Chris Ryan, president of Geo-Solutions Inc. has been experiencing a problem all businesses would like to have. His soil and groundwater construction solutions company has been experiencing rapid growth. Growth is what every business wants to achieve, but with growth comes a lot of added responsibilities.
“We have experienced some very rapid growth,” says Ryan whose company saw revenue of $18 million in 2010. “The biggest [challenge] has been trying to manage growth and get personnel into the company.”
The company’s rapid expansion over the past few years has kept Ryan looking for ways to continue the success.
Smart Business spoke to Ryan about how he manages to keep up with the growth his company has seen.
How do you plan for growth?
You have to take stock of your resources in every level that you need to achieve the types of work that you’re planning to do. You have to determine where your weaknesses are and fill those weaknesses before you try and do the work.
You have to have good communication within your company and with your senior people. You have to determine what your needs are and plan ahead before you’re in a crunch of having to do something.
How do you grow within a niche market?
We’ve set our vision in a certain niche market, which is the treatment of soil and groundwater. Anything that’s in that niche, we will take on.
Your niche has to match the expertise of the key people in your company. Anybody who is looking to get into a business or grow a business needs to determine what it is that distinguishes them from the majority of the competition. That will improve your chances of making a dent in the marketplace.
The businesses that do well in our market are the ones that identify what they’re good at and perform it well and gain reputations to get people to come back over and over again.
Do you hire before you grow in anticipation of it or after growth?
The first scenario is obviously preferable that you’ve planned properly and you’re prepared. We have done a certain amount of that and I have certainly experienced the second scenario where you’re completely out of people, and it’s really not a good situation. Everybody becomes busy, that’s for sure.
We had that situation a few years ago and what really scared me was if anybody had any major issue like an illness to themselves or their family or anything that would put somebody out of the mix for an extended period of time, it would have been a disaster for us.
How do you prepare yourself or guard against that?
You have to try and foresee what is happening in your marketplace. You have to make some kind of judgment as to what the level of business will be.
What do you look for when you’re hiring people?
You have to find what’s important in terms of skills and education for the person you’re trying to hire. Then you have to try and find a person that matches those requirements. With companies like ours and others that are in a niche market, all those similar companies are competing for the same people.
How do you attract those people and beat the competition?
The best way is to be the leader in your business or to be the market leader. If you do that, you become the place that people want to work, because they want to work for the best company. That would be number one, but obviously competitive pay and opportunity to participate in ownership and all those benefits are very important to attracting people to a job as well.
What are some other struggles of rapid growth?
As you grow rapidly you’re constantly changing your profile with your lending institution. You have to maintain good relationships with your bank and keep them well advised of what’s going on. It’s really about maintaining good communication.
HOW TO REACH: Geo-Solutions Inc., (724) 335-7273 or www.geo-solutions.com
Jack Ouellette knows that he is fortunate to be in charge of a company with rich history and he takes pride in celebrating that fact. In 2010, American Textile Co. celebrated 85 years of business. The company made a day out of it. Employees at the Pittsburgh facility brought their families and they enjoyed food, costumes and false store fronts that would have been in vogue in 1925. While celebrating where you came from is certainly important, looking forward is critical, as well. Ouellette, CEO of the 325-employee company, knows that he has to keep his eye on the future in order to stay in business for another 85 years and beyond.
In 2005, Ouellette saw that the company was becoming too one-dimensional. So he did what any CEO would do: He looked for ways to expand the business and break out of a stagnant slump by focusing on the company’s core competencies.
“We have intentionally been looking to grow the business,” Ouellette says. “We did that by looking around and asking ourselves, ‘What products are similar to the ones that we currently are involved in?’ It’s using all of the same skills that we have in basic mattress covers and pillow covers to make these items. We felt that there was a tremendous tie-in and a high correlation between those items and sleeping pillows.”
Here’s how Ouellette expanded into a new market by utilizing existing competencies and more than tripled revenue between 2007 and today.
Do the research
Making the decision to create a new product or enter a new market can make or break you. It can’t be taken lightly or done too quickly before knowing how and if you can do it.
“You have to make certain that you’re doing your homework upfront,” Ouellette says. “When we were first trying to determine what products we wanted to expand into, we checked with our customers to find out if some of the items we were looking at would have enough room for a new supplier. When we went to the retailers and said we’re interested in getting into the pillow business, they welcomed that idea. They said the industry does need another supplier.”
In American Textile’s case, the company had good products and an audience buying them. The company wanted to expand its business of making mattress and pillowcases by manufacturing something that wouldn’t require a huge change in the company, and pillows were a perfect fit.
“For us, the question became what product do you want to get involved in?” Ouellette says. “We are in the textile business and we make things that protect mattresses and pillows. The one thing that we required of ourselves was we didn’t want to write a plan that saw ourselves making batteries for automobiles two years from now. We wanted to make certain that whatever we did we utilized our existing core competencies the best we could.
“I would suggest that any company that wants to grow should look around and ask themselves, ‘What are similar types of products that can be manufactured or distributed?’ You have to look at who the competition is and understand what the market looks like. Is the market ready for another manufacturer or distributor of those products? You also have to be honest with yourself and ask whether you’re just going to be me-too or will you be able to provide some innovation in that category that will differentiate you from the competition?”
Build your plans
Entering a new market, whether it’s a new product or a new geography, takes time and careful planning in order to do it successfully. You must be willing to listen to the advice of your team members.
“When it comes to identifying a new area in which to grow, you have to trust your executive management,” Ouellette says. “When they are giving their expert opinion on where to go, you have to believe in them. People who have been in a leadership position for a long time, I think their real expertise comes in being the experts in what has happened in the past, but that may not be the path to the future. To be able to listen to and not have all the answers on where you want to go in the future and trust those people who might have a better vision of the future is really critical.”
Because of a big pillow company going out of business, there was plenty of room for American Textile to come in and pick up the slack.
