thin.
“It’s like branches on a tree,” he says. “You can’t be developing too many branches all at the same time. That’s where you start determining which seem to be the most logical fit for you at any one point in time in your business platform, and that’s always an ever-changing environment as time goes on. We’re always developing additional limbs off the main trunk of our chemistry.”
Constantly looking for new developments keeps the company’s products and services unique. You need to understand who you’re serving to be able to provide the best products.
“If you’re truly in touch with your customer base, you truly understand what you’re good at and what you want to be a leader in, then it becomes easier to understand when to increase the number of offerings, the best way to accomplish that, and why you’re expanding at all,” he says. “You need to understand the customer’s motivation, not only what they buy, but how they buy it and why they buy it. You also need to understand the competitive landscape and with these insights you can begin to define and develop products that meet your customer’s needs and move forward.”
Align your organization
To turn a vision for growth into actual results, it takes complete alignment around your customers, the marketplace and your product or service to make those plans fall into place.
“You must align the organizational capabilities to be successful,” Overdeck says. “Consideration regarding those capabilities differs based upon what your customers select as a market they want you to be good at.
“For instance, in some industries, great delivery may be very important, high level of customer service might be very important, low pricing may be very important or product features may be very important. You have to find one or two of those that drives the business. When you understand that, then you have to build your organizational capability to handle that.”
You can’t necessarily expand and overextend until you build the organizational capability to support it. That puts a check on unbounded expansion.
“Doing it by intuition and gut feel is where you get yourself into trouble,” Overdeck says. “You can end up making an investment in your facility or moving into a new product line without really thinking about how you’re most effectively going to deliver that and that’s where people get themselves into trouble. You might have a good idea, but the idea and the investment in the idea are ahead of your capabilities, and at that point you’re going to fail.”
In order to build your capabilities for the future, you have to have full understanding of what your core competency is.
“Once you understand what you’re really good at and what your competitors are not so good at, that’s what you focus on,” he says. “That’s an on-going process that you continue to build on. The key is you have to know what you’re good at. If you’re really not good at anything you’re wasting your time. Sometimes it’s not that easy to really understand what you’re good at. Sometimes you may think you know why you’re doing well, but that really may not be the answer.”
Overdeck makes sure he uses his resources to their full benefit. He utilizes his customers, employees and suppliers to better align the company with the direction he wants to go in.
“You have to be as informed as you can by getting as many sources of information coming back as you can enlist,” he says. “A common mistake is to think you know the answers as opposed to directing questions in a way that would foster additional ideas and thoughts as to why this company is good. It’s a function of how you handle yourself with your customers, your suppliers and your employees.
“There’s nothing that’s totally understood and on cruise control. You have to always try to make yourself better and in that process you have to keep your eyes wide open. If you stay focused on that, pretty soon you’re a leader in your industry and that’s where you want to be. That’s what you’re always trying to find — that niche where you can provide leadership, but importantly you have to make sure it’s a niche the marketplace wants.”
Alignment cannot just be internal. You have to make sure you have alignment with your customers needs and their needs align with your capabilities.
“There’s nothing more important than that,” he says. “From there, you can innovate your products and services to meet their needs. However, it’s not just a one-way street. A customer may have a need but you have to make sure that the need is aligned with your core competencies, your technical heritage and that it supports the company vision.
“A successful company wants to be a leader in the product and services that they select. From this foundation you can continue to grow complementary offerings. Once you’re on task it becomes easier to know directionally how to expand these products and services. This will help you maximize the value proposition to a customer. In my mind, it’s a pretty simple approach, but it’s very important that you stay on that path.”
Ultimately the path to growth and executing a successful vision is being able to build alignment around both internal and external operations and that means building relationships and partnerships.
“You put a fair amount of responsibility on the shoulders of your representatives to ask questions beyond the obvious to better understand your customer’s business,” Overdeck says.
