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Even if Grant Cornwell had come to the College of Wooster unaware of the school’s deep commitment to tradition, it wouldn’t have taken him long to figure it out. As just the 11th president in nearly a century and a half, Cornwell recognized how the school’s traditional roots and mission had helped the college build a strong reputation in higher education. Yet after assuming his new office in 2007, he was also aware that it was time to bring some of those traditions into the next century.

“These are very traditional, tradition-bound places, and that pretty much creates a kind of stability that protects the integrity of the mission through time,” says Cornwell. “For the most part, that’s a very good thing. At the same time, what that means is when there is a leadership transition, it’s a time when nearly everything needs to be rethought. I think my greatest challenge has been systematically working through our business practices and our kind of culture of decision-making and trying to bring it into this new era of strategic management.”

Cornwell’s challenge was not to change the college’s mission but to make it more relevant and effective with the changing nature of knowledge and global society.

“I have spent a lot of time in my research and in my consulting helping tune liberal arts colleges for this era of globalization. … That’s what I’ve been doing for 20 years, and that’s what Wooster felt it really needed to do now,” Cornwell says.

“As a college, Wooster is a great liberal arts college. In terms of the integrity of its core mission, it’s extraordinary: the teaching, the quality and depth and rigor of the teaching and learning that goes on here. At the same time, the college, the core mission, is supported by an organization, and I would say that the organization was only good. It emerged that really my work was to work with the organization to bring it to the level of performance worthy of the mission of the college, and move it from good to great.”

Though this kind of transformative change doesn’t happen overnight, to Cornwell, speed was not an issue at all. It would take a systematic change, and therefore, a systematic plan.

“We’ve had a very inclusive and transparent strategic planning process that has probably been slower and more complex than maybe some are used to, but that has been intentional because it’s gone in really three broad steps,” Cornwell says.

“If you look at other kinds of institutions of higher education, they can be whipsawed by trendiness. If something emerges on the landscape as a hot topic, they build a major in it and they hire faculty and then in five years it’s like, ‘What was that about?’ There’s a kind of stability and durability to an approach to liberal education that is deeply, deeply rooted in history yet not backward-looking.”

Communicate the plan

To get people on board with change, you first need to communicate what it means for them and for your organization.

Whether it’s through meetings, phone calls or informal chats, the more you actively involve people in building the new vision, the more you make change a blanket commitment across your organization.

“A leader has to know whether the ideas that they are putting forth are resonating with the people who have to move them forward and implement them, and so to be able to listen and meet in a common vision is critical for a leader,” Cornwell says. “What would be something to hold somebody back is the mistaken notion that leadership is the product of individual genius or a strong hand. I just don’t see that at all, at least, in the way that I conduct my work or what I see as successful. It has to be a commitment to listening, collaboration and building commonality of buy-in and inspiration.”

No matter what business you’re in, changing a vision doesn’t just affect employees but also customers, competitors, investors, the community and any number of people who are invested in its success. Facing the unique challenge of leading a college, Cornwell realized that the success of his vision involved a lot of people.

“These are complex organizations,” Cornwell says. “The stakeholders include students, of course, the faculty, of course, the board of trustees, the alumni, parents and the local community. So the first step was to work with all of those constituencies to rearticulate our mission and also articulate our vision of who we want to become to better realize our mission.”

It’s easy for people to grow accustomed to thinking and operating a certain way, and so it takes inspiring leadership to show people the benefit and the urgency of making changes.

“One critical element of success is the ability to articulate and communicate a vision in a way that is inspiring to others, because it doesn’t do any good to have a brilliant vision for a place if nobody else is inspired by that vision,” Cornwell says. “Communication is critical.”

By opening up communication with stakeholders, Cornwell was able to share the advantages that global learning and diversity could bring to further the mission of college, such as international learning opportunities for students, teachers and staff and a competitive edge in the higher education arena.

“It’s mostly a function of will,” he says. “Really, Wooster was completely ready to do this. The whole campus really just needed permission and a little urging to get on with it.”

Pick your battles

Now that you have a rearticulated sense of your mission and are clear about what you want to achieve, the next step is choosing which areas you want to track and show progress in carrying out the new vision.

“The second phase was going back to all of those same constituencies to say, ‘How will we know that we’re making progress?’” Cornwell says. “‘What are we going to measure? What are we going to attend to? What are we going to track? What are we going to study to know whether the things that we are doing differently are actually moving us from where we are to where we want to be?’”

In the strategic planning process, a pitfall of many businesses is to rush from point A to point B without thinking about what needs to happen in between. Strategic planning is meant to be a process, and while it’s tempting to start implementing changes right away and put your vision into action, it’s important to make sure the changes you’re making are set up for continuous improvement. Otherwise, the progress you make toward your goals will not be sustainable.

“If you are really going to make this kind of transformation, there’s no single tactic,” Cornwell says. “It has to be a systemic commitment, and so everything that you do has to be insolent by that set of values and that vision. So yes, it has to influence faculty hiring and staff hiring. It certainly influences new student recruitment. It also influences how you organize your work on campus, what the curriculum looks like and how you provide kind of developmental support for the community to become more diverse and international.”

A vision filters throughout an entire organization, so there isn’t just one way to measure its success but many. To create a road map for Wooster’s progress, Cornwell again worked all of his constituencies to develop key metrics that would be a good reflection of the changes Wooster was making.

“Each metric that we look at is itself a composite of a number of metrics, some of which are quantitative and some of which are qualitative. … It’s structured and systematic,” he says.

While using a systematic approach can take longer, it gives you a better opportunity to assess how your goals align with the vision while keeping focus on your core mission.

Implement your strategy

With the plan in place, and people rallied behind your vision, it’s now a matter of putting your goals and vision into an actionable strategy.

“That’s the most fun part of leadership, because it’s translating vision into practice,” Cornwell says. … “I’m a philosopher by training and I love ideas, but I think ideas are most interesting when they are actually put on the ground and put to practice in the world.”

You know who you are, what you want to accomplish and how you are going to measure the progress on your plan. Now your job as the vision leader is to help your senior leadership team execute it to the best of their ability.

