Crime doesn’t pay. Protection from crime, on the other hand, has paid off in a big way for AlliedBarton Security Services LLC.
The 55,000-employee company bucked the downward trend during the recession, growing from 2006 revenue of $1.2 billion to 2010 revenue of $1.7 billion. Chairman, president and CEO Bill Whitmore attributes the growth to a selective, informed approach to business, along with a dusting of opportunism.
“The good news for our industry is that during an economic downturn, there is a focus on crime,” Whitmore says. “There is a concern with protection, a concern with preventing workplace violence. Those things still exist, and a company like ours is here to fill that need.”
The seeds for AlliedBarton’s winning approach to business in a recession were planted in 2007 and 2008, when Whitmore and his team formulated a strategic plan. Whitmore’s team didn’t know the depths to which the economy would sink, but they controlled what they were able to control — the markets they decided to pursue and how they reacted to whatever the markets and the economy, threw at them.
“When we sat down and wrote the plan, we saw a couple of things that we believed would happen,” Whitmore says. “One is that contracts in our industry would be consolidated. They were, and we put together a national accounts team that works with customers embarking on initiatives. That program didn’t exist in 2007, and now it is roughly $400 million of our run rate. The strongest pipeline we have in our company is for those clients that are looking to consolidate.”
To make a strategic plan strong and accurate, you need alignment. That means you need your plan to fall in line with the vision and cultural values you promote as a company, and you need a team that is willing to embrace those values and work toward the goals outline in your strategic plan.
It’s a task that requires you to be equal parts cheerleader, lookout and air traffic controller.
Get focused on goals
Every item in the AlliedBarton strategic plan is tied to a goal, which in turn ramps onto the overarching goal of the organization, which is to protect the people, property and assets of clients.
With goals ramping upward, the responsibility for achieving the goals has to be communicated downward and tied to goals and incentives that directly impact each of the 55,000 AlliedBarton associates around the country.
“Goals get translated into an annual performance plan, goals get translated into compensation metrics as basic as performance planning documentation for individuals, which is then cascaded into the company,” Whitmore says. “Then we sit down and measure people on how they did against those goals and how well we did as an organization. That’s the accountability part, that we hold people accountable for doing it.
It’s a mentality that is shaped by management from an employee’s first day on the job. From the beginning of the first day, employees are schooled in the company’s goals, strategy and values. They are given a copy of the company’s cultural primer, “Dare to be Great.” The booklet is often referenced by Whitmore in conversation, and employees are expected to know its contents.
With “Dare to be Great” providing the template and Whitmore providing the guiding hand and reinforcement, the culture of accountability has taken root throughout the expansive AlliedBarton footprint.
“The one thing I’m very pleased with is we’ve had a number of examples in the last few years where people in our markets would kind of light up in various ways,” he says. “They would say to us, at the account level and regional offices, that there is a leader who is not living up to the standards that we as a company expect. We expect more out of our leaders than this, and we know that you on the corporate level do as well.”
If an employee, particularly on the management level, is not knowledgeable about the goals and values of the company, their technical competency matters less. Technical skills can be learned, and in management-level positions, is often a job prerequisite. Values and a willingness to work as part of a team toward common goals are far more innate to each person.
“Anyone can learn the software and technology of the job, but you want people to lead,” Whitmore says. “I was interviewing a woman for a senior position recently, and I brought the ‘Dare to be Great’ book with me. I showed her what we’re all about, what we’re hiring for. She had the technical skills, we was a seasoned executive, but I told her if she doesn’t believe in what is in this book, don’t come with us. You have to reflect on whether this is in your heart.”
Continue the challenge
Employees stay motivated to strive for goals when they are constantly challenged by management to test the boundaries of their capabilities. It’s something Whitmore has kept in mind as he has continued to fashion a future direction for AlliedBarton.
“One thing I always try to be clear about is that ‘Dare to be Great’ is exactly what it says,” Whitmore says. “I’m daring you to do something great. I’ve had competitors say to me, ‘You guys think you’re great,’ but that’s not the idea. We’re the first to admit that we’re not perfect. With 55,000 employees, not all of them does the right thing or gives 100 percent every day. It’s about challenging everyone in the organization to be great.”
Whitmore says that mindset should be at the core of every leader’s thinking, if a company is to stand any chance of growing and thriving.
“It is at the core of everything we do in leadership,” he says. “You walk in every day and say to your employees, ‘I want us to be better and better.’ I’ve been here a long time, and I come to work every day trying to think of ways that we can better this business today. What can we do differently? What new thing can we try? How can we enhance what we do? And that’s generally the feedback we get from our clients, as well — that our managers come to work each day asking how we can improve our service, better improve and develop our security officers.
“It’s fundamental. I don’t care if you’re running a single McDonald’s restaurant or General Electric. You have to come to work every day and challenge your folks to do better.”
Developing a culture of continuous improvement is so integral to the process of strategic planning, Whitmore says he has trouble separating the two when it comes to explaining how AlliedBarton does business. Without driven, motivated employees, your strategy will never bear fruit. Without a strategy as a structure, your employees will have nothing on which to focus their efforts.
“It’s just at the core of everything we do,” he says. “In order for us to meet our goals, in order for us to build our business, none of it is going to happen without the desired culture in place. You can say you’re going to be anything you want. Without the culture for it, you just can’t do it. We could just work on selling contracts and making money. But one of the reasons you see us going from a small regional company 10 or 11 years ago to where we are today is our belief that the financial results will happen if you do all the other things well.”
To point your company in a given strategic and cultural direction, you need raw materials in the form of good people.
Finding the right people for the job at AlliedBarton — regardless of what the job is — means finding people who have a high emotional IQ.
If your IQ is a measurement of your capacity for head knowledge, your emotional IQ is a more ambiguous measurement that takes the temperature of your softer, people-oriented skills and traits.
“We mean people who are good at dealing with individuals, who are willing to take responsibility, who are oriented around growth and can make a connection with people,” Whitmore says. “People who can show leadership skills.”
Whitmore and his leadership team promote teamwork and attempt to heighten the collective emotional IQ throughout AlliedBarton through the company’s training and continuing education programs, where leaders emphasize the concept of building a collaborative culture around the company’s strategic goals.
