Every industry constantly searches for the next thing to alter and improve how business is done. For Houston and the energy industry, that thing is clean technology. Lisa Epifani, an expert in the energy field, explains how it is bringing change to the energy capital.
Leading the energy industry
Houston will be a great leader in the clean tech world. Texas is super lucky to have great resources for wind and solar energy, and Texas has been harnessing those newer and renewable resources.
Clean tech versus oil and gas
It’s obvious that oil and gas are going to be a major part of the portfolio for a long time. We have to acknowledge that and be realistic about the tradeoffs as we transition to cleaner and cleaner fuels. Houston is positioned well, given its knowledge of the energy industry and its geographical location. Texas is a very attractive location for a number of headquarters. Houston is an attractive place for companies to come with its lower taxes and larger labor base.
Regulation in the pipeline
EPA regulations are coming down the track requiring cleaner energy. Companies are going to have to find ways to meet their production demands using cleaner technologies.
Oil and gas companies accept the reality that our economy is turning toward more carbon constraint. The traditional oil and gas companies are going to start making investments in clean energy, particularly as we see tax incentives, different policies, or perhaps something like a national clean energy standard calling for a greater use of those. These companies have money to invest in the energy industry and are going to position themselves to play across the full spectrum of resources.
Oil and gas are still boss
There is going to be a continuing demand [for oil and gas] for a number of years. I don’t see [clean technologies] as competing, I see them as offering a layer to the cake in the foundation of our oil and gas tradition and now we are going to improve on that with these cleaner, newer technologies.
It’s not a matter of one part knocking out the other but blending in a way that makes sense from an economic point of view, security point of view and from an environment point of view. It’s an exciting time in the energy industry and things are improving and it’s a matter of phasing in newer technologies in a smart fashion.
HOW TO REACH: Van Ness Feldman, (202) 298-1800 or www.vnf.com
Van Ness Feldman
About: Lisa Epifani is a partner at Van Ness Feldman and advises a range of clients on energy and environmental matters, with a special focus on climate change strategy, oil and natural gas issues, nuclear policy, and financial regulations. Her clients include industry coalitions, financial institutions, oil and gas pipelines and think tanks. Before joining the firm in April 2009, Lisa spent 10 years serving in key governmental and business community roles, developing energy policy and strategy. She was appointed assistant secretary at the department of energy for congressional and intergovernmental affairs by then-President George W. Bush.
In December 2008, William Toler arrived at Pierre Foods Inc. as its new CEO. A food industry veteran, Toler was hired to help the company get through the immediate crisis of facing Chapter 11 bankruptcy protection and then finding ways to make the company stronger moving forward.
“I was first attracted to the opportunity, because Pierre was a supplier to my last company and I knew that the products the company made were excellent and the team here was, largely, very good,” Toler says. “Obviously, there were some things that had caused them to go into bankruptcy, but they were pretty fixable.”
In a twist of fate, the four members of the new leadership team all ended up living in the same hotel when they moved to the Cincinnati area.
“The four of us were relocated here at the same time and we ended up living at the same hotel for a year,” Toler says. “So we found ourselves working out together in the mornings, working all day together then going to dinner and talking about the business from 6 a.m. to 11 p.m. four or five days a week. It really helped to create core camaraderie among the senior team that still exists today. So the fact that we were all relocating here at the same time and ended up living in the same hotel really gave kind of a dawn-to-dusk platform to discuss the business and get to know each other at the same time.”
And with the company facing several challenges, the extra time was a plus.
Pierre Foods’ struggles, while difficult, were not too severe that the company would never recover, and Toler knew that when he took over as CEO.
“You have to make sure you know that you have a good company under the problem,” Toler says. “Is the company the problem, or is the problem the balance sheet? In this case the problem was the balance sheet. It was a fundamentally good business inside of the problem, and a lot of times, it’s not. Make sure you’re doing the due diligence and the assessment upfront to make sure you’re going into a business that can be fixed. Does it have the fundamentals to be fixed? Is it a business that’s cyclical with the economy? Is it one that has a real competitive advantage that can be leveraged? Or is it a business that’s just a problem? In the case of Pierre, it was a strong business that had some unfortunate things happen to it all at once. I knew that we could get in here and fix it because it was a fundamentally good business underneath.
“The kind of business that you’d want to avoid is one that has parts undifferentiated or where you are in a commodity business where one product can be replaced easily for another that customers don’t value. That would be a problem or scenario that you’d be hard-pressed to go in and fix.”
Unprecedented inflation in the food industry in 2008 left Pierre without the systems, analytics or tools to understand how that inflation affected its products.
Toler’s first priority was to fix the obvious problems.
“They didn’t really know what the profitability of their various items or the profitability of their various business segments were,” Toler says. “They were unable to properly price the business to make sure they stayed up with inflation as that hit in 2008.”
Oftentimes when a new CEO takes over a company, the amount of data needed to successfully right the ship or move in a new direction is unavailable.
“We had quite a bit of limitations on data here,” Toler says. “We didn’t understand our profitability by item. We brought in an outside firm who developed a profitability tool and model for us that we still use today that essentially allowed us to understand the profitability by item. We also didn’t have all the plants on one ERP, so we moved all the plants to one ERP and got common visibility and common information across all the items. That allowed us to understand where we made money and where we didn’t and be able to take appropriate pricing and be able to work constructively to make sure that we knew what businesses to stay in and what businesses to get out of.”
Data is usually available; it just usually isn’t pulled out of the system in an effective way that leaders can use. Companies with data issues need to mine the data and then get a plan in motion to fix the problems they find.
Besides a lack of data, productivity was also an issue.
“The other thing we identified when we first got here was the idea that their plants were very good plants, but they hadn’t been stretched to [maximize] productivity,” Toler says. “We immediately began focusing on improving the productivity of the plants in terms of how they operated and the number of people per line and the efficiencies of the plants and the waste in the plants and all the things that can cost money to businesses. Really, it was about getting visibility on pricing and also driving productivity. Those were the two things we focused on when we first got here.”
Pierre had also made two acquisitions that they were struggling to integrate. That challenge, along with the condition of the industry and the economy, served to be too much for the company to handle all at once. Faced with the challenges of lack of visibility in data, lack of integration of acquisitions, and lack of pricing, Toler had to prioritize each task in order to get Pierre back on its feet.
“It was all about knowing where you made money and where you didn’t,” Toler says. “Once you have those things in place, you are able to act pretty decisively. You prioritize in the places were there is the greatest payback. Where can you get the most return for your efforts? Is it understanding the data, is it in moving the ERP’s together, is it in pricing the business or in driving productivity? You look where you get the greatest payback and you put your efforts into that.”
Communicate your plan
Once you have determined where your problems areas are and what needs to be done to fix them, you have to communicate to all your employees why those changes are being implemented.