“A leader has to have this mix of compassion and high expectations,” Cornwell says. “My real job is to help everybody else be successful. The role of the president is to try and make everybody around me as successful as possible, and that means making sure that they are satisfied, that they have a scope of creativity but also that they are held to account for their performance. They all have very clear goals that we talk about and negotiate on an annual basis, and we refer to those goals in every single meeting — how are we doing on achieving those goals? It’s a constant check-in with what we agreed that we’re doing.”

From bringing an international focus and diversity to Wooster’s campus, to implementing new studying abroad programs, student recruitment pipelines, and channels for student, faculty and alumni research around the world, Cornwell’s strategic planning process has successfully married the tradition and history of Wooster with a global approach to liberal learning.

In his first two years, more than half of the new tenure-tracked faculty hired brought either domestic or international diversity. The newly recruited classes have been the most diverse in Wooster history, in the number of international students, countries represented, as well as in the number of U.S. minorities attending.

For Cornwell, the goal again was not to change the mission but take it to the next level. So far the new vision has succeeded in helping Wooster carry out its mission better. In 2009 and 2010, U.S. News & World Report ranked the College of Wooster fifth out of the top 10 colleges in undergraduate teaching.

“The important thing for the College of Wooster and what I’m trying to do in my time here is not change Wooster but help it more fully realize its potential in who it already is,” Cornwell says. “That means both being committed to continuous improvement on the delivery of our mission, but it also means that making sure that more and more of that market knows how good we are. That’s what I get up and do every day.

“Tradition is not something that needs a lot of care and feeding. If anything, you have to always say, ‘Listen, we value these traditions, but we have to have them be dynamic traditions. Tradition doesn’t mean you do things the way you’ve always done them; it means that you hold on to a sense of yourself while you continually innovate.”

How to reach: The College of Wooster, (330) 263-2000 or www.wooster.edu

The Cornwell File

Grant Cornwell

President

The College of Wooster

Born: Aurora, Ill.

Education: B.A., St. Lawrence University —1979, M.A.; University of Chicago —1982 Ph.D.; University of Chicago —1989

Affiliations: Serves on the advisory board for the National Institute for Technology and Liberal Education; member of the SAGE Group, a collective of national educational leaders formed by the Association of American Colleges and Universities

If you could have dinner with any one person who you’ve never met, who would it be and why?

I would definitely have dinner with Obama. Actually, what I’d love to do is play basketball with Obama. I’m a basketball player, and I have this idea that I’d just love to be in a game with him.

Who are your role models for success?

I’ve had a number of very influential mentors throughout my career and they’ve been different people at different times, but I’ve learned a lot by watching people lead and talking to them about leading. A lot of what I’ve learned has been learning what not to do, too. Even mentors and leaders who I admire, I see how they have had shortcomings that have kept them from fully realizing their aspirations. I’ve learned a lot from those, too. So it’s been more a series of more personal mentors throughout my career.

What is your favorite part of your job?

What I like most about my job is when I walk out of my home and walk to work every day and I walk past thousands of students and know that these are wonderful young people whose lives are being changed by their time here, and that I have a part in that. That’s deeply inspiring on a day-to-day basis.

Published in Akron/Canton

Shortly after the movie “Saving Private Ryan” was released, I spoke with a World War II veteran who was one of the first soldiers to jump out of a landing craft to storm the beaches of Normandy. He said the movie was the most accurate depiction of that glorious and horrific event that he had ever seen. He was one of the lucky ones.

The beaches of Normandy are a good analogy to today’s post-recession landscape of buyout investors and operating companies: Many are dead, many more are severely injured, and a few are strong and thriving. What factors make the difference? The first and most important of these is debt. When used appropriately, debt can be a very cost-effective source of capital for growth. When used excessively, debt can put a company at risk of loss and cause a tremendous shift of resources and time away from your main focus — value creation.

The problem with debt is that lenders cycle greatly in their willingness to lend. At times like today, underwriting is very strict, and except for the most ideal borrowers, debt is very hard to get. Typical leverage today is around 2 to 2.5 times earnings before interest, taxes, depreciation and amortization (EBITDA). By contrast, at times like those from 2003 through 2007, debt is abundant and aggressive. Typical leverage during that period was around 3.5 to 4 times EBITDA, and often got as high as 6 or 7 times.

Lesson 1 from the recession: Don’t overlever

Even if lenders are willing to lend, only borrow to the extent the company can cover under conservative projections. If debt alone cannot meet the company’s capital needs, then look at bringing in equity. We often say, “It’s better to own half a watermelon than a whole grape.”

Lesson 2 from the recession: Run your company during boom times as if times were lean.

We have heard many leaders bemoaning that their companies would be far more successful if they had run them during the boom period as they are running them now. Without question, success can bring complacency. However, the best leaders we know resist this tendency. Their companies’ cultures foster continuous improvement and cost-reduction regardless of great performance.

Similarly, the advice we often give entrepreneurial and family business owners is, “Run your company as if you are preparing to sell it in three years.” This means eliminating underperforming employees (which can be difficult, even when done with great care and consideration, but is critical), and building cost-cutting and improvement initiatives. These efforts will grow EBITDA and result in a more successful, resilient and valuable company.

Lesson 3 from the recession: If you follow lessons 1 and 2, recessions can create great opportunities for growth and value creation.

Recessions eliminate the weak and reward the survivors. The weak generally are overlevered and are spending their time and significant dollars appeasing their debt holders. The strong, by contrast, are appropriately capitalized and well run. They are poised to bring in more work and to acquire other companies.

There are many companies, including our portfolio companies, which have thrived during the recession. These companies are growing revenue and EBITDA and are taking market share. They are accomplishing this both organically, often picking up business from failing competitors, as well as through acquisition. Those acquisitions often are of struggling competitors at very advantageous valuations.

Follow these lessons, and your company will be positioned to thrive through down cycles, and to dominate once the market turns positive.

Dan Lubeck is founder and managing director of Solis Capital Partners (www.soliscapital.com), a private equity firm headquartered in Newport Beach, Calif. Solis focuses on disciplined investment in lower-middle-market companies. Lubeck was a transactional attorney and has lectured at prominent universities and business schools around the world. Reach him at dan@soliscapital.com.