“Then you become to that customer a resource and a partner. You’re not just a vendor. That’s how you begin to bridge this gap of knowledge so you can really understand where your offering is best suited relative to accomplishing your company vision. Being an entrepreneurial partner with your customer base is where you want to be perceived.”
HOW TO REACH: Kost USA Inc., (800) 661-9391 or www.kostusa.com
- Make sure everyone understands the company mission and vision and how he or she fits into it.
- Understand where opportunities are that help your company grow.
- Be certain everything you do is aligned around your vision and your capabilities.
The Overdeck File
Kost USA Inc.
Born: Gary, Ind.
Education: Attended Indiana University and earned a degree in marketing. I went to work with Dow Chemical and during that time earned my MBA in finance from St. Louis University.
What was your very first job and what did that experience teach you?
In my junior and senior years of high school, I would go back home during the summers and work in the steel mills in Gary, Ind., for U.S. Steel. The magnitude of that world had an impression upon me. It gave me an experience of what American industry was like. That’s where I began to think about process change. I was just an hourly labor guy, but I was still looking around and saying to myself, ‘There are better ways of doing this.’
Who is somebody that you admire in business?
My dad. He wasn’t a business person, he worked in the steel mills as a machinist, but he was a very bright guy. He had wonderful ideas and a number of patents that he applied for and got. I looked at his commitment and his desire to succeed even though he was handicapped by not having the proper education. He was always willing to stand up and find a better way to do something.
What Kost USA product are you most proud of?
We consider ourselves experts in heavy duty off-road engine coolant for large trucks used in mines and quarries. There’s a lot of technology involved in the additive systems to make the product work as well as they can work, and we’re very good at that. We’re not a household name, but within that particular subset of the industry we’re recognized as guys who know their stuff. Another area is stationary engine coolant for the drilling work being done in the Marcellus Shale Region.
Bill Giesler has had to endure more change at Pedco E&A Services Inc. in the past five years than the company has had in its 30-year history. The climate of the current economy, the moves necessary to adapt to it, clients’ changing needs, and the start of retiring baby boomers has given the company a wake up call.
Giesler, Pedco’s owner and president, knew that with all this happening around the 84-employee design and consulting firm, business operations and the way leadership looked at the company had to change.
“We said, ‘Wait a minute. We’ve got to really change how we look at this business, how we manage the business, and how we lead the business,’” Giesler says. “In the last five years, this company has made a right turn from wherever we were headed; we deviated significantly from that path and really took control of our destiny as opposed to just floating down the river and going wherever it was taking us.”
That revelation and the ongoing changes inside and outside the business led the company to explore strategic planning.
“Our clients are changing in the downturn and they’re getting leaner and meaner and looking for quicker, better, cheaper ways of doing business, and we’ve really got to stay in alignment with where they are and what they’re doing,” Giesler says. “It really boils down to managing change. A lot of changes have been occurring over the last couple of years and just trying to stay in alignment with our clients on one side and then on the internal piece, we’ve got a lot of transitions occurring internally.”
The company had run itself tactically over the years and needed help making the transition to more strategic business and processes
“Over the last five years we’ve really opened ourselves up to bringing in outside experts and we brought them in for marketing, business development, HR, strategic planning, project management training and not just local experts but national experts as well,” he says. “What we’ve done is really tried to learn what the best practices are nationally and those that apply to us that we can use we grasp those and implemented those into our processes and how we look at the business.”
Trying to problem solve challenges internally was no longer garnering the best results. Giesler needed to strategize about how the company could improve for the future.
“You have to start off with strategic planning. … Think strategically and be open to using outside advisers and experts to understand best practices industrywide and utilize that,” he says. “The process that we went through recently is we discovered to a deeper level who we are. We developed six critical success factors to our business and we had really never thought of our business in those terms. Once you kind of focus on that you understand what drives what.”
Strategic planning is a great way to make your company nimble and adaptable to change. To get the most out of it you have to involve a team.
