If you ask Nicholas DeIuliis about the state of the energy industry these days, he would tell you it’s the nature of the industry that keeps it exciting and evolving.

DeIuliis is president of Consol Energy Inc., a more than $6 billion, publicly owned producer of coal and natural gas and one of the leading diversified energy companies in the U.S. He and Consol have been focused on new technologies, new energies and, above all else, keeping Consol one of the leading producers in its region.

“Energy has always been a big issue within our regional economy, national economy and now the global economy within the last number of years,” DeIuliis says. “Consol Energy still looks upon those tried and true forms of energy, but what’s really changed in the last number of years is how we’ve evolved in deploying technology in both the coal and natural gas side.”

As the industry continues to push forward, the success of companies such as Consol depend upon its ability to keep employees safe, effectively communicating and remaining innovative.

“The most important thing we do is we establish what our values are and we literally numerate them for our teams,” DeIuliis says. “We say what our top values are and which is first, second and third. For us, No. 1 is safety. Second is compliance. And third is continuous improvement and taking a long-term view.”

Here is how DeIuliis is helping to drive those values at Consol Energy that, in turn, help drive the company.

Safety first

In the energy industry, there are all kinds of dangers that employees face while on the job. DeIuliis and his team take great pride in running a company that focuses on keeping its workforce safe.

“Safety has always been something that is critical to us throughout our history, and we’ve been around for about 150 years,” DeIuliis says. “So we’ve learned what works very well and also learned the hard way through those 150 years what doesn’t work very well when it comes to safety.”

DeIuliis wants to take the challenge of safety and turn it into an opportunity, which sounds simple, but it’s often very challenging.

“We first started with the philosophy of safety itself,” he says. “What is our culture going to be when it comes to safety? Is it truly going to be our top value that will not change during market swings? A value is something that is constant. So first and foremost, that is our most important top value.

“Secondly, if it’s our top value, what’s the expectation going to be? Are accidents part of the business of extracting natural gas or coal resources, or can we truly take an approach of zero accidents of any kind across the entire employee base as the expected outcome and expected goal?”

Consol has taken the latter approach and created an absolute zero program that says the only acceptable standard of performance is no accidents to the employees on any given day across the entire company.

“Anything that’s an accident no matter how small or slight is an exception to that rule and a violation to that philosophy,” he says. “So you have that philosophical change that needed to occur to turn a challenge into opportunity, and over the last three or four years, it has turned and evolved into the culture and philosophy.”

Now DeIuliis and Consol have to find the ways to further improve the company’s safety outlook.

“What are the tactical things we’re going to do to improve our performance?” he says. “How are we going to bring the science and technology to the table to get smarter about risk identification, hazardous mitigation and overall employee training? All of those things lead you to a better place on safety performance.”

Communication is king

In conjunction with safety performance, how well Consol Energy communicates its message relates to how easily and effectively it can improve the organization.

“Communication is the lifeblood of taking a concept or an opportunity and making it a reality,” DeIuliis says.

Consol Energy has nearly 10,000 employees and 6,000 to 8,000 contractors on top of that. So communication throughout the organization is critically important to furthering a concept, philosophy, a new technology or standard, and whether or not that comes to fruition — and when it comes to fruition.

“Sometimes the when part is just as challenging and just as important as whether or not it actually comes to fruition,” he says. “You can’t overemphasize the importance of communication, especially in a complex and large organization or a complex and large world such as what we’ve seen in the energy space throughout the U.S. and the globe.”

Saying that your company communicates is easy, but actually getting results from your communication is much more difficult. You have to utilize multiple communication tactics.

“We use what we call a portfolio approach to communication,” DeIuliis says. “We don’t put all our eggs in one basket, one means or one method of communication. We will utilize a range of those like you would in an investment portfolio.”

Consol uses everything from closed-circuit TVs that update employees on safety procedures, initiatives, technological breakthroughs, compliance issues and regulatory issues to training programs to make sure that employees are engaged.

“We look at that as an investment in communication that is going to get that know-how rate of return, which will be very good, not just for the shareholders of the company and stakeholders but, most importantly, for the employees themselves, because they will be in a more safe and compliant place,” he says.

“There’s a whole range of different communication tools that we use … that will put us in a better position to succeed in that communication challenge and opportunity.”

In order for communication to be most effective, especially in a company the size of Consol, there has to be someone who has ownership of the messages being spread throughout the business.

“The communication approach goes back to the messaging and the content of what you’re saying,” he says. “The ownership is across the entire company. In reality, it extends beyond the employees within the company. It extends to our partners and other stakeholders that touch or deal with the company in some, way, shape or form. It might be the customers downstream that we’re selling the coal and natural gas to; it could be our contractor partners providing services at our rig sites and coal mines or anyone in between.”

While everyone owns a part of the communication process, it’s also critically important that that communication process and the messaging behind the communication are viewed as owned by action, not just by words with the leadership of the company.

“The leadership of the company for us means many different people, not just our CEO and chairman,” DeIuliis says. “It’s our CEO and chairman all the way down to the mine foreman, all the way down to the employee working on the barge line or all the way down to someone standing on one of our rigs right now.

“It’s a group effort and everybody has a role and a responsibility. Your actions have to be consistent with what you’re saying.”

Create innovation

Just as important as safety and communication are within the energy industry, so too is the need to remain innovative. Recent substantial growth in natural gas drilling and advancements in clean coal technology are two areas driving energy these days.

DeIuliis and Consol look inside and outside the industry in order to bring the best innovation to the forefront of the company’s operations.

“There are two broad groups I look to over time for help and insight,” DeIuliis says. “One is the management team that we work with and around. They’re the best and brightest in the industry. Getting that comfort level and that trust level with the exchange of ideas and thoughts as time goes on is the lifeblood of any successful organization.”

The other broad group DeIuliis looks at is almost the mirror image of his leadership team. He looks toward entities and individuals with insights and experiences outside the industries Consol works within.

“It’s amazing how many already established processes, technologies and concepts are out there in entirely different industries that are being viewed as innovations and ground-breakers with the coal, natural gas and fossil fuel industry that we operate in,” he says.

“Every time we tend to look outside our box and outside our industries, we always come away with an injection of innovation that keeps us going.”

As the world of business and that of energy continue to evolve and change as time goes on, the success of a company comes back to its values.

“In the energy industry, we’ve seen a lot of volatility and a lot of peaks and cycles through the years,” DeIuliis says. “We’ve become used to a certain extent of the things that will enviably occur. But if you go back to the values, and those that are truly the values of your organization, and if you’re the safest and most compliant operator in that environment, you’re going to be the most successful or profitable whether it’s a market peak or trough.”

The key to managing through those kinds of ups and downs has been simplicity.

“The way we manage in those downturns is sticking to those values and as long as we’re pushing for better safety performance, compliance and continuous improvement, we will be fine in any market,” he says.

How to reach: Consol Energy Inc., (724) 485-4000 or www.consolenergy.com

Takeaways

Find ways to improve the processes of your business.

Implement communication tactics that allow your business to succeed.

Innovate through internal and external channels.

The DeIuliis File

Nicholas DeIuliis

President

Consol Energy Inc.

Education: Graduated with a chemical engineering degree from Penn State. He received a master’s degree in business administration and a juris doctorate from Duquesne University.

Career: DeIuliis began his career in Consol Energy’s research and development group in 1990. He became vice president of strategic planning responsible for optimizing the value of Consol Energy’s assets resulting in the creation of CNX Gas Corporation, where he served as president and CEO from its 2005 inception until early 2009. He has been the president of Consol Energy since February 2011.

DeIuliis is also director at-large of the board of directors of the Independent Petroleum Association of America, a director of the U.S. Chamber of Commerce and the Bituminous Coal Operators’ Association Inc.

Regionally, he is on the advisory boards of the University of Pittsburgh Cancer Institute, the Pittsburgh Penguins Foundation and the Catholic Foundation. He is a registered professional engineer in the Commonwealth of Pennsylvania and a member of the Pennsylvania Bar.

Published in Pittsburgh

While many companies would be like a ship without its captain after the loss of its illustrious founder, Jess Jackson, the Jackson Family Enterprises had a very capable successor in Rick Tigner — one who would continue the family-owned winery group’s reputation and make mom and dad’s favorite chardonnay into the favorite of their millenial children too.

In April 2011, Jess Jackson died of cancer at the age of 81. He was an individual whose vision, perseverance and work ethic helped transform the wine industry.

He started the Kendall-Jackson wine business with the 1974 purchase of an 80-acre pear and walnut orchard in Lakeport, Calif., that he converted to a vineyard. Nearly 40 years later, Jackson Family Wines is among the world’s most successful family-owned winery groups, composed of more than 35 individual wineries.

Jackson Family Enterprises is the company that oversees Jackson Family Wines, its global sales organizations and the Kendall-Jackson brand. Tigner was named president of Jackson Family Enterprises a year before Jackson passed away. A 24-year veteran of the alcohol beverage industry, Tigner has held positions at Miller Brewing Co., Gallo, Louis M. Martini and nearly 20 years with Jackson Family Wines.

“When I first became in charge of Jackson Family Wines three years ago, one of my goals was to actually get one team, one dream,” Tigner says. “If I can get all 1,200 employees going in the same direction at the same time, how powerful would that be?”

The company, its 1,200 employees and its more than 30 brands of wine, was solely in Tigner’s hands, and it was now up to him to keep the operation flourishing.

“Our company mission is to be the best wine company in the world,” Tigner says.

Here’s how Rick Tigner is taking Jess Jackson’s legacy and moving Jackson Family Enterprises forward.

Connect with consumers

In any industry, it is extremely easy to be hands-off with consumers. In the wine industry, many vineyards deal with distributors or trade partners and aren’t very tight with the consumer. Tigner says that isn’t the case at Jackson Family Wines.