“Sometimes I get complaints because we have too many people working on different projects,” Whitmore says. “But I like it because it’s what drives our culture. We have a class here called ‘212,’ which is a reference to the Fahrenheit temperature at which water boils. I once went around asking people how long they had been coming to the classes, expecting them to talk in terms of weeks and months. But one person had been going for five years. The person was a former operator who had moved over to the sales side, and one of the reasons they kept coming back was the number of people who stepped up and volunteered to guide and advise.
“Those are the types of things that become voluntary when they become a trait of your culture.”
Whitmore likes large numbers of people working together on projects because he feels it is critical to the culture to have people in different disciplines and locations working together toward common goals and developing a mutual understanding of what is happening in the departments and locations of their project-mates.
“You get interdisciplinary groups of people working together on projects, processes and initiatives, and that breaks down the silos that can develop in an organization,” Whitmore says. “But I’m not going to kid you, it’s work to do that. You get someone who works in, say, El Paso, and because of what they do, they get very inner-focused. It is something we have to work on all the time, because if we let that go, everything else won’t work as well.
“It’s all because in any business culture, the number one thing — and it’s been said over and over again — is teamwork. If your company is made up of leaders who can work together for a common cause, and who are there for each other in good times and bad, I think those are the companies that survive.”
How to reach: AlliedBarton Security Services LLC, (484) 351-1300 or www.alliedbarton.com
The Whitmore file
Born: King of Prussia, Pa.
Education: Bachelor’s degree in business, Philadelphia University
What is the best business lesson you’ve learned?
Be curious. The world is changing, so don’t get tied into what you do every day. Ask why people do things a certain way. As part of that, do a lot of reading and keep yourself intellectually stimulated.
What traits or skills are essential for a business leader?
Integrity, honesty and being highly communicative. And do what you said you would do — walk the talk.
What is your definition of success?
I think if we meet all of our plans, then it is a win-win-win for customers, employees and shareholders. That is what I define as a success.
Michael Heneka runs the North American operations for an automotive component manufacturer. But when he first arrived, the challenges he faced had much more to do with airplanes and passports.
Heneka is now the president of Faurecia North America, part of Paris-based Faurecia. In his current position, he oversees more than 10,000 employees working in a business unit that generated $3.4 billion in sales last year. But when he arrived at the company five years ago, he was president of Faurecia’s North American interiors division.
At that point, Faurecia was still relatively new to the North American marketplace, and shipped a number of management-level employees to the U.S. for short-term tours of duty. The result was cultural quicksand.
“We had diverse staffing from all over the world,” Heneka says. “We had people from Spain, Mexico, France and Germany, so it was a bit transient. There were those who would be here for a short period of time and then move on. The difficulty in that approach was that you lack accountability if you feel you’re not going to be here for a long period of time.”
Not only were the short-term managers causing the company to suffer from a lack of accountability, the effect seeped downward to the subordinate levels. Heneka found lower-level employees were less inclined to see projects through to the desired outcome if they knew the boss was only going to stick around for a few more months.
“What I wanted to do was instill some sense of ownership in the team that was here,” Heneka says. “I wanted to lengthen the time period they would stay here in North America.”
Heneka also wanted team members to experience a higher level of engagement in the company’s culture during their lengthened stay. In short, the entire system of assigning, indoctrinating and training the people who would shape Faurecia’s presence in North America had to change.
Flick the first domino
Heneka needed to correct Faurecia’s cultural issues starting with corporate policy, then moving into the areas of training and communication. One of the first areas he addressed was extending the minimum length of an assignment in North America.
“What I didn’t like, and what I didn’t want, was an 18-month individual,” Heneka says. “I don’t think you can be held accountable for 18 months. So I asked for and received the authority to ensure that people were here for three to five years. That way, if something was started, the same person would be there for the finish and held accountable for it. If you’re going to be a part of the global growth and move from country to country, division to division, a minimum stay would be three years, and ideally five. Once we did that, we got rid of people working for a few months at a time, and it worked out much better. People lost that sense that, ‘My boss is going to be gone in six months, so I don’t have to worry about that.’”
With new rules on the books, Heneka turned his attention to getting his employees to understand and embrace a new cultural direction. It’s a step that required numerous meetings and fielding many questions about the company’s future direction.
He kicked off his communication by organizing everyone in his division’s technical center for a question-and-answer session.
“I told them who I was, where we were going, what I was trying to accomplish, and then I started to ask them questions,” he says. “I’ve been around a long time, and I’ve found the more I listen, the more I learn. I don’t learn a lot when I’m talking, so I tried to listen, find out what the issues were and report that.”
After the initial session, Heneka hit the road, holding lunch meetings and on-site forums, creating rounds of dialogue between upper management and workers in different locations.
“I’d go to each plant every couple of days as we were launching, seeing where we were going and where I could help,” Heneka says. “I wanted to see where our customer support was, or lack of support, so that I could help our facilities with the OEMs we were supplying.”
Faurecia was rolling out a number of new products in the same time frame, which added an extra layer of complexity to the process of ratcheting up the engagement level of Faurecia team members. Two months of traveling and communication gave Heneka enough time to focus the people in his division on the company’s culture, and how it would factor in the plans for the future. But he felt large-scale adoption and understanding didn’t occur until the four-to-six month time frame.
“We had to work fast,” Heneka says. “Within two months, I felt like I knew where we needed to go, but it was four or six months before we were pretty much on track with regard to where we were going. The plants still had some work to do because it can’t happen all at once, but within that six-month time period, we were focused and on track regarding what we needed to do.”
If you want to take your company in a new cultural direction, or find a new way to reinforce an established culture, Heneka says you need to show everyone in the organization why their work is significant to upper management, and how management supports them in their work.
“Most people simply want to know what is happening, where are we going, what is your goal, what are you doing to support us,” he says. “The more open you can be with what you’d like to do and what the company wants to do, you’ll find that people are much more willing to participate. They may not necessarily agree with everything you’re trying to accomplish, but knowing makes it a lot simpler. Once they know where we’re going and understand it, they’ll pull towards it because then they’re part of the solution.”