“You need to involve a cross-functional team in that process,” he says. “When we started out revisiting our process we were just going to use three or four of the very senior people to develop the plan. To have success at that strategic planning process and really get buy-in and then be able to implement it you need to involve a whole lot more people and it needs to be cross-functional. You need to reach out into every part of the organization that has an important role and involve somebody at some level in the process.”
HOW TO REACH: Pedco E&A Services Inc., (513) 782-4920 or www.pedcoea.com
Roll with the changes
As a result of a new strategic plan, Bill Gielser, president of Pedco E&A Services, kept pace with change by finding out more from the company’s clients.
“It’s really developing your critical success factors, action plans and priorities as a result of the strategic planning process,” he says. “You have to continue to have those high-level meetings on a periodic basis to make sure that you’re staying in alignment.”
Surveying and measuring customer satisfaction in some way shape or form is an important process.
“It really takes a lot of doubt out of how well you are doing,” Giesler says. “We also do an annual survey to understand what’s going right and what’s not and we look for themes. We’ve really implemented that strategy so that we stay close to them and that we’re looking at that and analyzing that and really setting goals based on that on an annual basis.”
Along with staying aligned with customers, it is critical that you continue to invest in your resources as much as possible.
“A lot of times the first thing to get cut in a recession is investing in training and development and I would really challenge people to do your utmost best to continue to invest in those things even though it’s a down economy,” he says. “That will pay dividends over and over and over as you move forward and as you come out of the down economy.”
Faced with an industry that was shrinking by nearly 40 percent, Bryan Putt and his team at American International Relocation Solutions LLC (AIReS) realized that things were about to change in the relocation services market. Due to the onset of the recession in 2008, drastic changes in the housing market and the fall of several banks and institutions, companies and employees alike became more reluctant to relocate.
With a new business approach in the company’s future, Putt, president of AIReS, a global relocation services provider employing more than 300 people and having annual revenue of $180 million, had to think of new ways to continue to grow despite a shrinking market.
“The biggest challenge was leading into 2009 and recognizing that the realities of the economy were going to have a profound impact on our business, both from the standpoint of our clients being directly affected and … the reality that a fundamental part of our business is the real estate market,” Putt says. “The devaluation in many cases of people’s property values created a situation where a lot of people who historically would have been open to a relocation for their companies have had to evaluate that with a much different perspective than they did for the 25 years leading up to that.”
Putt now had a choice to make. A common response is to prepare for survival mode and look to where cuts can be made, but Putt knew there were ways around that. Rallying his team, the decision was made to focus more on customer service and making sure clients understood the current relocation market.
Here’s how Putt focused on thriving instead of just surviving in a shrinking market.
Collaborate on your plans
Before Putt went ahead with any proposed direction for AIReS, he made sure that the plans were a collaborative process that included his senior team and had buy-in from the company.
“Our senior leadership team got together in 2008 and looking forward we said, ‘OK, all the signs are that it could be really bad. What do we want to do? How do we want to deal with this?’” he says. “It really was a function of everybody on that team having a strong belief in what we do. There was a consistency in terms of our vision and where we want to go and how we want to get there.”
That type of understanding within the organization is something that took years to create, but it has been one of the biggest factors to the company’s success.
“Building a culture that’s collaborative to begin with is paramount,” Putt says. “I’m one guy in the organization and honestly probably the least important individual in the company on a day-to-day basis. I’m very fortunate to be surrounded by really awesome people … who believe in the mission. They get it. They believe in what they’re doing, what we’re doing and they’re turned on by it. You’ve got to build a culture that is wrapped around that kind of singular focus of who you are, what you are and is a collaborative one.”
Having the ability to leverage that collaboration will help eliminate hasty reactions and will make people more comfortable about where your business is going.