“Innovation comes in different forms and fashions,” he says. “In the wine business, what you get is a lot of what I call the ‘sea of sameness.’ You look at a wine magazine ad and you see a bottle and vineyard, but it can be anybody’s bottle and anybody’s vineyard. The question is how do you connect with a consumer in different ways?”

Last January, Tigner was featured on the TV show “Undercover Boss.” He saw this as a new way for a wine company, especially a family wine company, to go on television and tell people about who the business is as a family, as a company and how it produces its products. The blogosphere gave generally rave review about Tigner’s TV appearance.

“The one thing that we’re always very, very focused on is quality,” he says. “We want to make sure that consumers know that whether it’s the Kendall-Jackson brand or the La Crema brand, quality is one of the foundations of our organization.”

To tell its consumers about its products, Jackson Family Wines is putting more focus on social media. The company recently hired a digital marketing team to make sure it has a presence on Facebook, Twitter and YouTube.

“A lot of companies have pretty pictures,” Tigner says. “What we actually want is engaging content … versus the standard picture of a bottle in a Wine Spectator or Wine Enthusiast magazine.”

Being involved in social media is becoming increasingly important, but it isn’t enough to just have a Facebook page; you have to engage with your fans and potential customers.

“If you look at Facebook, a lot of brands have Facebook, but the question is do you listen to the people who are on your Facebook page?” he says. “Do you react to how they talk about you on Facebook? We listen, and we learn from that activity. These are our friends and family who actually went online and signed up on our Facebook page, because they’re looking for interaction.”

Tigner says this interaction can’t be boring or constantly the same old thing. You have to be looking for ways to keep your audience involved and engaged.

“The key for us in regard to capturing our consumer is actually listening to them,” he says. “We create content that they want to see on video or in photos. We’ve done a lot of recipes. A lot of people want to talk about food and wine pairings. We have spent hours and hours and hours putting together a recipe program for our website.”

Jackson Family Wines has a lot of pages on its website and on its social media because even if a consumer doesn’t go to them all, those pages are there and available to them. The same thing goes for YouTube.

“If you go to YouTube and capture that consumer and they see a training video or a wine education video or a food-and-wine program, the next time they go look at your YouTube, you better have new content,” he says. “It has to be ongoing engagement, intriguing and informative. If you don’t have that, then you’ll lose your consumer. Those are things we’ve done to continually engage the consumer.”

What this kind of engagement helps Jackson Family Wines do more than anything is reach a more diverse audience. Many of the company’s consumers are baby boomers and social media is helping the brand reach the younger generations.

“We want to keep the baby boomers like myself who’ve been drinking our brands for a long time,” Tigner says. “But we want to capture the millennials. Who is that 25- to 35-year-old out there who has disposable income to buy premium wine? We have to give them the messaging and the content.

“We’re going out and making it new and fresh for them so it’s not just their mom and dad’s favorite chardonnay, but it becomes their favorite chardonnay and then their favorite cabernet or pinot noir.”

Educate about your product

The wine industry can be very complex due to the sheer number of wine styles, brands and varietals that make each bottle different. For Jackson Family Wines, it is crucial that its staff and its business partners are knowledgeable about the company’s products.

“In our company, we have 1,200 employees,” Tigner says. “In our sales team, there are about 400. I would argue we have the best sales team in the world and the best fine wine team.”

Tigner makes this argument because the company has four master sommeliers on staff and nine more in training out of a total of 180 in the U.S., who help to educate the sales team.

“They educate our sales teams, our distributors and our internal staff,” Tigner says. “We want to make sure everyone who works for our company, whether in IT, marketing or finance, has knowledge about wine and a passion about wine.”

Transferring that knowledge outside of the company is the hard part. Jackson Family Wines has to work with its distributors, trade partners and, more recently, directly with consumers to educate them on the products.

“In this business, 20 years ago, manufacturers or wineries like us spent all our time selling our wine to distributors and educating our distributors who then sold to retail stores who then sold to consumers,” he says. “About 15 years ago, that was still important, but the next piece was actually us communicating with our trade partners.

“In the last five years, all that is still important, but now we’re talking directly to our consumer, whether it’s online, in our tasting rooms or our wine club program.”

One of the biggest things related to education that Tigner has to keep aligned is the messaging Jackson Family Wines spreads both internally and externally.

“We broke down our strategic initiatives into three simple buckets,” he says. “You want to keep it simple so everyone knows what the plan is. Our strategy is lands, brands and people. So that when people want to know what are we working on, you can break it down to land, brands and people, and then we have the initiatives below that.”

To aid in keeping this message aligned and helping to push the company forward, Tigner has implemented management meetings.

“In the last three years since I’ve been put in charge, I’ve had more senior management team meetings,” he says. “We really didn’t have those before.

“Every quarter, we bring in the top 50 managers of the company plus outside guests and visitors and we talk about lands, brands and people. We talk about the strategic initiatives. I want to make sure everything we put in place at the beginning of the process is still being worked on.”

While his management meetings are a new tradition, there are some things that Tigner wants to maintain, like the company’s culture.

“When I first took over being the president, we had a great training program, recruiting program and succession program,” he says. “I want to make sure we have that exact same culture. Culture doesn’t show up on a P&L, but culture is very, very important to the company.”

The culture is something Tigner wants to be identical whether it’s the IT, finance, marketing or production departments.

“I want to make sure all our employees are treated similar and fair throughout the entire organization,” he says. “I take it upon myself on a regular basis to check in with middle management, lower management, field workers and sales workers because I want to make sure everyone has the right communication and we’re all on the same page.

“I spend most of my time making sure the messaging of the organization runs wide and deep.”

Just like a generous pour of chardonnay. ?

How to reach: Jackson Family Wines, (707) 544-4000 or www.kj.com

Takeaways

Connect with your consumers using new channels of communication.

Keep your content engaging and new.

Educate internally and externally about your product or service.

Published in Northern California

Bernie Moreno has always had a great love for cars. They had to be in his life. So as a 25-year-old, he went to work as a general manager of Herb Chambers’ Saturn dealership in Boston. During the course of 12 years there, he became Chambers’ vice president.

Moreno’s success caught the attention of Mercedes-Benz who asked Moreno if he would move to Cleveland to run a Mercedes-Benz dealership. Moreno agreed.

“I came in to Cleveland to see what this dealership was all about before I bought it,” Moreno says. “I pulled up here with my wife, I saw a salesperson, and I told him I was thinking about either a Lexus or a Mercedes — and I’m moving to Cleveland.

“The salesperson said, ‘I don’t understand why you’d want to move to Cleveland. This is the worst place on Earth to live. The people suck, the weather sucks, the economy sucks. I was born here and I’ve been trying to leave here since I came out of the womb.’ This is what the guy said to me.

“So I said, ‘People don’t buy Mercedes here?’ He said, ‘This is a blue-collar town. If we sell 10 to 15 cars a month, that’s a great month. If we sell 20, we’re dancing on the tables.’”

Moreno could have been discouraged, but he wasn’t. The dealership had been selling 200 cars a year before Moreno took over. He came in and set the goal high for the new dealership team.

“We came in, and I said to myself, ‘We can’t live selling five cars a month,’” Moreno says. “In our first sales meeting, May 13, 2005, I said, ‘We’re going to sell 100 cars a month.’

“We knew we had to do that because if we didn’t sell 100 cars a month, I couldn’t pay me, let alone my staff. I had to succeed because if I didn’t I would be in big trouble because I just committed my entire life to this endeavor.”

Here is how Moreno, president of Collection Auto Group, took one Mercedes-Benz dealership and built it into the Collection Auto Group that we know in Cleveland today.

Manage growth

When Moreno was working in Boston prior to 2005, he was helping run what was the sixth-largest privately owned dealership group in America with $1.5 billion in annual sales. In early 2005, he took over a dealership that sold only 200 cars a year.

“The difference is this one is mine and that one I just worked for,” Moreno says.

At that time, Moreno’s focus was to establish the dealership in the Cleveland area and create the right culture within the company.

“What helped in that tremendously was the fact that 12 guys moved from Boston to Cleveland with me,” he says. “That was a huge help, because when you’re establishing a culture, you need a critical mass of people who feel the same way that you do philosophically.”

Moreno says his desire to create further opportunities for the business fueled the dealership group’s growth the most. This, in turn, created opportunities for his staff.

“You can’t have all these guys in one store and challenge them and keep them growing,” he says. “All of them now have their own dealership that they run or a larger position within the company, which is great.”

In 2005, the dealership sold 24 cars between Jan. 1 and May 11. From May 12 to May 31 that year, it sold 80 cars. From that point on, Moreno and his team have been hitting their goal of 100 cars a month and then some.

“Our focus right now is really managing our growth,” he says. “We started with one dealership. We took over a small 200-car-a-year Lexus building. We finished the building in September 2008 right after Lehman Brothers collapsed. We used the opportunity to grow, and that growth was somewhat tame versus what we are doing today.”

Recently, Moreno has been expanding his business almost exponentially. Within the past year alone, the company has opened a Volkswagen dealership, a second Infiniti dealership, a new Nissan dealership, is building a new Mercedes-Benz dealership in Cincinnati and has been renovating several properties.

Moreno has plenty of projects to keep him busy. He has to buy the land for the new dealerships, build the dealerships, meet the individual car company’s requirements and hire people to run the dealerships. On top of all of that, Moreno still has to look after the other dealerships he has in operation.

Today, Moreno runs a collection of 24 dealerships, which led to the name, Collection Auto Group. The company is a more than 400-employee, $350 million car dealership group that sells Acura, Aston Martin, Buick, Fisker, GMC, Infiniti, Lotus, Mercedes-Benz, Nissan, Porsche, smart, Spyker, Vpg, Volkswagen and Maserati brands.