“The most important thing is to communicate [your plan] internally so you make sure people understand what you’re doing and why,” Toler says. “We did everything from e-mail communications to town-hall meetings to plant floor meetings to conference calls and various other forms of communications. It wasn’t easy, but it was straightforward. It was something we knew we needed to do and something we had to get at right away. The one thing that happens in challenging situations is that people often don’t communicate enough, and we tried to be very upfront with folks and let them know where we stood.”
The planning process is a calculated, communicative process that requires collaboration with everyone on your team. There is no substitute for communication during planning.
“I think the thing we tried to do was talk to the people that were closest to the business,” Toler says. “You have to talk to people working the lines, the front-line salespeople, talk to the marketing team and understand what they thought were the issues in the business. One of the things I’ve always found is that when you have a problem in a business, you go to the problem. You try and find out how we can help. You put people out in the plants, you put people out in the field and you talk to the team and ask them what things they think need to get changed and what things could get better.
“Assess what you’re good at. Assess where your competitive advantages are and assess where your weaknesses are and then leverage your strengths and try and either strengthen your weaknesses or get out of them. Stop trying to do things that you can’t do and focus on the things you can do really well.”
This strategy also paid off for integrating acquired companies, including two recent ones made last fall.
“When most companies go in and do these type of deals they just take the home-teams approach and wipeout the other guys,” Toler says. “The most important thing to do is to listen and to defer judgment when you’re getting opinion from folks that are new to you. You shouldn’t automatically assume that your approach is the best approach, but you should listen and be open to each others’ ideas. That’s been what we have all tried to do. We believe you can find a better approach by listening to each others’ best practices versus just saying, ‘Because I’m doing it a certain way, that’s the best way.’ It takes a little longer and sometimes it’s harder, but generally you end up with a better outcome if you have the patience and willingness to do it.”
Toler’s solutions led to the company’s best performance in 63 years.
“Coming out of the bankruptcy, the strength of the first year results has enabled us to more than double the size of the company,” Toler says.
Pierre’s merged last September with Advance Foods Company Inc. and Advance Brands LLC, creating Advance Pierre Foods, double the size of the pre-merger organization.
Today, the company has $1.3 billion in sales and more than 4,000 employees, making it the largest privately held company in the tri-state area.
“Fixing the bottom line by productivity and pricing, staying focused on our core products and understanding how to merge two businesses together with us that strengthen us in our product lines and also strengthen us in our core channels have made us successful,” Toler says.
HOW TO REACH: Advance Pierre Foods, (800) 969-2747 or www.advancepierrefoods.com
The Toler File
William Toler, CEO, Advance Pierre Foods
Born: Raleigh, N.C.
Education: Graduated from North Carolina State University with a double major in business management and economics
Previous work experience: Procter & Gamble, Nabisco, Campbell’s, Pinnacle Foods
What was your first job, and what did you learn from that experience?
My very first job was as a swim coach and from that I learned that leadership matters. Trying to lead to inspire others is an important approach in business and in life.
What is the toughest challenge you’ve had to face in business?
The hardest thing is letting go of bad business. Getting out of bad businesses or getting rid of customers that you don’t make money on. That’s always the hardest thing, because people love revenue and sometimes they confuse revenue with good business. Getting out of business is hard and saying no to new ideas is hard. The trick is to not do the things that can distract the business.
What is your favorite thing about working at Advance Pierre?
It’s the quality of the people I get to work with. The way we feed off of each other and the things we do to challenge each other makes it fun every day.
What is your favorite Advance Pierre product?
My favorite product is our Graham Snackers, which are two graham crackers with peanut butter and jelly in between. They’re really good.
Thomas Kirkpatrick, a 19-year veteran of the Procter & Gamble Co., had an urge to try his hand at entrepreneurship. In 1998, he bought the assets to Eco Engineering LLC, a lighting energy services company.
Kirkpatrick saw big potential for the service his company provided, but it was lacking an organizational culture. The values that Procter & Gamble used touched home with him, and he figured those same values could work for his small business.
“Those ethics fit well with my own beliefs, so I tried to establish those same values here,” says Kirkpatrick, president and CEO. “I wanted to develop the organization to create a culture that would bring the good things I experienced at P&G and leave behind some of the things that could plague a larger organization and prevent it from being a nimble, customer-focused organization.”
By following core values and his company’s vision and mission, Kirkpatrick revitalized Eco Engineering, which saw 2009 revenue of $15 million.
Smart Business spoke to Kirkpatrick about how he runs his business by sticking close to the values he knows can create success.
Establish cultural values.
As the CEO of a small business you have the sole responsibility in being the leader to establish the vision, the values and the culture to set the tone for your organization. It surprises me every day how carefully people observe what you do, whether or not you’re setting high personal standards. It is absolutely essential and critical to communicate well and make certain that you are sharing your own personal character and standards.
As a CEO, you need to make sure that you communicate clearly the mission and vision of the company. [Employees] need to have something they believe in with passion and something they can get excited about.
You’ve got to decide what kind of an organizational culture you want to have, your values. You need to establish honesty, openness and integrity and create partnerships. Once you get a clear mission and core values set up, you will be able to get an organization in place that can go to work. You have to put together a set of measures so that you have something you can look at to see if you are achieving what you set out to do. You then have to evaluate what you have established, and from there, you set out to try and be the best.
Record and update values.
One of the first things I did back in ’98 was put down on paper a vision, a mission and core values. Most small business owners might say they don’t need a vision, mission or values. But they would agree that they need to provide written guidelines on how the work needs to be done. Some have very basic guidelines and others just use an apprentice program where new people learn just by watching. They need to formalize that and instead of letting new people learn by observing, they need to force themselves to put the process down on paper, and as a result, they can have specific measures of how they’re succeeding or where they’re falling short. That will help them become a better company.
It’s important to continually be looking for the best practices from outside your own company. Participate in a CEO round table to share ideas with other CEOs or keep up on the latest business books. It’s making sure that the CEO doesn’t get so caught up in running the business day to day and that you’re taking time for your own personal development. If you’re not out there looking for the best practices and bringing those to your organization then you’re going to be stagnant.
Reinforce core values.
Every three to four weeks, I meet with all 53 employees, and every quarter, I meet with my leadership team, and we review our values and how we are doing. Have we made progress over the last quarter in working toward our vision and our mission? Are we living up to our core values? I reinforce the fact that our whole focus is customer satisfaction and that we are proud of ourselves and we want to be the best. The only way to do that is by focusing on getting better. As I review these values, it hopefully empowers every employee to live up to those.