In a situation in which you’re trying to build a case and stimulate dialogue, you first need to open the dialogue, then listen to feedback, then look for solutions based on consensus whenever possible.
“The days of autocratic rule are over,” Heneka says. “There isn’t a better example of that than Alan Mulally at Ford. He made all of his direct reports part of the direction in which he wanted the company to move, and made them part of the solution. They’re all moving in one direction, and that’s really what I wanted to accomplish here. I wanted us to all pull in the same direction, and so far we’ve been very successful the last few years.”
After the initial rollout of his go-forward plan, and as he took over the entire Faurecia North American footprint four years ago, Heneka has needed to keep the momentum going. So he has looked to Holland.
Holland, Mich., that is.
On the other side of the state from Detroit, Faurecia maintains a design center, separate from the manufacturing channels of the company. In the Holland design center, Heneka picks the brains of some of Faurecia’s top North American idea makers and has come up with some new ideas for how to maintain the momentum of the company’s culture of engagement and inclusion moving forward.
“What they do there is think about innovation and what we can do in the future,” Heneka says. “We have them come in and show their innovations to our manufacturing facilities, the technical centers. We show them where we want to go, the types of products we want moving forward, and continue to bring suggestions.”
It’s one of the ways Heneka keeps the questions and answers flowing on a frequent basis.
“We have Q&A sessions where we’re asking everyone present what they think, what could we be doing better,” he says. “We invite that. Our four process groups are completely different. What would be exciting to someone in our emission controls group may not be so exciting to our seating group. But sometimes that collaboration of those four different product groups really brings some innovation. And that’s what we’re trying to instill.”
Faurecia North America’s four product groups are interiors, exteriors, seating and emission controls.
The increased engagement of Faurecia employees in the company’s North American operations has yielded new innovations that the company has been able to implement on a larger scale.
“With the environmental awareness factor in the auto industry, where people need more green products, our innovation process has helped to develop wood-based products,” Heneka says. “In the past, we’d have finished a part with a coating or fabric, but now we’re exposing the wood-based look with some of our products. We gain a lightweight factor, we gain appearance, and that is something that came from our design group. It was out-of-the-box thinking regarding how we could make something different, lighter and greener.”
Heneka’s company is in an advantageous position regarding employee input, in that the people who work for Faurecia almost all drive cars, and therefore will likely come in contact with a Faurecia product in their vehicle at some point. But even if you don’t manufacture something that your employees use, you should still take advantage of the fact that everyone in your organization is a consumer, and can take a consumer’s mindset to visualizing your final product.
“All of our employees are connected with a car in some way or another,” Heneka says. “So their input is along the lines of ‘What would you like to see in a car?’ We have a new seat system coming out that is going to allow people to adjust their seats with their iPhone after taking a picture of themselves. So we bring our employees in and say ‘What do you think of this? Would you use it? Would your children use it?’ By getting their input, we have a really good market study within our own company.”
Ultimately, employees want to know that management is willing to work alongside them. They want to know that management will work as hard and as long as the people in at the front lines, and are willing to offer support when a problem arises.
“Employees want to know that you are there with them, that you’re willing to do what you’re asking them to do, that you’re going to be out at the plant late at night, even though you got up at five that morning,” Heneka says. “They want to know that you feel the pain when something happens and that you want to be a part of the solution. You can’t just be some guy in a corporate office. You have to be someone who is ready to help. I’m not the guy on the line trying to make a part, but I am there to help. Employees are going to notice that.”
How to reach: Faurecia North America, (248) 409-3500 or www.faurecia.com
The Heneka file
Education: Industrial engineering technology degree, Western Michigan University
History: After college, I went into the Marine Corps, not so much by choice, and after I got out, I got a job working for Charlie Gehringer, a former baseball player for the Tigers. He was running several manufacturing companies, and I ended up working for him for several years.
What is the best business lesson you’ve learned?
I’ve learned a few. But one of the best is to always try to bring a solution to a problem. It’s easy to have someone come into your office and say, ‘We have a problem,’ but bring me three or four solutions and we’ll see what makes sense. Because if I have to solve everything, I don’t need those people working for me.
What traits or skills are essential for a business leader?
You have to be willing to be part of a team. You have to be willing to spend the time that is needed. You can’t isolate yourself. You have to be available. And I think you have to want to complement people. You have to put your ego aside and understand what they’re doing. It’s about less ego and more listening.
What is your definition of success?
You have to put your family first. When I see someone in our plants who is ignoring that, I’d like that person to take care of their family. If that is successful, most other things will fall in place. Also, I’ve been reading some of C.S. Lewis’ books, and he was a pretty brilliant guy. He said, when you have reached your own room, be kind to those who have chosen other doors, and to those who are still in the hall.
In other words, if you’ve chosen your path and are successful with it, if other people are on a different path, embrace them and acknowledge those differences. Once you do that, you will succeed and people will work a lot harder for you.
As the recession tightened the noose around the business world in 2008 and 2009, most businesses were forced into a reactionary mode. Long-range plans were scrapped in the name of evasive maneuvers and survival tactics. But even in the darkest days of the recession, you probably knew that there would be a point when the economic skies would be brighter, and you’d need to plan for the long-term future of your business again.
As the economy slowly recovers, that time is drawing closer. You are starting to gain a feel for how your business will need to operate three years and five years from now.
Over the course of the year, Smart Business has spoken with a number of Detroit-area CEOs on how to build and execute a strategic plan. Here are what three of them had to say.
“You really need to be able to understand what your checkpoints are along the way in any process or product or initiative that you are outlining. It really needs to be a candid self-assessment of what is the reality that your customers are dealing with, the reality of how you’re delivering on expectations, then making adjustments to it.”
Stephen Polk, chairman, president and CEO, R.L. Polk & Co.
“Stick to your game. Don’t let other competitors run your business. Don’t get caught in a fact-and-react loop, where they tripled their offer so you’re going to quadruple it. You have to realize that the economy might be different, but it doesn’t change the fundamentals. It just makes sense to stick to what you know is right. Be mindful of your competition, but don’t let them run your business.”
