Honesty as policy Featured

8:00pm EDT April 25, 2008

For Jeff Neuman, the greatest danger executives face is falling in love with their >own ideas. Pouring resources into an idea that isn’t realistic is dangerous, but he neutralizes that potential problem by allowing his management team to second-guess him.

“You’ve got to be willing to cut bait,” says Neuman, president of Barnes Wendling CPAs Inc., a $10 million accounting firm. “Be honest with yourself but also have people in place to be a second stopping point.”

Smart Business spoke with Neuman about how to take risks on new ventures and why getting your ideas shot down isn’t always a bad thing.

Q. How do you determine where to devote your resources?

It’s an art; it’s not a science. You figure out what arena you’re going to play in.

If you’re going to be a niche player — which most businesses are — you need to say, ‘OK, what is the marketplace looking for? What is a need that hasn’t been served?’ Then you have to say, ‘OK, do I need to go out and acquire specialty services?’ Then you go look for them.

And you have to add them first — that’s the gamble. You have to add the resources first because the worst thing in the world is to go out and try something different, grab some business, and you can’t perform. Then, you’re dead.

Q. How do you deal with the fact that a new venture might not work out?

Be honest with people when you’re adding them on. Tell them, ‘Look, this is a new venture. Here’s the upside, but, obviously, there’s a downside.’

You have to explain that upfront. Cleveland’s a small town. You have to be fair with people and tell them what’s going on. Because if you do something wrong to somebody, they’re going to get an opportunity to come back.

Not everything works, and if you’re honest with them upfront and say, ‘This is the risk we’re both taking,’ most people accept that. Truthfully, not everything we’ve done has been successful. Fortunately, more have than have not.

Q. How do you communicate your vision to your employees?

It’s important to throw out a concept. But also, you can get more buy-in if you ask for their opinions. Here’s what we’re planning, and here’s a rough sketch of what we believe we have to do to achieve this. Let’s fine-tune this thing.

So you throw it out there for comments, brainstorming, etc. You get buy-in that way. Sometimes you get shot down, too.

Q. How does brainstorming with employees about the vision benefit the company?

They feel that they’re part of it, that they’ve had their say and, in many cases, a lot of them have good ideas.

Once they’re part of it, then it’s a team goal. It’s not my objective — it’s the entire organization. That works. If it’s just my problem and it fails, then it’s just my stupid idea. But if we all bought in to it, it has a much greater chance at succeeding.

Q. How else do you motivate and empower employees?

One, you have to hire motivated people. There are lots of educated people who aren’t motivated.

Look for motivated people, then give them the opportunity. Give them parameters, but let them go do the work. Don’t look over their shoulder every day.

You need credibility, consistency and a general positive outlook. People have to believe you, so when you have an idea, you tell them what the steps are to complete the idea, then you tell them what the benefits are going to be to everybody at the end.

And if you’re asking people to jump in the water, you’d better be the first one in.

Q. How do you create an environment that gives employees a positive outlook?

The biggest piece of it is creating a greater expectation amongst everybody that there’s a different way to do things; there’s a better way to do things — show a continuous process of improvement.

It’s not that we’re doing things bad, let’s just look for ways to do things better. And if we fail, let’s just pick ourselves up and move in a different direction. When you try something new, not everything always works.

Q. How do you let employees know it’s OK to try new things?

Your actions have to show that you don’t kill somebody for trying something new. You encourage them.

You do set financial limits and benchmarks along the way so they don’t go too far down the road, but if it fails, it fails. You can say you tried something, and now you know it doesn’t work.

If you cut someone’s legs out from underneath them, they’re never going to stick their neck out again.

HOW TO REACH: Barnes Wendling CPAs Inc., (216) 566-9000 or www.barneswendling.com