“We go through a strategic planning process and not having a knee-jerk reaction is built on people feeling comfortable to put their ideas on the table within that group and to validate the thinking behind it,” he says. “Challenge each other in terms of the assumptions that are being put forward and the ideas, but always at the underlying level of that is what’s best for your customer. Focus on how you take care of the client and how you best service your customers because that’s what leads to profitability. For too many organizations the first thing they think about is the P&L. They focus on profit — dollars and cents, return on investment. The first layer of focus has to be on the customer. On the heels of that, profitability is going to follow.”
Changes in direction are oftentimes met with opposition. How a leader goes about making those decisions plays a big role in creating buy-in.
“If you happen to be the owner of a business and you get the 51 percent call and make the final shot, you can always walk in and provide a mandate or a dictate that says we’re going this way,” Putt says. “The problem is the minute you do that if you truly have people opposed, they’re not going to be pulling in the same direction as you. At best they walk out of the room kind of indifferent. They may not openly work against the agenda, but they’re certainly not going to be 100 percent in it trying to help you go in the right direction.”
Investing in a collaborative process and getting consensus on where you’re going helps eliminate doubt and puts employees at ease. That collaboration within AIReS led to the decision to retain employees and focus more on customer needs.
“It boils down to that point where everybody on the team and everybody in the room can be into that process and at least say, ‘Maybe that’s not exactly how I’d do it, but I buy in and I’m good to go and I’m with you all the way.’” Putt says. “Building that consensus is absolutely critical. Invest the time. If people are pulling against it, if they’re fighting where you think you need to go, invest the time in understanding what their concerns are and why. Try to understand how you can address those concerns, get them onboard and get that consensus built. It’s a big investment in time, but it’s well worth it.”
Decide your direction
When the signs that the relocation market would shrink began to appear, companies approached the situation in different ways. Putt was set on differentiating the business.
“We said we were going to retain our talent and we’re not laying people off,” he says. “Our knowledge capital is the value that we bring. We made a conscious decision that rather than try to hunker down and cut and save our way to profitability, we opted to aggressively sell our way through the recession. Our approach was somewhat unconventional in comparison to certainly what we saw others in our marketplace doing and that was looking at different ways to cut their costs and try to save their way into a positive financial position.”
Before making these types of decisions in your company’s future, you have to first understand your market position and value proposition.
“Anybody sitting in that position and saying, ‘OK, I think we’re going to have a declining market; we have all these things going on. How are we going to deal with it?’” he says. “You’ve got to have a pretty strong understanding of your value proposition and how to leverage that. It’s having an objective, realistic perspective of where you sit in the market with value proposition in comparison with the client base and the competition that’s sitting out there.
“If you are a commodity-type provider and the market is just shrinking in general and you can’t bring a new value proposition, it may not be the right decision to retain all your staff and continue to invest that way. You may just have to ride the wave because of where you’re positioned in the marketplace.”
When times become tough and you have to change course, try to avoid instinctively looking to make cuts within your organization as a first reaction.
“I wouldn’t tell everybody to continue to invest, plow into it, and sell your way through if all of the markers are telling you it’s going to go the other way no matter what,” Putt says. “If you do have a strong culture organizationally and if you focus on your people, the first approach from my perspective is not to cut. Try to find that yes. Try to figure out how to retain your knowledge capital.”
A lot of times there is that kneejerk reaction to tighten the belt. However, there is a time and place for doing that.
“Certainly assessing your cost structures, cutting out unnecessary expense and limiting the expenditures is all part of any good organization even in best of times,” he says. “That knee-jerk reaction of ‘we’ve got to cut’ is amazing because a lot of times the first thing people want to cut is in the sales force, but they’re the folks that are out there in market bringing you business. The idea that you can just hunker down and spend a year or 18 months or whatever and just protect what you’ve got — I don’t subscribe to that theory.
“If you’re not actively working to sell and grow, you’re dying and shrinking. There’s no such thing as ‘just stay level and hunker down.’ If you’re not actively out prospecting, the reality is some of your existing wells are going to dry up. Even in the worst of times regardless of the industry you’re in, cutting the sales force to me would literally be one of the very last steps I would want to take. There are other avenues to look to before you start cutting out the hunters in your organization that are going to bring the opportunities in the front door.”
