Roger Andelin believes in the power of storytelling — so much that even an e-commerce business composed of people from the impersonal sales and technology fields can benefit from the skills of a good storyteller.
Andelin had served as the CIO of Internet retailer Buy.com for six years before leaving to take the same position with The Washington Post, one of the most famous and influential newspapers in the country. It was during his stint with the newspaper that Andelin, an executive with a commerce and technology background, discovered how to take good storytelling and apply it in the world of commerce.
“I became a lot more aware of the power of storytelling and the power that can have in a business, especially on the commerce side,” Andelin says. “Commerce was missing that.”
When the opportunity arose for Andelin to return to what had, in the interim, been renamed Rakuten Buy.com, he felt he could utilize the sum total of his experience as an executive, splicing together his e-commerce background with a newfound knowledge and appreciation of storytelling to open new doors for the company.
“When I sat down for the first time and heard about our chairman’s vision, it resonated through and through,” Andelin says. “The idea was [that] we want to give merchants a voice in our marketplace. Let’s connect our merchants with their customers; let’s bring a new shopping experience to the table.
“It was very different from the typical model in our space, which is you come in and search for a product, put it in your cart and check out. It really brought back a lot of the nostalgia in the commerce business, which was missing on the Internet and electronic side. We had a chance to bring that back to the whole process.”
After accepting the president’s role at Rakuten Buy.com — which was rebranded as Rakuten.com Shopping in January — Andelin set out to tell the story of the company’s new vision and how it would be realized. He wanted to get every executive, manager and associate in the Rakuten system to believe in the vision and to feel motivated to carry out the plans that would make the vision a reality.
Define your drivers
Any retail business — whether in the e-commerce space or reliant on a bricks-and-mortar network of stores — will always be driven by the numbers. The number of customers you can get to your site or store will convert to a number of sales, which will convert to a number of repeat customers.
But to realize the new vision for Rakuten.com Shopping, Andelin needed to promote something else. He needed to promote loyalty. It’s something that can’t be directly quantified on a balance sheet, but Andelin realized, soon after he took over, that it would be an essential ingredient in the success of the vision. It would be, in short, a primary driver of the business moving forward.
“The business really boils down to the number of visitors that come to our site and our conversion rate to how many of those visitors buy from us and what the average value of that order is,” Andelin says. “So once you look at those drivers, those KPIs [key performance indicators], you look into it and see what is it that drives that component. Traffic, or visits, are driven a lot by advertising but also by loyalty.”
As such, Andelin wanted his team at Rakuten.com Shopping to focus on driving customer loyalty and merchant loyalty. Since the staff at the company is, in large part, composed of people with technology backgrounds, it was a different concept.
“What happens is that technology departments often get focused on a feature,” Andelin says. “They’ve been asked to deliver A, B and C, and at the end of the day, they deliver that, but it doesn’t always yield the business value that was expected. So by shifting the emphasis away from the actual feature we’re delivering and getting the teams focused on delivering business value, it fundamentally shifts the whole project pattern in a very meaningful way.”
Andelin and his team began to implement initiatives, such as a reward points program, as a formalized way of building merchant and customer loyalty. But he also wanted to see his team deliver value in more fundamental forms.
“One of our objectives, for instance, is to increase the voice of our merchants online, to help them connect more with their customer base,” he says. “That is one of the main things that is going to separate us in a meaningful way from our competition. That technology stepping in and facilitating that communication is something that would be pretty unique for a merchant.”
Give people a voice
You can craft a well-thought-out vision that aims the company toward new heights of prosperity, but none of it will matter if you can’t achieve buy-in from everyone in your company.
It’s something that Andelin acknowledged early in his tenure, and it’s why he embraced the role of storyteller from his first day on the job. Employees can hear about the vision, they can learn the drivers, but until they see tangible ways that the vision will lead to a better, more profitable company — and by extension, more earning potential and job stability at their level — they won’t completely buy in.
“Alignment can be challenging,” Andelin says. “But I have found the best way to do it is to very clearly articulate the problem or very clearly articulate the vision and then explain why the solution we’re all working toward will resolve that.
“You start to get individuals to understand the vision or the problem by articulating it very clearly. They see it and recognize what you are doing and why you’re doing it. People generally get that. It’s when the communication isn’t there that the team starts to falter and lose the passion for what they’re doing.”
In order to tell a story, you need a means of communication. Authors have books, journalists have mass media and directors have the cinema. At Rakuten.com Shopping, Andelin has, among other things, weekly “asakai” meetings that utilize technology to bring together people from Rakuten’s U.S. operations and beyond.
During the weekly meetings, senior management reinforces the vision and values of the organization to employees throughout Rakuten’s footprint. The meetings are another way Andelin is using technology for storytelling.
“What we say at the weekly asakai meetings goes all the way down to daily huddles, where each department will get together and talk about their departmental issues,” Andelin says. “The thing to remember is the teams you are leading have to get it. The business leader has to be open enough and accessible enough, to the point where if the team has questions, they feel able to ask those questions.
“If they have concerns, they have to get those concerns out on the table and walk through them.
“One of the most powerful ways to reach consensus is not by reducing the conversation but by increasing it. It is through conversation that leaders and managers are able to convey the vision and get individuals to come on board with the direction of the organization. Communication is absolutely key.”
Show your wins
Every story has a beginning, middle and end. In Rakuten.com Shopping’s case, the story is still in progress. If you don’t have final results to show your people, you need to show them progress and trends. Keeping employees in the loop is another essential way to bring them on board with your vision. You have to demonstrate the wins you are tallying and the progress you are making toward realizing your vision.
“As an example, we ran one of our summer sales at the end of August, right after I started,” Andelin says. “We measured the sale based on year-over-year performance — so, how we did on these days versus the same days the prior year? That event ended up giving us a fairly sizeable increase in our number of orders, in visitors coming to the site, all of the key metrics that we’re looking at. Those wins really help focus the team.”
If you’re going to tell a story that it’s going to serve as a motivator for your people, the story has to inspire. That doesn’t mean your people have to leave the meeting or conference call ready to climb Mount Everest, but it does mean that they leave as believers in what the company is doing.
“It’s a fairly basic idea that winning is contagious,” Andelin says. “It builds confidence; it helps you to solidify a repeatable process. It shows us what we need to do to drive sales during a particular event. If we get really good and learn those things, we can repeat it, and we can grow our business to improve step-by-step, by improving those processes. Everybody gets excited, and it really becomes a companywide initiative, because everybody has a little piece of it. So when you start to achieve your vision, everybody feels good.”
How to reach: Rakuten.com Shopping,
(949) 389-2000 or www.rakuten.com
The Andelin file
What is the best business lesson you’ve learned? You want to take accountability for when things don’t go smoothly and perfect. At the end of the day, if you screwed up, take responsibility for it, figure out what happened and move forward. That is one of the most relieving principles in business. It’s a liberating principle for all leaders, as opposed to passing blame and making excuses.
What traits or skills are essential for a leader? Having a vision and being able to communicate it on both an individual and group level. Leaders have to be approachable, accept criticism and be able to defend their positions with logical, rational arguments backed by data and facts. Authoritarian leadership doesn’t fly nowadays. You have to win the minds of intelligent people who are used to thinking for themselves, are well-educated and have fabulous opinions.
What is your definition of success? There is a sense of irony around it, because as soon as you start to define success, you limit yourself. If you define success as you see it, you just cut yourself off from other areas where you could be a success. You have to kind of know success when you see it, just like knowing what art is, or knowing what sounds good in music. So many things drive success, to define it is almost impossible.
Tell a great story.
Communicate it to your people.
Show evidence of success.
Nobody in Alan Jay Kaufman’s field is looking for the insurance industry to develop the same professional glamour appeal as a movie star, professional athlete or international spy — but they are looking to get on the same recruitment footing with banking, finance and just about any other area of business.
The insurance industry is fighting that kind of an uphill battle. It’s primarily because college students, in many cases, don’t view insurance as an appealing career choice, which hinders the recruiting efforts of firms such as Burns & Wilcox, a 1,000-employee insurance brokerage, which Kaufman leads as chairman, president and CEO.
“The effort from our industry to go to universities looking for the best and brightest isn’t there,” Kaufman says. “It’s also not a profession that universities are encouraging people to go into. They think about banking, finance, marketing but not insurance. It’s not emphasized as a great opportunity or a great career.”
But without attracting, training and retaining great talent, a business in any field can’t hope to flourish. So Kaufman and his staff must swim against the recruiting current, challenge the preconceived notions about life in the insurance business and give bright, talented people reasons to want to come to work at Burns & Wilcox.
“That’s my biggest challenge,” Kaufman says. “We need to acquire the best and brightest talent that can take the company from one good level to the next higher level. And after you’ve acquired them, after you’ve trained them, you face the issue of retention. How do you retain the best talent you have so that you can continue to improve your team?”
It has required Kaufman to help spearhead recruitment efforts and formalize training programs, all with an eye toward making Burns & Wilcox not just an attractive place to work but an ideal place to build a career.
Find your selling points
To understand how your company can best appeal to potential employees, you have to understand what sets your company apart from the competition. You have to know what you can uniquely offer to the people you recruit.