“When we first had an opportunity to ship some pillows in 2005, we knew that there would be some good growth opportunities — or assumed that there would and that turned out to be true,” Ouellette says. “An important ingredient in identifying when and how you want to grow is making sure you talk to your customers. Identifying an area that might suit your competencies is only really good if the customers are ready for another company to come into that market.”
Once it is clear that you can expand into a new market, planning must be the next priority. You have to have the ability to plan for further out than just your initial launch.
“I think the biggest thing is to have a strategic plan,” Ouellette says. “You generally plan for just one year and you have to force yourself to look out further than that, like three years. To look out any further than that is difficult to really come up with good, solid ideas. I would advise actually following that strategic plan and making certain that there’s the right group of people. Once you have that plan, you have to make certain that everybody in the company knows what your goals are.”
Once a strategic plan is in place, it is to your advantage to continue to follow and update that plan. If you create it and never look at it again, there is little point to it.
“I know a lot of people talk about strategic planning. I think there’s a couple of ways a company can go,” Ouellette says. “One is to have a plan and just (put) it away. The other, which I highly recommend, is having a plan and really working it every single month. It requires an individual in the company to have responsibility for that plan and have responsibility for making certain that everybody’s working toward it. Finding the time to work on the longer-term strategy takes a lot of discipline.”
Communicate and monitor your plan
Strategic plans can get complex and will help guide your company for a long time. It is very important that the CEO be out in front communicating the direction of the company and how that plan is coming along.
“A strategic plan can be kind of complicated, because it touches all of the company and it goes out for an extended period of time,” Ouellette says. “The thing that we did was boil it down into a very concise statement. Ours is called ‘Focus on five.’ The five means the five letters in focus and each of those letters means something. The F stands for ‘first to market.’ The O stands for ‘optimizing sales.’ The C is ‘channel expansion.’ The U stands for ‘us or the employees’ and the S stands for ‘systems and processes.’ Every month, we have an event where we pull the company together and we call it a ‘Focus on five’ meeting. The first thing we do is to have one of the sponsors of each of those initiatives talk about what they have been doing in that area. It’s that constant reinforcement. With our planning team we have quarterly updates where we get in a room and spend two hours going over the strategic plan.”
When your plan takes effect, you have to continue to monitor the growth you are seeing. Check your growth against your plan and communicate the results as you go.
“In the long term, you have to absolutely set goals,” Ouellette says. “You have to make sure people understand those goals, and you have to make certain that you’re tracking those goals on at least a quarterly basis. That shows everybody a commitment to it and makes certain that everybody is making a contribution to that plan on a regular basis. Otherwise it’s kind of like college where you go to the classes but the only time you study is for the final. We don’t want that. We want people studying for the final every single month.”
When new initiatives are created it is easy to forget about other areas of your business. It is important to keep tabs on the core areas of your organization.
“You should also make certain that you don’t take your eye off of the core business,” Ouellette says. “Oftentimes because something is new and exciting in the developmental stages, a lot of the resources that you apply to your core business can be siphoned off to go to the new venture. Growing another product line is not an additional duty for the people who are involved in your core business. You have to keep that core business funded properly and the proper attention on it. You have to make the investment in people and in resources to fund that new business.”
A big reason that Ouellette and American Textile have been successful is because they stuck to what they were good at, but they have also been innovative in how they improved upon their core competencies. Having people who can foster innovation is important to be able to continue to grow your company.
“Innovation plays a significant part in our company,” Ouellette says. “We were once told by a major retailer in this country that ‘new’ sells, and it does, provided that ‘new’ makes sense to the customer. Having a group of people responsible for product development is a major ingredient in being able to grow. If you come out with a product that’s just the same as everybody else’s, it becomes a commodity and a price war. When you come out with a product that is new and different, that’s what the retailers are looking for and that’s what the consumers are looking for. Have a group of people who are trying to develop ideas based upon where trends are going, what the consumer is doing, how people live today and how that differs from how they lived last year. If you can find products that can solve their problems or fit their newer lifestyle, that’s a way you have an opportunity to grow more rapidly.”
It’s very difficult to just create innovation out of thin air. You have to work at it and create a culture that will support innovation within your organization.
“You really need to create and invest in developing an innovative culture,” Ouellette says. “When most people think of Pittsburgh, they think of steel. We tried to get people from Pittsburgh who knew the textile industry, but unfortunately, most of the people who know textiles are located in the southeastern part of the country. You can either try to move the talent to where you are, or you can move where you are the talent. The latter has really worked for us. The major catalyst is getting the experienced people in the industry.”
Having people that understand your industry in and out is crucial for growth. If you are unable to properly understand your market you will lose to the competition. You have to be willing to do what it takes to get the right people.
“The first dollar spent on the right talent is so critical,” Ouellette says. “If you don’t have the right people who are charged with the responsibility and know how to execute the plan, not just have the desire but the know-how, that makes all the difference in the world. You’ve got to get the right talent and you’ve got to pay for that talent. They have to have all the right experience and background, not just 80 percent of it. You’ve got to have the whole thing in our opinion.”
HOW TO REACH: American Textile Co., (412) 948-1020 or www.americantextile.com
The Ouellette file
American Textile Co.
Born: Springfield, Mass.
Education: Bachelor of science degree from West Point; MBA from Duquesne University
What was the first job you had out of college, and what did you learn from it?
My first job after college was second lieutenant of the United States Army. I was a fire direction officer. I was responsible for computing the data required to fire 155 millimeter artillery weapons. I learned the importance of how to manage a small team, and I’ve found that those same skills for managing a small team apply to larger organizations. It’s all about people.
Did you see any action?
I was a pilot in Vietnam for one year between 1970 and 1971. I flew an army reconnaissance plane on the Cambodian border for six months, and then I flew a twin-engine transport plane for the last six months all over Vietnam, Cambodia and Thailand.
What is the best business advice you’ve ever received?
It is taking care of the people whom you work with. You have to always be aware of that.
If you could invite any three people to dinner, whom would you invite and why?