Gregg Solomon, president and CEO, MotorCity Casino Hotel
“The one-year plan is set in stone, but as much as I say it’s set in stone, you still need the ability to move and adjust. It’s just that when you move and adjust, make sure your modifications are still within some guideline of business practice, so you don’t blow your brains out on any of your particular metrics.”
Brett Healy, president and CEO, Webasto Roof Systems Inc.
Learn to do accurate self-assessments.
Don’t run your business on your competition’s terms.
Stick to your plan, but remain flexible when necessary.
Has your company found it more difficult to compete in today’s marketplace? With the increased economic pressures and a more informed customer base, many organizations find it increasingly difficult to meet or maintain business objectives.
Six Sigma is a business management strategy initially developed by Motorola in 1986. Lean manufacturing is the result of years of practical operational efficiency tools developed by Toyota, often referred to as the Toyota Production System (TPS). Business practitioners have melded Six Sigma ideas with lean manufacturing to yield a methodology termed Lean Six Sigma. Put simply, it seeks to eliminate process variation and defects while optimizing the process by eliminating or reducing waste and increasing efficiency.
“Lean Six Sigma is a systematic approach using analytical tools to identify and remove problems within a process,” says Ed Siurek, director of Quality for Corporate College. “It creates efficiencies, drives productivity and reduces costs — all things companies are looking to achieve in a struggling economy.”
Smart Business spoke with Siurek about Lean Six Sigma, who should be involved within an organization and how the model should be evaluated.
Why is it important for companies to be aware of Lean Six Sigma?
In today’s global economy, consumers have become better informed and increased demands for higher quality, more consistent products at a lower price. Companies have been forced to perform at higher levels with the same or limited staff. Reduction of waste in the form of defects, operational inefficiencies and nonvalue-added activities is one place companies have turned. An additional benefit to reducing variation and defects is higher customer satisfaction. Having happy customers typically results in repeat business.
Why is Lean Six Sigma effective when compared to other management programs?
Plain and simple, it uses data. Lean Six Sigma uses a defined methodology when looking at process optimization. Part of this methodology involves collecting process data and using tools to pinpoint problems using statistical analysis. The approach takes into account variables that occur and may not necessarily be obvious. These process influencers are often not even considered when using other continuous improvement methods because they are not seen as directly involved in a process. Often management thinks they know what’s wrong with a process. But until they analyze the problem, it’s hard to identify the true root cause.
Is there an optimal time for an organization to implement a Lean Six Sigma program?
Any organization can see the benefits of Lean Six Sigma tools, but until an organization makes the conscious decision to deploy the program, the benefits will only be minimal and may not be sustainable. Organizations seeing the biggest benefits from Lean Six Sigma are those that implement the program before they ‘need’ to do it. Being proactive can allow companies to develop efficiencies and, more important, the culture necessary for continuous improvement. Implementing when it becomes a necessity is still very effective. Organizations must be diligent in the commitment and planning of their implementation to obtain the maximum benefits.
Who should be involved within the organization?
Lean Six Sigma is intended to be an enterprisewide program. Management must champion the different projects so they can help with major decisions and clear roadblocks. But the reality is that the people who are really analyzing and fixing the process are those who are doing the work — they are the closest to it. You also want to have individuals involved who are adept at identifying collateral damage. If the process you’re working on negatively impacts another process, you can create a bigger problem for yourself. This doesn’t mean every employee needs to be a Lean Six Sigma Black Belt, but every employee should be introduced to the basic concepts and principles. Individuals will then need to be selected to be trained to various levels within Lean Six Sigma, depending on their role in continuous improvement projects.
How should an organization get started with Lean Six Sigma?
First, make a commitment. Management needs to make sure they understand the program and commit to continuous improvement. Initially, many employees are afraid Lean Six Sigma will become the ‘program of the month.’ When implemented that way, it will fail. As management gets involved and employees see the personal benefits to their daily work, the program begins to take hold. Employees start to look for ways to optimize their work and others want to learn how they can benefit. At that point, the program has started to truly take hold and the benefits will quickly increase.
How should the effectiveness of Lean Six Sigma be evaluated?
Every project should have clearly defined measurables. Spending the time in the first phase of a project allows an organization to understand the process, the project scope and potential influencing factors. When evaluating a process, it is common for a Lean Six Sigma Black Belt to ask the process owner, ‘What’s your biggest pain?’ or ‘If you could fix one issue with the process, what would it be?’ Taking initial measurement of the process ‘as is’ is critical to understanding the impact of any continuous improvement project.
Effectiveness should be measured in defect reduction, time savings, monetary measures or anything else that can show direct benefit to the increased efficiency of the process.
Using Lean Six Sigma as an organizational tool for continuous improvement allows companies to constantly seek to minimize problems, increase efficiencies and maintain the highest levels of productivity, even during tough economic times.
Ed Siurek is director of Quality for Corporate College. Reach him at (216) 987-2828 or Edward.email@example.com.
Sam Liang is a leader who is always looking to the people around him to help make him better. What he expects from himself is what he expects from his company, Medrad Inc. The more than 2,000-employee medical device manufacturer prides itself on its ability to continuously improve upon every aspect of business.
Liang, who became president and CEO in June 2010, was brought in to keep the company pushing forward and to improve upon the success of the business.
“It’s interesting because sometimes CEO transitions, they’re because there’s a turnaround that has to occur,” Liang says. “In Medrad, it’s absolutely the opposite. It really is an opportunity to take Medrad to the next level. My predecessor, John Friel, to whom I owe a tremendous amount of credit, was CEO for over 12 years, and for 12 years, he built this business into a very successful business.”
The more than $500 million company is a market leader in all of the segments it participates in. Since Liang took over his role, he has been driving to further diversify the business through product innovation and improvement across the company’s metrics. Here’s how he reaches for the next level at Medrad Inc.
Never stop improving
Medrad has a culture of continuous improvement and has followed the Baldrige Performance Excellence Program since the late ’90s. The Malcolm Baldrige National Quality Award is the nation’s highest presidential honor for performance excellence and Medrad has won it twice.
“It was 2003 when we were recognized by Baldrige for the first award, primarily for growth,” Liang says. “The second time was 2010 and we were recognized for adaptability and agility through challenging times. The way that we achieved it is you have to invest resources. I would encourage you to find one or two leaders internal to the organization to become very familiar with Baldrige and go visit companies that have seen it. From that perspective, you can start your journey by driving a culture of continuous improvement throughout the organization.”