If you are aiming to hire young talent, as is the case at Burns & Wilcox, you have to develop programs and facilitate opportunities that appeal to recent college graduates who are mobile, both in a geographic sense and corporate-ladder sense. Young employees value career advancement, and many of them also value the opportunity to live in different areas of the country and world before settling down.
It’s something Kaufman and his HR staff have carefully considered as they have built their company’s recruitment and training programs.
“The recruits we’ve brought in have been impressed with our training, that we have a course that helps them get their careers off the ground,” Kaufman says. “We can move them around to different regions. They can spend some time here in our corporate headquarters in Michigan, and we can move them to different offices where we have training programs operating. They can understand how the office in Atlanta works versus the office in Dallas or Los Angeles.”
Not every office in the Burns & Wilcox system is set up for training but enough are equipped with training staff and capabilities so that a newly recruited employee has an opportunity to experience living in different cities and learn about the work environment in various company offices.
Kaufman and his team have developed the company’s recruitment and training platform, in part, by observing the competition and analyzing the holes that competitors weren’t filling in the recruitment game.
“We don’t necessarily react to what the competition is doing, but we do certainly pay attention to it,” Kaufman says. “We’ve realized, for example, that our competition has been more focused on compensation, as opposed to training and career advancement.
“I believe that the right leaders are going to realize that compensation is important, but training and providing promotion opportunities is more important to career advancement. We do meet the competition as far as compensation is concerned, so I’m not trying to undermine the fact that compensation is important, but the education and training aspect is critical.
“I’d like to see more of our competitors in the industry implement some programs for advanced training. It would be better for us and better for the industry. I consider it a weapon in our arsenal, but it’s not a secret weapon.”
Build a training program
To sell recruits on your company’s ability to advance their careers, you must develop a comprehensive and formalized training program that lays out a process for how your company can help its employees achieve their career goals.
At Burns & Wilcox, the company formalized its training program under the acronym KELP — the Kaufman Emerging Leadership Program, which is administered by Burns & Wilcox’s parent company, Kaufman Financial Group.
“We formalized the program to a greater degree by actually hiring a recruiter internally, just for university graduates, just for the program,” Kaufman says. “We have one person on staff who is devoted to that. That’s all she does. We’re constantly trying to improve our formal approach through the KELP program and other programs that we have. That’s one way we have of searching for the best talent — and I emphasize ‘best,’ because it’s not just a matter of hiring people. We need people who fit the insurance culture, who will embody the best aspects of our company.”
Employees in the KELP program have usually graduated college within the previous five years. The three-year program is selective, with approximately 30 people gaining admission each year.
“We hire many people with the hope that they’ll get into the program, because it’s not guaranteed that they’ll get entrance into the program,” Kaufman says. “We first hire them, then after a period of time — maybe six months to a year working for us — they can potentially get entry into the program.”
But the size of a training program is less important than its quality, measured in the success rate of its graduates. A successful training program is usually successful because the leadership of the company committed resources to it and made it an organizationwide priority.
To build great leaders, they need to be taught by great teachers who understand the principles of effective leadership and how those principles fit into your company’s culture.
“It certainly has to start off with the right leadership in the training program, and the company has to put that on the list of priorities,” Kaufman says. “You can’t have an internal program without the support of the senior executives and management, which is why we always try to involve the best leaders in our company in the implementation of the training program.
“For two weeks, we bring our best leaders into the program, people who work in various disciplines throughout the company — whether it be underwriting, brokerage, property, professional liability or any other area. Without the support of those people, the program wouldn’t be successful, and the company wouldn’t be as successful.
“If you look at the people in our company, the people who have historically been the most successful are the people we have trained.”
And that training has to be open to all areas of the company. You might have certain departments that you view as more essential to your company’s success than others, but the next great leader could emerge from a department that’s on the edge of your radar screen.
“Open your training to people in every area,” Kaufman says. “Our training program also includes assistant underwriters and other people through all levels of the company. It’s across the board because you can’t just train certain individuals. You need to have a macro approach. And that goes back to having someone on staff who is entirely devoted to training on an ongoing basis.”
Consider other factors
Your recruiting efforts can get talented employees in the door, and your training programs and compensation packages can get them to accept the job. But once you have them, how do you keep them? That is a question with a multipart answer that involves additional factors, including the work environment, networking opportunities and the way in which the job contributes to — or detracts from — quality of life.
“There is not a magic formula, but those items are all part of the formula,” Kaufman says. “How you balance it and mix it is an ongoing process. It’s never perfectly right, so you just have to keep looking at the ingredients.”
It’s why Kaufman makes it a point to personally keep his finger on the recruiting pulse of Burns & Wilcox. He empowers his HR staff to do their jobs but remains in tune with the company’s ongoing recruiting efforts.
“I participate in recruitment and the interviewing process,” he says. “I interview hundreds of people a year and certainly anyone on the management level. And I expect that standard of other people in our regional offices. You need to maintain a strong leadership team that works together and comes to a consensus on what to do. You want a consistent approach.”
How to reach: Burns & Wilcox, (248) 932-9000 or www.burnsandwilcox.com
The Kaufman file
Alan Jay Kaufman
chairman, president and CEO
Burns & Wilcox
What is the best business lesson you’ve learned? The lesson I learned from my father (Kaufman Financial Group founder Herbert W. Kaufman) about his door being open to anybody. You didn’t have to go through different layers to get to him. That is the way I am, and I encourage my executives to be the same way. If you want to know something, you have to go right to the source, and with our management style, you can talk to anyone in the company — and our employees do that. Regardless of your size, you want your company to keep that part of the culture, keep that feeling that people can talk to anyone.
What traits or skills are essential for a leader? Humility, honesty and hard work. That, and you have to lead by example. I can’t expect someone else to work hard if I’m not working hard. I set the pace for everyone, and I expect, from my level on down, to keep that pace. As an example, I expect everybody — clients, insurance brokers, agents — to understand our history and what we’re selling.
What is your definition of success? The quality of the team around you. The better the team you have, the more it will be able to carry you through thick and thin. A company isn’t one or two people; it’s the total team. A great team leads to success — it’s true in business, it’s true in government, just as it is in athletics.
Sell recruits on your company.
Build a strong recruitment strategy.
Formalize your training program.
Can you imagine a world without Oreo cookies? Anyone who has taken one and dipped it into a glass of milk before popping it into his or her mouth to savor the flavor would shudder at the thought of such a scenario.
But when Irene Rosenfeld returned to Kraft Foods in 2006, she found that the company was on verge of delisting the Oreo brand in China.
“We took a U.S. product and jammed it down the throats of the Chinese consumer,” Rosenfeld says. “We were losing money, and it was a very unattractive proposition. We had a $60 million factory in Beijing, which was sitting empty because sales had not materialized. So we were about to delist the product.”
Rosenfeld and her team at Kraft decided to reach out to people in China before taking such a drastic move. They asked what it would take to make the Oreo brand a success in their country.
“They very quickly told us that the product was too big and too sweet for the Chinese consumer,” Rosenfeld says. “When we allowed our local managers to redesign our product for the local taste and local customs, we had a phenomenal turnaround.”
The Chinese Oreo is smaller and less sweet and actually comes in a green tea flavor. It’s not at all what American consumers want when they open their package of Oreos, but different cultures have different tastes. Rosenfeld knew in that case she needed to adapt to earn the business of the Chinese consumers.
The effort has paid off thanks in part to China’s own Yao Ming, a former star basketball player in the United States.
“Who is the best symbol in China but Yao Ming?” Rosenfeld says. “He’s our spokesman, and we actually go to the local guy. It has been a phenomenal business in China with almost $800 million of the $2 billion business from Oreo worldwide,”
The willingness to adapt played a large part in the move completed last fall to split Kraft into two groups. Kraft Foods Group now holds the company’s North American grocery business, which is led by iconic brands such as Oscar Mayer and Maxwell House.
Kraft Foods Inc. is now Mondelez International Inc. and will focus on high-growth global snacks.
“Our dream for this company is to create delicious moments of joy,” says Rosenfeld, chairman and CEO for Mondelez. “The opportunity for us is to create a $36 billion start-up. It’s an opportunity to take an incredible roster of brands that are household names, brands like Oreo, Ritz, Chips Ahoy, Trident and Cadbury, and put those together.”
Getting to the market fast
Rosenfeld does not go so far as to say that the grocery side of the business was holding back snacks. But the two sides did require a different approach, and that created a challenge for leadership.
“North American grocery needs to be managed for cash and for margin,” Rosenfeld says. “There is a big focus there on maintaining the moderate growth but making sure it’s a very cost-focused company.
“Our global snacks business is all about growth. So the focus is on global platforms for each of our brands. The focus is on capabilities and the supply chain and sales, which will drive these products more rapidly around the world.
“The opportunity for us to be able to scale up very quickly if we are properly structured and have the proper communication from one part of the world to another is the main idea for our new company.”
The ability to make smart acquisitions of new brands and make strong connections in emerging markets will go a long way toward determining the ultimate success of Mondelez.
“The rate of consumption in the emerging markets is a fraction of what we see in developed markets,” Rosenfeld says. “So that whole investment thesis behind Mondelez is this idea of a growth company because of our geographic footprint and our category participation. It’s really depending on explosive growth, and we’re growing at a double-digit rate in these emerging parts.”