I would invite Dwight D. Eisenhower because it would be fascinating to hear about the Normandy invasion. I would love to invite [George] Herbert Walker Bush to dinner because I think he had one of the most interesting resumes of any president. And I would like to invite Arnold Palmer to dinner. Not only was he a tremendous golfer, but he had the ability to excite people and motivate people and anybody with those types of skills would be worth talking to.
Since Sushil Jain, founder, president and CEO of Empyrean Services LLC, started his engineering management and technical consulting business in 2000, he has had a very collaborative and consultative leadership style. Using that style to build trust and respect with his employees and clients, Jain has developed a culture that puts people first.
“The more participative culture with focus on teamwork makes people feel more involved, more empowered and they feel more a part of the company versus just being an employee,” Jain says. “That quality is very important particularly in a small business.”
That culture has helped Jain grow Empyrean Services LLC to annual revenue of $20 million in 2010.
Smart Business spoke with Jain about how he focuses on people to grow his business.
What have been key factors behind your company’s growth?
Fifty to 60 percent of growth in the business over the last several years is attributed to the people that have worked for me. We go out of our way to treat them with respect. Whatever their needs are, we fulfill them. You have to work with people and work for people. Be firm and fair. Lay out the cards the way they are and people will understand that you are treating them with respect.
How can someone make their culture people-oriented?
If people are working together, it makes for a very cost-effective and efficient organization. You should have an open-door policy and make sure people feel comfortable that they can come and talk to you about anything. You have to build the level of respect and trust in the organization so that people trust not only you as a leader but also trust each other. You have to really take the time to listen to the employees. Everybody talks about having an open-door policy, but people have to really see that in action. You have to take the time to walk the floors and sit down at people’s cubicles and start to talk to them. Talk to them about what’s going well and what’s not going well.
How do you get employees to come to you?
When people come and talk to you and they have an issue, you listen and you do something about it. In a majority of cases, you’re able to do something about it, but in some cases, you’re not. You have to go back to them and say, “I know you had told me this or you had talked about this or you requested this, but this is the reason I cannot do it or this is where I am with this and it may or may not happen because of this or that.” People really appreciate that. You have to explain the reason for your decision.
As you grow up in management as you become a CEO, you are faced with making a lot of decisions on a daily basis. Some of those decisions are going to be unpopular. You have to communicate to the affected department or individuals why you are deciding it that way. Some folks may not fully agree or endorse that decision, but they respect the fact that you took the time to explain why you came to that decision. You have to take full ownership and accountability in your decision. That goes a long way toward building trust and respect in the organization.
How do you align culture with who you look to hire?
I think chemistry is very important. You don’t want to bring in a person who has a very different management style than what the organizational culture is because that can be very disruptive. The person may have the best work ethics, the person may have the best intelligence and knowledge, but they do not fit with the team and it could be like a bull in a china shop. That can create a lot of disruption with the team and their contributions could actually be negative rather than positive. The fit with the organizational culture is very important.
How to reach: Empyrean Services LLC, (412) 528-1573 or www.empyreanonline.com
Bryan Ward, founder and CEO of Giant Ideas, knows there are many important aspects of developing a business. An often overlooked, yet vitally important aspect is the branding of your business. The full-service advertising agency helps develop and drive brand awareness for its clients.
“It’s about creating a connection between a product or service and a brand and creating that connection in people’s minds so it’s something they can remember easily,” Ward says.
With a corporate identity focused around Easter Island iconography, Giant Ideas has a name and logo people don’t forget. Ward’s branding tactics have made his agency one of the best in the area at what they do and led to 2009 revenue just shy of $10 million.
Smart Business spoke to Ward about how to develop a brand and why it is an important business aspect.
Define your brand. One thing that people often don’t seem to realize about a brand and it’s often a misunderstood word and misused many times … is that they already have one, there’s no creation of a brand. You can push it in a different direction, but you already have one. We all have a brand. It’s how people see us. It’s the way we dress, the type of car we drive, the way we speak. Everything that we do goes into building our own personal brand and the same thing is true for a company or a product or service. The way that the phones are answered, the way the employees treat people, the way employees dress. All of that is part of a brand.
You have to ask yourself, ‘Is that brand doing anything to help my company excel its product and services, or is the brand helping my product reach new customers? Am I utilizing it in the best way possible or not?’ If not, then something needs to be done to fix that.
From a CEO’s perspective, where do you want your company to be … two years from now, five years from now? You then backtrack from that goal. CEOs spend a tremendous amount of effort and time on supply chain logistics and all these other business processes that are important to get there and often overlooked is the brand marketing execution communication side of things. It’s part of that stream of business and is just as important as the others. Getting products from point A to point Z is important but also how is your brand working for you and how best can it do that job. Maximizing the amount of added benefit and added value that brand is bringing to that chain is just as important as the others.
Establish brand awareness. You have to clearly establish why you are who you are and why that matters to the consumer or the customer and why they should pay attention to you. We all have competition and you have to stand out from the crowd because it is a very competitive market.
A new brand has nothing. There’s zero name recognition, zero brand recognition, zero information in the consumer’s or customer’s mind about that. It’s a great time, too, because you have an opportunity to drive that story, to be in control of that story for a long time. The sooner and better that you can do that and establish what that story is going to be and drive that conversation yourself, the better off you’re going to be.
Drive your brand. You have to talk to customers, talk to employees and really get a sense of what is going on. You need to also have an understanding of the market. What are the other competitors in the space doing? How are they branding themselves? What tools are they using? All of that goes into building a picture of where your brand needs to be and where its optimal space is going to be. Once you start down this path you start to see common threads. It almost becomes self-evident at a point where your brand is going to live and what tools it needs to survive and flourish.
I can’t tell you the number of clients, the number of businesses that I talk to who had bad experiences in the past with branding. It is just as important as any other aspect of your business and it needs to be given the same attention and care and expertise that you would give to any other part of your business. If you don’t do due diligence when you have the opportunity it won’t serve you well in years to come and you will regret having gone in that direction.
HOW TO REACH: Giant Ideas, (412) 566-5756, or www.giantideas.com
After losing his job as an airplane pilot following the Sept. 11 attacks, Jerry Lasco turned to his hobby of food and wine for answers. With a desire to start his own business, Lasco brainstormed for a business idea that solved a problem people were experiencing.