HOW TO REACH: Eco Engineering LLC, (513) 985-8300 or www.ecoengineering.com
Since Normandy Catering Inc. opened its doors, the company has been on a continuous hunt for new areas of business it can break into. Not satisfied with simply filling its 500-person banquet facility on Friday and Saturday nights, the food service company has been growing in niche areas.
Ryan Baker, general manager, and James Carmigiano, vice president, have been expanding Normandy Catering’s niche business in both catering and in food service management.
“Normandy is a family-owned business that started in 1978,” Carmigiano says. “We started doing school food service in 1984, and from there, we started in delivery business and expanded our food service into other schools and higher education.”
It has been the food service side of the business that has really taken off.
“The focus that has caused our growth has been in the food service area versus the catering,” Baker says. “We’ll actually run your kitchen, manage the employees that are there, and we’ll manage the procurement procedures with all of the vendors and produce the food.”
Normandy has seen a lot of growth in this area with schools in Northeast Ohio.
“We can run a public school kitchen by delivering food cheaper than they can actually manage and run their own kitchen with their own people and realize substantial savings while increasing the participation rate that the children are purchasing,” Baker says. “It’s been a win-win and there’s been a lot of growth and a tremendous amount of activity in that section of our business.”
Normandy has also been expanding its service to schools that don’t have kitchens.
“What we’re doing is we’re actually catering the food,” Baker says. “We cook every morning and we deliver breakfast. We set up and have equipment there to serve it. Our people serve it, we clean up and we come back here, load up again and we head out and do lunch. We’re doing a couple thousand a day in those types of meals and there’s been a lot of growth in that area for us.”
The growth Normandy has seen has been due to the effort to find new niche areas that others can’t compete in.
“We decided that there’s only so many Friday’s and Saturday’s in a year for us to load people into our facility and so we’ve gone out and went after this section of the business,” Baker says. “We’ve been here for a long time, but we’re a young, progressive, forward-thinking and hardworking company that really sees a strong future.”
HOW TO REACH: Normandy Catering Inc., (440) 585-5850 or www.normandycatering.com
Founded by Dan Hanlon in 1976 under the principles of hard work and dedication to doing a good job, Allen Keith Construction Co. has been continuing to expand and grow its business.
Lonnie Hanlon, Dan’s son, took over as CEO in early 2010, but he has worked at the restoration company since he was a little boy only 10 years old.
“I started out sweeping the floors of the warehouse,” Hanlon says.
He’s now putting all his experience, knowledge and the company’s good name into continuing to grow the 48-employee restoration company.
Smart Business spoke with Hanlon about how he looks to keep growing Allen Keith Construction Co.
What are the keys to being successful?
Basically, it’s just about working hard. If things aren’t going right and you want to be successful, you’ve got to get in here and you’ve got to put time in. It’s about getting out and seeing people and getting involved. You have to make sure you keep an eye on everything, whether it’s a specific construction project or the overall financials of the company. It’s going out and seeing our customers and talking to them and making sure we are doing a good job. You have to also know the trends of your industry. Knowing when your busy season is and being prepared for it is important.
How do you grow your company?
There’s so many different ways to grow. It’s helpful finding niche businesses that relate to ours. Finding a niche is important because it’s tough out there. It’s a tough economy. It’s hard to find places to grow. If you’re the only one that offers something, you can control the market for that and charge whatever you want. By getting into that same business it can cut down costs and turnaround time and allow you to provide better customer service.
We are expanding into southwest Florida. We saw a market in Florida where construction is completely different than construction up here. They move a lot slower, and things are not as professional as they should be. We thought if we could bring the professionalism of Allen Keith and the quality of work down to southwest Florida, then there would be a huge opportunity for our business to grow.
You’ve got to be resourceful in this kind of economic climate. I think 80 or 90 percent of why businesses fail off the bat or when they are trying to grow in new areas is because they have too much overhead. One of the most important things my dad has taught me was to keep your overhead low. We have a 36,000-square-foot facility [in Canton] and we didn’t go down [to Florida] and just go all in and build a huge place. We are starting small and are going to work our way up.
You have to take your time when making decisions about new markets. You have to research every aspect and get to know that market. You have to talk to a lot of people. Who are your customers? If you do decide to go to that market, take it slow. Keep your overhead low until there is a need for it. Obviously, once you are growing, you’ve got to add more people to get more production and get your sales up, but don’t go in guns blazing.
How important is it for a company to keep up with technology?
Technology is obviously a very important part of growth. If you don’t keep up with technology, you’ll die. You have to know your industry. You’ve got to have foresight and you’ve got to be able to see down the road — whether it’s doing research or just talking to people.
You have to also know your competition. Look at your competition and see what they do. Are they doing something that you should be doing? Are you losing business because they have a new technology that’s making everyone’s life easier and you’re not doing it?
What can prevent a company from growing?
You have to avoid being shortsighted and not being able to see what’s ahead of you. Whether you’re talking about your industry or you’re talking about your market or the economic climate, not having that vision can prevent growth. If you’re not able to see that someone is doing something that may revolutionize your industry and you’re not on it, the people that do that stuff first can take a lot of your business away from you.
HOW TO REACH: Allen Keith Construction Co., (330) 455-5451 or www.allenkeith.com
When Michael Fetsko lands a contract to build a train system, it’s not because he is the best salesman in the industry. He gets contracts because he has dedicated himself to driving industry-leading innovation that has helped build Bombardier Transportation’s reputation as one of the best rail transit manufacturers in the world. When Bombardier was awarded the Hartsfield-Jackson Atlanta International Airport job, it was the innovation of Bombardier Transportation and its Systems Division’s automated people mover train system that won them the job at one of the world’s busiest airports.
Bombardier’s Systems Division faces a tough competitive market for their products. Fetsko, vice president of the Americas regions for Bombardier Transportation’s Systems Division, is constantly focused on innovative ideas and ways to stay ahead and on top of his industry.
“Ideas are encouraged, and our company encourages the divisions to do exactly that, to develop the next idea, the next game changer,” Fetsko says. “That philosophy is instilled throughout the company, and I think it is one of the foundations to our success.”
Innovation is ingrained in the roots of Bombardier. Even when Bombardier was just a small snowmobile maker, innovation and entrepreneurship is what led them to where the company is today. The Systems Division saw annual revenue greater than $1.3 billion in 2009, just a slice of Bombardier Transportation’s total annual revenue of more than $10 billion that year.
Here’s how Fetsko’s continuous drive and dedication to leading innovation at Bombardier has helped establish it as an industry leader.
Due to Bombardier’s commitment to being the best at what they do, Fetsko and his team need to always have an ear to the ground about prospective projects. A commitment to excellence and their ability to create strong business relationships help get them in the door.