“It was never the intention to move to Cleveland to have a small little dealership,” Moreno says. “That wasn’t what I wanted to do. I didn’t necessarily think I was going to have 24 dealerships in seven or eight years, but I knew it wasn’t going to be a small dealership.”

Moreno may have been worried about car sales when the dealership first started, but in 2012 alone, Collection Auto Group sold 6,500 cars companywide.

“It’s is a big change,” he says. “Managing growth is like blowing up a balloon — you want to make sure you manage it properly, because otherwise you’re going to do it too fast.”

There are several factors that have helped Moreno and Collection Auto Group in its growth trajectory, but above all else, it comes back to the fact that Moreno loves cars.

“No. 1, you have to do what you love because if you’re not doing what you love, then you’re never going to be as successful as you can be,” he says. “For me, cars have always been a passion since I was a little kid.”

Another thing Moreno says has aided in his success is that he didn’t chase money. In fact, Moreno was making more money in Boston before he moved to Cleveland, but he wanted the opportunity to be his own boss.

“The biggest mistake people make is they follow money,” he says. “They’ll take a job because it pays more or they do this business because they’ll be rich. Money follows; money doesn’t lead.”

While people may make a certain move because it means more money, people will also find excuses for reasons that they can’t do something due to a lack of capital.

“If you have a great idea and you have passion, money will find you,” Moreno says. “When I bought Mercedes-Benz North Olmsted in 2005, I bought it with every dollar I had ever saved in my life. I joke that if I could have put a mortgage on my socks, I would have. It was never a scenario where I worried about getting the money to put this together.

“You have to ask yourself, ‘How badly do you want something? How badly do you believe that it can succeed? And how much do you believe in yourself?’ If the answer to all of that is at the top level, money will find you.”

Lastly, Moreno’s success has been made possible by the team he has put together at Collection Auto Group.

“You have to give people reason to follow you and be with you,” he says. “Why would somebody leave a job if not for the opportunity for personal growth, career advancement and learning? That’s the promise you have to deliver.”

Define your business

Once Moreno and his team started to get settled in Cleveland, the focus had to shift to creating a strong culture and one that would define how the business operated.

“You have to define your business,” Moreno says. “What business are you really in? A lot of my peers would say, ‘We’re in the car business. Look around, it’s a bunch of cars that we sell and service.’

“If you define that you’re in the car business, it’s an extraordinarily narrow definition. If you ask any employee in our company, whether it’s a receptionist, a car wash kid, a technician or a salesperson, they would say, ‘We’re in the customer service business.’”

Collection Auto Group sells cars, but it’s in the customer service business, and as a result, everybody understands that nothing is more important.

“When a customer walks through that door you should treat them like (they’re) the reason I’m here today, not like an inconvenience,” Moreno says. “My door is always open. If I’m willing to do that, what does it mean to everybody else in our organization?”

Moreno’s attention to clients goes far beyond making sure he gives them his time when they need it. He wants to change the car-buying experience.

“Some people hate buying cars,” he says. “But people love to buy iPhones. What’s the difference? The difference is that car dealers have made it painful for customers to buy cars. Car dealers have made the buying process completely unenjoyable, and it should be the complete opposite.”

Before Apple, people hated buying computers too. Now, people often just go to the Apple store to hang out because they made it fun and interesting.

“In the car business, it should be the same way, and the biggest thing that gets in people’s way is this fear when you walk through the front door that you’re going to be taken advantage of,” Moreno says. “Knowing that, we try to create a culture that says, ‘Let’s get rid of that anxiety.’”

Collection Auto Group tries to be extraordinarily transparent to make the negotiation process quick and easy. That transparency helps attract customers.

“If a customer walks in and they are looking at a Mercedes-Benz C300 and the sticker price is $42,500 … and their trade-in is worth $20,000, you have to ask yourself how much effort you are willing to put into this thing,” he says.

“How much are you willing to battle and let me wear you down? How much time do you want to spend wearing me down and are you willing to invest two or three hours to make that happen? Let’s say you do. At the end of three hours of going back and forth, how much do you really enjoy your car now? You hate it.”

Moreno utilizes the fact that customers these days are well-informed about car prices and what their trade-ins are worth; transparency and honesty with the customer saves time and effort.

“You know that I’m going to sell you the car for the price that’s going to be more than fair,” he says. “That creates a customer for life because they know that we will take better care of them than anybody else.”

Today, Collection Auto Group is well-established in the Cleveland market and sells all the car brands that it wants without any brand competing against another in the portfolio.

“Now that we’ve built this thing, we can take it for a drive and really expand exponentially with the brands we have right now,” Moreno says. ?

How to reach: Collection Auto Group, (440) 716-2700 or www.collectionautogroup.com

Takeaways

Do what you love and believe that you can make it successful.

Create a culture that separates you from competition.

Treat customers with respect and honesty and success will come.

The Moreno File

Bernie Moreno

President

Collection Auto Group

Born: Colómbia, South America, but he grew up in Fort Lauderdale, Fla.

Education: Went to University of Michigan and received his undergraduate degree in business.

Goal: To be the chairman of the board of GM

What was your first job and what did you learn from it?

At 12-years-old, I delivered newspapers at 2 a.m. in Fort Lauderdale. My mom also owned three real estate offices so after delivering newspapers I went to work for her and ran the bookkeeping at 14 or 15 years old. That taught me that family businesses are a challenge, and it wasn’t something I was interested in.

What got you into cars?

When I went to Michigan I worked for Automobile magazine.

What was your first car?

A Honda CRX. I saw it on the cover of Car & Driver.

What was your favorite car you have owned?

I had an ’89 Ford Mustang GT. That was the coolest car.

If you had to choose a car to own off one of your lots, what would you choose?

Cars are like your children — you’re not supposed to have a favorite. But for me, Mercedes are the cars that I’m most passionate about. If I had to buy one car, it would be a S63 Mercedes.

Published in Cleveland

When Jean-Paul Ebanga looks up at the sky, he thinks about the more than 3 million people who fly every day on airplanes powered by CFM International engines. In fact, every 2.4 seconds an airplane departs under the power of a CFM engine.

“That means our role today is far beyond delivering engines to the industry; it is also making sure people are traveling in a very safe way at a decent price,” says Ebanga, president and CEO of CFM International, a $15 billion aircraft engine manufacturer that is a joint venture between GE here in the U.S. and Snecma in France.

CFM — which gets its name from a combination of the two parent companies’ commercial engine designations, GE’s CF6 and Snecma’s M56 — combines the resources, engineering expertise and product support of these two engine manufacturers to build engines for narrow body aircrafts.

“Today, in the air transport industry, the narrow-body segment is the main segment of the industry,” Ebanga says. “Looking forward for the next 20 years, there will be a need for roughly 30,000 new airplanes; two-thirds of those will be narrow-body airplanes and CFM is currently leading this market segment.”

If being the industry leader in engine manufacturing wasn’t enough of a challenge, Ebanga also has the challenge of leading a joint venture company where compromise and collaboration is the key to success.

“If you are taking two parent companies with two different cultures and you try to blend them, this will generate some difficulties,” Ebanga says. “But the net result, because you have to find compromise, because you have to work between different cultures, will be more sound ideas and a much more efficient organization.”

Here’s how Ebanga utilizes both GE’s and Snecma’s resources to keep CFM the industry leader in narrow-body aircraft engine manufacturing.

Compromise and collaborate

While a majority of companies are focused on streamlining themselves, CFM has to take a different approach to its business. Its joint venture means CFM has to work to find compromise above all else in order to properly function at its best.

“The problem with the JV is because you have two different constituents, you have to make compromise,” Ebanga says. “There is no one voice saying this is the way and the rest of the team just follows without asking questions. In terms of leadership, it requires some things to be a little bit different than normal leadership.”

The existence of this additional challenge makes this kind of partnership too difficult for some leaders and companies. But Ebanga sees the glass as half-full.

“If you are able to find the sweet spot between the two company cultures and then work around these difficulties, you enable a new space of opportunities and strengths,” he says. “This is the essence of joint venture success.”

CFM has been known for a long time by its superb engine family, CFM56. Now the company is looking to release its next generation of engines called LEAP, for which compromise and collaboration will be key to its success.

“This new product will be designed based upon a very detailed and comprehensive market survey,” he says. “We spend more than three years asking the customer what they are looking for in the next 20 years and understanding in a granular way how the dynamics of the market can evolve, and then we define the product, which is the answer and the solution to that.”

When you have two companies, the reading of the market dynamics will be different because each company has a different way of operating and a different culture, so they will analyze all the signals in a different way.

“Maybe the solution has some things shared, but the two won’t be exactly the same,” Ebanga says. “The whole key is how you bridge the two approaches. How can GE or how Snecma can make the necessary compromise to accept that the other guys also have a great idea and how can you work together to bridge ideas that make a great product.”

The trick is being able to step back from what you believe is the ultimate answer and being able to compromise with other ideas from another company that also thinks they have an ultimate answer.

“By bridging the two, you find out that some of what’s behind the idea of the other company you didn’t think about at first and vice versa,” Ebanga says. “At the end, the product you are putting on the market is far better than the one you could have done alone.”

Both GE and Snecma own their own technology. Snecma works on the front and back of the engine, while GE works on the middle of the engine. For LEAP, they both have been developing technologies for their respective parts of the engine, but the companies don’t unilaterally say, ‘Here’s our part of the engine.’ The other company has to accept and agree with the technology based on analysis. There are checks and balances that go into the process.