Focusing on health
It’s hard to talk about snacks and the love that people have of them without talking about obesity. Rosenfeld says the problem of people being overweight and out of shape is big in the United States, but it’s also a concern in other parts of the world.
“It’s every bit as challenging in India, and it’s on its way to markets like China,” Rosenfeld says. “It’s an issue we take quite seriously, and we look to address it in a couple of ways.”
The first part is looking at calorie intake. Efforts are ongoing to formulate products in a way that they taste good but can be enjoyed without guilt or risk to your future health and well-being.
“We continue to focus on taking things out like calories and sodium and sugar and replacing them in our products, as well as increasing the level of fiber,” Rosenfeld says. “We’re not pretending chocolate is going to be something other than it is.
“What we’re doing with products like that is to make sure the consumer has portion control. We’re making more of our candy bars scored so you can break off a piece at a time. We have resealable packaging. We’re doing a lot more single-serve products, which is good for price value and consumption.”
As for burning calories, Rosenfeld says she and her company will always do what they can to promote exercise and an active lifestyle for consumers young and old.
“We have been working very actively in partnership with organizations like KaBOOM! and with playgrounds in inner cities in this country and in programs like Healthy Schools in the U.K.,” Rosenfeld says. “We’re helping to educate children about good nutrition and the value of exercise.”
The key to being successful in providing nutritional foods to consumers, whether it be children, college students, young professionals or senior citizens, is easy to understand. But it’s often a lot more difficult to achieve in actual practice.
“Healthier products like Triscuit and Wheat Thins are growing at twice the rate as the base products,” Rosenfeld says. “There’s a clear business opportunity as well as the social responsibility. It’s not a tough sell, but what’s hard is to make sure these products taste delicious. Because at the end of the day, if it doesn’t taste good, the rest of it doesn’t matter.”
Staying in touch
From the outside, it seems like it would be a nearly impossible task to manage 100,000 employees. And while Rosenfeld has a proven track record of effective leadership and is regularly named one of the most influential leaders in the world, she agrees that managing that many people is impossible.
“The fact is I can’t manage 100,000 employees,” Rosenfeld says. “What I can do is inspire as many of the leaders of the company, then, in turn, to inspire their teams. It’s a cascading process.
“The single biggest role I play is in communication and talking about where we are going, why we are going there and what it is I need the organization to do. Then I really need the leaders to grab that and translate that mess into what it means for their folks on the ground.”
Rosenfeld spends about two-thirds of her time on the road meeting with employees and assessing whether they have what they need to succeed.
“I spend an enormous amount of time thinking about talent,” Rosenfeld says. “I look at our key roles, and I want to make sure they are operated by our top talent and that we have good career paths for those individuals as well as good succession plans behind them.”
The name change from Kraft to Mondelez has required a restating of what it means to work for this new organization.
“A lot of the work we’re doing right now is creating an employee value proposition and being explicit about what Mondelez can offer you as the prospective employee that you might not get elsewhere,” Rosenfeld says.
Empowering women to grow and succeed is another area of focus for Rosenfeld. Half of her management team is female and a third of her board is women.
“For many companies, they can legitimately say they have no one in the pipeline because they didn’t focus on that,” Rosenfeld says. “It’s a multilayered process, and it has to be a commitment from the top. I’m very proud of the progress we’ve made and we continue to talk with peers about what sort of actions we’ve taken that have contributed to our success.”
If you ask Rosenfeld for advice on how to succeed in life and in work, she says to just be yourself.
“If you’re not comfortable in the environment that you’re in, get out of it and do something else,” Rosenfeld says. “We all work too hard at what we do to not be comfortable and to feel like we have to be somebody that we’re not.”
The Rosenfeld File
Name: Irene Rosenfeld
Title: Chairman and CEO
Company: Mondelez International Inc.
Education and memberships: Rosenfeld holds a bachelor’s degree in psychology, an MBA and a doctorate in marketing, all from Cornell University. She is active in a number of industry and community organizations including The Economic Club of Chicago. She also serves on the Grocery Manufacturers Association board of directors and Cornell’s board of trustees.
The path to Mondelez: She began her career in consumer research, later joining General Foods, which itself became part of Kraft Foods. Rosenfeld led the restructuring and turnaround of key businesses in the United States, Canada and Mexico. She served on the team that spearheaded the company's IPO in 2001, and successfully integrated the Nabisco, LU and Cadbury businesses.
Rosenfeld took a short break from Kraft Foods in 2004, serving for two years as chairman and CEO of Frito-Lay. While there, she accelerated growth in better-for-you products and health and wellness offerings.
She returned to Kraft Foods, the predecessor to Mondelez International Inc., in June 2006 as CEO and became chairman in March 2007, following Kraft’s spinoff from Altria Group.
How to reach: Mondelez International Inc., (855) 535-5648 or www.mondelezinternational.com
With the market for computer backup storage devices decreasing about 15 percent a year as far as revenue and number of units sold, Simon Garneau feared that Digital Storage Inc. might soon be one of the many in the technology scrap yard.
“It took us awhile to see that it was declining because obviously all our suppliers were trying to convince us otherwise — that it is growing, and it is exciting,” he says. “Secondly, there are all kinds of competing and advancing technologies that satisfy the demand for more storage.
“So our challenge was what else can we do because if storage devices and distribution are all we do, we will disappear from the surface of the map,” Garneau says.
The parent company, Dexxon Group, which distributed high-capacity tapes for computer backups, decided it was time to diversify rather than to stick with the way things had been. Its response was to establish a division in North America of Emtec, its retail side of storage devices that grew in Europe out of the former BASF brand.
But there was a challenge, and Garneau knew it would be a formidable one.
“The whole strategy was to focus on the retail market of which we knew absolutely nothing,” he says.
“We had no idea how retail worked, how do you introduce these kinds of products to retail, and we were facing very large and well-established competitors: SanDisk, Kingston, Lexar and PNY,” he says.
Garneau was not fazed. His business sense told him that in a competitive market, you have to be different to survive.
Here’s how Garneau, president of Digital Storage Inc. and Emtec North America, built a $75 million successful retail business over the last four years by offering customers something the competition didn’t.
Pitch to a different crowd
If you are a clothing manufacturer and you are searching for the next big thing, it may be as easy as signing a promising designer and going with his or her creations. But Garneau didn’t have the luxury of just adding a new line to the market he was already in.
He was finding himself in the much the same stadium, but he was going to have to pitch to a different crowd.
“Digital Storage had focused on the commercial market, or the B2B as a wholesale distributor,” he says. “Our challenge was to find a growth market for the company because we knew that we could not stay where we were.”
The company started looking for opportunities in the data storage arena because it was a field in which it had familiarity as well as capabilities with logistics and distribution. Emtec would be the company’s own retail brand in North America that was sold through the business-to-consumer sector. An added bonus was that the European division had been marketing flash storage, or key USB flash drives, for a number of years.
Garneau and his team began discussions with existing customers about what Emtec could deliver that other companies would not.
“For instance, doing private labels, modifying their products, packaging it differently and that sort of thing,” he says. “So we decided as a strategy, we said, ‘Well, since we have no brand recognition, we will do for them what the other guys wouldn’t do.’ That was our differentiation strategy.”
The company began creating the novelty type of USB flash drives, with animal characters and popular culture comic icons such as Looney Tunes, Angry Birds and the European Asterix characters.
“Up to that point, most flash keys were totally utilitarian; they were all black or silver, fighting on price and no special attraction,” Garneau says. “But taking the lead from the customers, we decided to do private labels, and we added colors, patterns, schemes, shapes and forms and so forth. That’s really how we got in.
“So we got lucky in that sense and based on the advice of our marketing reps, they gave us good coaching as far as which programs to support with the customers.”
Garneau says that by taking the approach of listening to the customers, being sensitive to what they want, responding, making suggestions, engaging in a working dialogue as opposed to a high-pressure sales pitch — as well as receiving a vote of confidence from the headquarters in Europe — a solid retail effort was launched.
Get off to a good start
Once Garneau and his team had their strategy, it was time to find those who would drive in the revenue. The question then was whether to go in-house with sales associates or outsource the efforts.
“The No. 1 issue was if you don’t know anything about this business, you hire manufacturers’ reps,” he says. “We went with manufacturers’ reps because we felt that they would know the business, we would have the benefit of their contacts, and we could move quicker, if you will, and we only pay once we have sales, so it is not a drain on cash flow.”
Garneau was able to recruit in a short period of time a network of manufacturers’ reps, including one particular standout whose performance was excellent. A major opportunity for a large line review with a large company was obtained, which as luck would have it, already had a relationship with the European division of Emtec.
“Then here in the U.S., we were able to get some strong references from distribution customers who could say, ‘Digital Storage is very strong from a logistics point of view, and they are responsive, and we are happy with them,’” Garneau says.
With a sound strategy and a good bit of luck, Emtec was underway in the U.S.
“The first order we got was like $4 million,” he says. “We literally created a new category of flash keys. Now, we are challenged to keep it up because all our competitors are trying to imitate us. We have a thriving business.”
Sales figures support that observation. Two years ago, the business grew by 32 percent, last year 37 percent, and this year, Garneau budgets about 50 percent growth.
Keep the old as important as the new
If a company launches an innovative venture and the sales figures indicate that things are pretty rosy, there is still the challenge the company faces of how the new plays against the old.