“When we find out about projects, in this type of business, you really can’t walk into a particular city at the last minute and say, ‘Hey, I’m here to bid on your project,’” Fetsko says. “Our strategic plans take us out five plus years. We are already looking at the cities where we think and know transportation systems will be built. And we are going in and meeting with the decision-makers, the customers, the politicians and really trying to secure our foothold in that particular location. What it comes down to is building the relationships with the right people and making sure the community sees you as a viable player.”
Companies in big industries and companies that face tough competition have to rely on their ability to offer strong products that come with the support of the company from multiple areas. Bombardier is often selected because of its ability to provide the best price and the best value for the customers’ money. Bombardier’s drive for innovation is also a key factor.
“Over the last two years, for us in the Systems Division, (innovation) has become a core part of our workload,” Fetsko says. “We have 100-plus people working on various forms of innovating our products and making them better. For us, it really comes down to trying to stay ahead of the competition. It also impacts cost savings. We are working on product development right now called energy storage. We are trying to push the envelope to try and make our systems faster, more cost-effective, more energy-efficient, more environmentally friendly, and it takes a team of people to do that.”
Innovation is not just a one-off thing. If a company doesn’t work hard and continue to innovate, then it is not an innovative company. Fetsko and the Systems Division work continuously to encourage and drive innovation. Finding ways to innovate and ways for employees to bring new ideas forward are keys to the company’s success.
“It really starts at the group level, the transportation group level, and it gets pushed down through all the divisions,” Fetsko says. “Bombardier has an innovation website where we encourage employees to submit their new ideas. Each idea gets reviewed by a committee and a team, and, of course, not all of them can get implemented but many of them do. They could be simple ideas on how we might be able to save more labor hours to do individual tasks, or they could be ideas on how to create the next big product breakthrough. It’s highly encouraged, and there are a number of mechanisms we have in place for employees to submit their ideas and creativity on how we could better the business.”
Ideas like an innovation website and innovation meetings are smart and fun ways to encourage employees to submit their ideas. Without these mediums for employees to speak what’s on their minds, innovative ideas can go to waste and will only hurt your company. Three years ago, Fetsko even created a full-time position for someone to head up their innovation efforts.
“You’ve got to encourage innovation,” Fetsko says. “Part of that is you have to have people who are dedicated to leading the effort. You can’t just talk about it and hope it’s going to happen. I think that’s one of the reasons that we have been successful. Companies may not want to do it, because it’s an overhead kind of position, but we have found that it more than pays for itself in a lot of the ideas we’ve already implemented and things that we’re doing to better the business and better the product. You’ve got to have a person or a small team of people that are responsible for it and committed to driving it throughout the business.”
At Bombardier, they also have quarterly meetings where the top-level executives from the company’s numerous locations gather for a two-day discussion that is strictly focused on innovation, product development and product improvement.
“You have to look at where you want to go and what you’re trying to strive for your business to achieve,” Fetsko says. “If you want to achieve big things, you’ve got to dream big things, as well. You’ve got to put time into it. You have to run your product improvements like you would a particular project. They all have budgets they have to meet, and they all have schedules they have to meet, and finally, you have to make sure you drive it to completion.
“When we say innovation here, it’s not necessarily the next big breakthrough on a train system. It could be things on how we could manage our business better. It can even be discussions on a particular task and whether we can do it with less people and still accomplish the same thing. Can we get it done on time with the same quality perhaps for a lesser amount of hours? That all translates to cost savings. Innovation relates back to us being able to offer customers a lower price for a product in the future. When we say innovation, it’s more than just product innovation, and that’s why it’s encouraged by everybody. If you have ideas on how to make the business more efficient or how we could improve the business, that’s how we make better products.”
Of course, with any new product or innovative idea, testing has to be done before that idea can be declared innovative and useful to the company and to its customers.
“Some customers are reluctant to be the guinea pig for some things that are new,” Fetsko says. “One thing that we do here very well within our division is our expertise to build a transportation system from the ground up. Integration, testing and commissioning are our core areas of our expertise. When we put something new into a project and the customer says, ‘Yes, I’ll take it,’ from our standpoint, it goes through a rigorous level of internal testing and external testing. We go through rigorous design reviews with our customers, so these types of ideas if they are new and get implemented, really go through a high level of scrutiny.
“Everything has to pass through our safety group as part of our governance. They are the ones that have to give the final blessing that a system is safe to carry passengers. Anything that gets implemented that’s brand new or might get integrated into a system goes through that sequence of testing and conditioning, so both the customer and Bombardier are confident it’s going to work.”
Bombardier uses test tracks to make sure its products are up to the company’s high standards and are tested a second time once the product gets shipped to a customer.
When innovation plays a big part in your company, it is often very difficult for only one person to overlook the entire operation. Fetsko says that he encourages and expects his employees to know how to do their jobs and to be independent enough to make their own decisions.
“My philosophy is to allow for accountability for running your part of the business,” Fetsko says. “I’m not going to step in and tell people what they’re supposed to do on a daily basis and how they’re supposed to go about it. We have levels of governance and reviews that are put in place so that we can review what is going on in every part of the business. The people here are empowered and are expected to run their part of the business. My style is not to micromanage at all, but I will routinely walk around the building and interact with the employees. To them, it really shows a sense of caring and says, ‘Hey, here’s the guy that’s running the business, but he spends a lot of time with the employees.’ Not necessarily telling them what to do — I don’t do that — but rather asking them how I can help and asking them how things are going and really telling them and showing them your appreciation for what they accomplish for us every day.”
Establishing a culture where employees know that they are empowered to do their jobs is critical for a corporate environment that is innovative.
“The one thing you have to focus on is to set up a structure so that people feel empowered to do their work,” Fetsko says. “You have to make sure those parts of your business and leaders of those areas can handle the work and that they’re not too overburdened with trying to manage too much. You verbally and physically have to tell people what you expect from them.
“I’ve got monthly meetings with all the folks on my team. They are very short meetings, face to face, not through e-mail and not through the phone, to really interact on that basis is very important. If they come to me with a problem, I want them to come to me with three solutions or more, as well. I try to tell them, ‘Don’t expect me to solve all your problems.’ You’ll always have the folks that come in and say, ‘Hey, I’ve got a problem, what do you want me to do?’ My response to them is, ‘What do you think we should do?’ Certainly, I could give them my opinion, but I really try to encourage our folks and help them find solutions to their own problems. It comes down to empowering people and telling them that it’s theirs to do, it’s theirs to run. It raises a level of passion and it all translates to results.”
How to reach: Bombardier Transportation, (412) 655-5700 or www.us.bombardier.com
The Fetsko file
vice president, Americas regions
Bombardier Transportation, Systems Division
Education: Bachelor of arts degree and a master of science degree both in environmental sciences, from the University of Virginia; master’s degree in civil and environmental engineering from the University of Pittsburgh
What was your first job out of college, and what did you learn from it?