“Based on the other company’s remarks, you can improve your own part,” he says. “Snecma might make some comments about the core, which is the responsibility of GE and taking into account these remarks GE will improve its own part of the engine and vice versa. It’s a mutual cross-pollination.”

The level of compromise and collaboration that CFM has developed has been built up during more than 30 years and is now a major part of the joint venture’s culture.

“In our case, the different GE and Snecma leaders, over time, understood that CFM’s success is more important than their own success,” Ebanga says. “That is to say that if I’m trying to optimize my own interests rather than CFM’s interests, at the end of the day, I would lose the game.”

CFM and GE have been very successful at carrying out this approach even though the leaders have changed.

“One way to do that is we manage young leaders in the challenges of working in this strategic partnership environment,” he says. “If you are growing leaders in this environment, eventually when they are in the top spot, they will have the framework to deal with what makes up the success of this JV.”

A joint venture takes an investment in both people and process in order to make it work.

“In a strategic partnership, it is like being a couple — you could fall in love day one and it’s great for a couple of weeks, but if you are not investing in the relationship … it won’t be a great love story,” he says.

Plan for the future

One of the main challenges CFM has is that in the ’70s it was just a start-up company. Now it has become the leader of the aircraft engine industry, and in order to remain in that position, Ebanga and the company must be forward-thinking.

CFM has several matters it needs to focus on for the future of the company. No. 1 is executing on current commitments.

“This is a big deal because we are currently developing a new engine family called LEAP, and the start of this new program has been very successful,” Ebanga says. “We are the sole power plant for the next generation of Boeing 737 MAX aircraft, one of the two engine makers of the Airbus A320 aircraft, and we are the sole power plant of the new Chinese COMAC C919 aircraft.”

Beyond making LEAP the next engine of preference, CFM also has to ensure that whatever changes the market goes through in a decade or two from now the company will be able to adapt and reinvent itself to stay in the leading position.

“When you are in this top-dog phase, it’s difficult,” he says. “It’s about working on a short-term basis and, at the same time, articulating a strategy to change the way we are running to make sure we will still have the appropriate fit 10 years from now.”

Planning for what the future has in store is not an easy task. You need to address the situation in a very humble way.

“You are already overwhelmed by the shop-time challenges and to find time and perspective to think about the long-term is rather difficult,” Ebanga says. “Being humble helps you to engage in this journey. Along the way, you will have a lot of reasons to give up for a while and stick with the short-term. I think this is a recipe for failure. You need to stay humble on one end but also stay engaged and not let things go away.”

You also need to understand your market but not in the way you understand your market for your short-term objective.

“When you are looking at the market on a short-term basis, it is to make sure you have the appropriate marketing and value proposition to get yourself up and make your numbers,” he says. “When you are looking at the long-term perspective, it’s really the ability to elaborate scenarios about the change in your industry.” ?

How to reach: CFM International, (513) 563-4180 or www.cfmaeroengines.com

Takeaways:

Drive compromise and collaboration for best results.

Be able to reinvent your business to adapt to your market.

Develop plans for how the future of your market may unfold.

The Ebanga File

Jean-Paul Ebanga

President and CEO

CFM International

Born: Paris, France

Education: Graduated from École Nationale Supérieure d'Électricité et de Mécanique (ENSEM), France with a degree in engineering

What was your very first job, and what did you take away from that experience?

I was the leader of the photo club in high school. A lesson I learned from that time is that you can have some great ideas and be very fast in your head, but you have to have the ability to bring people up to speed. This is a great example of how a real organization works.

What got you into aviation?

It was the beauty and the exceptional achievement that this industry is all about. When I was in high school, I had two dreams—the first one was to be an architect and the second was to be an engineer to design great things. To imagine that I could generate some great things to enable this kind of achievement was absolutely fascinating for me. So I chose the engineering path and it still gives me great satisfaction. An aircraft engine is an absolutely amazing piece of technology, but also a piece of art.

Who is someone that you admire in business?

My first thought was the leaders and initial creators of Intel. Not only was this company able to start from nothing as CFM did and became the leading company in the microchip/microprocessor business. Initially they were the leader in the memory business and then they reached a point where they had to reinvent themselves. The reason Intel is the great company they are today is because they were able to reinvent themselves in the absolutely right way. So I admire this generation of Intel leaders.

Published in Cincinnati

Ron Fauquher has told it to his team a number of times, and the obvious sarcasm with a touch of humor always makes its point.

“I don’t think anybody gets up in the morning and says, ‘Whoopee! I get to go do crappy work today!’ he says.

“I think they want to do good work. They want to serve their customers, and they want to provide the innovation necessary to succeed,” says Fauquher, co-founder and CEO of Ontario Systems LLC, a developer of debt collection business software.

While Ontario is in the software business, the reality of the situation is that the company is also in the people business.

“Being in the software business, your creativity, your innovation, your customer service, your intellectual property — they all wear shoes,” Fauquher says. “Every day, they go home, and they can choose whether or not they come back.

“They can also choose the style of how to engage, and they can choose their own particular motivation about how they engage,” he says. “So it starts, in my mind, very much with people.”

To keep his talent from going home and not coming back, Fauquher says the key can be explained in one word — alignment. To achieve that, you need collaboration. To get collaboration, you need to understand that relationships — everyone working together — are the foundation of collaboration. And with employees, you build relationships by investing in the people: training, continuing education and the like.

Fauquher says with every that degree of alignment, you can figure out what kind of innovation has to be in your product, move it through the product management cycles in a way that gets it to the customer as quickly as possible and often before the customer actually needs it.

Here’s the scoop on how Fauquher keeps the very heart of the company from walking out the door and how he energizes the nearly 300 employees to generate more than $50 million in annual revenue.

Get in the game

Alignment in the simplest terms for a business boils down to what your customers want, what you offer and how close those two things compare. That’s it. The closer they match up, the closer your alignment is and, ultimately, the more successful your business is.

Fauquher and his team realized that Ontario’s accounts receivable software clients, which range from a small collection agency to a utility company to a hospital of significant size, have to stay on their toes to keep informed of the many new regulations, such as the Sarbanes-Oxley Act and the Affordable Care Act.

The company has seen enormous increases in compliance issues across the board in the last four years for his customers. To deal with the additional issues, Ontario System has had to come out with newer and newer versions of its software.

Fauquher found one effective approach was to engage with the regulators themselves, such as the Consumer Financial Protection Bureau in Washington, D.C.

“We wanted to create relationships there to kind of get ahead of what’s going on — what they’re thinking,” he says. “We don’t think of them as an adversary. We think that is just another business challenge.”

Fauquher says his approach is a little different from what some companies do.

“We have a listening ear and openly embrace what they’re doing partially because I don’t think they can change it but partially because that gives us an opportunity to have dialogue with them about what they are trying to do and how they are trying to do it,” he says.

But the real trump card that Fauquher suggests CEOs should have in their hands is a person in the industry. Ontario Systems has on its staff Rozanne Andersen, considered the industry expert on compliance issues.

“She is an attorney and had been general counsel for the largest association in our industry, the American Collectors Association, and eventually had a huge impact on the laws that were being written — she wrote some of them herself — but also became the singular kind of focus person on compliance in our industry,” he says.

“Rozanne spends an amount of her time teaching, dialoguing with the regulators in the state and the federal government, dialoguing with our customers on their interpretation and especially their legal people and their compliance experts. Then she helps our product managers make the appropriate adjustments in the software to deal with whatever needs to be handled.”

Invest, invest, invest

While having a virtual trump card carries with it certain benefits, it alone won’t allow you to coast in other areas. One other major card to play involves investing in your workforce.

But on the other hand, by not making the necessary investment, you are creating a roadblock for your employees, Fauquher says.

“Often, companies put barriers in their way,” he says. “Those barriers are not driven by action but often by inaction — what I mean is not actively investing; training is the first thing that gets dumped out of the budget when times are tough.”

Educational opportunities, seminars, discretionary time necessary to track business leads and speak with customers about what their needs are — these often get thrown overboard when companies are running pretty lean.

“I just don’t think that’s a good business approach,” Fauquher says. “Overall, investing in employees pays incredible dividends.”

To keep the support in your people through professional investments, you need to find other places to make cuts, he says, for example, by trimming travel costs.

“You can always, in our business, trim the travel costs; instead of sending four people to the client site, you might send two,” he says. “Engage your team in finding the necessary cost savings, not for the sake of the cost savings but so that the investment can continue on the people’s side of the fence.

You can place yourself in the position where you get to review the ideas, in effect, to do more with less.

“You have to figure out how to embrace those ideas and how to let the best ones bubble to the top,” Fauquher says. “Some of them are about cost savings, some of them are about new revenue, but all those play together to make sure that you’re not cutting back on the really important stuff, which is your investment in your team.”

Align the employees — and the leaders

Once you are investing in your employees on a regular basis, that’s not the end of the alignment process. You have to keep the leadership team aligned as well.

Fauquher found it effective to divide the leadership into groups, such as an executive leadership team and a broader leadership team. The first team takes in the supervisors who manage the different functional areas in the organization. The broader team consists of all the individuals who supervise people or those who have an influential role in the customer base or in the partnership network such that they are impact players.

The broader leadership team meets one hour a week in the Operations Council. The group discusses information needed to run the business.

“They get a lot of information on costs, revenue, they get a lot of information on customer issues, they get a lot of information on the various product lines so they can appropriately infuse that information down throughout the team and lead their team,” he says.

Then every weekday morning at 9, the executive team meets for 30 minutes in an information-heavy session. First, the business intelligence people give an update of relevant things that happened in the industry the previous day, new regulations, items they pick up, in about a 12-minute summary.

“If you do that every day, you all start to get a different sense about the trends in the industry,” Fauquher says. “You start to hear about things that are going on, and you start to make connections in different ways.”