“The problem that we wanted to solve was fear,” says Lasco, CEO of Lasco Enterprises LLC, the management company of The Tasting Room, Max’s Wine Dive and The Black Door. “The fear of not knowing how to navigate a wine store and not knowing how to navigate a wine list was a big fear that we wanted to solve.”
Helping average consumers understand a vast wine selection and taste the wine before they buy proved to be a good solution to the problem. Today, Lasco operates seven wine locations in three cities and had revenue of $12.5 million in 2010.
Smart Business spoke to Lasco about what it takes to get an entrepreneurial company off the ground.
Solve a problem. The question that I think is important for entrepreneurs is, ‘What’s the void in the market or what problem can you solve?’ Whether it’s starting a new company or a business initiative, what problem is it solving? You need to ask yourself a lot of questions and you need to do a very thorough analysis. Everybody has to go through some sort of due diligence process and gain a confidence level that their idea has legs. Then you take a leap of faith and put everything on the line to test whether or not you’re right. Due diligence is critical, and it’s specific to whatever industry or idea you have.
Prepare for growth. You don’t want to grow before you’ve got everything taken care of in your own backyard on your first business. You’ve got to have that down pat and you have to feel very confident in your initial business because that becomes your backbone. Secondly, the skill set that made you a successful entrepreneur — the risk taking, the idea, the strategic thinking — isn’t necessarily the skill set you need to be a growth company, which has a lot more to do with strong management abilities, organizational abilities, systems abilities, and visionary and motivational leadership. I think of entrepreneurs as inventors, but that doesn’t mean you can manage a complex organization and a complex system. You have to look in the mirror and figure out whether or not you personally have those skill sets or you need to bring those skill sets into your company. You have to make sure that you’ve got a complementary skill set or tool kit.
Manage your cash flow. There is a mindset that you have to have if growth is your goal. That means you’re going to have to reinvest and you’re going to have to hire more brainpower and manpower to allow you to grow. You have to have really good cash flow management. Running out of capital or running into financial troubles can devastate everything. There are countless stories about businesses that have had great ideas and probably would have succeeded except for a small mismanagement of cash flow. You never know when something unforeseen could come about. It’s challenging for small businesses because you don’t want to invest in accounting, a controller or a CFO because most small businesses can’t afford that. Whatever you do you have to know what’s going on in your books and in your cash flow situation, even if that means you’re staying up at night and doing it yourself.
Hire the right people. As you grow, it becomes much less about the entrepreneur and much more about the leader of the company. I think a great leader’s strongest asset is having the wherewithal to bring great people into the company. Get people that you can trust that have complementary skills. The greatest variable that is going to affect your growth positively or negatively is that you have the wrong people on board, a bunch of yes-people or people that aren’t contributing or aren’t complementary in strengths. If you put the right group together and you have a good idea, you have an excellent opportunity to get to where you are going. To be a good leader you really have to understand yourself and know what your motivations are and know what your strengths are. You have to hire people that have strengths in areas that you don’t have strengths in. Once you decide to grow, that’s when you have to specialize. You have to bring people in that are really good in those specialty areas.
How to reach: Lasco Enterprises LLC, www.lascoenterprises.com
John Magee walked away from a multibillion-dollar company to start over.
Before helping found Crane Worldwide Logistics in 2008, he worked for Eagle Global Logistics, a global supply chain company that had grown from $80 million to more than $3 billion in the time that Magee was there.
Unhappy with how big the company was getting and the loss of personal touch to its clients, Magee and eight others from Eagle left to start their own supply chain business, but they had to wait out a noncompete agreement for a year.
They took the time to scout how and who they wanted to hire and the clients they wanted to chase. One thing was certain: They didn’t want Crane Worldwide Logistics, a full-service customs brokerage and logistics company, to turn into the same thing they had just left.
“That sitting out actually gave us a chance to reflect on the industry,” says Magee, president of Crane Worldwide. “What did we see taking place in our industry? How did we want to launch a new organization in there? It was truly the best thing we could have done, because it allowed us to get so much set up the way we wanted to do it so that when we launched the organization 12 months later, we could do it, in many cases, very different than the way a lot of our competitors and the industry has morphed into.”
Not wanting to become another huge global company that lost touch with clients and not wanting to be too small and stuck in a niche, Magee and his other team members combined their expertise to develop their plans for growing and staffing their new company exactly how they wanted to.
Here’s how Magee grew Crane Worldwide to $252 million in revenue and 700 employees in 2010 by carefully planning for controlled growth.
Know your destination
Growing a company is ultimately not the biggest challenge, but being able to control it is.
You must clearly identify how you want to position your company and then stick to that plan.
“Since the late ’90s and into the turn of the century, our industry has seen a tremendous amount of consolidation,” Magee says. “All that industry consolidation created a few dozen big players that are $3 billion in annual sales and larger. They basically try to be everything to everybody everywhere. No matter what industry it is, what geography or what type of service somebody is looking for, they try to say yes and they try to do it. I don’t subscribe to bigger is better; I think better is better.”
Being better means staying true to how you want to position your company. You have to be diligent about not faltering from how you want the company to appear to employees and clients.
“You have to know what you’re good at and stick with it,” Magee says. “Don’t take on business for the sake of growing. Don’t sacrifice the company’s results because you’ve taken on something that doesn’t make good sense for your company. Don’t try to grow for the sake of growing, because you’ll spend time and effort and resources on nonvalue-added work. Everybody feels it. The company feels it, the people feel it, and it takes away from that feeling of being in high performance when everything is working right.”
Having started with a company when it was relatively small and watched it turn into a multibillion-dollar company, Magee knew that becoming a huge company wasn’t the right path to go down a second time.