Continuous improvement cannot be achieved by having a team devoted to it. It must be something the whole company and everyone in it strive to achieve.
“It has to be part of what you do every day,” he says. “It’s not a whole separate group of 30 people that are there to say, ‘Do Baldrige.’ Everybody has to be trained on the methods and the approaches and the tools you can use and then you have to deploy them. Then you have to stick with it. It’s a way of doing business and a way of thinking of being efficient. Start as soon as you can and it will pay itself off.”
Since Medrad started Baldrige, the company has achieved a 14 percent compounded annual growth rate in the last 14 years. To make the principles of continuous improvement work for your company, you must be completely devoted to it.
“It pays off and people think of it as a separate activity,” Liang says. “The No. 1 advice is that it’s not separate. You’re training your employee base to approach things in a certain fashion using tools that are accepted. It’s all about analyzing where you’re at and finding benchmarks out there of who’s doing it best-in-class. You have to put together a plan and execute against it to hit that best-in-class metric and if you don’t, you reiterate until you hit it. The key thing is, once you do hit it, you find the next benchmark to do better. You go through this continuous cycle of improvement.”
Form performance metrics
To know whether your company is improving, you have to measure areas of your business and form metrics around which your company will operate.
“One of the unique aspects about Medrad is that we run the company on what’s called the balanced scorecard, which is based upon the Medrad philosophy,” Liang says. “In 1983, one of our prior CEOs, Tom Witmer, and a group of employees, came up with the reason why Medrad exists. No. 1 is to improve the quality of health care. No. 2 is to create a rewarding and enjoyable work environment for our employees. And No. 3 is to deliver continued growth and profit for our shareholders. If we do all three of those things well, especially if we do the first two … the third aspect of delivering improved profits and sales will just happen. That has manifested itself in how we actually measure and metric the company.”
Medrad has devised five metrics to help measure the success of the company. Three financial metrics and two satisfaction metrics are what the company focuses on.
“What we do is we constantly focus on running the business, making decisions across the impact of those three stakeholders: our shareholders, our customers and our employees,” he says. “You have to keep it simple. Some companies will come up with 40 different metrics and what’s interesting to me is when you’re a small company you say you have to be focused. When you’re a large company, the biggest mistake I think large companies can make is, ‘Hey, because we’re a big company, have more money, have more resources, we can do more things.’ You actually find in large company settings you even have to focus more, because think about the inertia it takes to get a whole organization of people to go in a certain direction.
“My advice is to keep it very simple. Internally you can adjust [metrics] year to year, but from a business perspective, I would keep it simple. Our metrics are aligned with our philosophy. A starting point for other companies is to take a look at the basic operating principles of which the company is founded upon or that people commonly understand. To that extent, you can align your scorecard or your metrics with something that people already get. If people already understand it you want to build off of that foundation as opposed to introducing all new fancy terminology. Just keep it as simple as possible, because the key to Baldrige is making sure everyone from top to bottom understands what you’re trying to do.”
One of the things Liang and Medrad want to improve is the diversification of the company’s products.
“What we are essentially driving to do is to continue to diversify our businesses along three dimensions,” he says. “We have three businesses: radiology, interventional and service. The first level of diversification is within radiology. We want to diversify our revenue stream within radiology, which is the largest of our three businesses. The second piece is to diversify our businesses outside of radiology, which are Medrad interventional and service components. The third is, we have greater than 50 percent of our sales are all in North America. So we are on an effort to globalize and diversify outside of the United States.”
Liang had to take a look at the company and evaluate it to see exactly how he wanted to approach diversifying those areas.
“Using principles of Baldrige, one of our processes that we embrace and take is the strategic planning process. Part of that is looking at your external environment, looking at where you are as a company in terms of how well you’re positioned within that external environment and then coming up with the operating plans to execute against that external environment. If you have a company that’s doing well, you really have to understand the dynamics as to why it’s doing well and build upon that foundation. Don’t change that piece of the formula. The second piece is to put together and stretch plans that are aspirational and visionary but also that are realistic. You have to have very clear lines of roles and responsibilities around how you’re executing.”
In order to diversify the areas of the company that Liang wanted to focus on, he had to put an emphasis on innovation.
“A big part of diversification is innovation and we’ve shifted more dollars to innovation,” he says. “Some companies believe they can sell their way out of situations, ‘Well, let’s just sell more.’ But think about the markets today. It really is about focusing on innovation.”
Look to innovate
When innovation is a focus of your company, you have to get ideas and advice from the people who use your products every day and get their feedback on what to improve.
“We sit in our board rooms and we try to answer specific questions around directions and what should we do, how should we do this and do that,” Liang says. “I’ve always found that the answer always lies with the customer. You have to get close to the customer and you try to understand and gain valuable insights from the customer that no other company can see. The decisions and the directions you take become very clear very quickly around what you should do. You take innovation that is driven by customer needs or customer insights, that’s what I would focus on whether you’re a company that’s doing well or a company that’s in need of a change in strategic direction.”
Customers are your most vital resource for innovating products and can contribute to your company’s quest for continuous improvement.
“We spend a lot of time with our customers both informally as well as in a formal manner,” he says. “You go in and watch everything that they do. Part of the value proposition of Medrad and part of this informatics drive is to streamline the efficiency of how radiologists and technicians do their job throughout a day. Even simple changes in our algorithm of how you fill the syringe can save five or 10 minutes in a certain procedure in terms of set up time and what that translates to is the difference between a hospital being able, in one specific radiology suite, to see 30 patients a day versus 40 patients a day. The only way you get at that is by going in and watching everything that they do.”
Similar to how UPS adjusted its policy on right-turn-only routes to save gas, avoid accidents and decrease delivery time, Medrad uses customers to innovate and improve its products.