Next is a 10-minute update from the VP of sales on how business closed the previous day, deals that are in process, where he needs help from members of the team to close deals to get that business, and new business trends that are coming down the pike.

“Then we have two five-minute updates from our operations folks about what is going on in the business, where the issues have been escalated, and generally those are problems that need attention or at least awareness from the executive leadership team, so we can quickly respond to those customers,” Fauquher says.

“The last part is a round-robin of every member — basically where do you need help today, where are you stuck, and do you need help? And any other relevant information members of the team need to know.”

The same team meets for an hour every Thursday for a tactical meeting to deal with issues that need a little more discussion. Finally, that team spends one day a month working on strategic issues.

“What happens is the team is always in alignment. They rarely are not in alignment, and if they are not, it is a quick adjustment at the next meeting.” ?

How to reach: Ontario Systems LLC, (765) 751-7000 or www.ontariosystems.com

The Fauquher File

Ron Fauquher

Co-founder and CEO

Ontario Systems LLC

Born: I am an Indiana boy! I was actually born in Evansville, but I grew up in Muncie. My dad was a Ball Corp. executive.

Education: I went to Purdue University, and got an undergraduate degree in industrial management and computer science. Then I went to work at General Motors and got a master’s degree in finance and economics from Ball State University. So I am about as Hoosier as you can get.

What was your first job and did you learn from it?

My very first job was an evening paper route. Then I figured out, ‘I know all these customers, I’ll get a morning paper route.’ And then I said, ‘I know all these people so I will get TV Guide route.’ And then you remember the newspaper Grit? So I got a Grit route. The thing that I learned most was that was back in the day of cash collections. Most people paid you freely, but often I had a collection problem. So you have to figure out what to do. But my first business was an accounts receivable and distribution business! I think I was making 10 bucks a week, and I was the richest 14-year-old kid in the neighborhood.

Who do you admire in business?

One is my business partner Will Davis. He is the architect of the company culture and very much the father of Ontario Systems because it was his idea. Two other people that I admire a great deal include Kelly Stanley who was CEO of Ontario Corp. and Van Smith, who was the chairman of Ontario Corp. — extraordinary business people, extraordinary innovators, and extraordinarily caring about people. They knew how to build businesses; they knew how to encourage young entrepreneurs like me.

What is the best business advice you ever received?

As I was a young entrepreneur going to build a business, trying to make sure that we did things right, that we did things ethically really came from Van Smith in particular. I can hear him saying it now that the way you make business decisions, in order to get them right, you must make a decision this way: people, customers, facilities and technology and money, in that order. If you think about the impact on the people and doing the right thing for them, they will take care of the customer, the customer will take care of you, which allows you to invest appropriately in facilities and technology and at the end of the day, you will make money.

What is your definition of business success?

I suppose that probably has changed since I was 20. I think it is far more than financial success. Business success is when you can have a respected organization that is respected by your customers, that is appreciated for who you are and what you do and how you help them — that is an organization in which the associates that work there are proud to say that they work there. This comes down to not just business success because if you have business success in terms of financial success, that allows you to sustain the business.

But it’s much, much more than that. It is about being a good community citizen. It is about supporting the needs and desires and educations and motivations of your team. It is about caring for the team member who might be in distress. So it’s very much about not just being a good place to work but and accountable member and an admired member of the community. If you do all that well, that’s a pretty nice place to be.

 

 

 

 

 

Published in Indianapolis

Charles Swanson was used to dealing with challenges. As a youngster whose father was an exploration geologist for Exxon, Swanson had moved so often that he had been enrolled in 12 different schools by the time he was in eighth grade. But the challenge he was facing after a number of years with Ernst & Young LLP was more than new places; it had the peculiar description of being a doughnut phenomenon.

Swanson had helped build E&Y’s relationship with its client Ashland Oil (now Ashland Inc.) while serving at the firm’s Louisville office. He was chosen to lead the oil, gas and energy practice in North and South America at the company’s Houston office.

“We really didn’t have that strong of a core group practice in Houston in energy at that time, and it was kind of a doughnut phenomenon — we had some big clients and capabilities sprinkled all over the world, but we had no center to build around,” Swanson says. “So I was asked by the firm to try to solve that, to try to build the core and the home for the energy operation globally.”

It took the work of many dedicated partners at E&Y, Swanson says, who spent the time to get to know what the clients wanted and developed a vision of where they likely should be going.

The sacrifices and the heavy workloads that the E&Y partners took on paid off. The energy services department has grown by 20 percent each year, and Swanson’s efforts didn’t go unnoticed. He was promoted to his current position of managing partner of the entire $350 million E&Y Houston operation of 1,200 employees.

Here’s how Swanson took on the challenge, grew annual revenue in the energy division from $17 million to $250 million over 15 years and increased the number of energy partners from three to 50.

Talk about what’s going on

If there is one place to start filling in the center of a doughnut, it’s to find out the information necessary to deliver what clients want. Once Swanson realized this was where to begin, he took charge. He called for monthly sessions with partners to determine the energy pulse of clients and the market.

“I think that knowing what clients want is important, which seems so mundane to say that, but it amazes me how many times in the business world you run across managers and leaders who don’t fully appreciate that,” he says. “As the old saying goes, ‘If you are selling something that nobody wants, you go out of business.’ And that is essentially what happens.”

Swanson’s experience had showed him that E&Y was a collegial and collaborative firm, so he met with all the energy partners regularly and listened to them.

“We would talk about what is going on, what we are seeing in the market, what the trends are, what we believe they are. From that, you can come up with a view about what is likely to happen, and then that really drives your actions,” he says.

“I always try to look ahead three to five years, and I say, ‘OK, what kind of service needs are these companies going to have then?’” Swanson says. “Then you need to try to make sure that you are building to intersect with them at that point down the road.”

Staying abreast of ever-changing regulations and compliance with them should play a large part in arriving at a vision. Swanson cites the case of Wall Street reforms.

“A great example is the recent Dodd-Frank Wall Street Reform activity,” he says. “We knew that was coming a while back. While it primarily impacted the financial services industry initially, we knew that it would eventually affect commercial and industrial companies, many of them who are dealing with hedging activity or use of derivatives, and whether it is supply of fuel or whatever it may be, and product.

“So we geared our energy practice to develop the expertise and depth to be able to help our clients come to grips with that new requirement, and sure enough, it is arriving right on schedule as we thought it would.”

Put in the effort needed

It takes enormous effort from current staff to help make an expansion effort — filling the doughnut hole — a success. Indeed, many could be asked to put their personal lives on hold for periods of time. But with the knowledge that there will be light at the end of the proverbial tunnel, that task becomes achievable.

“You have to sacrifice on the part of many, but because as you try to bring in new partners, your existing ones have to carry a bigger load of work because it is a whole lot easier to convince a firm to promote a new partner or bring one in from the outside when there is a book of business already in place for them,” Swanson says.

“Our partners sacrificed quite a bit during those early years in carrying very heavy workloads, knowing that by doing so, it would help us get more people promoted into the partnership in energy, and then we could start off-loading some of that work.”

Once new additions joined the fold and learned the culture, they were expected to do the same: carry a heavy workload for a while.

“That kind of mentality took hold, and we realized 20 percent annual growth rate ever since,” Swanson says.

While that sums up the process, under the surface, you have to account for variations within your team.

“As for our growth and success, I’m often asked why, and I really attribute it to our partners,” Swanson says. “I think they have a very strong market and service orientation. But even with us here, it’s not everybody. I mean some partners are really attuned to that. They tend to be very good service providers, and they can be very effective in the marketplace when it comes to bringing in and tracking new clients and growing our revenue for our people.

“But it’s not true for everybody; that was true when I came to Houston, and it is even still true today. I certainly try to instill in them an awareness and an understanding that serving the market well, serving our clients is paramount, and it is that which will give rise to future growth and financial strength, which creates opportunities for our people.”

Lead by example

To get your team members all on the same page, it is critical to set the tone at the top. By leading by example, a leader can spell out the expectations — and then craft that final piece to fill in the doughnut hole.

“I think each organization has to set for itself what are the priorities that need to be focused on,” Swanson says. “Then whatever those are, the CEO needs to devise different mechanisms to make it clear to the organization that this is what they are defining to be important, and then here are the goals that they set within those priorities.”

To the majority of organizations, revenue growth and financial strength are often those goals.

Building consensus is going to help you implement and realize the goals.

“Ultimately, it is the people who are going to make it happen — the people out in the trenches or in the field — and they have to be engaged and motivated and, more than anything else, respect their leadership to really do that,” Swanson says. “That respect is critical. It is very hard to accomplish much of anything in the long haul without it.”

The leaders who generally are the most effective are those that have a connection with “the trenches.”

“I don’t think leadership comes from the podium or through webcasts,” Swanson says. “You’ve got to be out there, understanding, as Gen. Omar Bradley was always so well known as doing: He ate the same food as his troops because he wanted to know how hard he could push them. That’s a good lesson in many large organizations as well as the business world.”

The lesson learned helps lead to better decisions that can be made to bring about optimum results.

“There are actually processes you can go through to help you make the right decision, but one of them is there is no reason usually to delay in making a decision,” Swanson says.

“Delays rarely work for you,” he says. “I have always followed a philosophy that I am going to make the decision, and I am going to make it quickly. If I am wrong, I will be wrong quickly. It’s not OK, but it is better than being wrong slowly. If you are wrong quick enough, there is often time to change your decision and go another direction.

“Don’t be on cruise control; be ready for change. No matter how good it is right now, times will change again. As the folks say around here, it doesn’t take long to fall from the saddle and hit the ground. And we are always trying to stay in the saddle.” ?