“I can tell you the bigger we got, the harder it was to be great at what you do,” he says. “We want to be this global midsized player,” Magee says. “We want to have high touch, high service and really get back to the core brokering of supply chain solutions. I want to bring this high focus on it that I think a lot of the big guys lost, but be large enough so that people with global supply chains are willing to trust us with it. That was our vision. We want to be a $1 billion company. It’s not because that’s some magical number, it’s really to let the market and, more importantly, our clientele know where we are positioning ourselves.”
Hire for growth
When you have a clear path that you want your company to go down, you need employees who will be capable of continuing that growth. If employees are unable to handle the growth your company sees, you will end up having to let go of them and start the process all over. You have to hire for the future.
“What I saw [at my old company] was us outgrow our management team easily four times, arguably six times during my 13 years there,” Magee says. “When you start making management changes, you run the risk of getting this momentum built up and then, all of a sudden, you have to bring in a new leader who can take us from here to the next level, and by doing that, you run a risk of seeing that momentum come to a stop.”
Because of the experience of the founders of Crane, they knew that they would be able to get their company off the ground and grow. However, they still needed to be smart about who they looked to hire.
“Part of our plan for the future is let’s go hire these key positions above and beyond where we are today, where we’re going to be in two years, but let’s really think about where we’re going to be in five to seven years and let’s hire for that,” Magee says. “That has allowed us to attract the talent that we needed and ultimately that has led to what we’ve been able to accomplish in the first two years.”
In order to hire in front of your growth, you must constantly be on the lookout for potential employees. You want people who you can see working in a higher-level position than what you’re hiring them for.
“If you can envision that you can see this person being developed into two levels above what you are hiring them for, then you probably have a good candidate for the job,” Magee says. “It’s vitally important that your human capital pipeline can keep up with your sales pipeline. If you can’t bring on the right talent, you’re going to ultimately hit a ceiling even though you can continue to bring on revenue. It’s going to hit a ceiling and your customers are going to feel it. As we know with inertia, what’s in motion stays in motion, but what’s at rest stays at rest and you don’t want that momentum to stop.
“You have to prioritize recruiting. You don’t recruit when you have a need. You recruit every opportunity you can. I’m always asking, whether its colleagues, whether it's customers, or whether it's suppliers, ‘Hey who’s out there that I should know?’ Because when the time comes to pull the trigger if you’re starting your recruiting then, you’re falling behind. When the time comes to pull the trigger, if you already have multiple candidates that you’ve been getting to know and been recruiting over time, even though you didn’t have a role for them, it’s a lot easier to finish the process and bring them on board.”
Create the right culture
Controlling growth means setting up the right culture for your company. With the right culture, people will instinctively do things the way you want them done. This requires finding the right people to help you reach your goals.
“Having lived and worked all over the world, whether I worked with some great people or I competed against them, I was fortunate that I knew a lot of folks and a lot of my colleagues knew a lot of folks,” Magee says. “We spent the year that we were off creating a recruiting database. We couldn’t talk to anybody from our former company for 12 months from a solicitation perspective, so we went out and built a recruiting database everywhere else.
“We also defined what kind of culture that we wanted and we called it our Crane Character. I basically took the letters from Crane and I created our character statement. The C stands for customer-centric, the R for responsible, the A for attentive, the N for integrity, and the E stands for execution.”
It is crucial that all employees agree with and abide by the company culture that has been established. If employees don’t mesh with the culture then the odds of it working in the employee’s or company’s favor are slim.
“When we are hiring, can we see the individual that we are bringing on board … developing into two levels above what we are hiring them for,” Magee says. “Do they have the first four values within our character statement? Are they customer-centric, are they responsible, are they attentive, and do they have integrity? If they pass that test, then we bring them in the door. At the end of the day, if they don’t execute … they are probably not staying if they can’t actually do the job that we are hiring them for. But if we’ve done a good enough job betting it, then your success rate on bringing in the right person is pretty high.”
That upfront attitude has been a big reason for Magee’s success hiring people who can continue to drive the growth of the business. You have to be able to tell employees exactly what the company’s plans are and why.
“You have to lead by example,” Magee says. “Have integrity. A lot of leaders tell people what they think they want to hear versus just being completely open and honest with them. I know that’s the only way I want to be treated is if somebody just shoots me straight and is very open and honest. I think if you lead by example, have integrity and be open and honest with everybody and communicate, people will follow that. They want that from their leader and when they feel like they are getting partial truths, that’s not as good.”
HOW TO REACH: Crane Worldwide Logistics, (888) 870-2726 or www.craneww.com
The Magee File
Crane Worldwide Logistics
Education: Received a marketing degree from the University of North Texas
What was your first job and what did you learn from that experience?
When I was in middle school, I went and printed up business cards and started mowing lawns in the neighborhood for $6 a lawn. Mowing lawns was a commitment. If you make a commitment, you’ve got to stick with it. My friends would invite me to the pool or to the amusement park and although I would have loved to go, I said no I couldn’t I have to mow yards that day. That taught me the value of money.
What is the best piece of business advice that you have received?
Don’t set your goals too low and write your goals down. If you look, I think statistics say that only 3 percent of the world writes its goals down, but that 3 percent makes more money than the other 97 percent put together.
If you could have a conversation with any one person, who would it be and why?
Jack Welch. I have a tremendous amount of respect for what he did during his leadership at GE. I’ve read lots of books on GE, and Jack and I definitely don’t subscribe to everything that Jack does, but in my mind, he goes down as the best executive that’s ever run an organization.
Mark Seremet, president and CEO of Zoo Entertainment Inc., understands that, in the ever-changing world of technology, you must innovate to stay on top. Since being founded in the spring of 2007, Zoo Entertainment Inc., a developer, publisher and distributor of interactive entertainment software, has been recognized as one of the fastest-growing companies in the region because of its ability to generate new ideas.
“As an organization, not just externally but internally, we are very open,” Seremet says. “You have to encourage communication and you have to encourage ideas from everyone regardless of what their position within the company is.”
That openness and ability to have free-flowing ideas within the organization has led to revenue of $45 million through September 2010.
Smart Business spoke with Seremet about how he motivates Zoo Entertainment Inc. to innovate.