“We’ve done the same thing in all of our specific technologies,” Liang says. “In our Medrad Interventional portfolio, we are market leaders in the area of mechanical thrombectomy, which is sucking out blood clots throughout various parts of your body. In working with customers and understanding what their needs are, we’ve introduced a new console that the catheter hooks up to. We have reduced the steps [it takes to set up]. In an emergency, all the doctor has to do is put in a cartridge, push a button and then prime and he’s ready to go. I’m over simplifying it, but before, he had to put in a bunch of cartridges, connect a lot of tubing and then purge and get ready to go. If you’re having a heart attack or if your leg is green, you can’t afford to do all of that. All of the answers lie with the customer.”
While getting customer feedback for innovative ideas sounds simple, it still takes time and resources to develop an innovative culture that helps define your company.
“A lot of people talk about innovation, but the reality is as you look at the amount of money they would dedicate to research and development and innovation, the dollars aren’t necessarily there,” he says. “You have to put resources to it. We have a corporate innovations group, which is the group that looks out at your portfolio and takes the competencies and the technologies that the company has and they are looking out beyond three or five years. They are looking at where our technology can be applied or in the markets we are in right now; what are the longer-term unmet needs. We put money to that for these folks to … dream. We know that a certain percentage of them may not come to fruition, but you have to allow that forward-thinking innovation.”
HOW TO REACH: Medrad Inc., (724) 940-6800 or visit www.medrad.com
The Liang File
Born: Atlanta, Ga.
Education: Bachelor of science degree, mechanical engineering and material science, Duke University; Master’s degree in management, Kellogg Graduate School of Management, Northwestern University
What was your first job and what did you take away from that experience?
My first real job was working in a hospital outside Washington D.C. in a pathology lab. I did everything. I filed pathology reports and logged in specimens coming off the OR. That was where I got my interest in health care and when I knew I wanted to do something health-care related.
What was one of the toughest parts about coming into Medrad as a new president and CEO?
One of the toughest parts personally is that it was a very, very successful company and the former CEO, John Friel, had been here for 12 years. Those were big shoes to fill. For me, it was about trying to learn and connect with the business and connect with the people.
What is your advice to incoming CEOs?
I started in June 2010, but by the three-month mark I did a full 360 and got feedback from anybody I had extended interaction with. It’s a two-way street. I also worked in the field and that’s one thing I think you have to continue to do. You can never do enough of that. You have to keep doing work in the field with the customers because that’s where a lot of the answers are. Spend as much time as you can with customers. Formulate your own impressions.
If you could invite three people to dinner, who would you invite?
I would invite Abraham Linclon. If you look at the issues he had to face and the decisions he had to make as a leader, boy, he had to make them all. You could walk away with so many valuable learnings.
I would want to talk about the topic of innovation, so I would invite Thomas Edison. He was such a leader in that respect.
The third person I would invite is Thomas Jefferson. Anybody that had a say in the founding of this country or writing of the Declaration of Independence is an amazing person. The whole thought process around democracy and the ability for other people to make decisions for what’s right for them takes an amazing amount of forethought.
Technology moves fast, and advances in information technologies, along with changes in work force behaviors, are driving the need for faster, higher-bandwidth data solutions.
Businesses that want to stay ahead of the pack need tailored, fast data solutions.
“It’s critical for businesses today to map their current and future data needs and to partner with a data provider that can offer customized access solutions,” says Jitesh Bhayani, vice president of marketing for the Midwest Region, Time Warner Cable Business Class.
As data-intensive activities such as online collaboration, video viewing and Web conferencing grow more prominent, businesses need the bandwidth to support these functions. Clients, vendors and colleagues expect to communicate with businesses online, and your systems need to have the speed to make it happen.
Smart Business spoke with Bhayani about innovations in data and bandwidth and what opportunities are available for businesses.
What data trends are driving the need for more bandwidth?
Forecasts show that business Internet traffic will double between 2009 and 2014, and in 2010, Internet traffic demand among businesses in North America grew by 17.2 percent. The way employees work today in a Web-connected world is driving this demand.
There’s an emphasis on continued collaboration and companies are interacting online with customers through platforms such as e-commerce. Work environments are highly dependent on being connected to the Internet — a Forrester Research survey revealed that 72 percent of employees use a Web browser hourly or daily. Over time, a business can easily exceed its available bandwidth, and the answer is a higher-speed data solution.
What technologies give businesses greater capability to collaborate online?
Internet-based technology and software have advanced so that businesses can collaborate more readily with satellite offices, vendors, partners and customers. The days of passing paper are over as the ease and speed of sharing documents electronically increases and businesses recognize the cost effectiveness and environmental friendliness of using Internet-based tools for collaboration.
For example, with Web conferencing, employees do not have wasted travel expenses and unproductive time spent en route to a meeting location. Web conferencing is an alternative to in-person meetings, and it’s an ideal tool for conducting product demonstrations or service calls with customers.
Meanwhile, cloud computing with the use of Web-based business software frees up employees to work anywhere, anytime and still be connected to the office. These tools are often called Software-As-a-Service (SaaS), and include e-mail, calendar, project management and accounting systems. Basically, a business rents the amount of the application it needs and accesses it through an Internet connection. As more businesses use cloud computing, these firms will require higher-speed solutions and more bandwidth.
How does social media impact a business’s need for higher-speed solutions?
With the rapid growth of social networks such as Twitter, Facebook and LinkedIn, businesses have new opportunities to reach more people and respond to customers more effectively. They can share their corporate environment through blogs. They can use social networks to connect with potential clients, build relationships with peers, vendors or prospects, and get the word out about their products and services.
Looking ahead, social media will integrate even more software applications and advanced Web services, which will put more of a strain on existing data solutions. Businesses need to assess whether they will have enough speed and bandwidth to accommodate emerging technology. Now is a good time to consult with a data solutions provider and take an inventory of what your business’s current data capabilities will allow. Do you have room to grow? What are your plans for technology integration? Discuss your current and future needs with a provider that can act as a partner and customize a solution.
How can a business customize data services and add bandwidth?
The amount of bandwidth you need will depend on the number of employees in your company and the Web-based applications you use. Take stock of your current business situation. What high-speed data challenges do you face as you prepare for the future? What are your current bandwidth levels? A data solutions professional can help you understand what tier of power and speed you will need for optimal business performance.
What options are available for power and speed?