How to reach: Ernst & Young LLP, (713) 750-1500 or www.ey.com

The Swanson File

Charles Swanson

Managing partner

Ernst & Young Houston office

Born: Tulsa, Oklahoma. I grew up primarily in Oklahoma. My father was with Exxon, and we got moved literally every year.

Education: Tulane University. I got my bachelor’s degree and my MBA there. I initially majored in mathematics, but I later focused on political science and economics. They did have a graduate business school, so I was geared toward going to that after my undergraduate years. I went into the MBA program, focused on corporate finance. I did get enough accounting to sit for the CPA exam. And I ended up in the accounting profession, of all places.

What was your first job, and what did you learn from it?

I used to get paid five bucks a day to take care of the Little League fields, water them, rake them and then line them to get ready for the games every evening. I learned responsibility and the importance of dependability. The game was going to start on time every time so field had to be ready, one way or the other.

Who do you admire in business?

I admire a number of our clients. We have the fortunate luck to work with some really capable, bright, innovative people. I admire visionaries and innovators. In Silicon Valley you have a bunch of them, such as Steve Jobs, and a lot who are not as famous, who make new products and come up with these things that really have an impact on our lives.

Then there is what I would call the entrepreneurial innovator visionary. I think we need a lot more of the latter. Since the early and mid-’80s, we have gotten away from that. Too much financial engineering, too much regulatory stuff, and I think that is really one of the big burdens of trying to get our economy going and getting job growth.

What is the best business advice you ever received?

Everything keeps changing, nothing stays the same. Don’t get lulled into thinking that because you are sitting fat and happy right now that it is going to continue. I have seen a lot of our client companies over the years just going great and then five years later they are out of business. They get bought up because they’re about to go out of business.

Things will change; it will be uncomfortable when they change. That’s how we live our lives. Don’t let it scare you, don’t avoid it; try to deal with it in an upfront fashion, and I think it helps you get through it.

What is your definition of business success?

I would say to gain the respect of your colleagues and your clients and customers. I think that’s very important. When you say that, to gain it and maintain it, there is a lot that underlies that. You’re talking about your interpersonal skills with these people, how to communicate with them, the judgments you’ve made that they have seen or not; your technical competence is important, whether you are an engineer or CPA or attorney or whatever it may be. It’s the ability to have vision and connect the dots in a way that other people haven’t yet.

 

 

Published in Houston

When it comes to attracting businesses, size alone should put Palm Beach County at a distinct advantage over its Florida peers. With 38 municipalities, the county trumps Broward, Pinellas and even Miami-Dade as the largest in Florida and third in population.

The problem is, although geography plays a role, it is not nearly the most important factor for businesses choosing whether or not to invest in your county, says Kelly Smallridge, president and CEO, Business Development Board of Palm Beach County.

“When you’re in economic development, one community can look like another community,” she says. “These CEOs are looking at 20 or 30 communities at a time, and it’s the communities that are going to roll out a much different experience and feeling of a corporate home that they are going to remember.

“We cannot present the same product as everybody else. So with everything that we do, whether it’s the message we deliver in a website, social media message, any printed material or their experience when they visit our community — it must make a lasting impression.”

Since taking the top role at the board in 2004, Smallridge has helped overhaul its economic development strategies to grow jobs and drive business investment in the county. Between 2011 and 2012, these efforts have helped create or retain 1,700 jobs and $166 million of capital investment into Palm Beach County.

In addition, Smallridge herself has been recognized by the South Florida Business Journal as an “Ultimate CEO” and by South Florida CEO as one of the top 40 business leaders in Palm Beach County.

Smart Business spoke with Smallridge to discuss what economic and business leaders can do to create make their counties attractive for businesses and why it’s an ongoing process.

What makes a county globally competitive for business?

Workforce has to be top notch, meaning highly skilled and available. Education K-20 has to also be more than excellent to attract families and corporations to this area — so workforce and education. The cost of doing business has to remain affordable … and the ease of doing business has to be far better than other locations, other competitive sites.

As CEO, what did you feel that Palm Beach County needed to change to be more competitive with other counties?

I saw a tremendous amount of focus on bringing someone in from other states, when really, a job is a job whether you bring it in from the outside or you create one here locally — it’s the same opportunity for our area residents.

I saw too much of a focus on that outside effort and not enough focus on nurturing those companies that already call Palm Beach County their home. So we traded more of a balance internally to grow what’s in our backyard. As a result, about 70 percent of our job growth in this county comes from companies that already have an existence in this county and 30 percent come from the outside.

How did you begin redirecting the county’s job growth efforts?

First of all, I had to build the best economic development team. Hiring great leaders that were well-experienced in economic development was No. 1. Two, I had to educate my own community — my own public and private leaders — about the value and importance of economic development and how to be well-versed in what CEOs are looking for when they are selecting a location for expansion, retention or relocation.

Starting with your internal leadership, what were the key steps in building a strong economic development team?

If you study economic development organizations throughout the county, the challenge is that a lot of these people are selling counties — they are very good at it — but they don’t know their county the way we know our county because we are products of this county.

Building that team of VPs here who are very passionate about what we are selling is No. 1 — hiring the best economic development professionals. Our average tenure in this organization is 10 years, very rare. … A quarter of our staff was either born or raised in the county that we are charged with selling.

No. 2, making sure that we subscribe to the highest levels of economic development principles. We went through what’s called an accreditation process. There are only two accredited economic development boards in the state of Florida, and we are one of the two. There are something like 25 in the United States.

We didn’t go for accreditation until we knew we had reached certain fundamental goals in this organization, a five-year strategic plan, the highest level of leader on our board, strong financials — most not-for-profits are strong financially — and more private support than public support.

So how did you apply those principles across the county’s 38 cities?

We created something called Economic Development 101. We started training our elected officials and municipal stakeholders on how to answer questions from CEOs looking at their city.

It was very surprising how much elected officials didn’t really understand about economic development and what would be the highlights of promoting their areas: understanding the major employers, the taxes, the cost of doing business, knowing what the strengths are of their cities from a business perspective and being able to speak very articulately about what makes their city one of the best business locations.

How did you develop the Economic Development 101 curriculum?

Once we did three municipalities, we really got a much better understanding of what the learning gap was, what they clearly understood and what they didn’t understand. We changed that accordingly and continue to build upon that. Every time that we go to an election we go back to those cities and re-educate those people. It’s made a very big difference.

Another key part is making sure that economic development is a top priority of the municipalities. If you have strong economic development, your retail thrives, your mom-and-pop businesses thrive and your residential does well because now you have people with expendable income who can purchase your homes and apartments and frequent your restaurants and your retail establishments.

We really try to get them to understand that it’s the high-end economic development that’s going to create the trickle-down and fuel the other types of business operations in their community.

Why is it so important for economic development boards to work closely with city leaders?

Too often, economic development boards focus on their organization and don’t understand that they really represent their entire geographic region.

They have to get out there and make sure that their entire geographic region has tax incentives, that they are moving quickly in expedited permitting, that they are cutting down on the layers of bureaucracy and they can speak the languages that businesses need to hear, that they put out a warm, friendly welcome mat.

Sometimes it’s not about the amount of money or incentives that you send to a CEO; it’s about how warm your welcome mat is.

I can only sell the product that I’m given by my cities. So if they don’t understand how to make their area attractive to businesses, it doesn’t matter how strong my organization is. I have to make sure that the product is strong, and the product is the comprehensive component of 38 cities.

Once you get everyone on the same page, how do you keep them there?

You form an economic development stakeholders council that brings them all together on a regular basis to communicate, share best practices internally, inform them of what new programs have come through the state that are available for all municipalities and that they can integrate into their respective areas.

Some of the things that we’ve brought to the table that many of our municipalities have taken advantage of are Ad Valorem Tax Exemption, passing that through their cities, and expedited permitting ordinances.

This is very large county, and one of the new things that I implemented when I became the leader is, ‘You are visible if you are present in their community.’ The county is about 40 miles long. It’s the largest county east of the Mississippi River and larger than a couple of states. It’s a very big, massive land area.

What I did was to establish satellite offices in the north, central, south and western part of our county. I went from one office, to one office and three satellite offices — big difference. Now you’re present in the community working side-by-side with your teammates and other city officials.

What results have you seen from PBC’s newest economic development initiatives?

Too many presidents of economic development boards are quick to get to that ribbon-cutting ceremony when really we’re in there to help them through the entire process until they turn the key and then for many, many years down the road. That’s why we’ve had companies come back to us five or 10 years beyond our initial relationship to help them with their expansion.

If you have an entire community that is working in the same direction toward creating jobs and you eliminate the competition internally and you get everyone on the same page, you end up with entire group of public and private leaders that are all working toward the same goal.

That may seem very fundamental, but it has taken years to get to that stage. If you look at other communities throughout the U.S., you will find very few where all public and private leaders have the same end goal in mind. ?

How to reach: Business Development Board of Palm Beach County, (561) 835-1008 or www.bdb.org

The Smallridge File

Kelly Smallridge

President and CEO

Business Development Board of Palm Beach County

Born: West Palm Beach, Fla.

Education: University of Florida

What would your friends be surprised to find out about you?

For the most part, I keep my private and professional lives separate. Therefore, my friends would be surprised to see what a normal business day is like for me. Every minute of every workday is usually booked solid with meetings, speeches, interviews, prospecting, traveling, deadlines, with absolutely no downtime until Friday afternoons.

How do you recognize new business opportunities?

I do not like to perform or develop a product or program that I’ve seen out on in the market. If I see it, then I tend to steer away from that and try to figure out what is really going to be the ‘wow’ factor in the way that we present a product. It distinguishes us among our competition.

What happens when you don’t close a business deal that you wanted?