Published in Los Angeles

Chris Ryan, president of Geo-Solutions Inc. has been experiencing a problem all businesses would like to have. His soil and groundwater construction solutions company has been experiencing rapid growth. Growth is what every business wants to achieve, but with growth comes a lot of added responsibilities.

“We have experienced some very rapid growth,” says Ryan whose company saw revenue of $18 million in 2010. “The biggest [challenge] has been trying to manage growth and get personnel into the company.”

The company’s rapid expansion over the past few years has kept Ryan looking for ways to continue the success.

Smart Business spoke to Ryan about how he manages to keep up with the growth his company has seen.

How do you plan for growth?

You have to take stock of your resources in every level that you need to achieve the types of work that you’re planning to do. You have to determine where your weaknesses are and fill those weaknesses before you try and do the work.

You have to have good communication within your company and with your senior people. You have to determine what your needs are and plan ahead before you’re in a crunch of having to do something.

How do you grow within a niche market?

We’ve set our vision in a certain niche market, which is the treatment of soil and groundwater. Anything that’s in that niche, we will take on.

Your niche has to match the expertise of the key people in your company. Anybody who is looking to get into a business or grow a business needs to determine what it is that distinguishes them from the majority of the competition. That will improve your chances of making a dent in the marketplace.

The businesses that do well in our market are the ones that identify what they’re good at and perform it well and gain reputations to get people to come back over and over again.

Do you hire before you grow in anticipation of it or after growth?

The first scenario is obviously preferable that you’ve planned properly and you’re prepared. We have done a certain amount of that and I have certainly experienced the second scenario where you’re completely out of people, and it’s really not a good situation. Everybody becomes busy, that’s for sure.

We had that situation a few years ago and what really scared me was if anybody had any major issue like an illness to themselves or their family or anything that would put somebody out of the mix for an extended period of time, it would have been a disaster for us.

How do you prepare yourself or guard against that?

You have to try and foresee what is happening in your marketplace. You have to make some kind of judgment as to what the level of business will be.

What do you look for when you’re hiring people?

You have to find what’s important in terms of skills and education for the person you’re trying to hire. Then you have to try and find a person that matches those requirements. With companies like ours and others that are in a niche market, all those similar companies are competing for the same people.

How do you attract those people and beat the competition?

The best way is to be the leader in your business or to be the market leader. If you do that, you become the place that people want to work, because they want to work for the best company. That would be number one, but obviously competitive pay and opportunity to participate in ownership and all those benefits are very important to attracting people to a job as well.

What are some other struggles of rapid growth?

As you grow rapidly you’re constantly changing your profile with your lending institution. You have to maintain good relationships with your bank and keep them well advised of what’s going on. It’s really about maintaining good communication.

HOW TO REACH: Geo-Solutions Inc., (724) 335-7273 or www.geo-solutions.com

Published in Pittsburgh

Tom Swidarski may not be a secret service agent, a bouncer at a night club or a front desk manager at a high-profile office building, but as president and CEO of Diebold Inc., his job’s focus is similar to all three — security.

On one hand, Swidarski’s job is to supply security solutions for his customers, which include financial institutions, government operations and commercial businesses across 600 worldwide locations. However, in addition to handling security for customers, Swidarski is also responsible for ensuring the security of Diebold’s 150-year-old legacy, a part of his job that presents its very own set of challenges.

When Swidarski became president of Diebold in 2005, he was tasked with the weighty challenge of eliminating $100 million of cost out of the company over three years — a program dubbed the “SmartBusiness 100.”

“We weren’t sure exactly how we were going to do that,” he says. “But we said, ‘Hey, Charles Diebold probably had ‘SmartBusiness 1.’ He got the first dollar out. It’s our job to get the $100 million.’”

Building a profitable business is a matter of controlling costs as much as it is generating revenue, and amid the global economic slump, Diebold’s SmartBusiness cost-savings initiatives have been a key part of increasing Diebold’s profitability and securing its position in the competitive global landscape.

Since 2005, Swidarski has not only led Diebold to achieve the SmartBusiness 100; but in the last year, the company has already launched SmartBusiness 300, and begun its third $100 million tranche of cost reduction. The company’s shares rose 18 percent last year, with fourth quarter revenue increasing nine percent to $791 million.

“Hopefully, the economy turns and things move in the right direction, but in all of our businesses, you can control the cost side of the equation,” Swidarski says. “You can’t control the revenue side — so it’s making sure that we have a good understanding of the cost side.”

Get the info

One way to better understand the cost of your business is to utilize your information-gathering and research tools. By having focused research to use in your company’s strategic planning, you’ll know where resources are most needed for your business to become faster, more nimble and more cost-effective, whether that’s in setting up new operations or proactively adjusting value points with spending to meet changing customer needs.

Before you decide how to allocate your company’s physical and financial resources, you have to make sure information about your customers, industry, competitors and so on, is collected and evaluated similarly throughout your organization. In Diebold’s case, Swidarski added paperwork for all of his global market managers to analyze industry activity in detail.

“What we tried to put in place was a similar process that we could use across the board in terms of the evaluation,” he says. “Then we put it incumbent upon each of the country managers to fill out the documents and forms. At first, people looked at is as, ‘I’m filling out documents and forms.’… Now they understand that to get the R&D effort that we need for a place like Thailand, we need to know the specifics and granularity of the competitive landscape there and how that differs from Brazil, because they are different competitors. To get a group of diverse people across 90 countries focused on the priorities, everybody has to understand the endpoint. So collecting that information became very important.”

Implementing new information-gathering procedures in your business is sometimes necessary to ensure you have all the knowledge needed to make financial decisions.

For example, Swidarski recognized that Diebold could better plan for global operations by moving its $70 million per year R&D — previously based in the United States — out to its top revenue-generating countries and develop micro-market plans to map out each market’s strategy.

“In those micro-market plans, we know exactly what gaps we have, what technology from a software-hardware service standpoint and what we need to do to create competitive advantage,” Swidarski says. “Those countries — they drive about 80 percent of our total revenue — so [there is] very focused effort there.”

Having focused research for specific markets also helps Diebold identify which markets need new capabilities and which could be served by the company’s existing technology.