My first job out of college was working for a company called Ensr, and I worked as a geologist. They were an environmental engineering consulting firm. What I learned was how important it is for projects to meet their deadlines and their goals. I also got a lot of chances to travel and meet with customers.
What is the best piece of business advice you’ve received?
The best advice is the importance of relationships and developing relationships in your business, both with internal customers and external customers, and having that face time with them. People really appreciate that level of interaction versus conversing through phone or e-mail.
If you could choose one person, past or present, to have a conversation with, whom would you speak to and why?
Going back to my athletic days of playing football for the University of Virginia, one person I would really like to have a conversation with would be Lou Holtz. I have read some of his books and I am a fan of his style of leadership and what he has been able to accomplish as a football coach and what he has been able to accomplish with people who have played for him and passing on the values he’s lived by.
If you could have any superpower, what would it be and why?
If I could have a crystal ball and I could see into the future of what’s going to happen, that would probably help, as far as being able to make the right decisions and growing the business.
Shawn McGorry survived the days of the Wild West-like dot-com boom when employees enjoyed free Mountain Dew, foosball tables in every office and nonexistent dress codes.
So when he was charged with incorporating the cultures of the dot-com boom and a more serious corporation at Expedient Communications, he knew just how to handle it.
“The role in that kind of transition, especially a traumatic transition, is to be a very competent and thick-skinned man in the middle,” says McGorry, president and COO. “I spend a lot of time assuring, comforting and explaining to the management group and the employees of Expedient that things are different and there’s a reason.”
Expedient Communications, a network of data centers and a provider of managed services, has successfully steered through acquisitions while continuing to thrive. With 150 employees and annual revenue just shy of $100 million, Expedient offers a culture that most companies can’t.
Smart Business spoke to McGorry about how he successfully united different company cultures with compromise and communication.
Be honest. I try to have a very open and honest culture in the organization and make sure that not only the managers that oversee the different departments and functional groups but also the employees themselves feel empowered, feel engaged and understand what accomplishing their objectives means to the growth and success of the overall organization.
We have a longstanding practice of having open, all-employee meetings every quarter. We’ll have a luncheon and spend half a day sharing with all of our employees our successes, our shortcomings, our challenges, down to the financial numbers and sales numbers. We open up the kimono and let everybody in the company feel like they’re privy to everything that’s going on, good and bad.
Don’t be afraid to discuss and address company business or concerns directly, factually and confront any rumor mill that might be purveying or brewing that may not exist. Honestly address any concerns or any information that might be out there, whether it’s factual or false. If it’s factual, even if it’s concerning your bad news, acknowledge it and outline what you and the management team are going to do about it and take it on as a challenge. If it’s false, acknowledge that you’re aware of it and explain the reasons why it’s not true. Present data that demonstrates why that’s not the case.
Be available. I’m more often than not disappointed when I hear employees say, ‘Well, they were afraid to come to you or they’re a little nervous about coming to you, or what do you expect, you’re the president, they’re not going to come to you.’ That makes the challenge a little stiffer because there is a cultural protocol that is built in to our society that has these walls that get more impenetrable as you move up the management title chain.
I’ve done a lot to soften those walls and knock them down where I can. You have to keep your door open. Be very visible. Get to know everyone’s names that you could possibly get to know. It’s important that you have at least a congenial, friendly, nonassuming relationship with every employee you encounter. Periodically invite yourself to lunch with some of the lunch groups that inevitably form in every organization. Take the time to spend five minutes to exchange pleasantries, whether it’s asking an employee how vacation was or how their kids are doing or just discussing sports events.
Compromise. You have to manage the cultural clash from both ends and ask both sides to make compromises. It didn’t work in all cases. Some people didn’t survive. We have had employee turnover where the employee said, ‘Forget this; it’s not worth it to me. I’d rather go work somewhere where I could do what I want.’ People feel like if they can go work for a more liberal company, they can have more freedom and that’s what they want.
You have to look at all of the things that go with the work experience and look at them in a big basket. That is really your compensation. It just doesn’t include the paycheck in that basket, it includes benefits, it includes the work experience, it includes the opportunity, it includes some of those freedoms, it includes the people you work with, the friendships you have at work and travel time to and from work. You compare what’s in that basket to what’s in the basket somewhere else. I think we have a pretty doggone good basket.
How to reach: Expedient Communications, www.expedient.com
Armed with the knowledge of a financial analyst, Charles Chanaratsopon knows what makes a successful business and how to manage that success. In 2004, he took that knowledge and applied it to an advantageous investment market and founded Charming Charlie, a women’s boutique and accessories store.
“I saw an opportunity, not only in an operating store but also in the realty business,” says Chanaratsopon, founder and CEO. “The capital or investment market was very frothy. So you could quickly develop shopping centers on leverage and build quickly.”
Deciding to break into the market for women’s accessories, Chanaratsopon saw an opportunity for big growth with little competition, and his plan has worked. Since 2008, Charming Charlie has been opening new stores at a furious pace, and today, it is one of the fastest-growing private companies in the country.
“The operating business had a lot of demand,” Chanaratsopon says. “A lot of customers were coming in and buying product from us. We had lines outside every day before the stores opened. People just loved the product. I wanted to figure out a way to grow even faster.”
For the last six years, that’s exactly what he has gone out and accomplished. He knew that with the right mix of employees, strategy and innovation, Charming Charlie could be big.
“From the very beginning, when we had three stores, I always thought we had the potential to be all over the country,” he says. “People always talked about how I had big aspirations and thought I was crazy, when at three stores, I thought we could be all over the country. Now we are all over the country, and I think we could be all over the globe.”
Listen to the consumer
Chanaratsopon saw an opening in the market for women’s accessories, due to a lack of stores that strictly focused on accessory needs instead of clothing. Only large department stores offered those products to women.
“Once we saw what the market looked like, we knew we had an opportunity to create a specialty store around it,” Chanaratsopon says. “We saw it as an opportunity that we could exploit, so we did.”
As Charming Charlie took off in the Houston area, Chanaratsopon knew he could grow the business quickly if he continued to offer what customers were looking for and wanted to see in the store.
“That thesis worked out and held very well for the first two or three years,” Chanaratsopon says. “As we opened stores, stores were very busy and business picked up. We went out and built another center and then another center and went out and did it again and again. As we focused on listening to the customer and building our team out, that was basically the steps for our success.
“The key thing is, you need to listen to your customers before you break into a market,” he says. “You can’t really go until you do a market feasibility or market study about what they need. Does it make sense for Charming Charlie to come; do they like the concept? We always explore to see what opportunities are out there before we do a big push. We test the different markets to see if the concept will work. Our concept is very portable, so we are able to now move quickly through the different markets.”
It’s all about making sure there is a net demand for what you sell, before you go out and start something.
