Super User

You would likely forgive James Turley if he forgot for just a moment about the importance of individual people.

After all, as chairman and CEO of Ernst & Young, he is responsible for about 144,000 of them, a population larger than the country of Grenada.

So if he spoke about his people in terms of regions, or even in terms of countries, it would make sense. And yet to hear Turley tell it, multibillion-dollar market movement is created by thinking about individuals.

“When you think about our culture, we have a mindset of people first,” Turley says. “We actually think first in every business decision we make about the impact on our people, because the people are all we are. Every one of our assets, when they go home at night, we want to be the kind of place they want to come back to the next day.”

And what gets people back in the office each day is a sense of ownership that makes them feel like they’re an entrepreneur growing a business in their local community.

“It’s very important that we stay entrepreneurial in spite of our size,” Turley says. “When the outside world looks at Ernst & Young, they see us as being the most global, as having the best people culture, and, very importantly, they see us as being best at both serving entrepreneurs as well as being entrepreneurial ourselves.”

To keep that entrepreneurial feel, Turley has to trust that people can keep things moving without him having to sign off on every decision.

“You do that by empowering people to actually make decisions and do the right thing every day,” he says.  

Global scale, local execution

That all sounds nice, but execution is, of course, the chariot of genius. Anybody can espouse the virtue of empowerment, but letting go of the reins can be tough.

Turley was in Cleveland in April for a Boy Scouts of America luncheon. He was the guest speaker and also got to spend plenty of time with Don Misheff, Northeast Ohio managing partner for Ernst & Young.

Misheff heads the local execution of Ernst & Young’s grand designs. He leads more than 1,000 people and was the committee chairman for the charity lunch. The event was the kind of touch point that has made Ernst & Young feel like a local shop. A company that’s spent 12 straight years on Fortune’s “100 Best Companies to Work For” list could likely do without having two top executives spending so much time in the marketplace, but the individuals outside the company are on both Misheff’s and Turley’s minds, too.

“I think keeping an open door, staying connected with our people, being engaged with them in daily activities in the community to understand what they’re dealing with from the market side of the house, that’s important,” Misheff says of being out in the local community. “The other thing, when we talk about entrepreneurship, it gets lost sometimes because people get too focused on size instead of style or culture.”

That culture is one that sees and understands that the local marketplace is where future employees are growing up and, ultimately, where global growth will be created. To Turley, opportunity is everywhere, and focusing on individuals instead of being trapped with the 30,000-foot level mindset of such a large organization is the most important thing he can do.

“At Ernst & Young we actually look at the world outside in terms of the potential that exists — the potential in people, in the companies out there, the potential in the community,” Turley says. “And we dedicate the skills we have to try to help others achieve that potential, so it’s very much community focused, very much focused on helping others. It’s something we do all around the world.”

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Motoring through the desert

When Bill Ford Jr., executive chairman of Ford Motor Co., announced several years ago that he intended to apply his lifelong commitment to sustainability to the company his grandfather founded, few thought it would work.

Today, Ford’s vision has helped the motor company weather one of the worst economic climates in modern history and positioned Ford as an industry leader in developing economically friendly vehicles.

That’s one reason why Ernst & Young LLP asked Ford to kick off the CEO invitation-only Ernst & Young Strategic Growth Forum 2010, which will be held Nov. 10-14 in Palm Springs, Calif.

This program convenes more than 1,500 of the nation’s top CEOs, entrepreneurs, advisers, investors and other senior business leaders and is the country’s most prestigious gathering of high-growth, market-leading companies.

The forum delivers leading business advice designed to help entrepreneurs master strategies for company growth, discuss ideas on the transaction market and available capital, learn the critical success factors of mergers, acquisitions and IPOs, hear inspiring stories from game-changing entrepreneurs, and meet potential customers, investors, partners, acquisition targets and buyers.

It concludes with the 24th national Ernst & Young Entrepreneur Of The Year awards, the largest gathering of entrepreneurs in America, hosted by Jay Leno.

Beyond Ford, this year’s speaker lineup includes a who’s who of business:

  • Muhtar Kent, chairman and CEO, The Coca-Cola Co.
  • A.G. Lafley, former chairman of the board, president and CEO, Procter & Gamble
  • Deepak Chopra, co-founder, The Chopra Center for Well Being
  • Tom Adams, CEO, Rosetta Stone Inc.
  • Arthur Levitt, former chairman of the United States Securities and Exchange Commission
  • Jeffrey Joerres, chairman and CEO, Manpower Inc.
  • Rob Enslin, president, SAP North America
  • Christina Lampe-Onnerud, founder and CEO, Boston-Power Inc.
  • Debi Fine, president and CEO, Direct Brands
  • Greg Norman, professional golfer and entrepreneur

Learn more at

www.ey.com/us/strategicgrowthforum

Motoring through the desert

When Bill Ford Jr., executive chairman of Ford Motor Co., announced several years ago that he intended to apply his lifelong commitment to sustainability to the company his grandfather founded, few thought it would work.

