Man of steel Featured

8:00pm EDT July 26, 2008

Michael Siegal holds a special place in his heart for people.

Although he’s now chairman and CEO of Olympic Steel Inc., big

business wasn’t always his aspiration. Instead, as a young man, he

went to school for and earned his degree in education.

“People were always important to me,” he says. “Teaching was

always important to me.”

Although his path shifted and he’s now the leader of the steel

processor and distributor, he ensures that while the materials he

makes are hard, that his heart stays soft for the ones that handle it.

“Steel’s neutral ...” Siegal says. “Steel doesn’t care. The truck

doesn’t care, but the truck driver has to deliver it well. The guy

who loaded the truck has to load it to the customer’s specifications. If the person doesn’t care if we loaded the truck wrong, we

look like an idiot to the customer. ... It’s not that the steel was

loaded wrong — it’s someone loaded it wrong. It’s always been

about people.”

Olympic Steel was founded more than 50 years ago on that

employees-first principle. That focus still holds true today, as its

1,200 people have garnered some handsome results — $1.03 billion in net sales last year, up from 2003’s $472.5 million, while

also earning five years on the NorthCoast 99 list, which recognizes the top places to work in Northeast Ohio. Siegal says the

key to creating and maintaining a culture as solid as steel lies in

articulating your company’s values, hiring and advancing the

right people, getting feedback, and rewarding people.

“At the end of the day, all that matters is people,” he says. “People

say, ‘Oh, the CEO says that — they’re supposed to say that,’ but the

reality is everything else you do is neutral.”

Articulate your values

It’s a simple illustration — 10 jigsaw pieces interlocking to a centerpiece and forming a circle. The centerpiece reads “Olympic

Steel,” and each of the other 10 has a different value on it. The illustration represents the ideas that are most important to the company

and Siegal.

“Every corporation has a values structure, and the company has

the opportunity to articulate their own value structure, and if you

don’t do that yourself as a corporation, then the employees will

determine what that value system is,” he says.

To clarify Olympic Steel’s values, Siegal took his management

team off-site, and he told them to think of anything that they

thought the company stood for and put it up on a blackboard. That

resulted in about 70 values, and from those, the team had to cut

them down to 10.

“We said, ‘God came up with 10 commandments, so that’s a

workable number,’” he says.

They started with the easiest cuts.

“It’s more that you’re eliminating the duplicates of words that

maybe had the same meaning or weren’t the accurate expression

that we wanted to make,” he says.

For example, some liked the word “honor,” but others thought that it was difficult to understand what it really meant.

“If you’re in the military, you understand honor,” Siegal says. “If

you’re the everyday person, honor is a difficult construct as

opposed to integrity and respect.”

Then you have to look at values and see which ones embody

what you believe but are also going to reflect well on you to external constituencies like customers.

“Should you tell your customer that, gee, you actually do make a

profit?” Siegal says.

In this case, “financial stability” made the cut as opposed to just

profits.

The process was collaborative, and it promoted debates that

would yield group decision-making and consensus; however,

sometimes you also have to overrule the group. Siegal had to force

in one value that others didn’t agree with because he knew it was

important. He won’t say which one though, because he says that

it’s just as important as the other nine, even if he had to force it in.

“The good news is organizations aren’t necessarily democracies,”

he says. “You basically say, ‘Look, this is one that has to be here. We

don’t all have to agree on it, but it is one that Olympic Steel stands for,

and that’s the end of the debate, and let’s move on.’”

Once you identify the values that your organization embodies,

you then have to get buy-in for them.

“It starts at the top,” he says. “There has to be a buy-in always at

the top. If there is hypocrisy, employees will see it.”

In order for employees to understand the importance of buying

in to the values, they need to see that management buys in to them

and lives them every day.

“You have to be, both in good times and bad times, consistent,”

he says. “Certainly, in good times, it’s easy to be consistent, but in

more difficult times, you have to act with consistency around the

value structure because you’re always going to be challenged on

your integrity in business — profit versus doing the right thing.”

For example, safety is one of the company’s values, and it’s one

of the most evident ones to employees.

“It’s easy to say, ‘Well, maybe we don’t have to buy safety equipment in the periods of time where you’re not doing well financially,’ and the answer is, ‘No, that’s not a sacrifice we can make,’”

Siegal says. “We have to constantly be sure that the things that are

valuable are always reinforced, regardless of the circumstances of

the market.”

Lastly, the way you communicate the values is also important.

“We list them alphabetically, not in order of importance, because

they’re all equal,” he says.

Once you tell them what the values are, you then have to go a

step further so they’ll hop on board.