“I think that is just moral hazard,” he says. “Whatever you plan, plan on not meeting it. Have a worst-case, base-case and an upside-case plan, because most of the time, it’s very unpredictable in the beginning. You have to mitigate the downside and make sure that you have contingency plans if things don’t go well in the beginning, because capital will be a constraint.
“In our first year or two as we solidified our playbook, we had a lot of key takeaways in ‘learnings’ and mistakes. So before we could go out and do a cookie-cutter approach, it took us a few years to make sure we had the right recipe for success.”
Everything starts and ends with the customer.
“My best advice is to go out and learn the customers, and make sure there is a need before you go out and build anything,” he says. “You survey your current customers and your noncustomers, and you ask them questions about what you can do better to improve. At the end of the day, our boss is the ultimate shopper. We just listen — that’s what we do. I don’t mean to make it sound so simple, but it is. We listen to what they need, and we do it, often. We spend a lot of money listening to their needs, and we try to give them what they want.
“We are not a tech company or a research group. We sell on experience and what we do is listen to our customer and make sure we deliver the best that we can, and that’s our mantra.”
Innovate and adapt
Growth in any industry naturally causes issues that must be overcome. The higher the rate of growth, the quicker a company has to adapt to that growth in order to succeed.
“You’re running at red line all the time,” Chanaratsopon says. “What I mean is when your car is running at 6,000 rpm, to get everybody used to running at that speed and understand what you’re doing is challenging. Not many companies grow this quickly, and that’s evidence that shows the percentage of retailers that can actually go out and do what we’re doing [is small].”
Charming Charlie has seen revenue grow from $9.2 million in 2006 to $51.9 million in 2009, a three-year growth rate of 463 percent. Chanaratsopon expects 2010 revenue to be around $140 million, and he realizes just how special his success has been.
“The odds are against you,” he says. “Five percent of businesses make it, and 5 percent of businesses only make it to $5 million. A very low percentage of businesses make it to a critical mass. So it’s very challenging to move at the current pace we are doing. It’s also very hard to change the mindset of your team when you’re managing three stores to now managing 100 stores. Your management team has to be open to change. When you don’t innovate and adapt to the business, I view it as binary. Either you innovate and you win, or you lose. There’s no common ground these days.”
In today’s economy, innovation and adaptation are very important to a company’s success. Chanaratsopon pointed to the examples of Linens ‘N Things and Circuit City, both of which went out of business within the last few years.
“That’s one of the great things about American capitalism,” he says. “You’ve got to be very sharp and very on, or there’s no room for you. You have to have the mindset to implement your information technology ahead of time and to plan for that is very challenging.
“You need an ability to split up what’s needed during your day-to-day part of the business. You also need to be cognizant of planning for the future and future roadblocks. You need to be able to set up radar or a systematic view for upcoming issues and be ahead of the curve. Have a cognizant view of how you spend your time between your short- and long-term strategy. Depending on what your long-term strategy is, set a blueprint to that plan and measure yourself constantly so you hold yourself accountable to your own business and personal plan.”
Hire smart, build smart
Since the founding of Charming Charlie in 2004, the company has grown to roughly 3,600 employees and has stores in 23 states. Continued success and the ability to keep opening stores in new markets, takes hiring more employees — and good ones at that. Chanaratsopon says the hardest part about getting the business up and running was finding the right people.
“This is a people business,” he says. “It’s hard finding the right team members to help you facilitate growth. There are a few things that are very challenging. No. 1 is finding the right people to help build a team. Whatever you do, be creative in the way you find people.
“We have gone through different people in the organization, and most businesses are team businesses, and without the right team, you can’t do it. You should overhire. If you think you have conviction in that your product or business will succeed, go out and get the best people that you can. Don’t be cheap on it.”
Start by focusing on attitude.
“You need to have people with good attitudes, specifically in a growing business. Attitude is half the battle. You also want people who have the same set of core values. A lot of people undermine that. When you have a small business that’s growing, you have to do many different things that you’re not accustomed to coming from a big retailer. People have to be able to adapt, and hiring on ability alone is not enough.
“My focus is trying to hire experts that are smarter than me in their specific function. I try to find people who are passionate about what they do and the business. I try to just give them the tools and support to help grow the business.”
A fast growth rate and an equally fast hire rate caused Chanaratsopon to adapt once more and create ways for his team to focus on common goals and visions.
“As you get more people, there’s a lot more people to build, as we call it, an ACA model with,” Chanaratsopon says. “That’s alignment, commitment and accountability. What we try to do now to achieve one goal is to find a team dynamic.”
In order to get his management team all on the same path and chasing after the same goal, Charming Charlie holds weekly one-on-one meetings and they build a company goal.
“That’s our road map to success or our blueprint to our business,” Chanaratsopon says. “That gets us all aligned and committed to the business, and we build accountability by having published goals that we need to achieve. It’s during these types of meetings that you need to follow up on your company goals. You need to make sure that people are executing to your goal. If I said, ‘Hey, I want to meet you in Florida.’ I’m sure you’ll get there. But if I said, ‘Hey, I want to meet you in Florida, and here’s a map.’ I’m sure you’ll get there faster. You need to have something mapped out. It may not be a perfect map, but you can change it along the way.”
One way that Chanaratsopon maps out his company’s future is by hiring ahead of time in order to acclimate new employees to the company and the goals it has set moving forward.
“Growth is challenging, but we weather through it by planning ahead,” Chanaratsopon says. “I invest in the future knowing that we are going to grow. I try to put our team players on early so that we can jell before we grow fast. A lot of people talk about what’s your capital budget plan. I talk about what’s my human capital budget plan. I need all these different team members to do this if we are going to open another 100 stores next year. I’m going to hire the overhead or infrastructure today, so we don’t have to do it last minute.”
Chanaratsopon emphasized that having fun and recognizing when employees do a good job are valuable aspects of creating a good rapport within your team. It also helps company culture to provide employees with ways to give feedback.
“Have a good feedback system,” Chanaratsopon says. “Your company is your customer. You want to survey about how your management team is doing. The same way you listen to customers, listen to employees.”
How to reach: Charming Charlie, (713) 579-1936 or www.charmingcharlie.com
The Chanaratsopon file
founder and CEO
Born: Houston, Texas
Education: I attended Loyola Marymount University in Los Angeles and received my MBA from Columbia University in New York City.
What was your first job out of college, and what did you learn from it?
I was a financial analyst at a bank, and I learned how to access money, how to put capital together, and how to understand a balance sheet and the ins and outs of financing businesses. I also learned about what makes a business work and what makes a business fail and the different metrics and how to measure against it.
If you could have a superpower, what would it be and why?
I wish I could fly. I always had dreams of flying as a kid. It felt pretty real in my dreams, so it would be pretty interesting to be able to fly around like Iron Man or Superman.