Today, Ford’s vision has helped the motor company weather one of the worst economic climates in modern history and positioned Ford as an industry leader in developing economically friendly vehicles.

That’s one reason why Ernst & Young LLP asked Ford to kick off the CEO invitation-only Ernst & Young Strategic Growth Forum 2010, which will be held Nov. 10-14 in Palm Springs, Calif.

This program convenes more than 1,500 of the nation’s top CEOs, entrepreneurs, advisers, investors and other senior business leaders and is the country’s most prestigious gathering of high-growth, market-leading companies.

The forum delivers leading business advice designed to help entrepreneurs master strategies for company growth, discuss ideas on the transaction market and available capital, learn the critical success factors of mergers, acquisitions and IPOs, hear inspiring stories from game-changing entrepreneurs, and meet potential customers, investors, partners, acquisition targets and buyers.

It concludes with the 24th national Ernst & Young Entrepreneur Of The Year awards, the largest gathering of entrepreneurs in America, hosted by Jay Leno.

Beyond Ford, this year’s speaker lineup includes a who’s who of business:

  • Muhtar Kent, chairman and CEO, The Coca-Cola Co.
  • A.G. Lafley, former chairman of the board, president and CEO, Procter & Gamble
  • Deepak Chopra, co-founder, The Chopra Center for Well Being
  • Tom Adams, CEO, Rosetta Stone Inc.
  • Arthur Levitt, former chairman of the United States Securities and Exchange Commission
  • Jeffrey Joerres, chairman and CEO, Manpower Inc.
  • Rob Enslin, president, SAP North America
  • Christina Lampe-Onnerud, founder and CEO, Boston-Power Inc.
  • Debi Fine, president and CEO, Direct Brands
  • Greg Norman, professional golfer and entrepreneur

Learn more at

www.ey.com/us/strategicgrowthforum

Friday, 25 September 2009 20:00

Gentle push

Kyp L. Ross doesn’t really care how successful you’ve been, he knows you can do more.

He’s not trying to downplay anyone’s success, but Ross believes that there is always more work to do and more victories to be had. In that vein, he has worked his way up at Dawson Cos., where today he serves as president of Dawson Insurance Inc. With roughly $30 million in commission, Ross has helped Dawson Insurance develop, but he has also dealt with growing pains, as he tries to constantly build a culture that helps people push forward.

“So as we grew, we knew there were times where maybe we had to bring our arms back around that culture and get it back to where we wanted it to be going because as you get 250 people, not all of them are marching to the same drum,” he says.

Smart Business spoke with Ross about how he’s maximized employees’ talents by pushing them to do more and why you have to be willing to be uncomfortable to be more successful.

Show employees how it’s done. My theory is you have to lead by example. You don’t ask any of your employees to do something you wouldn’t do yourself. Your employees have to see you exhibit a desire, a dedication and a determination they feel they can buy in to.

I still handle the largest book of business from the customer standpoint in the agency, so I hope that they see my work ethic and my willingness to sacrifice myself, my own time, to make sure we do what the client needs and what the client does best. If you put the client’s interest before your own, you’ll always be successful.

When you join our organization, we give you the opportunity, and really, the sky is the limit. So if you look at me, I’m the perfect example, I came here with nothing, was in an affiliated industry, came here and worked hard, had success, enjoyed working with the other people that helped me reach those levels, and I’ve been able to promote up through.

I try to stay away from talking about myself, but I do embark them with the knowledge of how I got to where I did. I’ll bring the young guys in and I’ll say, ‘OK, what are you doing this week?’ And they’ll share with me and I’ll say, ‘I’m not telling you that this is the way you have to do it, but let me share with you how I did it.’ And, again, if you’re visibly leading by example, people understand that and they just naturally pick that up. I’ll also, from time to time, take some of those guys out with me, or if they have an appointment, I’ll say, ‘Hey, do you mind if I tag along?’

Help people stay hungry. I would say the best business advice I’ve received is to stay hungry and never get outworked, and I received that when I was very young from a regional manager of a company I did an internship with in college.

What I try to get our guys to understand is you always have to be growing, you always have to be improving, you can always work harder, you can always improve yourself, because I think in many areas of our nation people get complacent when they’re living well, and they kind of reach their own level of expectation. So what I try to do is try to get them to understand that there is always more.

Most of the people here have been here longer than me, so they’ll say, ‘How much do you need; isn’t that enough?’ That’s not really even an applicable question in my world, because people go out of business, people get bought, they get sold, so if you are resting, you’re actually declining.