“You have got to tell them why,” Siegal says. “‘Why are we doing

this?’ is as important as ‘What are you doing?’ but if you’re just saying, ‘Come to work every day, work really hard, and trust me,’

that’s the mouse on the wheel. ‘Why? Why would I trust you? You

can’t tell me why I’m doing this, then I’ll give you my minimal

effort, and I’ll go home and do what’s important to me.’”

Hire and advance the right people

Once the values are in place, you need the right kind of people to

integrate them into the culture.

“In the cycle of the employee development, it starts with a good

hire,” Siegal says. “That good hire means, are they capable of doing

the job you hire them for?”

Siegal says he has a constant struggle with one of his managers, who consistently hires really nice people, but really nice

people who aren’t qualified for the positions he’s putting them

in. So first check a person’s qualifications and make sure they

match with the job for which you’re hiring.

Once you’ve established that, then you need to find out what’s

important to the job candidates. Siegal says it’s crucial that people

who join Olympic Steel care about something.

“If you can’t say, ‘I care about something,’ you probably aren’t going

to care about your job, so the first priority is caring,” he says.

During interviews, Siegal will bluntly ask job candidates what

they care about. It may be their family or it may be the environment, but regardless of what it is, if they can’t articulate something,

then that’s a sign they may not be committed to your business.

“We’re happy to invest in you as long as you’re willing to invest in

yourself, but it’s a partnership,” he says. “I’m not going to invest in

you if you don’t care.”

Once you’ve hired someone who is qualified and cares, then you

have to advance that person through the organization if he or she

is a top performer. Choosing the right people to advance can often

prove challenging, but Siegal says to start with the people who buy

in to your values.

“If you share our values and perform, you have no issues,” Siegal

says. “If you perform, but you don’t share our values, you probably

won’t have a sustainable job here.”

Once you’ve identified someone, then you have to see if that person is ready for the next level.

“Put new people on projects, and see how they perform,” he

says. “If they’re saying, ‘I don’t have time,’ or, ‘I’m too busy,’ or,

‘I’m coaching my kids in softball,’ or, ‘I have life issues,’ or, ‘My

parents are sick,’ at a certain point, we keep asking you, and you

keep saying no, you’re not going to get a lot of chances.”

It’s also important to communicate to your employees why it’s

important to take the opportunities the company presents.

“You tell the younger people who aren’t experienced, ‘Look, if I

ask you to do something, and you say no, it’s a test. It’s a test of

who I can count on and who I can trust,’” he says.

Once you have someone who is both aligned and has stepped up

to the plate, then you need to talk to that person about his or her

goals.

“They have to say what they want,” he says. “If you cannot tell me

what you want for your career, it’s very hard for me to meet your

standards. Start off with, ‘What do you want? How do you see yourself? Where do you see yourself when you’re 45 years old?’ If you

can’t articulate that vision, then I probably can’t help you get there.”

If someone says that he or she wants to have a full career and

wants to stay with you, then that’s a person you want to invest in

and help get to the next level, so point out what needs to be done

to get to there.

“Here’s the skills you need to get there — you don’t have

them yet,” Siegal says. “Here’s how we can help you get there,

but it’s going to take commitment for you to go back to school,

go to seminars. You’re going to have to do things at night.

Homework doesn’t end when you graduated high school or

college. It goes on. The stuff you do at home is a lot more valuable than just doing homework. It’s doing lifework.”

It’s also important to identify what an employee isn’t willing to do to reach the next level.

For instance, Siegal says that if someone refuses to leave

Cleveland, then he may not be able to advance that person

because the next opportunity may never come up here, but it

might come up in Georgia or Minnesota.

“You have to go out to the world, and then you can come back,

but the world is not centered in Cleveland, Ohio, so you have to be

able to also be willing to commit to your career as much as the

company is willing to commit to you,” he says.

Get employee feedback

You might think you’re doing a good job in your culture-strengthening endeavors, but it’s best to go straight to the source to find

out.

Start by building relationships with employees so they feel comfortable talking to you.

“You can’t have relationships if you don’t have any time with people ...” Siegal says.

“If you make the statement that people are our most important

asset, then you can’t say that people are my most important asset

but never go visit your physical facilities. ‘Oh, I’ve got to go see the

customer. Oh, I’ve got to go see the shareholder. Oh, I never have

time for my employee — but my people are my most important

asset.’ I have to be visible to them.”

Some leaders may say they spend time with employees because

they have every fancy teleconference gizmo there is, but Siegal

says you can’t rely on virtual communication.