In the case of AIReS, the customer is the company’s focus. Putt made certain not to eliminate the critical things that would make the new direction successful.
“If you have a focus on the customer as your primary reason for existing, generally the first reaction isn’t let’s get rid of the things that make the customers happy,” he says. “Building that into the organizational DNA is probably the most important thing and that’s a long-term process. You don’t build a team or react to scenarios when the bad times come along. That’s a process that during the best of times you’re focused on building an organization that thinks about what’s coming down stream. You’ve got to be cycling through that process all the time.
“When you’re staring into an inevitable negative situation you have to take the right steps. You’ve got to have the managerial courage to do it, but it’s figuring out the priorities of when and where and not doing the easy things because it looks good for a quarter.”
Meet customer needs
Now that Putt had decided on a direction for AIReS and got buy-in from his company, he had to understand where the company could better meet customer needs.
“One of the big areas of concern is the real estate market,” Putt says. “You want to move your staff members and their families around. Probably the most valuable asset they’ll ever own in their lives is their home, and the market is plunging precipitously depending on where you’re sitting.
“The home that that transferee owns that was worth a half a million dollars a year ago is suddenly worth $350,000. It’s pretty easy to say, ‘Aha, this is a great area of concern for our clients. How can we help them with this? How can we add value in the process and support them through this?’ We can’t go in and suddenly make that house worth $150,000 more.
“What you can do is you can add value to your selling process of helping your clients and helping the individual transferee come to grips with the realities of the market.”
Since AIReS’ clients’ livelihoods are at stake when they decide to relocate, the company decided to focus on helping them understand the current market.
“A big part of what we had to do was to go through a coaching process with each of the transferees to help them get a truly objective perspective of what the value of their home is,” Putt says. “You need to move through your employer and you need to sell your house. If you’re not realistic about what the value of your home is in today’s market, you’re not going to be able to sell your home and you’re going to go through a process that’s a lot more painful.
“So it was helping people get that realistic perspective and investing the time with the transferees to help them understand the market so they can make good knowledgeable decisions that helps them and it helps their employer.”
AIReS used its knowledge capital to the max in order to provide its clients with better service and understanding than before.
“It’s spending that time and being a problem solver for them as much as being simply a service provider and really leveraging that market knowledge we have of dealing with 400 or 500 corporate clients,” Putt says. “It becomes a process of evaluating what they’re doing and sharing good solid strategic business intelligence with them to help them obtain their goals.”
To help clients achieve their goals, the process was simple.
“You have to ask,” he says. “Go to your market and ask the questions and understand what their pain points are and where they’re seeing things not generating the kind of results they want to generate and then evaluate how you can help in that respect. The term ‘think outside the box’ is overused at this point, but come up with innovative alternatives to help clients overcome what’s occurring in their market. Generally, there are alternative ways to tackle a problem or concern that is going to be more palatable than just going down the path the way it currently is.”
The new direction of AIReS helped the company overcome the potential trouble of a shrinking market.
“We saw good returns on our investment even in the face of a really difficult year, and 2010 and 2011 have continued with even more healthy growth,” Putt says. “Our overall market shrunk somewhere between 30 and 40 percent, yet we were able to maintain an 11 percent growth rate. We have to continue to focus on building our team, recruiting and retaining great people who buy in to our culture and get it.
“We also have to continue to focus on the core services we deliver … and continue to automate and streamline and find efficiencies of our underlying activities so we can focus more time on the client.”
HOW TO REACH: American International Relocation Solutions LLC, (412) 788-0461 or www.AIReS.com
- Form a collaborative environment to create a unified business.
- Avoid kneejerk decisions and make customers your focus.
- Find unmet needs of customers to differentiate your business from competition.
The Putt File
Born: Indiana, Pa.
Education: Attended Indiana University of Pennsylvania and studied information systems.