“When you face a situation like this, the challenge is how do you motivate the people — all of them?” Garneau says.
“You have a group of people who are dedicated to your old business, which is declining. And at the same time, you are building a new business, which is all new and exciting, but you have to keep a balance between the two because you need the first one to provide the cash to fund the new one.
“The key challenge then, which is also ongoing, is how do you motivate everybody and not make the old people feel that they are not so important anymore versus the new guys who are building all the excitement,” he says.
Should you find yourself in this or a similar situation, communication will often make or break the situation.
“We do this through a lot of information exchange,” Garneau says. “We tend to be very open with everybody. We share the numbers. We have town meetings every quarter. We state the strategy in simple terms.
“The trick is to make sure that everybody feels they have a role to play and that they are very important in that challenge.”
This has to be reinforced all the time, Garneau says.
“I like to do a lot of walking around,” he says. “If I talk to the people in the warehouse, they have to understand how important it is for them to be quick and caring and satisfying for the customers, which they do. But everybody has a role to play. We need people to sell the old media because we have to maintain that business as long as we can.
“So it’s ongoing. Let’s communicate; let’s talk. Let’s share the information. Everybody’s important; everybody has a role to play.”
In short, you need to develop your company culture to include two extremely important aspects.
“What makes us different from others is that people care,” Garneau says. “Everybody here cares. If a customer hurts, everybody hurts. We don’t tolerate indifference. We don’t hire indifferent people; you have to be excited. You have to believe in what you do, and you’ve got to care.”
The second point is to try to be fast, not fast to the point of making mistakes but to the point, quick and responsive.
With a major retailer that didn’t know Emtec from anyone, Garneau established a 24-hour turnaround policy for communications.
“Every single thing that they asked of us, we responded within 24 hours,” he says. “They were totally surprised. They were flabbergasted. It gave us such credibility with them because they were thinking, ‘Well, gee, if they respond to our legalese that way, we can only imagine how they will service our account.’ And we really got their attention that way. We ended up doing business. We’ve been doing millions of dollars of business with them ever since.” ?
How to reach: Digital Storage Inc., (800) 232-3475 or www.digitalstorage.com
The Garneau File
Digital Storage Inc. and Emtec North America
Born: I was born and raised in Québec City, Canada. I am French-Canadian.
Education: I have two degrees from Université Laval in Québec City, a bachelor of arts and a bachelor of science in engineering physics.
What was your first job and what did you learn from it?
As a teenager, I pumped gas at a gas station. I realized that, in those days you had to serve the people gas. But it struck me that most people wanted to talk to you, as opposed to sitting in the car and to let you finish filling the gas tank. So it really hit me. I felt that, gee, this was an opportunity to be of service and be pleasant and listen and be curious about these people and you can have a little chat. It could be to your advantage to take the lead with people as opposed to assuming that they don’t want to talk to you.
What is the best business advice you ever received?
I will give you two that really hit me and served me well in my career. I worked for a CEO, and the big thing he taught me was that his approach was to focus on revenue first. Everybody believes that a budget is a license to spend, well, it is not. You only spend if you have the money. If the money is not in there, let’s talk revenue first.
As for the other one, I was the president of the division at National Computer Systems in Minnesota. I learned from the CEO not to feel obligated to fix every problem at once.
Who do you admire in business?
I don’t go by names; I admire attitude and style. Just to give you one example, one billionaire CEO I used to run a company for was so humble and simple had such respect for people. If he made a commitment to you, he would always honor it. That is the kind of person I respect. To me, when I give my word, I come through with it, even if you cross me. I will meet my part of the bargain. But it is this kind of honesty and commitment that I admire. I like people who commit and come through with their commitment.
What is your definition of business success?
Make your numbers, because if you don’t, you can explain and this and that but when you make your numbers, everybody is happy, you are satisfied and everybody wins. And you don’t have to explain it for too long. I remember when I applied for this job that was the point I made to the people. At the time, out of 30 years in business, I had made my numbers at least 28 times. To me that is important.
The financial meltdown that rocked the economy in late 2008 damaged U.S. businesses in myriad ways — but LeasePlan USA Inc. was one of the unfortunates that got hit from several angles at the same time.
LeasePlan, which provides automobile fleet management services and manages about 385,000 vehicles for its clients across the United States, is basically in the business of financial services. It helps companies finance and service their vehicle fleets. When the meltdown happened, liquidity and credit dried up practically overnight, making things very tough for LeasePlan.
“All of a sudden, these things became a huge issue for us,” says Mike Pitcher, LeasePlan’s president and CEO. “In that environment, a lot of our clients were under a great deal of financial pressure. And so were we, with regard to liquidity, cost of funds and simply doing business as usual. Financial services and the entire industry were very challenged.”
At the same time that liquidity and credit were drying up, the recession began to stifle many sectors of the economy, sending some of LeasePlan’s key corporate clients into downturns of their own. Consequently, those companies started looking for ways to save money. And one of the line items they began to scrutinize closely was vehicle fleet costs.
“Some of our clients were starting to downsize,” Pitcher says. “Their fleets were getting smaller, and they started looking at different options for vehicles as well.
“A telltale sign for us was that, before this downturn, the six-cylinder engine was always the predominant engine in our industry. Nobody ever ordered four cylinders for fleet. But we started seeing some of that. We started seeing some of our clients not only downsizing the number of vehicles in their fleets but using smaller vehicles. And they were holding onto vehicles longer instead of replacing them.”
All of these factors put strong downward pressure on LeasePlan’s business.
“In ’09 and ’10, we saw our overall fleet — the total amount of cars we finance — go down quite a bit,” Pitcher says. “I can tell you that our overall fleet went down by thousands of vehicles. It was a substantial drop. It got our attention. These were significant client behavioral changes we were seeing. It was an indication that some fundamental changes were happening in our industry.”
Focus on controllables
Pitcher pulled his management team together to come up with a practical plan aimed at pulling LeasePlan out of the down spin it was falling into.
“One one hand, we knew we had a credit crisis going on,” Pitcher says. “The availability of credit and liquidity was a serious issue for us. But that was really at a macro level and largely beyond our control.
“So what we decided to do as a company and as a senior management team was we started talking about how we could get back to the basics and get all the basics right.”
The result of these deliberations was a new five-year strategic plan dubbed Triple Crown, which LeasePlan put into effect near the end of 2009.
“Our Triple Crown initiative was based on our performance in serving our three main groups of constituents,” Pitcher says. “Those constituencies are our employees, our clients and business partners, and our shareholders. And we said that none of those were more important than the others. Each was critical and fundamental to our business.”
LeasePlan’s Triple Crown five-year plan set forth concrete objectives regarding how effectively the company serves each of those three stakeholder groups. The plan laid out methods to measure employee engagement and client loyalty and goals to be reached in both of those areas based on those measurement methods.
LeasePlan’s shareholder return objective was to achieve a double-digit percentage increase over the five years covered by the Triple Crown initiative.
“We started to measure employee engagement — not just satisfaction but employee engagement,” Pitcher says. “We started to measure customer and client loyalty — again, not just satisfaction but loyalty — with the key definition of loyalty based on whether the client would refer us and whether they had an intent to repurchase and do business with us again.”
LeasePlan hired a consulting firm, TNS, to periodically survey its employees as a means of measuring their level of engagement in their work.
One of the initial findings was that LeasePlan has an unusually high percentage of workers classified as “drivers” — that is, passionate, already highly engaged employees who act as if they have an ownership stake in the company and work hard to deliver exceptional service every day. They learned that with such a high percentage of “drivers,” communication becomes even more critical than usual.
“We learned that with a group like this, you can never communicate too much,” Pitcher says. “Part of the reasoning for this is that in the absence of truth, people will start to make stuff up. If you don’t tell them the truth — clearly and consistently — they’re going to make something up. And usually it’s something far worse than things actually are.
“So we started having regular town-hall-type meetings and monthly communications from myself and our CFO regarding our financial performance and monthly emails from our chief sales and marketing officer talking about accounting and departures.”
LeasePlan also pledged not to lay off workers except as an absolute last resort and managed to live up to that pledge, even through the recession’s darkest days. The company implemented a two-days-a-week, casual-dress program and a weekly “dress for success” day, as well as an employee health program called HealthyU that includes free biometric testing, a weight-watching program and a running group that participates in 5K races — all of which have been popular and have helped increase the company’s employee engagement scores.
“We’ve received great feedback from our employees,” Pitcher says. “They love these programs. They’re great morale boosters, and they cost the company little or no money.”
As part of its Triple Crown five-year strategic plan, LeasePlan engaged an outside firm to interview its clients by phone to measure their degree of loyalty as well as their perceptions about LeasePlan’s customer responsiveness, its level of innovation, its technological know-how and the value of its service vis-à-vis how much it charges for that service.
“Client loyalty is really about a lot more than client satisfaction,” Pitcher says. “It’s about a client’s intent to repurchase. Will (clients) be willing to spend additional dollars with you as a vendor? It’s about expanding services and share of wallet and whether they’re willing to be a referral for you if another client would call. Those are the factors that drive client loyalty.”
Pitcher proudly notes that LeasePlan is now laying the groundwork for a new five-year strategic plan because it achieved all the goals of its Triple Crown five-year plan in just three years.