Identify your company direction. The most important thing to keep in mind when dealing with your organization is communication. Everybody needs to understand where this company is going, how can I help us to get there and understand what the metrics are that the company is measured on to know if you’re successful or not. If you’re not communicating and telling people what’s going on, what’s important to the organization, you’re unlikely to get innovation around the areas that you need it. You may get some innovation and some innovative ideas, but they may not fit with where you’re going with the company.
We have monthly meetings to communicate the direction of the company. You have to communicate how the company is doing, where we’re going, new initiatives that are being driven. At the end of the meeting, we have a period where anybody can bring up comments, ideas, thoughts, criticism whatever it may be. … We encourage anybody’s views there. You have to continually reinforce it, because it’s a message that people get every month. A lot of times, when you’re working in an organization, you don’t want to just feel like it’s a job or you’re stuck and you don’t really know how you fit into the whole thing. So we talk about how all of those pieces work. You just have to keep communicating that message and what’s important to the company every month.
Create an innovative culture. It’s interesting to look at other businesses that are innovative or maybe models that are working that may be similar to your industry but not necessarily in your industry. Then learn all you can about what that company is doing and what some of the drivers are in their success and then try to employ those same drivers into your business. That’s a good way to explore innovation and culture around that innovation. When you think innovation, you often think of technology, but you don’t necessarily just innovate around tech. You could innovate in customer communications, manufacturing, whatever it is. There is a lot you can do just by looking at these other organizations and applying that knowledge to your own company.
That culture comes from the leader, the CEO. I think it’s important that CEOs manage by walking around. It’s important that CEOs personally communicate with as many employees as they possibly can. They will learn a lot about the organization, and at the same time, they are encouraging people to bring things up. You’ve got to have a culture where employees know that we want to hear these ideas, we want to pick some up and move with them, and we also want to reward people for having created an innovative idea.
Be open-minded. If you’re open-minded, you will see a lot of ideas that larger companies don’t get an opportunity to look at because they have a very regimented and bureaucratic structure. To be innovative, you have to listen to people. If you’re myopic, then you won’t see what’s happening around you both within your organization and externally.
A lot of innovation can be customer-driven. If a customer sees improvements or sees potential ways to improve your product or recommends a new product to you, you’ve got to be listening to that. A lot of innovation is driven by being open-minded and having a reasonably flat structure where people can communicate effectively.
We foster the idea internally with people externally that we are looking for new games and ideas and anybody can propose them and they can communicate with the executives about it. Your idea might get shot down … but the environment and the culture is such that we want to hear those ideas. I think the biggest driver behind innovation is solving real problems. You’re creating a better product or experience for consumers.
HOW TO REACH: Zoo Entertainment Inc., (513) 824-8297 or www.zoogamesinc.com
When Michael LaRosa took over as CEO of his family’s 64-restaurant pizzeria chain in 2008, he couldn’t just rely on the quality of the pizza, hoagies or calzones to get him through.
The economy was bad, and people weren’t eating out as much as they used to, and that included stops at LaRosa’s Pizzerias, which his father founded in 1954.
“It has been an extremely difficult economic period to lead a business and organization in any industry,” LaRosa says. “What I look at in my role as CEO is that I have to do my very best to keep the morale and the culture of the organization from my leadership as positive as possible and try to encourage everyone to keep doing the right things.”
Due to the economic climate of the last few years, LaRosa has had to stress more than ever the importance of making customer service his highest priority. From driving service into the corporate culture and training new employees to modeling expected behavior and learning from mistakes, LaRosa’s has survived the economic downturn with great customer service from more than 2,800 employees who helped the pizza chain earn revenue of $124.5 million in 2010. Here’s how LaRosa kept customer service his No. 1 priority.
The economy the past few years put a dent in how and where people spent their money. When economic climates change, you have to be able to adjust to those changes and make sure you continue to do what you can to provide the best for your customers.
“People are doing a little bit less of some of the things that are life’s luxuries,” LaRosa says. “You wouldn’t think that buying a pizza falls into the luxury category, but people decide to eat at home a little more often and try to save some money, and at the end of the day, everybody feels it. Even though we are all doing our best to manage costs and waste and making sure that we have efficiencies everywhere, at the same time, we can’t let the economic feeling be prevalent inside our business, because we are in the customer service business.”
When times are tough, you can’t let that trickle into your business. It is crucial that you be as positive as possible and continue to focus on providing the best products and services to your customers.
“You must keep your eye on providing your guests great quality products and great service and you can’t allow a dip in attitude throughout the leadership of the company or your store management teams or your front-line people,” LaRosa says. “You just can’t allow for that because there are already fewer people calling and coming in and the ones who are coming deserve the most fantastic experience ever each time they come in. I think anybody who has been in a leadership position certainly has sensed the importance of doing a much better job just keeping your people positive, keeping your eye on the ball and inspiring them each day to do the best they possibly can with the guests that they’re serving.”
It is also important that your people understand the company goals during trying times. Setting goals and making strides toward achieving them can provide a boost in morale when times are tough.
“If you have important goals clearly stated and understood by everyone and you proactively review those metrics on a frequent basis, you celebrate the things that are worth celebrating and you address the other issues, I think that activity can help lift everyone’s spirits and morale,” LaRosa says. “You have to have the right goals established and be communicating them to everyone and then have frequent reviews so that you can respond positive or negative as you need to.”
Make training a priority
Regardless of what the focus of your company is, it is critical that all of your employees understand it and that they know it from the moment they begin work.
“What you try to accomplish within the first 30 or 45 minutes is to create an expectation that is simple to understand, yet extremely important,” LaRosa says. “For us, we focus on our promise. Our promise each day is that we want to bring a smile to every one of our guests every time we serve them. Our promise is clearly stated and easy to understand, but in that first 30 minutes, you want every new addition to your team to understand that.”
When showing new employees what you expect of them, it is important that you are able to view the situation from their perspective and make them feel comfortable.
“You need to understand the team member’s perspective,” LaRosa says. “I’m hiring people and sometimes it’s their first job. They’re very nervous, and they’re fearful of what they are going to encounter. We work hard to understand the nature of our new hires, and we try to create an environment that’s comfortable for them.”