One of the keys to any leader is that you’ve had numerous failures. Every one of those I’ve look at as character building exercises. We’ve lost some deals that I thought that we should have won. I don’t sweat over that too much, but instead, evaluate the situation very quickly, figure out what we did wrong and what we did right, and move toward developing some sort of resolution that ensures to the best of our ability that it won’t happen again. We’re quick to take a look at ourselves and be our biggest critics.

What do you do for fun? 

I am a firm believer that in order for my mind to stay healthy and make good business decisions, I must find time for fun. As a mother of three boys, all of my free time is spent with them at football, basketball or family vacations. We love to cruise to the Caribbean a couple of times a year as a family. In addition, I am blessed to live within a few miles of my parents, my brother and my sister. Getting together at least monthly with the whole family, especially during football games, has been a source of great memories.

Published in Florida

Egos are a big factor in business. Egos can cost companies a lot of money.

I learned this simple fact a long time ago, and to this day, it amazes me how much time, energy and resources are wasted by individuals unwilling to check their egos at the door and let their companies be successful. Believe me, I have an ego myself, and I have to remind myself that all the time.

We all know the type — the guy or gal who always has to be right and whose questionable judgment in business stems either from a sense of self-importance or is based upon what they feel others expect from them because of their position. This person can even be fairly pleasant and well-meaning. But when they turn out to be someone with whom you have a working relationship, things can go downhill very quickly, especially when they’re pushing ideas and making decisions for all the wrong reasons.

I sell a line of bison meat products, which is marketed as a healthful alternative to beef. One day, the company with which I was partnered hired a new marketing fellow who immediately wanted to change the packaging. It was clear that he wanted to make a big splash with his new bosses, but I was dumbfounded by his decision.

I argued, “We’ve been enjoying tremendous success, and our branding has been very clear. Why in the world would we want to change it when we have a winner?” I’m a pretty agreeable guy, but I also know when to dig in, especially when I’m fighting for something I believe in my heart is right.

After a brief internal debate, my partners agreed with my logic, and we happily continued on with our hit product.

In business, it is paramount that everyone looks for the perfect solution that works for everybody else. This isn’t about getting along with each other just for the sake of it but rather about learning to be successful together.

Ego, when it comes from a place of experience, confidence and wisdom, actually can be a tremendous asset if properly managed by the individual.

I’ve recently started working with a good friend of many years, and I totally respect his ego. He understands exactly what it takes to be successful and has the experience to enable him to accurately size up a situation and make sound business decisions. He also knows how to work with partners like me, creating a complementary relationship, not one in which there is constant bickering.

When you’re around people with healthy egos, they create an aura of chemistry and trust and can provide a nesting ground for others to be their best. These types of individuals don’t make radical changes on a whim, but they try to understand their business environment, then make decisions to either build upon existing success or fix what is not working. People like this aren’t afraid to make wrong decisions because they have the confidence — the ego — of knowing that eventually they will make the right decision.

In dealing with complicated business relationships, the most critical relationship is the one we have with ourselves. Always ask yourself the reasons behind your decisions, especially if you are challenged by peers, partners or others in trusted positions.

There is nothing wrong with standing up for what you truly believe in. But be sure you are guided by wisdom and a clear thought process with the intention of truly solving a problem or building upon previous achievements. If not, allow yourself to hear other voices and have a healthy enough ego to let them contribute to your success. ?

Tony Little is the founder, president and CEO of Health International Corp. and executive chairman of Positive Lifestyle International. Known as “America’s Personal Trainer,” he has been a television icon for more than 20 years. After overcoming a car accident that nearly took his life, Little learned how to turn adversity into victory. Known for his wild enthusiasm, Little is responsible for revolutionizing direct-response marketing and television home shopping. He has sold more than $3 billion in products bearing his name. Reach him at guestbook@tonylittle.com.

 

Published in Columnist

To turn Pinnacle Technical Resources Inc. into one of the fastest-growing technology companies in northern Texas, it just took a living room office with one employee, a big dream of success and Nina Vaca’s entrepreneurship.

Now, some 16 years later, the founder is not only chairman and CEO of the company, which provides contingent IT workforce staffing and vendor management services to Fortune 500 companies in North America, but she oversees 4,200 employees who help the company earn revenue of $236 million.

Vaca talked with Smart Business about the combination of entrepreneurial drive, motivation, culture-building and astute hiring that she has used to propel her company to these heights.

Q. Your organization seems to have a group of passionate people who love what they do, and that seems to come from the top. How are you able to get people passionate about what they do?

By simply communicating to my team that everything in life is a matter of perspective. How you view yourself, how you view what you’re doing in the world — it’s all a matter of perspective.

We have found a way to have an incredible perspective about the industry we’re in. You’ll never see such a big group of people on fire about third-party contract labor. I mean, it’s not sexy, but it’s something that’s growing tremendously.

The perspective I grew up with in my childhood is that you can do anything you want in a country like the United States. That perspective shaped my ability to dream big and to be passionate about what I do. I do the same thing at Pinnacle.

There’s a fundamental difference between motivation and inspiration. I think you can inspire people about what they’re really doing, being part of an award-winning company, their contributions to this economy, how it’s allowing us to be a better country. Those are things we often don’t think about when we do our day-to-day jobs.

I take the perspective at the 10,000-foot view and communicate it often, and people are excited about it.

Q. How do you communicate it? We often see that leaders who communicate well create effective cultures that can carry on without them.

What you’re talking about is actually extremely difficult to do once you start to grow quickly. An example of someone who has nailed this concept is Mary Kay [Mary Kay Ash, founder of cosmetics maker Mary Kay Inc.]. I really try to emulate a lot of things she is doing.

As we grow larger, it’s more difficult. What you have to do is really make certain that your culture is advanced not just by your leadership team but the layers behind them. When we were smaller, I would do a campaign with a different theme every year, and everything we did that year was based around that theme. You even see this in large corporations — there’s a theme for the year and everyone moves in that direction. We would have shirts made, mugs made. We would constantly see it visually, because you can launch a theme, but if you’re not seeing it every day, there won’t be enough energy around it. Whether it’s on a mousepad or a pen, you have to constantly be reminded of the theme.

Those are small tactical ways that we’ve been able to energize the group, and believe it or not, they work.

Q. How many employees do you have?

We have 4,200 people in the U.S and Canada. By the mere fact we are in third-party labor, we have lots of W-2s. And there’s a lot of motivation around those 4,200. Every Friday, everyone around the country wears a Pinnacle shirt. That’s just what we do. It’s part of our a culture. It’s a tradition that we have upheld. Little things like that are really important.

Q. What was the impetus behind founding the company?

I could tell you I was a visionary who knew Texas was some sort of can-do business state and that it would be the last one into the recession and the first one out as well as a right-to-work state. But the truth is I come from a very entrepreneurial family, so I understood the risks of starting a business and growing one. I had a front-row seat to make sure I capitalized on the opportunity.

Like a good entrepreneur, I found a need and serviced it. Starting a service organization, the barriers to entry are very low. I was young and aggressive. Again, I watched my parents and their parents and my whole immediate family make their way through entrepreneurship, so I wanted to do the same.

Q. Do you have a theory about children of entrepreneurs? Do they have a built-in entrepreneurial spirit? Talk about that front-row seat and how it helped you take that leap.

That front-row seat helped make me who I am today. During my upbringing, the silent example my parents taught me was big in the fact that I watched them lose a lot. I always tell entrepreneurs to never be afraid for your children to see you stress or to see you fail. It’s naturally human that we want our kids to have a better life and to have it easier — and to not see you cry and not see you lose. But I actually think the opposite. I think watching my parents have and have not — mainly have not — really taught me a lot about risk tolerance.

Now we’re all grown up, and when we have decisions and we have our lulls and it’s full of peaks and valleys, I never sweat it because even at our worst we’re light years ahead of where my parents were. I keep my perspective very crystal-clear on the mission we’re trying to accomplish.

Q. What’s an example of a challenge that you faced in your organization, what you learned and how were able to find a solution to overcome it?

I started the company in 1996, and we grew very quickly. As a service organization at the height of the dot-com era, there was lot going on in the staffing of third-party labor. Margins were big and life was good. I had a group of about 50 consultants, and life was great. Then, in 2000, we had our first recession.

I had a partner at the time, and we were pretty much down to a liquidation plan. One of my first customers, which we had about 50 percent of our business in, took it to India overnight. To say we were devastated is an understatement. My partner at the time said, ‘I’m out of here. If you have X [dollars], you can have it all.’ So I bought all of nothing, pretty much. It was a very lonely time for me — emotionally, in business. To be down to a liquidation plan and have the consultant say you need to wrap it up and let go, that was a very devastating time for Pinnacle.

But I have learned throughout my personal life experiences that it’s in your darkest moments that you always find your most inner strength. The absolute refusal to give up and the fact that I did have 100 percent control gave me the freedom to literally take matters into my own hands, which is what I’ve been taught to do my whole life. I diversified the business, I recruited some of the best talent in the industry, I went and talked to our customers and found out what they were really looking for. We found a niche in fixed-base, deliverable IT solutions. I leaned on my mentors and my family to work for free. I worked for free. Fortunately, my husband had a great job. I had an absolute refusal of giving up and had the ability to share a vision with others and have them come on at relatively low pay or, in some cases, no pay. That was the tipping point for Pinnacle. It was in 2001. We were literally at our worst. We’ve been growing since then.

Q. How did you extrapolate that vision, communicate it, and then create the plan to get there?

I spent a lot of time personally recruiting and handpicking all the right people. The CEO’s job is getting the right people on the bus.

Q. When you say the right people, you must have had an idea of what you were looking for.

Oh, absolutely. They had to embody the traits we were looking for, and they had to have the right type of expertise.