“We laid out a five-year plan, but our team hit all the metrics we set forth in that plan within three years,” Pitcher says. “We achieved them all during 2012. This plan brought us back to pre-credit-crisis levels of profitability.
“We hit our metrics in all three areas — employee engagement, client loyalty and shareholder return. So now we’re back to the drawing board, looking at what our next five-year plan is going to look like.”
Asked what key pitfalls he has learned to avoid while leading LeasePlan through the credit crunch and financial downturn, Pitcher says he strongly suggests resisting a common mistake.
“One of the biggest pitfalls is surrounding yourself with people who always tell you you’re right,” he says. “If you get a big enough audience with very diverse and original ideas, you’re going to find out you don’t have all the answers. As a CEO, you can become very insulated, and people won’t bring you the real problems and the real challenges. You have to stay away from a group of advisers or managers that simply always tell you you’re right.”
Pitcher also recommends empowering the rank and file to help find the solutions your company needs when it gets in a tight spot — and be sure to acknowledge those contributions.
“One of the things we learned is that your team members really want to be part of the solution,” Pitcher says. “They want to be heard. And they usually know best how to attack a problem or an opportunity and find the solution. Our best recommendations and suggestions almost always come from front-line employees.
“The other thing is — and I know this sounds trite, but it’s really not meant to be — people want to be recognized for a good job. People do a lot of good things, and it’s leadership’s responsibility to catch people doing things right, make a point of to others and say thank you.”
How to reach: LeasePlan USA Inc., (770) 933-9090 or www.us.leaseplan.com
The Pitcher File
President and CEO
LeasePlan USA Inc.
Born: New Orleans, La.
Education: Bachelor’s degree in marketing, University of Louisiana at Lafayette; MBA, Emory University
Looking back over your years in school, do you recall any important business leadership lessons you learned that you still use today?
That you can learn from any experience, good or bad. From good leaders you can learn good aspects of leadership — but you can also learn from bad leaders, what not to do. There are role models on both sides of that coin, and if you take every experience as a learning experience, I think you can become a very well-rounded leader.
Another important lesson is that attitude is everything. In the face of crap, you can say, “The whole world is falling apart, and there’s nothing I can do.” Or you can say, “This is an opportunity.”
What was the first job you had, and what business lessons did you learn from it?
I was a painter and sandblaster on oil rigs in the Gulf of Mexico. I worked 21 days straight, 15 hours a day. In other words, I worked a 105-hour week for three weeks in a row. And the lesson I learned is that I wanted to make a living with my mind, not my back.
Do you have a main business philosophy that you use to guide you?
It simply would be that people have an inherent desire to be successful, and management’s main objective should always be to harness their passion and find ways to show them how they can succeed.
What trait do you think is most important for an executive to have in order to be a successful leader?
If I had to pick one, it would be integrity.
What’s the best advice anyone ever gave you?
Never do anything your mama wouldn’t be proud of. My older brother said that. Having been raised by my mom for a long time, I would say that’s up there.
Bob Duncan was taken aback a little when he went to a meeting last year as the new Indianapolis International Airport executive director.
There were only three people at the meeting. It was the employee engagement committee.
“I said, ‘What’s going on? Where are the rest of them?’”
It turned out the committee hadn’t been maintained that well. The group needed new leadership and was ready for a revival.
When Duncan along with the HR director breathed new life into the committee, it was re-energized into a much more interactive and robust employee group.
“So that’s worked really, really well in the last year,” he says.
It turns out that making things work well is Duncan’s signature. He had been with the Indianapolis Airport Authority for nearly 40 years and previously served as general counsel and COO. Duncan was closely involved in the planning of the airport’s new midfield terminal, which opened in 2008. Add serving as interim executive director in 2012 to his resume after the previous director and the board of directors parted ways.
As he came into the leadership post, he was fortunate that he had a fairly clear picture that the culture under the previous administration was not as collaborative as he would have liked. He already got to know over the years hundreds of employees by their first names, so the territory was familiar.
“But I viewed the culture as tense,” he says. “Kind of silo-ish. You hear that a lot, that people had developed silos, which was not efficient in my mind. With the reorganization that I did, I broke down the silos.”
Here’s how Duncan eliminated the silos, built up teamwork and put his signature on the culture at the Indianapolis International Airport, which had revenue of $193 million in 2011, serving 7.5 million passengers.
Instill a sense of teamwork
If you’ve determined that your mission is to make your organization’s culture more collaborative, the most important sense to instill is that of teamwork.
Duncan realized that he needed to focus on the senior team members as well as the line service. He wanted to gain their trust, which would increase their commitment.
As a first step, Duncan recommends making yourself known.
“I made it a point to get out and about at virtually all hours,” Duncan says. “I have been known to show up at 5 o’clock in the morning and go to police roll call. I show up on Saturdays just to talk to people, particularly on second and third shifts, to let the folks know that I am interested in what they do and how they do it.”
As you cover your territory on foot, you will get to know your people better.
“I insist that my employees call me by my first name so that we can develop a team spirit,” Duncan says. “At the same time, you have to establish trust in management so that they know when a decision is made that may impact them, they understand why it doesn’t come as too much of a surprise.
“Be credible. Be open. Be approachable. Recognize the type of workforce that you have. I want them all to call me by my first name.”
As an example of building trust, he cited a recent instance when the airport’s public safety officers, which are not law enforcement personnel, were privatized. Rather than eliminating the 38 jobs, Duncan found a private security firm that would start to re-employ the officers at the airport in similar roles.
“So everybody that day walked out knowing they had a future,” Duncan says. “That is the right thing to do when that happens. It established trust in management, that we were sensitive to the feelings of the people, and I didn’t want people walking out with a change like this without the security that they knew they were going to have a job and benefits. That’s what we did, and it worked really well.”
Look for inefficiencies
A shakeup will always cause people to sit up and take notice. It’s a sign that you are in charge and want to try a better idea, hopefully to get better results.
Duncan reorganized his senior leadership staff, and it resulted in the reduction of some positions. However, it not only shrank the senior management numbers, it improved the organizational efficiency.
“I literally abhor bureaucracy,” Duncan says. “We are a quasi-governmental entity so there is a certain amount of statutory bureaucracy that we have to deal with. But what you deal with about internal planning and internal decision-making, you try to cut down layers of the approval process so that you empower people to make decisions and do that in a collaborative manner.”
A sore subject for some executives is the number of hours of meetings they often have on their calendars. Duncan is a firm believer that such time often could be spent more productively.
He took 18 hours of senior-level meetings a month down to four.
“Let’s say there was a senior-level meeting, and then two days later, there would be a senior-level meeting with the director-level people,” he says. “So there are five hours of just talking. What I’ve done is to have all the senior managers meet at the same time with most of the directors at 9 o’clock every Monday morning.
“Everybody brings everybody up to speed, and then once a month, we bring in directors, managers and supervisor levels so anything that they want to talk about, we can bring up. That’s worked really well for me.”
Spending less time on unproductive discussions forces managers to organize their thoughts and prioritize issues. It’s important that everyone gets together on the same page, and it should be done at least once a month.
“We have a project coordination meeting; it doesn’t last very long,” Duncan says. “We go down all the projects, so all the department heads know what projects are, where they are and what’s going on with them. So that’s the kind of attitude I want. I don’t want anybody sitting in their chair without getting up and talking to other department heads.
“Let senior directors and their directors develop their own action plans, their goals and initiatives,” Duncan says. “I can count on one hand and two fingers the number of times that I have gotten directly involved and changed something. That is because I know a lot of these people, and I trust their judgment, they trust mine, and that’s really important to the effective operation of the organization.”
Duncan says it is essential that the CEO encourage his team to challenge the leader’s ideas without fear of any potential negativity. It’s part of being flexible.
“I can remember when I reversed myself twice in the same day,” he says. “Someone came up to me and said, ‘You sure you want to do that?’”
Members of a team should feel free to make mistakes and get the experience of surviving through them.
“I always ask folks that I come in contact with, ‘Do you know what experience is?’ I will get a wide variety of answers,” Duncan says. “Then I will say, ‘No, experience is the exercise of good judgment,’ and you get experience through the exercise of bad judgment. Everybody is going to have some of the bad judgment experience.
“Let people know that if they make a mistake, they are not going to get their head chopped off. As a team, we will work around those kinds of problems the best we can.”
You don’t necessarily have to say you’re not an asset to the organization because you just made a mistake.
“I don’t do that, I mean, there are certain folks that sometimes you try to do all you can to improve them and like all organizations, there are just sometimes when you have to say this just isn’t working,” Duncan says. “I work real hard not to have that happen.”
Nurture success and keep it alive
There comes a point in your effort to build teamwork that you want to know if your approach is working. If you aren’t seeing more employee engagement, it’s not working. Employees should feel a more collaborative effort. They know that you are in charge ultimately, but without teamwork, there is no progress.
“I think as an executive director or CEO, sometimes you have to keep your ego in check,” Duncan says. “At the same time, you are earning the respect of the people that you’re working with and maintaining that respect. You do that by empowering people.”
Also, look at your turnover rate.