What was your very first job, and what did you take away from that?
I was an office cleaner. That taught me that you have to focus on what you’re doing. Sometimes what you’re doing isn’t fun. Sometimes there are days when what you do can be a dirty job. If you focus on doing it well and you take care of the end user, it works, it pays off and there’s value in it.
What is the best business advice you’ve ever received?
Take care of the customer, and if you do that, profitability will follow. That was an epiphany for me. If you don’t focus on the customer, none of the numbers will matter because they won’t keep coming back. That was a defining moment for me in terms of defining my perspective of business.
What advice do you give others?
One of the things I tell people during orientation is you’ve got to have passion about what you do. Life is too short to just show up for a paycheck. You’ve got to do something in your life that you can connect to.
What geographies are you seeing the most relocation in?
It’s global. Within the U.S. there are key markets where you see a lot of corporate presence so you see a lot of relocation tied into those markets. On the international side, there is a heavy concentration and interest in the BRIC countries. Brazil, in comparison to what it used to be, is heavy. You wouldn’t compare it in the same way to China, but as a representative percentage against what they used to be, Brazil is a hot spot. China is huge right now because Asia is booming. The Chinese government is doing a pretty good job of setting a regulatory and investment environment where companies are comfortable. Then there are the traditional markets such as the U.K. and Singapore.
Kevin Reddy has a reason to like social media. It’s because of those data points that the chairman, president and CEO of Noodles & Co., a fast-casual lunch and dinner restaurant chain, decided he had to bring the chain to Pittsburgh.
The Colorado-based company has more than 5,200 employees and more than 280 restaurants in 22 states. Two of its newest locations are Market Square and Oakland.
“One of the wonderful things about social media is the amount of data points and guest feedback that you get,” Reddy says. “That’s one of the reasons why we decided we needed to get to Pittsburgh because we’ve gotten quite a few requests over the years about opening in Pittsburgh. It got to the point where we couldn’t ignore it; we’ve got to go.”
In an industry that has seen a decline in restaurants for the past three years, Noodles & Co. has been seeing double-digit growth.
Smart Business spoke to Reddy about what makes the Noodles concept so successful.
Execute growth plans.
For any business to grow successfully today, you’ve got to be one of the better, stronger performers within your niche and within your segment. One thing that we’ve been successful at is we have a pretty simple, focused philosophy on creating a dining experience that we’re really proud of and it’s based on three things; really good food, served by genuine, nice people, in a friendly, welcoming place. That’s what we’ve been doing over the past five years and we just keep getting better and better and better at it.
It starts with being very objective and critical about what you’re currently doing well today and what you’re not doing well today and really understanding how the guests view the brand. It’s one thing if a management team believes something but if the guests believe something else, you’re never going to create that connection that you need to. You have to be very objective and truly understand your guest’s perception of your brand. You’ve got to be very honest and objective of what your system is capable of executing and how well they’re doing it. Once you assess that you can put the right strategy together and form the whole discipline around identifying what’s important, being rigorous in how you innovate, and having a slightly unreasonable expectation in execution.
Grow your infrastructure.
Infrastructure for growth starts with understanding the right risk tolerance level. It’s about funding, it’s about capital, it’s about expectations around growth and you’ve got to believe in your own brand to grow. For anyone to grow, you first have to look at real estate. You really need to understand who your guest is, what influences how far they’re willing to travel and how frequently they come. You’ve got to be able to define those areas that make up the key decision criteria. Understand those big blocks of demographics and how they influence sales within the range of your own concept. Then it’s how do you replicate it. When you’re growing fast, you have to have the analytical model down pretty tight, and then you’ve got to have the discipline to stay true to your site screen.
Enter new markets.
Every year we add two to three brand-new markets. We pick those based on what we can get on data. We try to find out which cities and states are thriving and growing and which are struggling. We picked Pittsburgh because Pittsburgh has done a phenomenal job in staying relevant and transitioning its economy.