There are several tiers of power and speed, so first consider what your businesses needs on a day-to-day basis. Then think about goals for the future. Will you do more cloud computing with Web-based software programs for accounting or project management? Are you ramping up your video conferencing to avoid windshield time? Will more employees work outside of the office from satellite locations or home offices?
For businesses that use e-mail and basic Web applications, broadband Internet access can provide ample bandwidth and speed. Businesses that do more data sharing and use Web-based applications and require advanced connectivity are better served by wideband Internet access. For businesses that need a dedicated, scalable solution to meet growth and security requirements, there is dedicated Internet access. Start by talking with a solutions provider who can explain how each of these options works, and help you understand what level of power and speed you need to accomplish your business goals today and in the future.
Jitesh Bhayani is vice president of marketing for the Midwest Region of Time Warner Cable Business Class. Contact a Time Warner Cable Business Class account consultant at (877) 407-4260 to discuss your communications needs.
Hospitals nationwide are being pressured and, in some cases, forced to adapt to changing demands in the health care industry. Rising expectations in the quality of delivering care, the cost structure of health care and a looming shortage of personnel are just a few issues hospitals are looking for solutions to. Dr. Cary Gutbezahl, president and CEO of Compass Clinical Consulting, specializes in hospital consultation. His firm helps hospitals solve these issues by improving efficiencies.
Smart Business spoke to Dr. Gutbezahl about how hospitals are streamlining their operations to combat health care issues.
What are the most pressing issues facing hospitals today?
Hospitals are facing a couple of important challenges. One is rising expectations for the processes and results of delivering care. That means things related to improving patient safety, reducing the occurrences of undesirable events and reducing hospital readmissions.
The other pressure is the cost structure of health care. The way it has been funded has generated some pretty significant overhead costs and investment in technology that have made health care costs rise to the point where they are pretty much unsustainable both for private-sector insurance as well as for public insurance.
The third challenge which is looming on the horizon is shortage of personnel. In the future, with rising demand for health care services and the aging of the existing population, there is going to be a severe imbalance between supply and demand.
How are hospitals looking to solve some of these issues?
The challenges give hospitals a number of opportunities to make some changes both in their traditional scope of operation as well as expanding their scope of operation.
One of the areas that hospitals have had incentives to work on, but many hospitals haven’t addressed is the issue of how to manage hospital care expeditiously in order to minimize the amount of time and expenses that are provided for a patient.
A number of hospitals have patients stay a number of hours in the emergency department. They are sitting in the emergency department waiting for an inpatient bed, but in the meantime, they are not getting the physician consultation and diagnostic tests that you would normally get as an inpatient. One way that hospitals can accelerate care is to make sure patients either get to a bed quickly, or that the care process begins while the patient is in the emergency department so there aren’t hours waiting for things to happen.
They also have to recognize when a patient’s care can be safely transitioned to an outpatient setting. Some hospitals are identifying and working with the physicians and nurses to say this patient can get the rest of their care as an outpatient with home health care or with outpatient rehabilitation therapies.
What is the main focus of hospitals right now?
Right now there are two things that hospitals should be focusing on and they are related. One is called throughput. That is increasing the capacity of the existing facilities, meaning both space and people, by redesigning the way patients flow through the health care delivery system so that they move more quickly.
That means people sitting in the emergency room for less time so that the existing beds in the emergency room can accommodate more patients. It means moving patients through the inpatient side quicker so the hospital doesn’t need to build additional beds in order to house people for inpatient care. If hospitals have to build more beds, then the costs are going to rise. The only way to try and keep the cost of health care down is going to be to work on these through put issues throughout the hospitals. The ORs, the inpatient beds, critical care units, emergency department, all areas of the hospital where there are backups in terms of patient flow.
The second thing is looking at how we redesign the delivering of health care services so it becomes more efficient. One technique that’s being used on the outpatient side in a number of large multispecialty medical groups is the idea of group appointments. You have a number of patients who have similar kinds of clinical problems. Instead of meeting with each of them one by one … a number of these organizations are scheduling group meetings for patients who have [the same diseases].
HOW TO REACH: Compass Clinical Consulting, (513) 241-0142 or www.compass-clinical.com
Jerry Williams thought it was going to be a good thing when the firm that provided software services to Schuylkill Valley Sports Inc. sold its business to a larger software firm.
“We thought that the larger software company was going to take the aspects of this other company, integrate them and make it a more solid system,” said Williams, president of the $25 million sports equipment and apparel company.
Last year, Williams needed software to support the retail and wholesale aspects of his business, so to save money, he agreed to let the software provider try a beta version of a new management software system. But Williams and his staff quickly found out that the system wasn’t ready for use. As the holidays approached, the staff at Schuylkill Valley Sports was flying blind, unsure of how much money or inventory the company had. Williams and his leadership team were thrust into crisis management mode.
Smart Business spoke with Williams about how to manage through a crisis and how to stay prepared for when things go wrong.
How did you react to that situation?
The biggest thing is it completely stressed out every employee. They basically had to do their job blindly, based on experience, and as a result, some can handle the stress and other people can’t. A lot of what I had to do was deal with people, calm situations down. A lot of it was just sitting with people individually and try to get them to not panic. Take it one day at a time and get them to do their best. For some it worked, others were ready to jump ship. It depended on the person. Some people thought the sky was falling, some held it all in, even though they were equally frustrated.
How did you start to dig the company out of the crisis?
The biggest thing was to pressure the software company, to let them know the effect it was having on us. At the same time, they knew if this system doesn’t function, no one in the industry is going to purchase it. So I had let them know that without threatening them and try to work on it in a way that was mutually beneficial.
However, as I ratcheted it up with the president, their reaction was kind of acting nonchalant. They told me that they always have problems when they roll out something new, and it was going to take six to 12 months.
But there was no point in getting angry with them. The same sales task you had with your employees, you had with the software company. You had to sell the software company so that they would understand that they had something riding on this, and it wasn’t just all our problem, but do it in a way that wasn’t threatening.
We began to see improvement probably at the beginning of March. Our people knew they went through the worst part, several were still sarcastic, but the key people were starting to realize it was a work in progress and these things can’t be corrected overnight.
What would you tell other CEOs about managing a crisis like this?