If you could invite any three people you wanted, living or not, to a dinner party, whom would you invite?
Rodger Federer, Warren Buffett and Barack Obama. I would be curious about how they think.
Deciding when or how to transform a small company into a global company can be a tough task, but James Tallman took the reins of Datacert Inc. at the height of the economic downturn in 2008 and made a tough task a reality.
As president and CEO, Tallman took the company from a modest provider of software and services for the legal industry that had 2007 revenue of $21.5 million to a global company with 2009 revenue of $33.7 million.
“Datacert was an entrepreneurial company, 10 years old, and they needed someone to come in and bring the company to the next level,” Tallman says. “The company had done well, but it had reached the point where we needed to take a different approach to the marketplace, and we needed to do things in a more scalable fashion.”
Smart Business spoke with Tallman about how he grew a small company into a global success during one of the toughest economies since the 1930s.
Reassure employees. My first challenge had nothing to do with the company, it really had to do with the people and the economy, and it was getting my team to understand that a downturn in the economy could actually be the greatest opportunity for a company. I was really blessed because over the past two years, I’ve had a really outstanding board and I’m surrounded by an outstanding management team. We really had to rally the troops who, for a lot of them, were going through personal strife, where their husbands and wives were losing jobs in the marketplace. My challenge as a leader was to get them to understand that a downturn in the economy, when other companies and your competitors are struggling, winds up being a tremendous opportunity for you to take the market and grow.
When you transform from an entrepreneurial-based company to a professionally managed company, the key challenge was spending time with the employees and spending time helping to develop the skill sets that they needed to get the company to the next level.
Plan for the long term. Do what you say and say what you do. As you lay out a clear plan and you tell people this is what we’re all going to do, make sure you stay the course. During bad economic times, your tendency sometimes can be to react to a short-term market force and not stay with the long-term strategy. I made a commitment to the employees that I was going to invest in them and I was going to reinvest 30 percent of our revenues, and yes, I didn’t know what the economy was going to do, but we were going to stay the course. If I invested in them and we invested in the new technologies and where we were going, the benefits would come.
As the sales and the revenue of the company started to grow and [employees] saw the reaction from the customers, at first, they were open to the plans that we had, but they were also skeptical. As they started to see the results, they became believers. The reactions I started to get were people coming by my office and thanking me and saying, ‘Everything we said we were going to do, we’re doing and we’re winning and we’re dominating the market now.’
Develop growth. Make sure that the company isn’t entirely dependent upon you. Put your ego in check and recognize that to grow a great company, you need a great team around you. Any company that’s driven by one person or just a couple of people, although you can exhibit short-term growth, you’re never going to achieve a long-term sustainable growth strategy if you don’t surround yourself with people who are better than you are.
As a CEO, the first thing you have to do is look in the mirror and ask yourself, ‘What am I really good at and what am I not good at?’ I have a small company and I want to make it a global company. I need to ask myself, ‘Do I really understand what it takes to go to the next level, do I have the talents within myself, and what kind of people do I need to surround myself with that have talents that I don’t have to be able to do that?’ It’s one of the biggest failings that I’ve seen of CEOs that I’ve worked for. The CEOs who truly understand that they don’t have the answers and they need to hire people who are better than them in a lot of different aspects of the business is a critical thing for a CEO who is trying to transition from a small company to a large company.
The past few years have brought about the worst economic climate we have seen since the 1930s, and for Steve Cuntz, president and CEO of BlueStar Inc., the situation was no different.
However, Cuntz saw the economic downfall coming and prepared his company for the worst. His actions have helped BlueStar not only get through the downturn relatively unscathed but put it in a growing position and expanding globally.
“We have been successful beyond my wildest dreams,” Cuntz says. “I really anticipated more problems than we have experienced. Having been in the electronics industry long enough, the one thing you can guarantee is change.”
BlueStar is a national business-to-business distributor of point-of-sale and auto-ID products. Its ability to adapt to ever-changing conditions played a big part in its success through tough times and in its growth.
“Any time you’re growing, it’s anticipating the strain that scaling causes on an enterprise,” he says. “In any organization, your growth can put you in a position where the things you never would have dreamed of doing, now you’re going to have to do.”
BlueStar’s ability to adapt and keep its 370 employees hard at work through the downturn resulted in 2009 revenue of $365 million.
Here’s how Cuntz created a company that can weather tough economic times.
As a private company, BlueStar has sometimes had trouble getting suppliers to pay attention to it as a viable distributor.
“Since we are a privately held business, [suppliers] have a tendency to sometimes question your capability,” Cuntz says. “We manage to overcome it one supplier at a time. There’s nothing like performance that wins somebody over. It takes awhile for people to drink the tea, but once they get a taste of it, they understand what we are about. Usually in business, especially in distribution when you are doing order fulfillment and things like that, it’s just take the order and fill it. We go out and try to find new orders and try to develop new customers for our manufacturing partners, and over time, that has helped us create a major difference.”
During a time when a lot of companies were losing money and struggling to keep business, BlueStar was growing. The company used its position to help its customers, and in return, BlueStar gained valuable relationships.
“During the last recession, we bent over backward to extend credit terms and find ways of creating a business flow of capital that allowed our customers to live and keep their credit ratings while we continued to try and expand the marketplace,” Cuntz says. “That was a bit unusual, which may have had an impact to our suppliers, because during the recession, our sales actually went up. It’s ironic because a lot of what we sell is exactly what an enterprise needs to do to cut expense overhead.”
Cuntz didn’t think twice about stepping in and helping customers through their tough times. In fact, that kind of effort is a company philosophy.
“Going above and beyond is just part of our organization’s philosophy, which is ‘Give more than you receive,’” he says. “It provides a differentiator in so many ways. In the long term, it provides an advantage. Providing that extra value also provides you extra recognition, notoriety and opportunities that might not exist otherwise. You have to create a unique difference for yourself. Fill a need or a void that currently isn’t being filled. It depends on the business you’re in, but always be good for the money and always create a value-add difference for your business, and it will work.”
Hire strong employees
During the recession, companies like BlueStar had to keep people motivated by keeping them busy at work.
“It became very activity-based,” Cuntz says. “Call the customers up and let them know that if they have a deal, we want to help them close it. Call them up and tell them the good news that we’ve got extended credit. Call them up and tell them that we’ve got inventory. We didn’t cut our purchase orders, we stayed the course. We became one of the few distributors that actually had product available. They saw an immediate return on their investment because of increased activity. So it wasn’t hard to keep people motivated because they were writing orders as fast as they could.”
That motivation was also fueled by strong leadership and employees who were hired because they would grow within BlueStar and help the company succeed.