“At the senior director, manager director level, we don’t have much turnover,” he says. “Since we do run three shifts a day, we have a little higher turnover rate in third shift janitorial services. But I am trying to figure out how I can reduce that rate of turnover, and it could just be the hours that the third shift works or things like that.”
Once the operation shows improvement, don’t get complacent about communicating with employees — and fall into the lure of email’s convenience. Duncan believes email has become too impersonal.
“If you are not careful, you can say things in emails that don’t mean or that people take the wrong way,” he says. “It is much better to walk around and talk to people — more of a face-to-face thing. Again, that’s part of my concept of openness and having people come in. I have two doors in my office and they are always open. People can walk right in anytime they want. “That’s the way I like it; some people don’t. I do.” ?
How to reach: Indianapolis International Airport, (317) 487-7243 or www.indianapolisairport.com
The Duncan File
Indianapolis International Airport
Born: Philadelphia. I lived in New Jersey until I was 15. Then I moved to Indianapolis. I learned to fly when I was 16 years old, and I was a professional pilot when I went to law school. Flew all day, went to law school at night.
Education: Bachelors’ degree from Hanover College in Indiana, with a major in history and political science. I went to law school at Indiana University.
What was your first job and what did you learn from it?
I worked in service stations. I pumped gas, cleaned windshields, and I was a pretty good car mechanic back in the early to mid-’60s. Then I started flying.
What is the best business advice you ever received?
The gentleman that hired me, Dan Orcutt, executive director of the airport for 25 years — I’ve had the deepest respect for. I think part of my business attitude came from him. It was kind of what I have already said. He said, ‘Be credible. Be trustworthy. Be firm but be fair.’ I think that that works because sometimes in business negotiations, you have to be firm, sometimes vocal, but you always want to be fair. We work hard at being fair to ourselves and our business relationships but also to our customers and tenants. Sometimes we have to say no, and they don’t like hearing it, but they will always understand why and why the decision is what it is.
Who do you admire in business?
To be perfectly honest, I don’t know if I could drag it down to one particular industry. The aviation industry — one is Elaine Roberts, the president and CEO at the Port Columbus International Airport. She started here at the airport. I always admired her sense of fairness and her sense of doing the right thing, and at the same time making very sound business decisions. I really kind of admire her in my particular industry.
What is your definition of business success?
For me, it would be respect, that people shoe respect knowing that they would be treated fairly in dealings with the airport, that we are recognized for our integrity. That would be business success for me in addition obviously to positive financial results.
When Jason Bernal started teaching at YES Preparatory Public Schools 15 years ago, he began every day by picking up students in a van — and he quickly learned that going the extra mile would be routine in this job.
“I would have four stops, picking up students in a van and then bringing them to school every single day,” he says. “I can’t tell you the amount of time that just not me but every teacher put into every single student.”
He often took students home at night, when they stayed after school to crack the books.
As a charter-managed school organization whose goal is to give low-income students exposure to high-quality educational opportunities, YES Prep knows about engaging both teachers and students. In a big-city setting, where in the past, quality education for low-income families was hard to find, YES Prep has a current enrollment of 7,000, a waiting list of 7,000 students and is recruiting to boot.
“Our big focus is increasing the number of low-income Houstonians who will graduate from a four-year college or university,” Bernal says.
In order to graduate from the high school, students have to be accepted to a college or university.
“Currently, we have 80 percent of our kids who have graduated from college come back to Houston to work. From the very beginning, we always talked to our kids about, ‘We want you to be leaders in your communities. We want you to go to college, and we want you to come back and work in your community.’”
Driving that kind of visionary change begins with people who have a mental picture idea of what the educational process should be like, Bernal says.
Here’s how Bernal, president of the 700-employee organization of 11 schools (and growing) uses engagement so students and teachers will burn the midnight oil — and help drive visionary change.
Get in at the ground level
Every vision has a beginning, and every company has a founder. Chris Barbic, the founder of YES Prep, wasn’t satisfied where his children were going after they left his sixth-grade classroom. It was the impetus for the open-enrollment YES Preparatory Public Schools, which operates on $77 million revenue, including state funding, donations and fundraising efforts.
Simply defined, a vision is where you want to be or what an organization wants to realize at a certain point in time.
“To YES Prep, it’s really just raising that bar and how we meet the needs to make sure that every student becomes successful in life,” Bernal says.
Getting quality front-line managers — in this case, the teachers — is so important that numerous steps are taken. If applicants pass the first screening process, they then go through a series of interviews. The candidate is then interviewed by a school leader, the equivalent of a principal, who sets up a sample teaching lesson for the person to be delivered to a class — where the candidate can be viewed in a virtual on-the-job experience.
While the hiring process takes an extensive look at the candidate, it’s only the beginning of how deep YES Prep will go to support the right teacher.
Mold your new faces
Call it on-boarding or orientation, the process of bringing new employees into the fold is receiving more attention now from companies and organizations than ever. And no wonder when there is so much competition for good talent.
“When we are hiring brand-new teachers, we have to make sure that they have the necessary training to go into the classroom day one and be an effective instructor,” Bernal says. “We don’t have time for a teacher to get his or her feet wet for a few months or even a year.”
A Teaching Excellence program trains the first-year teachers, starting in July before classes start in the fall. This intense two-week induction program focuses on the basics: what it is to be a YES Prep teacher, what the expectations are and best practices to be a good teacher.
While that step is similar to what happens in many fields with new employees, the next step is less common but is very effective.
In addition to the training, the teachers are paired with an instructional coach, a non-evaluative mentor, Bernal says. The coach meets weekly with the new teacher.
“That is extremely important,” he says. “There are lots and lots of observations, lots of communication.”
Once a month, on Saturdays, the teachers also have professional development time as well as on Wednesdays when schools are let out early to accommodate the program.
The Wednesday sessions are kind of quality control meetings, organized by grade level, and they address concerns and other issues.
“You have your logistical items of what has to be taken care of, but you spend the majority of the time in those meetings talking about individual students and how you can meet students’ needs,” Bernal says.
“You need to have a full network of support counselors at every school so when you have a student that is a concern, you’re not a teacher on an island. In fact, we make sure that our teachers bring up those concerns with other teachers in the meetings or with school counselors to ensure that we find a way to help the student.”
Consider salary bands on merit
When it comes to the subject of wages and salaries, it’s one topic no company or organization can afford to ignore. Some companies put a salary cap on positions, limiting advancement and often denoting a dead-end job.
However, YES Prep realized that there are some people who just want to teach and be great teachers so a pathway called Teacher Continuum was created, a system on how teachers are paid based on performance and not tenure.
“With the Teacher Continuum program, we have teachers who start out at in a certain band; if you are a first-year teacher, you start off at the novice level,” Bernal says. “Then you can move throughout the bands to mastery teacher. So based on how your performance is throughout the year, you can move into a higher position.”
This is the second year of the program, and there are no mastery teachers yet.
“A big part of this is that we don’t want to lose great teachers and people who don’t necessarily want to go on to be administrators,” he says. “They just love teaching. We want to keep those teachers. It gives teachers the incentives just to continue doing really well in the classroom.”
Commit with a contract
Another part of the engagement process involves a contract — contract learning, while not a new concept, serves in a way to bind the teacher, the student and the family.
“We sit down with the parents, talk about what YES Prep is, and we have the teacher sign a contract basically stating that the teacher will be there with the students 24 hours a day, seven days a week, to ensure that that child can receive the support to go to college,” Bernal says. “Parents do the same thing; students sign the contract too.”
YES Prep keeps the contract all the way through graduation. Though not a binding legal document in the strictly legal sense of a contract, the support the document provides offers one more layer to the commitment process that can lead to graduation.
Actually, 100 percent of the seniors are accepted to college and matriculate, but this is a tricky statistic because students who are retained as juniors or choose to leave the school on their own accord aren’t calculated in that number. A little more than 90 percent of the class is retained each year. Currently, 72 percent of alumni are enrolled in a four-year college or university or have graduated.
While some critics may require numbers to provide success rates, Bernal sees it otherwise.
“I think the nice thing today is our next campus, Campus 12, will be opened in 2013 by a YES Prep alum,” he says. “More than 20 of the students that have graduated from YES who went off to college have now come back and are teachers, administrators, school leaders and school directors. It is really cool to see how this whole thing comes full circle.” ?
How to reach: YES Preparatory Public Schools, (713) 967-9000 or www.yesprep.org
The Bernal File
YES Preparatory Public Schools
Born: Denver. I’m a big Denver Broncos fan. Later, when I was in third grade, we moved to Montana.
Education: I graduated from Helena High School and went to Montana State University-Billings. I have a bachelor’s degree in Spanish and a master’s degree in educational leadership from Sam Houston State University.
What was your first job?
During college, to try to make ends meet, I did what any college kid would do — shovel snow before class, and in the summers, I worked for the city as a garbage man.
Who do you admire in business?
Our founder, Chris Barbic. He was the visionary for YES Prep. He is definitely the one whom I look up to. Another one is my sister, Michelle Berg. I would not have gone into education if she didn’t encourage me to apply for a job with YES Prep.
What is the best advice you ever received?
When I took this position over, I had a case of nerves when I started, and Chris Barbic said, ‘Just be yourself.’ Maybe it’s too simple but that’s the best advice. Things won’t work out if you are trying to be someone you aren’t, and it’s going to come across as not being genuine. That has gotten me through a lot of difficult situations.