You have to really understand the elements of your business and which ones are critical to replicating success because not all things are important equally. You have to look at what’s on the consumer side, on the operation side and then the real estate side. You have to willing to build those systems — the training programs and decision logic before you start growing. You’re always going to modify and get better, but it gets really difficult to build the ship as you’re sailing it and you don’t want to make fatal mistakes early on. What’s critical to the right real estate? How are you going to merchandise and market the guests? How are you going to make the brand relevant and make people aware of it so they’re going to try you? You can’t just chase a number for growth. You have to pay attention to every one of those details because they all have a chance to dilute your ultimate success.
HOW TO REACH: Noodles & Co., (412) 562-2191 or www.noodles.com
Chris Simchick and Scott Barnyak must have missed the memo that companies are supposed to hunker down and not hire while times are tough. The two principal partners of SDLC Partners LP, a 230-employee business and technology consulting firm, hired 100 employees last year and have big growth goals planned for the company.
Founded in 2004, SDLC saw 2011 revenue of more than $24 million, which Simchick hopes to turn into $120 million by 2020. With a focus on strategic planning, cultural values and hiring top-level talent, Simchick and Barnyak are well on the way to making that goal a reality.
“That kind of growth creates tremendous opportunity, but it also creates those challenges for people to step up in a time frame that is meaningful to the business,” Simchick says. “It’s the expectation if you’re going to be a partner at SDLC Partners that you are responsible to challenge ideas, challenge thinking and come up with opportunities.”
It’s this type of mentality that has put SDLC in growth mode. To take full advantage of the opportunities that present themselves, the company plans for the future.
“About 2.5 years ago we embarked on a strategic planning process,” Simchick says. “We engaged an outside firm … not just to facilitate but to bring a process to the table that we then implemented and institutionalized within the company which links both the growth and culture.”
The management team meets once every quarter with the outside strategic steering partner to drive the plan forward.
“No. 1, our team walks out of that room very aligned around the most important things we believe will have the greatest impact for the company this business year. No. 2, we have a plan of attack and an owner of each of those initiatives for the next 90 days.”
Utilizing an outside party helped SDLC see things they might have otherwise missed.
“If you’re not using some outside objective help to do that, you’re probably missing an opportunity,” Simchick says. “The guys that we’ve engaged and worked closely with have gotten to know our business, have gotten to know our people and have held our feet to the fire in terms of being honest and challenging ourselves.”
It is also critical to keep an open mind and listen to other perspectives.
“You have to admit that you don’t know it all and use that as a theme for when you engage both outside help and when you’re looking to hire into the company,” Barnyak says. “One of the challenges that leaders need to be aware of is it’s real easy to hire people like us. You have to make a conscious effort to hire complementary people who bring different skills, techniques and personalities to the table to help you think differently.”
The hiring process is often the most difficult part about running a growing business. Simchick and Barnyak make sure they are always looking for potential new hires.
“One of the biggest challenges is identifying and hiring enough of the right type of people that fit well into the firm,” Simchick says. “If there’s one thing that we’ve continually talked about, it’s how do we accelerate that hiring curve.”
As SDLC has grown and hired new people, Simchick and Barnyak have made sure to keep one thing constant: the company’s culture.
“As the company continues to grow, holding true to that culture that we’ve built is front and center,” Barnyak says. “It’s culture first, skills second. As hard as it may seem at times, particularly while you’re growing fast and you need that technical skill in the company today, hiring to the culture and growing that person in the long-run tends to have the better impact, particularly if culture and core values and those things are important to your organization.”
HOW TO REACH: SDLC Partners LP, (412) 373-1950 or www.sdlcpartners.com
Diversify your services
While strategic planning and hiring the right talent have played a big role in the growth of SDLC Partners LP, principal partners Chris Simchick and Scott Barnyak look to diversify the company’s services to create new opportunities.