“Other countries may fall out that are going to use the technology we develop for a China or a Brazil or a United States or a France,” Swidarski says. “So though we may not develop something specific for a smaller country in Europe, we still have the technology that we developed that may be specialized for France that we can use there. That helps us hone our resources not only on the front end but on the back end.”

Look at the big picture

Another way businesses can learn to be more cost-effective is by changing the way they analyze their operations. There are many different parties and steps involved in operational processes such as product design or engineering, so it’s difficult to gauge how cutting costs in one area might affect another. To understand where costs can be streamlined, you need to look at entire processes as whole, complete puzzles instead of as their separate pieces.

“You may make a module less expensive, but then you have to service it out in the field,” Swidarski says. “So for us, it’s looking at all aspects of it and the intelligence you want to build in the module that may give you savings on the backend. That is even more important than saving $2 on the front end if you are going to save $5 or $10 on the backend by having a sensor that helps you have reduced inventory.

“Probably some of our biggest innovations come from our treasury. Our day sales outstanding in the United States have dropped from 60 and 75 days to about 30 days because of process improvements with less people. That’s really where we get the biggest gain. How do we handle everyday processes and look at them wholistically, rather than ‘my little piece of it.’ When you look at an order-to-cash process, where are the areas of ways you call pull out of that? And through that, you get cost savings, as well. We need to do that based on the competitive environment that we are in.”

By looking at the big picture, you’ll have a better sense of how different parts of a process interact and affect one other and, therefore, recognizing how to trim, alter or consolidate costs in one or more areas without sacrificing quality in others.

“There’s more to come out from a process-improvement standpoint than there is from working with suppliers and saying, ‘I want that for 3 cents versus 4 cents,’” Swidarski says. “That gets you a little bit. But it doesn’t change the process.

“It’s not only the design aspect of what’s needed in the marketplace; it’s what are the other aspects of what that device is doing and the connective tissue of it as to what the total cost is and how we attack that wholistically. So we’ve brought our engineers from our service organizations in earlier. We brought manufacturing into design. We brought software in and where we use to test serially, we now test entire pieces wholistically. It really has made a tremendous difference.”

Recognize your value points

You can’t have a good understanding of cost if your strategic analysis doesn’t take into account how the value points that your customers are choosing constantly change. So lastly, to understand the cost side of your business, you need to follow your value points.

The real value a business brings to its customers is shaped and changed based on the competitive landscape. Swidarski sees that more and more of the value Diebold provides customers today is in the service side of its products such as ATMs; so he’s led Diebold’s transition into services-focused organization rather than a manufacturing one.

“The way I view it is: If someone defines you as a manufacturer, you may or may not be,” Swidarski says. “That may be a little part of what your value is. … In our case, if you use a simple device like an ATM, the knowledge of how that needs to be incorporated within an environment is much more important — the software associated with that, the intelligence you can put on that to make it more valuable, the ability to self-heal a remote device. So as we look at it, manufacturing may be a phase that 10 or 15 years down the road, doesn’t have to be something that we absolutely do. Now, today, we do that, but I wanted to make sure that the value points, that the bank that my customer’s choosing, I recognize what those value points are.

“There’s 80 percent that’s spent on managing an ATM that has nothing to do with how much that hardware costs. It’s that 80 percent that has the services that have the greatest value that we spend a lot of time focusing on.”

The point is, you don’t want to define your value it in a way that may not be relevant for your customers changing needs and interests.

“When I met with the first CEO from one of the biggest banks in India, he said to me, ‘You know, your ATM costs four times what it costs for me to buy a car,’ and I said, ‘Well, my ATM’s about 40 times more reliable than your car,’” Swidarski says. “The point is, as you deal with different folks from a different perspective, there are different issues that are the most important issues in their decision process. Having something over-engineered and developed from very sophisticated U.S. folks may not make it to the marketplace because the price points might be wrong.”

When you better understand the cost of doing business, you don’t just learn what strategies are needed to save money and be more efficient. You also learn you can focus your financial resources where they can have the most impact, so as your customers value points change, your business can adapt and grow to meet them.

“It’s in viewing the value chain and how you fit in,” Swidarski says. “Not limiting our thought process in that regard has allowed us to move the value points and allows us to generate over half our revenues from recurring revenue.”

“Now we are about managing high value of networks, creating and managing complex networks. That’s really what we do. It happens to be an ATM today. It happens to be security devices. But in the future it can be anything.”

How to reach: Diebold Inc., (330) 490-4000 or www.diebold.com

The Swidarski File

Tom Swidarski

President and CEO

Diebold Inc.

Born: Pittsburgh

Education: Bachelor’s degree in marketing and management at the University of Dayton; master’s degree in business management from Cleveland State University

What is a typical week in the life of Tom Swidarski when you are not in the office?

Quite a bit of my time — maybe 40 or 50 percent — is spent traveling. And a lot of that is international. That’s really for me to get in front of customers as well as our associates and understand and make sure that we’re meeting customer needs and where we have holes or gaps and making sure that the information we’re getting in. It’s important for customers, especially larger customers that are maybe spending $100 million or $150 million with you, that they see the CEO and that he’s committed to it. So China is important in that regard. Brazil is important in that regard. For me, it’s also important to not only go see them but also to view our operations, to sit with our top team as well as always spend time with our folks internally.

How do you get employees to buy in to your vision?

If you can demonstrate in the deepest, darkest hours the humanity of making tough calls and doing it appropriately, that really helps people buy in to the vision of what you are trying to accomplish, regardless of how good you are at communicating. Regardless of how good your vision is and how fancy it is, it comes down to do people trust you. For me, that’s what it’s about.

Published in Akron/Canton
Saturday, 30 April 2011 20:12

Strategizing a turnaround at Inuvo Inc.

Richard Howe wouldn’t call himself a “turnaround guy,” but based on his track record of turning around struggling companies, some of his peers might.

“I’m not a ‘turnaround guy’ just because I’ve done three turnarounds,” Howe says. “You get kind of branded that way, but I’m not really the turnaround guy. Really, I’m a business grower.”

As president and CEO of Inuvo Inc., Howe has already helped reposition the $50 million company to generate fourth quarter revenues 46 percent higher than the same quarter of 2009, which was also the year he joined Inuvo. Part of his strategy to accomplish this was improving Inuvo’s organizational structure to eliminate inefficiency and better carry out the company’s vision.