Making sure that new hires are comfortable will help ensure that they will be able to grasp what you expect them to do in their roles. What you tell them in the beginning of their training is crucial.
“You have to be very understanding of the individual you’re training so you can design a program that not only meets their needs but helps them be successful beginning with the first 30 minutes of their training,” LaRosa says. “I think sometimes people make the mistake of using a little too much corporate language and acronyms and they blow right past the new hire and the new hire isn’t comfortable enough to ask what that means. You have to understand your target and create an environment that makes them comfortable especially when asking questions or asking for clarification. If you’re able to do that, there’s a pretty good chance you’ll provide pretty good training.”
Excel at customer service
In just about every industry, customer service is one of the top priorities within a company. If customer service is something you pride yourself on, it is important that you are constantly providing it in every circumstance.
“Regardless of how pleasing the meal may or may not have been, service can mean more to the guest,” LaRosa says. “They will continue to go back to a place where maybe the food is a little bit inconsistent, but service will bring them back because they feel appreciated. Customer service has to be prevalent everywhere. You can never overuse it. It has to become an integral part of your culture.”
To make something an integral part of a company culture, the behavior has to be displayed by the CEO and everyone else will follow.
“The CEO is expected to lead by example, and then that just trickles throughout the organization and everybody else is expected to behave the same way,” LaRosa says. “If you do that 110 percent of the time, chances are your people are going to be doing it pretty well, too. You also have to make it prevalent. Refer to it and point to it constantly.”
Feedback is another great way to improve upon your services. It provides a firsthand opinion of what you can do better to make your customers and your employees happier.
“You have to make it easy for your customers to give you feedback and you have to respond to it,” LaRosa says. “The same thing goes for your team members. All levels of management need to constantly ask their team members for feedback. Is there anything that we need to do or provide you to help you do your job? Are there any obstacles that I can help remove so you can do a better job providing quality products and quality service? You have to always be out there asking for feedback that can help drive your improvement.”
Getting feedback from customers and employees can often lead to new practices, products or services that can provide a boost to your company.
“It’s always fun to use specific suggestions or recommendations that are made by front-line team members and build that into the company,” LaRosa says. “Those things are huge wins. Those kinds of things have to be free flowing. You have to have a culture that allows everyone to come up with ideas that will help make things better, save time or steps, make something more efficient or help make a customer more satisfied, those contributions are invaluable.”
Contributions from employees or customers will only improve your business if you are open to those suggestions. It is imperative that you hear all feedback and respond one way or the other.
“You have to be open to all comments and suggestions,” LaRosa says. “However, you have to have some sense or some sort of an evaluation process where you can put something into a test mode and determine if this is really going to be something that improves this, that or the other. It’s like a funnel, you want to be open to all ideas and all suggestions, but what actually comes through the funnel are things that maybe a subcommittee or a quality team has reviewed.”
Motivation to perform well and recognition of a job well done is an important part of creating an atmosphere where employees will want to excel.
“Somebody taught me a long time ago that when you catch someone doing a great job you need to make a big deal out of that and let them know that you appreciate that,” LaRosa says. “As much as possible I’ll visit a store and congratulate and thank a team member. That recognition of a job well done is very important and we try to share those stories.”
A job well done must be celebrated from the top down. Otherwise people won’t know that your company cares about good performance.
“Our team members see that as our attitude and that helps draw out the best in people,” LaRosa says. “If it was the opposite of that and no one cares and that’s the attitude, then that will trickle down, as well. As CEO, it’s really important to make sure that your managers are doing the right things and they care and are responsive to their employees.”
Managers must make sure they are providing encouragement in the right manner, because employees will respond positively or negatively based on how they are treated by their supervisors.
“What’s most important is having a culture where the managers care about their team members and their satisfaction so that your team members care about the guests and their satisfaction,” LaRosa says. “It’s a two-way street. Your team members are only going to perform at a level of how they are interacted with by their superiors. You’ve got to have an environment where everybody understands that a happy internal customer is going to provide for that external customer. So the culture and the environment have to be one that you care about your people at all levels.”
To build a culture that cares about people and motivates them at all levels, you must be able to learn from mistakes. If your company can do that, everyone will be better off having learned from those experiences.
“You have to have continuous learning and process improvement that’s driven from that learning,” LaRosa says. “That’s a very important way to motivate people across the organization. Leadership is charged with the responsibility to create that urgency around improvement. Complacency is the enemy. There are always little details that can get better and be improved upon. As a CEO, you have to create that type of environment.”
HOW TO REACH: LaRosa’s Pizzerias, (513) 347-5660 or www.larosas.com
The LaRosa File
Name: Michael LaRosa
Company: LARosa's Pizzerias
Food service experience: Has been in the food service business for more than 35 years working in and around the family business. His father started LaRosa’s in 1954.
Do you hope that your children will continue the family business?
My oldest son is involved in the company, and he is very passionate about the family business. But it’s really up to them. I don’t think it’s something you want to force upon them. It has to be a decision that they want to make for the right reasons.
What would you eat if you went into a LaRosa’s for a meal?
I would have a bowl of minestrone soup, a traditional crust pizza with pepperoni and sausage and a Diet Coke.
What are some traits of a good leader?
I think you have to be a person of integrity. You need to have vision. You need to be a servant leader and go out of your way for others and be as concerned about others and their development as you are yourself. You also have to be passionate about what you do.
If you could have a conversation with a person from the past or present, who would you like to speak with?
I would probably speak to Jesus Christ. I think you could have a pretty interesting conversation with him. I have a strong faith, and he is one of the people I most admire.
Charles Hammontree believes in following his leadership instincts and giving his employees what they need to succeed. His instincts have been leading Hammontree & Associates Ltd., a civil engineering firm, for many years now. Through his experiences and his success, Hammontree, president and CEO, has helped the 51-employee firm continue its steady growth.
