Driving growth Featured

8:00pm EDT July 26, 2007

One thing Steve Potash will never be is out of touch — The president and CEO of OverDrive Inc. constantly asks his employees for updates so he can identify potential trouble spots before they become problems.

OverDrive works with publishers and libraries to distribute audio-books, e-books, music and video files over the Internet, and Potash is always reminding his employees of the importance of communication to keep things running smoothly.

“It’s not just academic when you’re trying to resolve problems for service personnel in Afghanistan who are trying to download a digital book through the Army digital library Web site,” he says.

With partners such as Microsoft and Adobe, OverDrive doubled its revenue in 2006 and is adding to its current count of about 80 employees throughout 2007.

Smart Business spoke with Potash about why you have to screen your business opportunities and why silence in the office can be dangerous.

Q: How involved should leaders be in the day-to-day operations of the company?

They should be significantly involved to appreciate where the challenges are and where the team leaders and team members are seeking either guidance and direction or additional resources. It is important to appreciate what the day-to-day challenges are of every member of the team if we’re going to empower and enable them to be as successful and productive as we would like.

I travel extensively, but I am always trying to communicate as much as I can with each member of the team to understand how I can help them. Is it additional technology? Is it human resources? Is our account or customer expectations well-managed? Are they given enough opportunity to produce what’s expected of them?

It’s important to stay in touch with the folks who are actually serving your customers and delivering the value.

Q: What are some pitfalls that a CEO should try to avoid?

Making assumptions that just because you’re not hearing problems that there aren’t issues brewing.

I always ask everyone to tell me, ‘Where are we heading into a problem?’ I want to hear problems or bad news immediately. We have lots of time to listen to the praise and what we’re doing well — and I enjoy hearing that — but I want to know immediately where we can intersect with a customer, a supplier or an issue at the earliest date, and head off a problem before it escalates into a real issue.

Just because folks aren’t walking into your office telling you — sometimes silence is a little dangerous because you have assumptions that things are going fine.

You really have to probe and challenge. Who isn’t happy, where is an expectation not being met? We try to overdeliver value in every relationship we have,so that we have a comfort level, so that during tougher times our customers will be loyal because they know we deliver excellent value for products and services.

A pitfall is when you are a little out of touch and you make assumptions that things are going well just because things aren’t being put on your desk.

Q: How do you manage growth?

Cautiously. We’ve had success in scaling our ability to service a growing base of customers, a growing base of channel partners, but want to ensure that we’re not diluting or diminishing the time and the tension and the importance we attribute to every relationship. So we are looking for those most effective team members who can learn from our existing team and help us deliver the same level of relationship that we expect in every one of our partners. We do it pretty cautiously.

We also say no to a lot of opportunities if we see them being short-term opportunities and not really in line with our core businesses. And while we are adding new products and services, they need to overlap with our existing businesses so we can stay effective in delivering good results. So it’s growing cautiously, it’s saying no to a lot of short-term opportunities, and it’s managing distractions.

Q: How do you manage distractions?

We have to communicate to our prospective customers where we are available to help and where and why we aren’t. We do a pretty good job of screening prospective accounts by telling them upfront, honestly and fairly, what the cost or the time to deliver their solution might be like. So I have individuals in the company who act as gate-keepers.

We get hundreds of inquiries a month of opportunities that are not appropriate for us to engage with. So we’ve developed standard methods and particular personnel to manage expectations for those who want to be in business with us. You tell someone upfront and realistically that it’s not going to be a profitable partnership and what the cost and time to market might be.

We don’t sugarcoat it. It’s really screening the business opportunities, sheltering our team members so they can focus on the customers we’ve engaged with, and not chasing new opportunities and using gatekeepers.

HOW TO REACH: OverDrive Inc., www.overdrive.com or (216) 573-6886