“We’ve got substantial managers in our organization,” Cuntz says. “Our philosophy is you can’t move up until you replace yourself with someone better. Our management team has continued to get better because we keep hiring better people than we are ourselves and after awhile that becomes attractive to talented people who look for a career path.
“You have to create an environment where you lead by example. Every day, people are watching you, and unless you have somebody better than you sitting behind you pushing, it’s easy to fall into that yes-man trap, and we haven’t had that. It’s very important in a growing company that you have people that want to grow.”
BlueStar’s challenge quickly changed from “How do we stay motivated?” to “How do we meet goals in this down economy?”
“You have to be honest and communicate with your employees,” Cuntz says. “You should tell them what you expect them to be doing. We use budgetary goal setting to discuss our future plans and growth. Sometimes we will use weekly meetings depending on what things are happening within the company. We have weekly meetings with our sales and marketing teams, and we communicate through terms of budgetary accomplishment and feedback loops and what we expect. Are we hitting our goals? Are we not hitting them? Why do you think that is? You have to ensure that employees are doing the things necessary to succeed. If you’re not meeting goals, then you need to communicate with staff and see what things need to be changed.”
Cuntz and BlueStar are also constantly combing for people who will bring drive and the desire to grow to the company.
“Hiring people is kind of like Glengarry Glen Ross with the ABCs of selling, ‘Always be closing,’” Cuntz says. “We use the term ‘Always be recruiting.’ I think you have to always be in the frame of mind when you see a talented person who expresses a desire to be a little bit more in life or has some desire to make a change; we just try to be sensitive to that and keep our ears open. Networking is critical. With the nature of our business, we are constantly at trade shows, and we work with hundreds of suppliers, so we are constantly networking with folks. We try to carefully define what we are looking to accomplish and what kind of skill sets and characteristics it’s going to take to fill that position. It’s not just a saying, ‘Always be recruiting.’ We are always thinking of that.”
Grow and invest
In the world of technology, the industry is never quiet. It is constantly changing and progressing forward, and it is crucial for companies like BlueStar to be able to grow, adapt and invest within those changes.
“The things that seem intuitively obvious with an enterprise package are not,” Cuntz says. “That was a real challenge for us, and it continues to be. We knew coming in that we will face change. How you change and how you succeed with that change is the real key. With a flexible mindset and a flexible business plan, you have to expect that it’s going to happen and you have to be willing to make the investments. You have to invest in change. I’m always thinking about what’s our next investment.
“You have to have some expectations of three things when you think about investing. First of all, you have to understand what the investment is thoroughly. I don’t care whether that’s stock of a Fortune 5 company or a small business. You need a real thorough understanding of who that company is and who the people that are managing the company are. The second thing is does the company have the capacity to do better than it’s currently doing? Look for the missing links. What could you do to bring about change that would help make this company or this investment more than it is? The third thing you should look at is does it fit with your culture? Also, is it attractively priced? If all those elements are in place, then you could probably move forward with that investment.”
In recent years, BlueStar has grown to a level where it has been looking to expand globally and make acquisitions that will augment and enhance its business. However, with global growth comes more changes and challenges.
“The one thing I didn’t plan on was the organizations’ cultures,” Cuntz says. “Different parts of the world have different customs, labor laws and things like that. The biggest challenge to us has been to understand not so much that the business appears to do the same kind of work that we do but to understand the underlying business development of that organization and what the thought process of those employees are. Those are the challenges of understanding if you bought a company that doesn’t match up philosophically with yours.
“You have to focus on companies that are in the core market of the kinds of products you sell. If you’re going to look for a merger or key acquisition, you have to look for key managers that are going to stay on that share your corporate philosophy. And you really have to know what it is you want to accomplish. You have to look for similarities where you don’t necessarily have to reinvent the wheel but where you can offer them something that they need that will help both of you grow.
“You have to understand the market you’re getting into and the culture of that market. Does the market have the potential to grow? What’s the economic climate? The U.S. is not the best benchmark for how most of the other parts of the world operate. You have to understand that there are other costs involved of managing foreign entities that we are not aware of. You have to have a team in those regions that can clearly explain to you what those costs are and what those opportunities are so you can make a valid decision whether that’s going to fit your business model.
“We can determine pretty quickly whether they’re of a like mindset or not. You have to sit down and say, ‘Here’s where we want to go, and here’s how far we have reached.’ And if they’re not in agreement with that, then sometimes you have to make a change. It’s going to come down to communication. Communication is not a quantifiable formula. It’s a skill set on both ends of the communication.”
If you’re the investor, it’s your job to make sure that you are being understood. And it’s your job to make sure that you understand what’s also implied or said or inferred in a relationship.
“It’s an art form, a skill set to make sure that you know your partners,” Cuntz says. “That’s something there is no formula for. You have to be completely unassuming. My method is I assume that I was not clearly understood and there’s the old saying, ‘Inspect what you expect.’ My first inclination is maybe I didn’t say it right, so I’m going to monitor the response to the communication to make sure that I’m seeing the results to the request. You have to be very, very specific.” <<
How to reach: BlueStar Inc., (866) 830-0140, or visit www.bluestarinc.com.
The Cuntz file
President and CEO
Education: Received a bachelor’s degree in accounting and a master’s degree in finance at Xavier University
What was your first job, and what did you learn from it?
My first job was as a night manager for a fast-food restaurant called Burger Chef. What I took away from that job was that I found out I didn’t have any ability to know I was making a correct hiring decision at the time I was making it. Some people interview well and wind up being terrible employees, and some people are terrible at being interviewed, but they make tremendous employees.
What is the best piece of business advice you’ve received?
Always spend less than what you make. The gentleman I heard that from was my loan officer, Bob Herman, who actually helped BlueStar get going when I became CEO. I asked him, ‘What advice do you have for me, because I don’t want to ever let you down?’ He said, ‘Steve, you’ve got to spend less than what you make and you got to set money aside for contingencies, and the businesses that fail to do that usually don’t make it.’
What do you enjoy most about your job and why?
I really enjoy setting budgets and goals and then hitting them. I’m a very goal-oriented person. It’s kind of an architectural thing. You put it up on the board, and you look at it and wonder if you can build that thing, and then you put together plans to achieve it.
If you could invite any three people, past or present to dinner, whom would you invite and why?
I would love to have George Washington, Albert Einstein and Lou Gehrig to dinner. I would be curious to know how Washington kept it together in the face of that kind of adversity. His skills and leadership just floored me.
Guys like Einstein, I’ve admired my entire life, because I wish I’d been a better science student. Einstein was able to take really complex ideas and make them really simple. I still don’t understand half of what Einstein talked about. And Lou Gehrig, to me, was an icon. He was a natural-born leader and had the respect of his teammates and was one of the first truly great athletes that also was a role model.