Well, first off I’d tell them never to do a beta test. But really, I’d tell them to prepare mentally for the worst, and I think that was the biggest challenge. Our people didn’t know how difficult this was going to be. We weren’t prepared for the all the challenges. The only thing you can think of is to prepare for the worst-case scenario, not having information, not being able to do a sale or a return or a credit card sale or paying invoices. If you prepare for the worst case scenario, as challenges come up, you will be better prepared for the difficulty.
How to reach: Schuylkill Valley Sports Inc., (877) 711-8100 or www.svsports.com
There seems to be a widely held belief that success correlates to time in the business world. In other words, business owners need to have a number of years under their belt before attempting to expand or branch out. I ask, why? Why not let your experience be a part of your growth?
I look back at the evolution of my duct cleaning business, DUCTZ. It grew from my daughter’s bedroom into the nation’s largest duct cleaning franchise with more than 150 units. Now, along with its sister franchise, HOODZ, it benefits from ownership by BELFOR, the world’s largest property restoration company. All of this in less than five years’ time.
How? Through partnerships, mergers and acquisitions. And most importantly? A forward vision and an open mind from all members of our team.
When I started DUCTZ, I had a passion for what I was doing, but insufficient knowledge for how to share my vision. I needed access to the people and places that needed these new services. Who better to open those doors than the contractors who did have the access? Once you convince key people that you offer a quality service, they will naturally begin to refer you to others. Then, it’s not about how little time you’ve been in the business, it’s about how long of a time they’ve been in the business.
Seeking a way to accelerate my growth, I identified an existing, synergistic franchise with a growing number of units. I reached out to this company. It turns out, the timing was right and a partnership was a great fit. We hitched our wagon to theirs and increased our reach almost overnight. That was step one.
Step two was to seek people or services to fill a void in my current system. I met with a company that helped write the federal government standards for indoor air quality. My recent partnership had afforded me the credibility to negotiate with this new company; we identified our strengths and their needs. Together, we would “have it all” and the merger became a reality. This move, single-handedly, made us the largest duct cleaning franchise in the nation. In effect, I had to give up a piece of the pie, but in so doing, I orchestrated the opportunity for a much bigger pie.
When we established our niche as the nation’s largest duct cleaning franchise, we were given an opportunity by BELFOR to do work for them around the country. Why? Because we were strategically positioned — we had locations in the places where they needed us. This association with BELFOR enhanced our credibility on a local level, which led to increased referrals and contractor relationships. It wasn’t long before BELFOR made the offer to acquire our company. An association with a company of this magnitude opened a new world of opportunity while reinforcing our core model.
Here are some other things to remember about accelerating growth:
Never lose focus on your core business.
Whether embarking on a partnership, merger or acquisition, if you’re not careful you can strategize your way into an entirely different business. Stay open to diversification as long as your core business stays intact.
You cannot be afraid to think outside of the box.
To think out of the box is your job — if you don’t, someone else will. Your competition is strategizing about how to get ahead of you as we speak. My advice is to actively live your role as a strategist — don’t get bogged down in the daily emails and operations — that is not where your time is best spent.
The best strategy? Never stay static — it’s crucial to remain dynamic and to keep moving forward.
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.
The ultimate life challenge for most leaders is how to balance home and work — especially with today’s demanding travel schedules. While we are chasing urgent business goals, we often lose sight of the truly important priorities of family, faith, and friendship.
Are we doomed to workaholism as we labor to ensure our company’s success? Or, the flipside: will we never advance in our corporate world if we put family first? I don’t think so.
After many, many years at this, I conclude: There is no such thing as work-life balance — and that’s OK. We live in a constant state of imbalance. Life and work events necessitate elasticity in our time and attention toward each. The key is to know where you are on the continuum of imbalance and to be proactive in managing through it.
On the work side, you may face weathering the largest economic downturn in our lifetimes, managing through a merger or acquisition, developing a proposal that might double your company’s size, supporting the leadership of the nonprofit board you sit on, or managing through a difficult time. Each of these demands extra hours, conference calls, and endless days. These are all but guaranteed to impinge on your personal or family time.
Similarly, on the “life” side, you may face the sudden or prolonged illness or death of a parent or child, helping your teenager navigate a difficult time, or supporting a close friend who has encountered a tragedy. Each can demand a sudden or prolonged time away, such that you need others to cover for you. You also need to honor less-urgent but highly important things like your son’s little league championship or your daughter’s dance recital, or a long-planned family vacation, regardless of conflicting business demands.
These tugs and pulls define the ebb and flow of our lives — and that’s a good thing. It will always be this way. The key is to have strategies to deal with it successfully:
Take care of your physical and spiritual health. Commit to sleeping, eating healthy, and exercising. You must be healthy, both physically and emotionally, to be at the top of your game. If you don’t take care of your body, then where will you live?
Get ahead of your schedule by prioritizing your time. It’s one thing to manage tugs and pulls, but it’s another to be the caboose getting whipped around because you’ve lost control of your schedule. Work closely with your assistant or teammates to ensure everyone is aligned on where your time should be spent.
Know who your A-Team is at work. Tell them about both the business priorities and your personal commitments. Enroll key people who can help you seamlessly cover work needs when your attention must be elsewhere.
On the home front, recognize your unsung heroes. Devote special attention to your spouse/partner/parent who sets the tone for how your children and others understand the demands of your job and your absence from events. Recognize the huge impact your work challenges have on your unsung heroes, and how hard they work to help hold everything together. You cannot thank them enough.
Remember that what we sow, we reap. So, model your support of others when their work-life imbalance shifts unexpectedly. In doing so, you are demonstrating how others can help you do the same. Because you bring passion to both your work and life, and bring your A-game to the table every day in all that you do, you will inevitably emphasize one over the other at times, thereby living fully into your work-life imbalance. But that’s a good thing. Just know its happening and plan accordingly.
Leslie W. Braksick, is co-founder of CLG Inc. and author of Preparing CEOs for Success: What I Wish I Knew (2010) and Unlock Behavior, Unleash Profits (2007). Braksick advises top executives, their leadership teams and boards of directors on issues of strategy execution, leadership effectiveness and organizational performance. She can be reached at firstname.lastname@example.org.