What is your definition of success?
When I think about success at YES Prep, I think I always want the best for students, to provide great opportunities for them. It’s students going to college, graduating from college, doing something that they love to do and being leaders and seeing that every day. I think that’s an easy way to define success for our kids. And I want to be able to create opportunities for our staff members, too, so they excel, so they grow professionally, and that they are doing things they never thought they would be able to do.
Interviewed by Dustin S. Klein | firstname.lastname@example.org
When Marcelo Claure got into the mobile phone business in 1997 as it was just getting started, there were 1 million mobile phones sold a year. Today, there are 1.7 billion sold every year.
The founder, president, chairman and CEO of Brightstar Corp. lives and breathes the fact that massive growth and change are part of the territory. Smaller, more powerful and robust smartphones and wireless technologies are being developed constantly.
“Change is part of our culture and our game,” he says. “We need to adapt to change. Being a distribution company at our core, we’re constantly changing suppliers, not just to change but because they become less and less relevant.”
What started as an effort to be the leading distributor of mobile phones in Miami soon became the leading distributor in Latin America.
“Then we said, ‘What about in the U.S., too?’’ he says. “Then we said, ‘What about the world?’ Today, we are the world’s largest distribution company.”
And it couldn’t have happened without a concerted effort to find executives who could operate in a dynamic, changing environment — very different from the traditional executive.
“They’re very unique and hard to find; at the beginning, we made a lot of mistakes,” Claure says, describing how the talent was having a difficult time keeping up with the technology.
But under Claure’s leadership, Brightstar has attained unprecedented growth, expanding to 51 countries in only 15 years. With $6.8 billion in revenue and 5,500 employees worldwide, the company is in a great position today, realizing growth in all areas. Here is an inside look on how to deal with frequent change, explosive growth and the necessary talent to rein it in.
Take an ‘on-your-toes’ approach
Claure says a large part of how you deal with change is your approach. If you can establish a team that is always on its toes, that’s one of the first steps to what in simplest terms is a two-part culture.
“Change forces you to have a culture of innovation and a culture of ‘What’s next?’” he says. “If you look at what our company is today and what it was 10 years ago, it’s a completely different company.
“We are a lot more service-oriented now; from being a trader of mobile phones to today, we’re a leading supply chain company in our industry. We’re one of the leading insurance companies in the arena. We’re the world’s largest buy-back and trading company. Pretty much one thing is always thinking of what’s next.”
Many companies who stay on the cutting edge of technology look for individuals who are often the type to be called “early adopters.” These employees stay up on all the latest developments and are eager to try the latest product, even before all the bugs are out of it. However, an executive with impressive credentials doesn’t always equal an early adopter.
“We thought that by bringing big executives from big firms they would automatically yield success,” Claure says. “We couldn’t have been proven more wrong. The type of execs that fit our profile are the innovators and people who are used to building stuff, who operate in a changing environment, are very different than your traditional executive who is pretty good at grabbing something and keeping it constant or making it grow at suboptimal levels.”
It’s a somewhat painful process of trial and error. You are looking for a good fit when the tolerances are very narrow.
“We’ve learned and figured out the profiles of what makes somebody flexible at Brightstar,” Claure says. “Definitely it’s enough flexibility and adaptability to change and willingness to try new ideas, to bring new ideas to the table and to do different things in the course of their career. That’s what makes an executive at Brightstar shine.
“We’ve gone through a lot of hits and misses, but I think we’re getting better at recruiting the right talent.”
Be flexible to evolve
Once you think you have the right talent in place, you will be in a position to stress that, as the technology evolves, the company has to evolve with it.
“You have to build the culture and company that is ready to be flexible and be able to change pretty fast,” Claure says.
“If you look at the players we’ve dealt with since our founding, we’ve seen the rise of Motorola and Nokia. Nokia is struggling. If you look at where we’re working today, the focus now is on, ‘How can we offer a high-end smartphone like an iPhone or Galaxy for lower-income people so they can pay us a dollar a day?’
“If you go back 15 years ago, would we ever think that was possible? Absolutely not. So we’re used to change, we’re used to mobility. If you just see my industry, Apple was nonexistent there 15 years ago; today, it takes 75 percent of the industry profit.”
What began as a distributor is transforming into a service company for Claure.
“We’ve built our services around the phone and leveraging the structure we have around the world,” he says. “It’s pretty unique. Today, we run supply chains for some of the world’s leading operators.”
An entrepreneur is always looking for ways to expand his or her business, and Claure set his focus on ancillary products and services in that vein.
“We now buy more than 25 million used phones from consumers, we recycle them and we sell them in American markets,” he says. “Then we focused on the consumers who are accidentally losing their mobile phones; we launched an insurance company.”
Insuring the devices filled an expanding need in the market. Devices are misplaced, lost, dropped or stolen every day because, in part, of their convenient size.
“We wanted to be in the insurance business so we bought a small insurance company,” Claure says. “We fix our systems so they can scale, we fix the management team and then put that insurance business into our 51 different countries so that it immediately explodes our growth. Our insurance company has grown 450 percent in the 1½ years since we bought it. Next year, it will grow 1,000 percent.
“Then we figured out that retailers needed help in managing the growing wireless complexities so now we manage wireless categories at the world’s leading and biggest retailers in the world.”
Learn to use your advantages
Once you have been evolving your business in tune with how the industry is evolving, you often get a very good sense of where trends are going so that you can make some solid predictions, which can lead to expansion.
Claure says in addition to those skills, an advantage can be had in just being a bigger company.
“Being big now means ideas come to your company — a lot of people come with them,” Claure says. “That’s a lot easier now. Now your job is to pick the right idea, pick the right product and solution and make the right decision. It was a lot harder seven to eight years ago when you had to invent everything. We’re very good at identifying and saying we want to play in a specific business.
“We’re constantly being approached by smaller entrepreneurial companies. We buy them or partner with them or figure out other ways and then put them into the Brightstar platform. It gives them pretty amazing growth. It’s a lot more fun now when you can choose than it was before.”
As competitors try to encroach upon your space, use your experience and foresight to decide what new partnerships to explore.
“More than mobility, we’re going to experience in the next few years the connected world,” Claure says. “Everybody has a mobile phone today. There isn’t much more to mobile phones but not everybody is totally connected.
“Today, each person probably has a couple of devices — like tablets and your phones. If you look at the future and what’s expected by 2020, we’re going to have 50 billion connections, which means every human being is going to have a connection. So what does that mean?”
He sees opportunities to wirelessly connect smartphones, computers, digital cameras, cars, refrigerators, washers and dryers — whatever. It all will be connected.
“We’re moving toward a completely connected world, which means new supply chains need to be formed to operate that connected world,” Claure says. “There are new ecosystems, new businesses and new players.”
It all boils down to who has the capability to execute, he says.
“The keys are how do you execute? How can you scale? How can your systems and people scale?
“We sit in a position where we have sufficient business for the next couple of years. The potential with this business, if you execute an opportunity, then nobody tells you how good you do, that’s expected.
“But when you screw up or do something wrong, news travels fast, and that’s a problem. We need to make sure we continue to do what we do. Never take our customers for granted. Make sure we execute. A lot of activities we execute are because customers are outsourcing to us so their expectation is that we’re going to do a lot better with price than they used to do themselves.” ?
How to contact: Brightstar Corp., www.brightstarcorp.com or (305) 421-6000
The Claure File
Founder, chairman, president and CEO
Education: Claure holds a bachelor’s degree in economics and finance from Bentley College in Massachusetts. He also received an honorary doctorate degree of commercial science from Bentley College and an honorary doctorate degree from the Universidad Tecnica Privada de Santa Cruz.
Claure on how to deliver exceptional service: Talent, talent, talent. I spend 40 percent of my time interviewing new talent. I have replaced 80 percent of my management team in the last two years and the reason for that is the people who got us to a certain point aren’t the same people who are going to get us further.
Out of that 80 percent, half are still with Brightstar but they’re not the leader, the same COO, CFO, CTO. A company’s most important asset is its talent base. For every company and every industry, if you have great people running your company, great things will happen. If you have mediocre people in your company, bad things will happen. You might be good for a certain period of time in your company; it doesn’t mean you’re going to be good forever. Talent management is a very important process.
Secondly, you have to do the painful exercise of investing in having the right systems and processes. It’s painful because it’s expensive but also because it’s disruptive. Every time you have to implement a new ERP or a new warehouse management system, your initial reaction is delay. Delay — but then you pay for the consequences later on.
We’re learning. For example, I won’t tell you the customer but in a very large country we grew faster than our systems. There was a point where we couldn’t shift devices. They were like, ‘Oh my God.’ Those are problems you can’t fix at once. Those are problems that you have. … As we build our new products and services, we have to be dedicated to investing to make sure we can scale our systems, people or processes.
What does Anthem do to support women in business? The same things we do to support every business leader — because women expect the same value, innovation and dedication as any other forward-thinking leader. How do we know? Our parent company was named a 2012 “Top 50 Company for Executive Women” by the National Association for Female Executives.
We also listen to the many women business leaders we serve to stay on target. Ohio is ranked No. 9 of the top 10 states for women-owned businesses. And as of 2012, there are more than 8.3 million women-owned businesses in the United States, generating about $1.3 trillion in revenue and employing 7.7 million people. Clearly, women have a voice in everything we do.