“I’ve run about a dozen businesses and three of them were turnarounds, and they all have similar characteristic traits to them,” Howe says. “One specifically, is the company has been excessive in its spending of money, so that needs to be curtailed. The costs need to get under control. Two, the team, the people around you often need to be changed, retooled and improved.”

One of the biggest expenses most companies have is in employee head count.

“I believe in team, so I spend a lot of time making sure we have the right people in the right roles in the company,” Howe says.

“You go through an exercise of evaluating staff. We created a system and the system had variables in it, different characteristic traits for what constitutes a great employee and what constitutes a not-so-great employee, and we rank ordered them. We took a look and said, ‘Going forward, what are the parts of the company that we’re going to focus on? From the collection of resources that we have and scores that we’ve gotten from everybody, who’s best to help us achieve the vision of the company?’”

Rather than set a specific head count number of employees to keep or cut, you should simply look at ways to structure the leadership more effectively. Sometimes that can involve small changes in personnel, but in other cases — at Inuvo it was also a matter of consolidating subsidiary businesses — it can mean creating an entirely new organizational structure and changing out entire management teams and boards.

While making personnel decisions is always difficult, reassessing your leadership team is a key part of getting your company back to operating efficiently and profitably on a cash-flow basis. It also demonstrates to existing employees that you’re giving them the leadership they need to achieve growth.

“The whole company was re-energized and re-motivated when they finally realized that we actually did have a senior leadership team at the company that was committed to the success of the company, one,” Howe says. “Two, they felt like they were a part of something that was going to be very successful and grow.”

Howe saw that personnel headcount was the biggest expense base for Inuvo and a key area to improve cost efficiency; yet, before making these decisions it’s important to look at all your areas of business to examine cost saving opportunities.

“Every single expense line in the company we just systematically went down through them and said ‘Why are we spending this money? Why are we spending this money?’ And, is it giving us a return or not?’” Howe says.

Most important, once you have a plan to reduce expenses, you need to enact it quickly.

“When you first do a turnaround, you’ve never done one and you get in there and you tend to over analyze the problems,” Howe says. “It causes you to take too much time to make the kinds of expense cuts you need to make to get the operation under control.”

How to reach: Inuvo Inc., (727) 324-0211 or www.inuvo.com

Stay focused

There will always be unforeseeable challenges and problems that arise to threaten a company’s growth, but according to Rich Howe, the most successful business people are those who undertake such challenges with strong intent and determination.

“It’s one of the single, greatest characteristic traits that I’ve found in successful business people; it’s the sense of urgency,” says Howe, the president and CEO of Inuvo. “It’s waking up and realizing that today is the best day to call someone or do something or get something done. … I’ve just found that those people tend to be able to get the impossible accomplished.”

Even when things aren’t going their way, these people won’t let themselves be steered off course.

“In business, you are going to encounter rough periods,” Howe says. “It’s just going to happen. It seems like some individuals have the ability to get punched in the face and get back up and keep going, and others seem to not be able to deal with those challenges, and they end up failing as a result. The most important characteristic trait of any leader: Can you take a punch and get back up and keep fighting? And if you can, then there’s a good chance that you are going to be successful, because it’s the getting back up part that’s the key.”

Published in Florida
Thursday, 31 March 2011 20:01

How to hire a rock star

Rumor has it that an economic recovery is underway. Maybe your employees haven’t ditched their chairs to sit on piles of cash (yet), but it’s at least evident from the slight uptick in the job market. If you’re fortunate enough to be adding to your teams this year, you’re probably doing so with great caution so getting the very best people matters more than ever.

Surely we all understand the costs — in lost productivity, morale and coffee — of making a disastrous hire. And most likely, your hiring skills are honed such that you can weed out these obvious stinkers during the initial interviews, if not before. The trick, though, is finding the truly great in a sea of good enough — finding a candidate who’s an indispensable game changer and not just another competent game player.

In my experience, it’s not dumb luck, but rather a combination of a rigorous process, an investment of effort and creativity, and a willingness to trust your gut (but only if it has largely served you well in the past. Otherwise, trust someone else who has a better one).

Here are a few proven tricks to jumpstart your talent scouting efforts:

1. Invest care and creativity in your job description.

If you’re using dry, boilerplate job descriptions, get ready to read lots of dry, boilerplate applications. Instead of viewing your job description as a classified ad, think of it as a marketing effort aimed at your ideal future employees. They’re not going to work for you, let alone apply to work for you, let alone even read your job description, if it doesn’t speak to them. Also, when you put time and effort into your postings, you’ll be pleased to see that great candidates do the same, and then it’s much easier to pick them out of the clutter.

2. Require cover letters and weigh them heavily.

Thanks to the Internet and fancy Word templates, anyone can crib together a smart-looking resume. But a compelling, thoughtful and well-written cover letter — those tend to come only from bright, interesting people. Great writing skills are an asset in any position, so it’s safe to assume that if people can’t craft an engaging page about themselves for a job they want, they’re not going to be any more engaging when, say, communicating with one of your customers. The time you spend reading all of those cover letters is time you won’t spend interviewing a bunch of duds. Candidates won’t do it, you fear? They will if they are humble, committed, caring and interested people, which are key characteristics of a true rock star employee.

 

3. Have an audition.

There’s a difference between talking about expertise and actually having any. We require our writers to pass writing tests. Our engineers have all passed coding tests. Our salespeople have prospected for their jobs. Our project managers weren’t hired until they demonstrated an ability to assemble a production schedule and impress us in some client-handling role-plays. And our marketing guy who bragged in his cover letter about making the best chili in the Midwest? Well, it’s a bit spicy for my tastes, but the point is, no one should be hired for merely talking the talk.

4. Weigh “DNA” over experience.

Greg Gretsch, a 2009 Midas Winner at Sigma Partners (and an investor in The Jellyvision Lab) says a secret to his success is picking A teams with B ideas over B teams with A ideas — because really great people can adjust to bumps in the road, whereas B players can drop a perfectly thrown spiral pass. So if someone comes in with smarts, hunger and a phenomenal work ethic, they just might be a better business bet than the perfect resume fronted by someone who lacks passion, intuition or creativity, for example, which are all characteristics that really can’t be learned.