“As I mature in this position, my instincts seem to be paying off,” Hammontree says. “Part of it was seeing some opportunities that competitors didn’t see and delivering a service and expertise on a level that’s hard to match.”
The combination of his leadership instincts and his company’s ability to follow his lead and back up his plans with results has proven successful and led the firm to their best year yet in 2010.
Smart Business spoke with Hammontree about how to successfully grow your company.
What can a leader do to differentiate their business?
Don’t follow the crowd; follow your own instincts. Find out what the crowd or your competitors are doing and do something different or sometimes do the opposite. If they’re going after one market sector and they’re all competing and the odds are low that you’re going to make an impact, go to a different area and find another source for your services. Go where the probability is better that you’ll succeed.
How can a leader of a company help its staff be successful at their jobs?
You have to lead by example; you can’t just talk. You can’t just tell people what to do. You have to go in when something’s hard to do, and [employees] have to see that you’re willing to do what’s hard for the benefit of the firm and the group. You’ve got to be responsive to your team, and if there’s something that they need to succeed, you have to see that they get it. I like to give all my people the tools to succeed rather than have any excuses not to. My staff comes to me with recommendations and my philosophy is to say yes and give them what they ask for more so than to say no. I trust them and put the onus on them to deliver with what they think they need to succeed, and more times than not, that pays off and we get a return on those investments.
What are ways to grow a business once it is doing well?
If I have a section or a sector of business that’s doing well, I like to use our resources to reinvest into that sector and make it even stronger. I will invest some resources in less profitable sectors but not the lion’s share. You don’t want to use your resources to invest in something that’s less likely to have an immediate or even a long-term return on that investment. What you’re doing well in, you should keep doing and keep investing in and play on that strength. Focus on what you do well and invest in that and do more of it and do it even better and expand on it rather than trying to beat the dead horse with something that’s struggling.
How can a business plan for growth and new possibilities?
As the CEO you have the overall picture. You have to bring your team members together who have different parts of a solution to a new offering. You have to build confidence in the staff that they can deliver and approach that market. It’s about networking your own team members and having the overall picture. You have to think about bringing in good capable people who like to work and like the work that you have for them to do. If you can get those two ingredients, that’s a good formula for success.
How can a CEO keep in touch with employees as the company grows?
Let them know you’re involved and part of the team. Keep in contact with your staff. It’s all one family and you’re all part of the same team. You have to be visible and you have to have an open-door policy. You can say it and you can encourage it, but I think the average staff member is still a little intimidated. They don’t want to fall in disfavor with the CEO or the boss. You have to let them know that you’re there to make them happy. Even if they can’t physically walk through your door they’ve got to know they can call you anytime or e-mail you and you’ll be responsive to them. Just like a project manager has to be responsive to his customer, a CEO has to be responsive to his staff.
HOW TO REACH: Hammontree & Associates Ltd., (330) 499-8817 or www.hammontree-engineers.com
As a pilot for 43 years and president of Voyager Jet Center, Rich Ryan knows what it takes to create excellent customer service.
Ryan leads by example and demonstrates the level of effort and commitment it takes to deliver the customer service that Voyager Jet Center, a private aircraft company, is known for.
“I think when the employees see the president pitching in, whether it’s picking up a piece of trash, flying an airplane or cleaning something, I think they know that I’m committed and therefore they should be committed,” Ryan says.
Attention to detail by all 60 of Voyager Jet’s employees allowed for $25 million in sales last year.
Smart Business spoke with Ryan about how he keeps customer service the focal point of his business.
How do you keep your employees motivated?
I’m a walkabout manager. I am in every department every day observing, showing my face and asking people how things are going. That’s a management style that’s worked well for me. Make yourself visible. Make yourself visible to the customer and to the employee. Don’t hunker down in your office, get out and about.
I also have an open-door policy. People aren’t hesitant to speak with me, because I see them every day. If you’ve ever been to a presentation by a senior executive to his staff, at the end invariably the lecturer will say, ‘Any questions?’ and people are reluctant to speak openly. So the follow up is, ‘If you have any questions that you don’t want to say now, I’ll be available in my office for the next half hour and you can talk about it.’ If I address the employees as a whole, I usually end up in that arena. Some people just don’t speak well in front of a group of people, yet they may be perfectly lucid in a one-on-one conversation.
How do you create and evaluate customer service?
Training is one way to keep the quality of service up. Voyager Jet Center spent roughly $650,000 on employee training last year. Most of that training was simulator training for the pilots, but we also train our dispatchers and our line service personnel. As a company, we sell several types of products, so our line service personnel need to be trained in safe and efficient service.
A lot of the customers are my friends or associates so I will call them and ask them or send them an e-mail and ask, ‘How was your trip last night?’ By constantly evaluating what our service is by getting feedback from our clients, we hope to improve our service.
We have evaluation forms … for the pilots to fill out who come in and buy fuel from us or use our facilities.
For employees, we have a standard evaluation process. I’m a big believer in the sandwich technique, the good the bad and the good. So I would say, ‘Mark you’re doing a great job; however, you’ve been tardy three times in the past two months, so once you correct that, overall, you’ve done a good job.’ Evaluating progress is critical. Otherwise the employee would be operating in a vacuum.
How do you improve customer service?
Listen to what the customer says and listen to what the employee says. The employee knows more about his job than you do, so listen to him and then react.
Make sure that you involve employees in the decision-making process. Push decision-making down and make sure that each employee has bought in to the goals of the company. Employees need to understand what the goal of the company is, and they need to buy in to it. By involving them in the decisions, it becomes their decision, not your decision.
How has customer service helped grow your business?
We sit in one airplane every week. We sit in it for several hours, and we open every drawer and open every table and look in every nook and cranny to make sure it’s clean and that some old magazines haven’t gotten in there. That’s very important to us.
People talk about what’s a good restaurant or what’s a good tailor and who’s a good jet provider. Who can you rely on, who’s safe? So if you have a cadre of happy customers, then they’ll tell their friends, and that’s an important manner in which to build the business.
HOW TO REACH: Voyager Jet Center, (412) 267-8000, or www.voyagerjet.com