“It’s not how fast the Internet can go — there are no relationships

there,” he says. “Relationships are spending time, building a personal relationship, so that when you have to pick up the phone, the other

guy on the other end of the phone actually picks it up.”

Siegal’s also realistic about how much information he can gather

in those conversations.

“You can’t get to everybody when you have 15 or 16 locations, so [a

survey] is a great tool to use to essentially communicate and let the

employees communicate back.”

Olympic Steel administers surveys electronically and in person

to all of its employees.

“We do opinion surveys with the employees every year, regardless of the market, because we want the feedback from the

employees,” Siegal says. “The employee opinion survey is predicated around the value system. We get feedback from all of the

employees, and you get the good, the bad and the ugly.”

When you administer surveys, it’s important that the feedback is

received anonymously.

“If you ask people, they generally will tell you if they feel there is

value to and respect to their opinion, and that’s why we do it blind

so they don’t feel threatened if they have something negative to

say,” he says.

Once the surveys are complete, that feedback goes to an external

source for processing, and it’s important that it’s external as opposed

to someone internally. Siegal has seen firsthand situations where

internal people try to hide information.

“Sometimes, you have an individual who may sanitize the information if they think there may be something negative about them,”

he says.

When you get the survey results back, keep in mind that the goal

isn’t to get mad at requests or to find people to tattle on.

“You get the constant, ‘I want more money,’ the constant sort of

stuff that you expect, but there’s lots of valuable information, and it’s

not a witch hunt,” Siegal says. “The purpose is to find out, are we

being competitive in our universe. Are we doing things the way

we’re suppose to all the way down the line?”

Armed with information, you then have to gauge what is and isn’t doable.

“You sort of absorb between the ‘need to haves,’ the ‘want to

haves,’ to the ‘Boy, we better because it really is telling us something we’re doing wrong,’” he says.

To make those decisions, Siegal says to view each suggestion and

decision as if it were part of a three-legged stool.

“You really serve three different constituencies,” he says. “You

serve your shareholder — that’s true in a public company, but it’s

also true in a private company because you serve yourself if you’re

100 percent owner — but you serve the shareholder. You serve

your employee, and you serve your customer. That three-legged

stool can never be out of balance.”

For example, your employees may want you to double their

vacation time, which would be a great perk for them, but then you

wouldn’t produce as much product, so you may not be able to fill

customer orders and you won’t make as much money, so both the

customers and the shareholders would be hurt. Weigh suggestions

against all three constituencies to make sound decisions about

what to move and hold on.

“If you see the elastic band pulling too far in one direction, it will

snap back, whether you like it or not, and if you pull it too far, it

breaks.”

Reward people

Olympic Steel gives out several awards to recognize attendance,

safety and company culture efforts as well as performance. It is

also active in the Make-A-Wish Foundation and awards college

scholarships to employees’ children. All of these programs and

rewards are important to building a strong culture, but you also

can’t deny the power of showing people you care with the almighty

dollar.

“There’s rewards, there’s recognition, there’s all kinds of stuff along

the way,” Siegal says. “Money matters. People will tell you that money

doesn’t matter, but they’re kidding you. ... People will tell you the pat

on the back goes a long way — it goes a long way, it really does — but

at the end of the day, money also matters. A pat on the back is great,

but I can’t fill my gas tank up with a pat on the back.”

If you create a program to financially reward your employees,

those pats on the back will go much further.

“The key is, everybody rewards their sales guys,” Siegal says.

“How do you reward your administrative people?”

To do this, the company has a profit-sharing program for everyone.

The more money the company makes, the larger the percentage of

profits people get.

“Now everybody says, ‘How are we doing, and how can I help

you make more because if we make more as Olympic, I make

more’ ... and your administrative people go, ‘Gee, business doubled; I’ve got twice the paperwork, how come I don’t get any

upside of this?’ Well, you do,” Siegal says.

Rewarding people communicates that you care about them and

helps them better buy in to the values you established. When people

buy in to what’s important to the company, your business will grow to

new heights.

“Have a vision and focus and a strategy that says, ‘If I have the

right people to execute on that, we’ll get there, and there’s something for everyone at the end of the rainbow —not just me but for

everyone at the end of the rainbow,’” Siegal says. “I’d rather have

the momentum of 1,000 people moving in that direction than one.

The energy, mass and force will get you there. You could be the

best rower in the world, but give me the physics of 1,000 people

saying, ‘I get it, I know what’s in it for me, and I’m willing to buy

in.”

HOW TO REACH: Olympic Steel Inc., (216) 292-3800 or www.olysteel.com