5. Be patient.

For me, this one’s the hardest. When you’ve got financial targets and deadlines looming, it’s tempting to staff up with B teamers and bulldoze forward. But the truth is — whether you’re a small outfit or a ginormous conglomerate — a handful of rock star employees is better than a roomful of roadies — every time.

Truly great employees are rare, as you may know from all the times you wished you were working with more of them. All the more reason to be patient. Position yourself properly, make yourself visible to them, and they’ll appear. And when they do, you’ll know it.

Some inspiring job postings:

Designer: http://www.zefrank.com/jobz/

Engineer: http://blog.reddit.com/2010/08/reddit-is-hiring.html

Intern: http://lowercasellc.com/ranchhands/

Amanda Lannert is the president of The Jellyvision Lab, the interactive conversation company. Jellyvision creates virtual advisers who help clients attract customers, train employees, and reduce the costs of customer service. Lannert has served on the board of the Chicago Improv Festival, mentors local startups and often waves to people she doesn’t even know on the street, just to be encouraging. She has climbed several mountains, including Kilimanjaro and Space Mountain, birthed a gaggle of daughters and is known to award limitless slabs of grilled meats to co-workers who grow ironic mustaches for her birthday. Reach her at amanda@jellyvision.com or (312) 266-0606, ext. 116.

Published in Chicago
Thursday, 31 March 2011 20:01

What do you stand for?

In the book, “Judgment: How Winning Leaders Make Great Calls,” Noel Tichy and Warren Bennis state that “Judgment is the essential genome of leadership.” They add that “While misjudgments in any domain can be fatal, the one where a misstep is most damaging is poor judgment about the people on your team.”

Tichy and Bennis have articulated what many of us know from experience. We’ve demonstrated poor judgment or seen poor judgment in action when it comes to building an effective team. So how do we maximize the opportunities we have to build effective teams? Here are a few suggestions that provide a foundation for building a leadership team before you even address whom to put on your team.

Clearly define your value

One of the first considerations in building a leadership team is being clear about the value you’re trying to create. In last month’s column, we discussed the importance of knowing your primary organizational strength. The roles that need to be represented on your team need to support the value you’re creating.

Let’s use UPS as an example. Its primary organizational strength is operational efficiency. The value to the customer is dependable, cost-effective delivery. When thinking about building a leadership team for an organization like UPS, it seems logical that one team member needs to have operations as his or her sole focus.

If, however, you are leading a social service organization, while your processes need to be efficient, it probably won’t be your primary organizational strength. Your operations may fall under another function such as finance. However, talent management is critical. You may want to consider having someone outside of your transactional HR function serving on your senior team since your value is so critically linked to the attraction, retention and development of your people.

Of course, everyone on your leadership team is critical to your success. Each team member has different roles that will depend on your organizational strength. The key question is, “What functional leadership do you need to ensure that you’re building the value you’ve agreed on?”

 

Clearly define your role as CEO

As leader of your team, you serve two broad functions: One is to ensure the organization’s goals are met. The other is to ensure that your team has the resources it needs to meet those goals.

In order to do the first, you need to lead the team in defining who you are as organization. This includes, but isn’t limited to, your organizational purpose, direction, how you’re different or better than your competition and the behaviors that are key to your success.

You also need to lead the team in creating shared goals that support your identity. What will you do to make the identity come alive and how will you measure your progress over time? You need to ensure that the team has resources to meet your goals. This includes having the necessary talent, setting the right measures and ensuring the commitment to measurement and adaptation when you’re not meeting your goals.

Clearly define the purpose of your team

Other than being your direct reports, why does your team exist? What purpose does it serve? Here are a few suggestions:

  1. Your team exists to be stewards of your identity and shared goals.
  2. Individual leadership team members lead and serve their teams by ensuring they have set goals that support the entire organization and that resources are available to meet those goals.
  3. Leaders need to model the behavior outlined in your organizational identity. You need to live and demonstrate what you expect from others.
  4. Leadership team members hold each other accountable for the goals you co-create.

Unless you address these three steps first, even the best leaders can flounder in helping your organization create the future you long for.

 Andy Kanefield is the founder of Dialect Inc. and co-author of “Uncommon Sense: One CEO's Tale of Getting in Sync.” Dialect helps organizations improve alignment and translation of organizational identity by discovering and using the unique strengths of the organization and its people. Andy can be reached at (314) 863-4400 and andy@dialect.com.

Published in St. Louis

Just as every action sparks a reaction, I can clearly remember the moment that spurred our decision to add a new brand and expand our company. Or, perhaps I should say that we recognized the undeniable need for change, and adding a new brand was the ultimate solution.

In another instance, adding an additional service line was the right answer.

How might your need for change bring you to one of these conclusions? In my experience, there are some key points to consider.

• What are the synergies? Consider whether the new service or brand will complement your core business or detract from it.

• How well can you support it operationally/administratively? Carefully consider the additional time and manpower this new service would require.

• How will it impact the branding or industry positioning of your core business? This is where marketing comes into play and, in my opinion, can play a large part in determining whether you expand your existing service offering or add a new brand.

• What is the long-term viability of the service or brand — is it sustainable? Are you dealing with something that is hot today but could become a passing fad?

• Is there a market for the product or service? An amount of new R&D will be required.

• What will your point of differential be? Again, is it different enough to warrant a new brand or will it better serve as a complement to your current service offering?

• If acquiring a business, how does it fit culturally? If the addition may compromise your culture, you may want to reassess.

After years of explosive growth within our DUCTZ air duct cleaning franchise, we saw revenue begin to level off in specific markets, particularly when the recession hit. We identified a synergistic service in kitchen hood cleaning, which fit many criteria including technical expertise and administrative support.

However, adding the new service would present a challenge in positioning, as the customer base was exclusively commercial and geared toward fire prevention, whereas DUCTZ services commercial and residential focused on indoor air quality. We decided to launch HOODZ as a separate brand, giving franchisees the option to represent both brands. HOODZ actually lent itself to the existing marketing treatment of DUCTZ and, although complementary, it was different enough to warrant its own brand.