At Anthem Blue Cross and Blue Shield, that means working hard every day to improve the lives of the people we serve.
With the help of many successful women, we’ve been able to:
? Make meaningful connections with our members — from online groups to personal health coaching.
? Develop leading health plans that reflect diverse needs in a changing market.
? Teach people how their healthy choices influence the people around them.
? Inspire kids and their families to choose (and stick with) healthy habits.
? Help lower health care costs with new plans, new payment models and new technology.
Thanks to all the women who lead by example, extend helping hands to our communities and pave the way for the next generation of successful women. ?
Denise Tomechko is vice president of national account management for Anthem Blue Cross and Blue Shield. Reach her at (800) 928-2902, www.anthem.com or on Facebook at www.facebook.com/HealthJoinIn.
Click the links below to read about the 2013 Perspectives panelists and sponsors:
Interviewed by Dustin S. Klein | email@example.com
With more than three decades of experience in the lodging industry, including the last seven years as president and CEO of LQ Management LLC, the company that owns the La Quinta hotel chain, Wayne Goldberg is a man on the move. The company’s two major brands, La Quinta Inn and La Quinta Inn & Suites, are in major expansion mode: La Quinta had 425 hotels at the end of 2005; today, it has more than 800, with 9,000 employees. The growth has been fueled in part by technological innovations that enable La Quinta’s customers to make fuller use of the technological devices with which they travel.
Goldberg recently talked with Smart Business about the technological modernizations and some of the other strategies he has used to drive La Quinta’s growth over the last few years.
SB: Let’s talk about innovation. How are you becoming innovative leaders in your space — not just in the properties, but how you market yourselves and build your brand?
WG: I’ll start with technology, because what I like to say is that I view us as the little engine that could. We have done some things that we’ve received a lot of recognition for. We were recognized this year by Technology Innovator magazine as Technology Innovator of the Year. In our little company of 845 hotels, we have done some very creative things.
First of all, what I would tell you is that the world has changed. It used to be that it was all about giving the guest the technology that they needed and wanted. You would make that technology available and put it in the room, whether it was a fax machine or the delivery of bandwidth to the room. The actual hardware and software — you gave the guest all of the technology they needed.
Today, it isn’t about giving them technology. It’s about giving them the capability of using the technology that they’re traveling with.
We’ve taken a different approach. We’ve done a number of firsts. In 2012, we launched a new mobile site, the first of its kind. On this site, we launched a platform called LQ Instant Hold. When you go to book a room, you’ll see a banner that says LQ Instant Hold. If you click on it, we will hold a room for you for up to four hours. All you have to do is enter your phone number. It’s unique.
We launched this in February, and by June, 40 percent of all our mobile bookings were coming through LQ Instant Hold.
SB: Are your properties franchised or company-owned?
WG: It’s a combination. It’s a different model than most of our competitors. In my view, this is another point of innovation; we own and operate 400 of our 845 hotels. We are significantly invested in the real estate and in the operation of our business, which I think is a big positive for us because we have real skin in the game.
We are going to our partners and saying, ‘Look, you need to change the bandwidth from 1.5 megs to 3 megs as a minimum standard. By the way, we can show you the return on the investment and the improvement in guest satisfaction. We can show you the reasons you should do it. And we’re doing it at 400 hotels. We’ve invested millions on our corporate side.’
All of a sudden, we have more credibility than someone just brand-building and telling people to increase profitability by spending money.
We don’t ask our partners to do anything that isn’t economical. It’s all about doing the things that are economical, and if it makes economic sense, then you can get the troops around those issues and initiatives and really make progress. But if you’re doing it just for the brand, where is the real economic value? And why would I do it?
I can tell you that being a franchisee of another brand — which we are — we see this all the time. We’re asked to do things and invest capital [where] there is no economic value. And, by the way, some of our competitors make money every time they require their franchise partners to do something by making them use certain vendors and products and then by taking a percentage of everything you’re buying. There’s a little bit of conflict of interest in that type of approach.
SB: Would you discuss your brand from both an ownership standpoint and a franchise standpoint. How has your brand changed and evolved?
WG: What I would tell you is that in 2000, we were 99 percent company-owned. We owned and operated 298 hotels, and we had one franchise property. What we have done over the last several years is our entire focus has been to leverage the brand, not the balance sheet.
For us, what that means is that we started the franchise business, and we decided we were going to grow our way out of a challenge we had of owning a large amount of older real estate.
Many of our owned assets are some of our older assets. In many cases, they were our inns. We’re one brand with two products. We have La Quinta Inns, which are limited-service hotels that operate in the upper end of the economy segment, and then we have the La Quinta Inn & Suites, which operate in the middle to upper end of the midscale category.
As I said, we wanted to grow our way through some of the challenges we have with our own real estate, so we have sold some older hotels. We have identified hotels that we felt were obsolete or at the end of their life and took them out of the system and sold them.
We’ve done this a number of times. From 2000 to 2006, prior to our acquisition and public-to-private transition to Blackstone, we were 99 percent company-owned, approximately 70 percent of our properties were Inns, the average age of our hotels was 26.1 years, and about 70 percent of our properties were exterior-corridor.
Today, we’re 53 percent franchised and 47 percent company-owned, we’re 70 percent Inns & Suites, the average age of our properties is 15 years, and we’re 70 percent interior-corridor. And it absolutely enhances our brand when we move to interior.
SB: Let’s go back to wireless service. How is your company innovating with the delivery of wireless to La Quinta customers?
WG: For Internet, bandwidth has been and continues to be the key issue. We embarked on a program two years ago where we fundamentally changed the way we deliver bandwidth to our properties and changed our brand standards.
For most of our competitors in our space, the typical bandwidth requirement for a property is 1.5 (Mbps), so to speak. We began about two years ago integrating circuits, and now it’s almost like delivering bandwidth “on tap.” So you’re not paying for extra bandwidth that you’re not using. We’re only buying and using what is needed.
What we do is integrate circuits with a multitude of providers, and we deliver bandwidth to the hotels based on what is actually being used. It changes based on the usage, so that the bandwidth being delivered is sufficient for the property.
We also changed our minimum from 1.5 to 3 megs. On average, we’re closer to 6, and we actually have a property with 19 megs of bandwidth. Now, that property is a hotel where we have a contract with a dorm, and they have a whole building, and there are two students per room and they’re on the Internet 24/7, so in order to give them what they need, we deliver 19 megs. So that is an extreme and an exception. But we basically doubled our minimum.
And what we watch for is 90 percent of the capacity being used. When that happens, then you move and integrate an additional circuit and additional bandwidth.
SB: So you basically have bandwidth on demand and there’s a trigger point where you flip a switch and it’s on?
WG: Well, it’s a little more complicated, but we would change the bandwidth for that property based on what the usage is over a period of time.
SB: So it’s not just for a day or a week? You bump it up because you’re seeing the trends?
SB: How are you gauging and monitoring the system?
WG: We monitor the percentage of what is being delivered and the usage of what is being delivered.
SB: Is there a correlation between that and the room occupancy rate?
WG: It plays a part, and it’s a significant correlation, but it also has a lot to do with the demographics of the property. For example, if you’re in a location next to a technology park and you’ve got a sophisticated, technologically advanced consumer staying with you, they will be using more bandwidth, so you have to deliver more.
What happens in this industry and what used to happen with us is that there are small percentages of people using a large percentage of the bandwidth. What most of our competitors are still doing today is when folks are streaming video and using an inordinate amount of the capacity, they bump them off the system basically to make room for the folks that are just checking email. They’re not allowing people to use the kind of bandwidth they may require. ?
How to reach: LQ Management LLC, (214) 492-6600 or www.lq.com
The Goldberg File
President and CEO
LQ Management LLC
Education: Bachelor’s degree, University of Louisville
Goldberg on fee-based franchising: We have very strategically focused on growth through our franchise fee-based organization. Today, we are 70 percent Inns & Suites, and if we take our pipeline and take some things we’re going to do with additional assets, where we have identified some noncore assets, we’re going to look to divest.
In 2014, those numbers will change. The breakdown between Inns versus Inns & Suites will be 75 percent Inns & Suites. If you look at the average age in 2000 — 26.1 years — today, it’s 15 years, and in 2014, it will be 13. The average age has come down dramatically because the bulk of our new franchise fee-based has been new construction. Even the ones that aren’t new construction are much newer properties, because we’re not allowing anything out of the system.
Goldberg on growth: We were recognized in 2012 as the fastest-growing limited-service hotel brand. If you look over 10 years, we have grown 166 percent. Our closest competitor, Holiday Inn Express, grew 62 percent. And in addition to begin the fastest-growing brand in the segment over 10 years, we’re also the fastest-growing brand over five years. According to Smith Travel research, we’ve grown 62 percent over five years. The closest competitor is Hampton Inn at 43 percent.
Goldberg on evolving the company’s brand: Speaking to the evolution of the brand and the product and the positioning of the organization, last year we were recognized by Forester Research. We were recognized across all brands, full-service brands included, on customer experience. They asked how easy the company was to transact with, and whether you would transact with them again. We ranked No. 2 in consumer experience among all brands, one point beyond Hampton Inn & Suites.