“We looked at horizontal offerings that would apply to almost any industry in a generic sense,” Barnyak says. “It’s leveraging your core and seeing what could be transferable. The trick is finding the right amount of domain expertise to blend with that to lend you some credibility in that area.”
You have to challenge your people to think differently to find ways to leverage the investments that you’ve already made.
“Those become the differentiators that both clients recognize and are where we gain big wins internally because someone stepped forward and identified an opportunity,” Simchick says.
No matter how appealing an opportunity may seem, you have to keep focused on what you’re best at.
“It takes discipline because it’s real easy to get distracted from your core and the things that you do well,” Barnyak says. “If you’re doing something really well and it’s within the core business, extending that core to another industry is viable, but you have to be careful that you don’t get easily distracted and take yourself away from the things you do really well.”
There aren’t many companies that are able to do what George Young and his team at Kalypso LP can do. That lack of competition and the abilities of the firm have put Kalypso, a 120-employee management consulting firm focused on innovation, product development and product lifecycle management technology, in growth mode and looking to keep that growth going.
Young, co-founder, founding partner, and CEO at Kalypso, plans to grow by 400 percent over the next four years. To accomplish this goal, which they call the four-by-four plan, Kalypso puts a lot of emphasis on hiring talent that fits the company.
“We think that’s realistic based on the demand we see and what we think is possible, because we don’t really have a head-to-head competitor,” Young says. “We want to do four by four, but we’re going to do it while maintaining the values of the firm and that’s the challenge. It’s getting the right people and making sure that the core values of the company don’t change while we have this explosive growth.”
Smart Business spoke to Young about how he finds and maintains top-notch talent to grow his business.
What are the challenges of Kalypso’s growth?
One of our challenges is growing people at the right pace and creating new partners so we have increased delivery capabilities so we can keep up with the demand. Consulting at its core is an apprenticeship model. People come in and they learn the trade by working with senior practitioners, they grow professionally, they’re promoted and eventually they become partners. That career path takes most practitioners seven to 10 years to get there. Kalypso has managed this pretty amazing growth and we’ve only existed for seven years, and you’ve got this apprenticeship model where it takes seven to 10 years for your people to become partners.
Do you promote from within or look outside the company for talent?
There are senior people that might be working in other consulting firms, but they haven’t grown up in our firm. They don’t understand how we work and they don’t understand our core values or how we deliver projects. It is much harder to have those people join and be successful than if you grow those people internally. Our biggest challenge is all around people and getting the people with the right attitude and skill set to do the projects we do. You’ve got to have people that are highly credible. I spend a lot of my time looking for talent, recruiting talent and maintaining the talent that we have because that is the determinant.
What do you look for when hiring new people?
There isn’t a prototypical Kalypso consultant. We have a couple of core values that are really important to how we deliver projects, but they are also really important for when we are looking for talent and recruiting. The first is our diversity statement; characters with character. We don’t hire the traditional consulting automaton. You’re working with creative and innovative types: scientists, engineers, marketing people, advertising and creative services people. All of those people are extremely talented and a little bit weird in a good way. We have to have people like that. There are certain things you can look for on the resumes or certain schools you can go to, but a lot of the interviews have to be around fit. We look for diversity, fit and good weirdness.
How can people make sure new hires are a good fit in their company?
Try to spend as much time with that person as you can. In my experience fit has won more times than strength of resume. The intuitive side of the interview and the intuitive side of how you feel about the person is a strong aspect. Many times you get a resume that just pops out at you. The person has tremendous test scores and tremendous GPA and things like that, but they may not work out as well as someone who maybe doesn’t have those things but turns out to be a more rounded individual. The only way you can assess that is to spend a lot of time with them and do interviews that are nontraditional. I like to take people to Steak ‘n Shake. I don’t take them to a fancy dinner or to a coffee house, I take them to a place that is pretty plebian and we just sit there and we have a conversation. You have to try to do as much as you can to understand their background.
HOW TO REACH: Kalypso LP, (216) 378-4290 or www.kalypso.com