We revisited the DUCTZ service offerings to establish a comprehensive solution for our customers. Because a significant benefit of duct cleaning is improved indoor air quality, we sought other services that would do the same.

We found that, second to ductwork, carpet and upholstery cleaning greatly improves indoor air quality. Carpet cleaning alone is a competitive field so it wouldn’t have made sense to launch a new brand, plus we needed to establish a point of differentiation. As the nation’s largest indoor air quality company, we added the service as the DUCTZ Total Care offering, adopting the marketing position, “Improving indoor air quality from the ground up.”

Once you’ve gone through a similar checklist and process and identified parallels and strategic marketing initiatives, ask yourself one more thing, ‘Is it going to be strategic?’ In this case, I would define strategic as accomplishing at least one of the following: increasing your customer base, increasing value-added services to your existing customer base or increasing purchasing frequency from your existing customer base.

John Rotche is the president of Ann Arbor-based BELFOR Franchise Group Inc., a multiconcept franchise system. The company’s two franchise concepts, DUCTZ and HOODZ, center on the compliance and proper maintenance of commercial kitchen hoods and residential and commercial air duct, carpet and upholstery cleaning services. For more information, visit www.belforfranchisegroup.com.

Published in Detroit

No one who lives in southeast Michigan needs a reminder that the region has been one of the epicenters of a massive economic recession. But it might help to remember that there will be a light at the end of the tunnel, and you can reach that tunnel in better shape if you are prudent in how you lead your business. You can take steps to become more opportunistic, managing your spending and focusing your employees on the vision and mission of your company.

Over the past couple of years, Smart Business Detroit has spoken with a number of Detroit-area business leaders about the steps they’re taking to help their companies weather the economic storm. Below is a sampling of what three of them had to say.

“Employees are smart, and many of our employees have been here a long time. They can see when we are going after the real problems, not just the appearance of problems. That’s one way we convinced them of our intentions through actions instead of words.”

Marty Kahn, CEO, ProQuest LLC

“Take all of the other distractions away. Get rid of ancillary businesses, ancillary and unimportant initiatives, things that are taking away from the core, uniform strategy that you’re trying to deploy. It’s an ongoing effort. It’s an evolution, and you keep working through it. You keep building momentum over time, and eventually it does pick up."

MaryAnn Rivers, president and CEO, Entertainment Publications LLC

“As you think about the future of your organization, you have to do scenario planning. You need to come up with best-case, most-probable-case and worst-case scenarios. You need to be able to anticipate and stay ahead of the curve. Leaders need to do that all the time.”

Patricia Maryland, president and CEO, St. John Health System

Summary:

Employees know when you're addressing the real problems

Get rid of factors that take away from your core businesses

Plan for many possible situations

Published in Detroit

Dr. Steven G. Gabbe was aware that a lot of hours had been put in developing plans for a new cancer hospital on the campus of The Ohio State University. Gabbe was at OSU when the James Cancer Hospital first opened 20 years ago, and in 2008, he was back as CEO of The Ohio State University Medical Center.

He was excited that the project was moving forward but also aware that concern had been expressed about some of the plans that had been made.

“People wondered about the plan,” says Gabbe, who is also senior vice president for health sciences. “There was concern about the design of the hospital, which included two towers side by side with an atrium in the middle.”

This wasn’t the only concern and the uncertainty was great enough that university trustees wanted planners to take another look at the project.

“They challenged us to pause and go back and look carefully at those plans and then come back to the board of trustees and present to them our revised plans for the new hospital,” Gabbe says.

This opportunity excited Gabbe. He saw it as a great chance to go back to square one and get a clear understanding of the plan and its impact on the 16,000-employee OSU Medical Center.

“It was a billion-dollar project and most of the hospital was going to be paid for by our clinical revenues, as well as some philanthropy, but primarily by our clinical revenue,” Gabbe says.

It would have been completely natural for those who had put in a lot more time and effort on the project than Gabbe to be a little frustrated at the prospect of starting over.

“I’m sure some folks said, ‘Oh my gosh, now we have to go back and look at the plan again,’” Gabbe says. “But to everyone’s credit, no one was discouraged. No one looked at it as a burden. They all realized this was a chance to get to do this right.”

Get people excited

Gabbe began his effort to meet this important challenge by focusing on the opportunity he and his team were being given, rather than presenting it as a burden they would have to bear.

He focused on the fact that this new hospital would be built on a site that had previously been home to a tuberculosis hospital that was no longer needed.

“We now have effective means to prevent and cure tuberculosis,” Gabbe says. “And on this site, we hope to build a hospital that will provide care for cancer patients while at the same time, hoping there will be a day when this hospital won’t be needed anymore, because we’ll find cures for cancer.”

Gabbe focused on that opportunity, and then quickly moved into the challenges that were facing his team in making the opportunity a reality.

“Clearly describe the challenges you’re facing and why those challenges are important to everyone involved in the work group or in your company,” Gabbe says. “The project that you’re going to be working on impacts everybody’s position and the outcomes are going to impact everyone for years going forward.”

One of the keys to getting support on a big challenge is your ability to convey confidence and personal engagement. Your team needs to see that you’re not just passing all the work off of your plate.

“If you’re going to be leading an effort like this, you have to come in having done the work,” Gabbe says. “You have to have a vision for what you see that future will be. You have to understand the strategic priorities in the planning process. You have to be realistic about the challenges and about the difficulties. It’s going to be hard work. There are some understandings and some compromises we’re going to need to make.

“We’re going to make those together. You also have to make sure that people understand they need to be accountable for the decisions that are made and that those decisions need to be made together.”

Gabbe began by making sure that everything was put on the table at the beginning and nothing was left out. He began to ask questions, a lot of them, and had his team do the same.

“We kept asking the question, ‘Who else needs to be at the table?” Gabbe says. “What information do we need?’ One thing we did not want to do was create an elite planning group where people felt like it was being done behind closed doors, and they didn’t have a chance to influence the plan. This was too big and too important a project. Much to everyone’s credit, when we got done with the project, we did not have someone come up to us and say, ‘Well, you didn’t think about us.’ Or, ‘We weren’t involved.’ The group was very inclusive as we made the plans.”

Be thorough

There were more than 100 issues that were identified as requiring an answer with the cancer hospital project. Gabbe knew the team needed a method to track progress on resolving each of these items.