Q. How did you figure that piece out?

By being a student of the industry. I spend a lot of time figuring out what our next play should be. If people aren’t buying contract labor, they’re buying fixed-priced, deliverable IT solutions. You have to be a student of the industry, a student of the procurement process. When you do business with Fortune 500 companies, you have to be able to figure out why they buy your service. ?

How to reach: Pinnacle Technical Resources Inc., (214) 740-2424 or www.pinnacle1.com

The Vaca File

Nina Vaca

Chairman and CEO

Pinnacle Technical Resources Inc.

Education: Bachelor’s degree in communications and business, Texas State University-San Marcos

Vaca on delegating and motivating: I spend a lot of time working not just on the business, but in the business. Of course, as we’ve matured, I’ve had to work more on the business and not as much in it. But you have to be willing to do both. You have to be willing to roll up your sleeves, and you shouldn’t ask people to do things you’re not willing to do yourself.

Vaca on grooming IT workers: America is at an all-time high for IT workers in this country. Yet the number of degrees we’re producing, not just in technology but in STEM [Science, Technology, Engineering, and Mathematics], is at 1980 levels. So we’re upside down. If America wants to continue to be a front runner in the world of information technology, we have to create a bigger pipeline. What companies like Pinnacle are doing is taking matters into our own hands and specially grooming our own. We have veterans program, a youth program. We’re doing everything we can to be ready for tomorrow.

Vaca on corporate citizenship: I don’t believe you should just live in a city — you should help build it. At Pinnacle, we do that on steroids. We’re involved in a number of initiatives: the Blueprint for Economic Prosperity program; the [Dallas] mayor’s internship program; the Peace Through Business program. I have the privilege of serving as chairman of the U.S. Hispanic Chamber of Commerce. We’ve grown our corporate partnership in the last two years by more than 70 corporations. We’ve had to change our approach to achieve this, because corporations are shrinking the amount of philanthropy dollars. We no longer communicate to them that this is goodwill or corporate responsibility or a feel-good item. Our new approach is more pragmatic: Here is our mission, and our goals, and here’s how that mirrors your mission and your goals. It’s a business proposition. And it’s something they’re willing to invest in.

Published in Dallas

Michael Kaufman has the people who made his company. And he has the people who will make his company.

It’s Kaufman’s job to know the difference.

“Can the heroes of the past become the heroes of the future?” says the president and CEO of Specialized Education Services Inc. “You have to assess if you need the heroes of the past around anymore or if they can become the future of the company.

“It’s hard, because you might really like and respect somebody, but they might not be able to come with you on the journey you’re beginning. It’s tough to move someone along because it’s just not working anymore — especially when they were there to help you grow from the beginning.”

With approximately 1,000 employees throughout the SESI organization — which conducts programs for special-needs students in public school districts throughout 11 states and Washington, D.C. — Kaufman and his leadership team have an ongoing task as they continually analyze the people within the SESI organization, determining what puzzle pieces they have and how they can best fit together to strengthen the organization moving forward.

“When you hire someone, you want to start from day one thinking not only that you hired them for a job, but you start thinking about what they can do here in their career,” Kaufman says. “You start thinking about their leadership trajectory. If people see and feel that, they’re going to want to work for your organization.”

Determining the trajectory of people within the organization means evaluations of their strengths and weaknesses, ways that the strengths can be optimized and ways the weaknesses can be neutralized — either through skill compensation from others or skill enhancement of the individual via training.

“To me, that all comes with building relationships,” Kaufman says. “You need to be very comfortable talking to people about what they’re good at and what they need to work on. If you spend time with people, you can tell them that tough feedback, because they’ve seen that it’s in their own best interest. You want them to do well.”

Assess your people

Not many people like performance reviews. Whether they’re monthly, quarterly or annually, no one relishes the idea of sitting down with their boss and having their work critiqued.

You might not like the fact that your company has to conduct performance reviews. Depending on how many employees you have, it can become a lengthy process involving many different people. It’s man-hours that could be put to use running the business instead of making sure your employees are doing their jobs at an optimum level. But standards have to be maintained.

That’s why Kaufman and his team try to navigate what can be a less-than-pleasant process by continually coming back to the concept of continuous improvement. At SESI, performance reviews focus on the positive aspects of an employee’s work as much as the areas for improvement. Any need for improvement is phrased in the context of the employees’ growth as an individual and a professional.

“We have different areas we look at to assess how a person is doing,” Kaufman says. “Since we are an educational company, we call it ‘A-plus performance.’ That A-plus performance comes around different things that we look at and test. It could be students growing from the beginning of the year to the end. It could be staff assessments of the leaders, district satisfaction surveys or financial targets. We communicate around those regularly.”

In all cases, Kaufman wants his employees to buy in, which makes what he and his staff communicate and how they communicate it vital to the continuous improvement of the organization and the people who work in it.

“I feel that if you create rules and goals from the beginning and you can create buy-in, and you can assess the progress against those goals, nobody feels that they’re getting cheated,” Kaufman says. “It’s very fair.”

One of the ways Kaufman facilitates communication is by creating a sense of ownership between an employee and his or her progress. He doesn’t want supervisors simply dictating an employee assessment. He wants employees to take an active role and look within.

“I love to do self-assessments,” he says. “You ask someone to assess how they are doing, and it’s interesting to see how most people will be tougher on themselves than you will be. It’s great to get someone to look at themselves and acknowledge what they need to work on before you even need to tell them yourself.”

Individuals are often their own worst critic, so in some cases, you need to paint a realistic picture. You don’t want to sugarcoat your assessments, but you don’t want employees to develop an excessively negative view of their performance. It’s something Kaufman reinforces when he brings the leaders of his organization together at meetings.

“When I bring our leaders together — and that’s all our middle and senior leaders, which I do a few times a year — I really try to teach them that communicating with employees is all about authenticity with affinity. You have to be authentic, but you have to have affinity for the person.

“I used to be a big sugarcoater. I only wanted to tell people the positives, and I realized that people liked me, but their respect for me was somewhere in the middle. I found out the more honest I got, it’s what people wanted.

“If a person doesn’t feel like you know them, it feels like criticism when you give them feedback. The glass is only going to be half-full if they know you want them to do well. And you should want them to do well. Your company is only successful if your employees are successful. If they can’t perform, you’re not going to look good.”

Develop new leaders

The practice of assessing the skills, strengths and weaknesses of your team members will only matter if you put your findings to use. Your assessment methods can help identify areas of focus for training and improvement, but it is also going to help you find individual roles that will allow your company to best leverage the skills and talents that each person brings to the table.

Great talent can look less than stellar if people in your company are utilized in roles that don’t properly suit their skills or personality.

“We had one of the most credible people in the company running a school,” Kaufman says. “He was outgoing and gregarious; he loved people and loved the company. But he really struggled with giving tough feedback. If someone was struggling, he would pretty much ignore it and only highlight the positives. That led to a bit of a free-for-all at the school.

“But as far as the school districts, he was amazing. He’d check up with them to see how they were doing, and the people who ran the districts absolutely loved him.

“So I created the position of outreach director for him. It was really where he needed to be. He was so good at it; we’ve added other outreach directors in other parts of the country. He basically created the position by assessing his strengths, and we were able to work with him and find a suitable role in the organization.”

If someone is struggling in their current role, you may or may not have another place for that person in your organization. But before you cut ties with a mismatched piece, you should always step back, look at the landscape within your company and see if there are other places where a given person might make a better fit.

Cutting good talent loose should only come as a last step. Once it’s gone, it’s gone, and if your company gains a reputation as an organization that treats employees as interchangeable pieces, you’ll have a more difficult time attracting good talent and making quality hires in the first place.

“You really are only as good as your employees,” Kaufman says. “You have to look at that and find ways to develop them. As a CEO, if you’re going to grow and you want to have more operations, you have to create a replicable model that can be run by other people besides the CEO. That’s why the best gift you can give to somebody is to believe in them before they believe in themselves.”

You believe in your people by giving them the structure to improve their skills, move up in the organization, and continually learn — both in formal training and on the job. You often learn on the job by making mistakes, which is why you can’t be quick to punish someone who commits an error.

“You have to be extremely generous with praise and really allow people to do their jobs,” Kaufman says. “Don’t micromanage them. Allow mistakes.

“If you can find an incredible talent who believes they were put on this planet to do what they’re doing right now and you can get them to see that they are capable of even more than that — that they can become an amazing leader creating more leaders — that is the whole idea of believing in someone before they believe in themselves. It’s the greatest gift I ever got as a leader.

“And it really is the greatest gift you can give to someone in the business world.”

How to reach: Specialized Education Services Inc., (215) 369-8699 or www.sesi-schools.com

Takeaways

Assess the competencies of your people.

Critique with the goal of improving your people.

Identify and develop new leaders.

The Kaufman file

Michael Kaufman

President and CEO

Specialized Education Services Inc.

What is the best business lesson you’ve learned? To create leaders from within. Always make sure you are doing that. When you interview somebody, don’t just interview the person for the position that you’re seeking. Interview people for all they can be.

What traits or skills are essential for a leader? You need strength, compassion, accessibility and accountability. You need to be someone who is well-rounded and understands what it takes to lead an organization. You need to be able to look at the numbers. Don’t run from them, and don’t make excuses. Let everyone know what is going on in the organization, because there shouldn’t be any surprises for anyone. The strongest leaders are transparent. Don’t act differently based on whoever is in the room.

What is your definition of success? If someone thought I was an incredible CEO, that’s nice, but the real question is whether I lived my life with dignity and class, and have I earned the respect of others. Not just that I got respect because I ran an organization, but that I earned it because the people knew I had the best interests of the organization at heart.

Published in Philadelphia