They came up with a color-coding system that used three colors everyone knows very well: red, yellow and green.

“We found the scorecard was very helpful in defining each of the tasks we had to complete for the project,” Gabbe says. “It was something we could look at and see red if we hadn’t solved the problem, yellow if we were getting there and green if it was fixed. It was a good reminder of where we were and what we had done and what we hadn’t done. Then we expected people to be ambassadors for the project and be willing to go out and talk to their constituencies and come back with objective feedback about what we were doing.”

Once again, reaching out to others is crucial in beginning to move toward solving your problems. The team asked the CFO to go back and confirm the medical center’s and OSU’s long-range financial plan to make sure financial projections were still accurate going forward.

“We had our architects go back and begin to look at design elements of the building and how they could be structured in a different way in a setting where there were smaller patient care units, space for education, space for research and space for families,” Gabbe says.

There was an analysis of parking and how far people would have to walk from their car to specific rooms. When concern was raised about the height of one of the hospital towers and how it might impact medical helicopters, the Federal Aviation Administration was contacted.

“We said we better make sure we talk to the FAA to make sure we’re not going to need to change where our helipad is,” Gabbe says.

But it wasn’t just problems Gabbe and his team had to address. They also needed to look at ideas that might not be able to be implemented for some reason, whether it be funding or the lack of availability of resources.

“We developed what we called ‘circuit breakers,’” Gabbe says. “If our long-range plan is not as positive as we had hoped, we need to come up with a list of parts of the building that we can hold back on.”

It’s easier to come up with these things in the beginning and easier when you have to make adjustments if that possibility is already stated at the beginning of the project. So develop a list that you can refer to in the event something unexpected happens. If it doesn’t, you haven’t lost anything for the effort.

“We presented that to the board that if things are not as good as we had hoped, we will defer the construction of this part of the hospital until things are better,” Gabbe says.

The fact that all this work was supposed to be completed in 100 days was never far from Gabbe’s mind and he made sure it was never far from his team’s mind either.

“You need to create an understanding of the overall importance of the project to the company or the work group and the sense of urgency about the time that’s allowed,” Gabbe says. “Provide a sense of what the timeline is and when this work must be done.”

Keep asking questions

As much effort as you make to work with your team and include others in a project, you still need to make sure everybody else knows what you’ve been up to. Whether that’s the rest of your employees or, in Gabbe’s case, the employees, students and faculty at OSU, you need to share your story with the masses.

And you need to do it before you’ve carved it all in stone.

“You want to do it at a point in time when the plan remains open to change,” Gabbe says. “This is going to be the largest building we’ve ever built at Ohio State and it’s going to be something they are going to pass by or be in every day. They need to feel they had the opportunity to be part of the planning. That was a key question. We wanted to have enough information so they could react to the plan. We wanted to have enough time so we can respond to their constructive criticism.”

Don’t just rely on one meeting to present and wrap everything up. People need an opportunity to hear about what you’re doing, mull it over, and then come back and raise their concerns or ask questions.

“We presented to them the overall design, but we also presented to them a number of different options we had for the hospital plan,” Gabbe says. “‘Here’s how we could do it. Which of these options do you prefer? Here’s how we could do that. Which of those options do you prefer?’ They could come and they could hear the plan and they could participate in the audience response, they could participate in a question-and-answer session, and they could send us their comments to a website so we could review those, as well.”

You should also let people know how they will be affected and be thorough and thinking about the impact of your project on the business, aside from the project itself.

“For example, we know the construction on our campus has disrupted traffic and we know it has made parking more difficult,” Gabbe says. “We tried to do everything we could to get out in front of those plans and let people know why we were doing what we were doing.”

If people have concerns, go out of your way to address them and give the person everything you can to either allay their fears or show that you’re addressing the issue.

“It’s what people don’t know that can be the risk,” Gabbe says. “People then begin to imagine or project. It’s always best when people understand what the finances look like. It’s just very important. There were no secrets. If people said something was wrong or something wasn’t right, we worked together until we were convinced we had the right projections for the future.”

Gabbe and his team worked through the multitude of issues that needed to be addressed and met the challenge. Work on the new James Cancer Hospital and Solove Research Institute is expected to be completed by 2014.

By 2015, the entire expansion to the OSU Medical Center is expected to add more than 10,000 full-time jobs in Ohio, in addition to the 5,000 construction jobs that will have been needed. The center takes in about $1.8 billion in operating revenue each year, but the expansion project is expected to create an additional economic impact of $1.7 billion by 2015.

“It was a great privilege and opportunity to be part of planning something that would make a difference in people’s lives every day for years and years to come,” Gabbe says.

He credits the openness and transparency of his team’s efforts for the successful outcome.

“The communication plan when you’re doing something as big and impactful as this is almost as important and maybe just as important as the plan for the new building itself,” Gabbe says.

How to reach: The Ohio State University Medical Center, (800) 293-5123 or http://medicalcenter.osu.edu.

Steven Gabbe

CEO

Ohio State University Medical Center

Born: Newark, N.J.

Education: Bachelor of arts degree, Princeton University; medical degree, Weill Cornell Medical College

What was your very first job?

I was probably about 10 or 11 when I worked on a fishing boat off the New Jersey coast. I helped people bait their hooks and clean their fish, and I got a chance to do some fishing while I worked on the boat. I met a lot of people who got seasick.

Whom has been the biggest influence on who you are today?

Dr. Priscilla White. She was a pioneer at the Joslin [Diabetes Center] in Boston. I developed diabetes when I was a medical student. Dr. White took care of me when I was a resident in Boston. She was a pioneer in the field of diabetes in pregnancy. She began working with women not long after the discovery of insulin. I have dedicated most of my career to taking care of pregnant women with diabetes. She was a huge influence on my career.

What’s the best advice you’ve been given?

Do good, and don’t complain.

If you could sit down with anyone, past or present, whom would it be and why?

Hippocrates. I’d like to learn about the practice of healing as he thought of it in its very earliest stages. As physicians, we take the Hippocratic Oath. I would love to talk with him about how the Hippocratic Oath came to be formulated. It still influences our day-to-day practice of medicine.

Published in Columbus