We have a couple of mature gentlemen that were here before I got here, and when I first got here, they probably said, ‘Yeah, sure, he says he’s going to work hard and he says he’s going to do those things.’ ... Well, after I was here for a while, we formed a very good relationship and they had been around the same level for a number of years and one of them even said to me, ‘Well, I’m pretty much maxed out.’ So I actually challenged him in several ways and said to him, ‘If I can do this, there’s nothing special about me, you can do it, you can even exceed my numbers if we do it intelligently and we work smarter.’ I probably have the most pride in that, the one gentleman has almost doubled his book of business, and he had been in the industry for 15 to 20 years at that time.

When I came here, they were very successful, but in some ways, the expectation was this is where we can get to and hopefully what I’ve allowed them to understand, being the newer kid on the block and hitting some of these levels, is, ‘Wow, maybe our expectation wasn’t really realistic for ourselves.’ And you look in the mirror, that’s how you judge yourself every day; you look at yourself in the mirror.

Push people out of their comfort zone. We have to make more calls, we have to be out more, and we have to get outside of our comfort level. There’s a comfort circle, and most of us spend 90 percent of our life in this comfort circle, and the ones that are really successful they not only get outside that but they step way outside that to an area where they’re uncomfortable and that’s what we try to get our guys to understand today. We’ve been very successful, and we’re still doing well, but in order to reach the goals and expectations we have for ourselves, you have to step outside that comfort zone more than ever.

What I try to do is just sit down with them one on one and if I hear that they’re having some concerns maybe over the economy or maybe some of our competitors have laid off some people, you sit down and you have a face-to-face conversation, you hear some of their concerns and you’re just honest with them and you get them to understand that many times it’s not as bad as you think it is, so I try to do it one on one.

When you’re in a group, you get a lot of different distractions and a lot of different questions coming, which isn’t a bad thing, but for that purpose, I don’t know that it gets down to the core of what the person’s fear is.

How to reach: Dawson Insurance Inc., (440) 333-9000 or www.dawsoncompanies.com

Wednesday, 26 August 2009 20:00

Touchy-feely

Look, he knows he’s the boss and everything, but Marc Brownstein can’t help but admit he likes his 57 employees.

He really does.

And do you know what? That affection hasn’t stopped him from taking the family business, the Brownstein Group, to the next level. As president and CEO, Brownstein has helped the multipronged advertising agency take charge by opening a digital marketing division well ahead of the competition, and he’s overseen growth to $10.4 million in fee income.

All the while, though, Brownstein has hired carefully, instilled systems of accountability to keep people motivated and taken care of the people who make the company’s creative motors run.

“By doing that, you build a great team,” he says. “You have great culture, and within that, you do great work.”

Smart Business spoke with Brownstein about how much easier it is to check references in a world filled with social media and why he can tell a lot about a job candidate by how they treat a waiter.

Take care of those who will take care of you. The best advice I ever got is probably something my dad always said to me growing up, ‘Take care of the company and the company will take care of you.’ And by that he means don’t abuse the business, be modest in how you live and operate, and it will always be there to take care of you and your family. So we don’t have any debt — we’re debt-free. We don’t live lavishly. We take care of the family business, and it provides a good lifestyle, not just for me but for everyone on the team.

You keep people by creating the right atmosphere, and we’re not micromanagers. Everyone here is measured on performance. So everyone knows what they have to achieve, and then we measure their achievements because everyone wants to know, ‘How am I doing?’ If you leave it nebulous and in a gray area, then people don’t know where they stand, and human beings, in my experience, want to know where they stand. And we’re really generous with recognition when you do a job well, and then we get to know the human being.

We want to know how you are doing — ‘Hey, how’s that new dog? How’s the baby; is she walking yet? Hey, how are you feeling?’ We just want to know, and we care about the individuals. We’re a very human organization. That may sound touchy-feely, but it’s genuine, and it helps keep people here because they know that they matter.

It’s pretty easy. I don’t sit in my office, I’m out there; the sleeves are rolled up. It’s a pretty hands-on business, and when I’m walking to someone’s office, I make sure to stop along the way at other people’s offices, even the interns, everyone matters.

Build a management team that can follow suit. It’s hard to find because I prefer to hire talent first. By talent I mean in a lot of industries if you find a good manager they can do the job well, but in our business, you have to have a specific skill set, a marketing skill set, maybe you’re a writer, a designer or a strategic planner or a public relations expert or whatever, but in addition to that, when you’re more senior level, I also need you to be a good manager of people, and it’s often hard to get both the right lobe and the left lobe of the brains operating equally. A lot of times you find someone who is a good manager, but they’re not that talented. Or a great talent, but they’re a disaster as a manager. So my greatest challenge has been building a management team that has both.

We hire slowly, and if we make a mistake, we fire fast rather than the other way around. We take our time with people, and we really get to know them. Our interview process is pretty rigorous, and you have to meet with a lot of people on the team, and then you have to spend some time with us out of the office. We don’t want to check the references you provide, we want to check the references we discover, and if everything comes up real well, then chances are you’ll be a long-term member of our team. It’s so much easier to check outside references today than it was five to 10 years ago with all the online tools and strategies. You can find people who know these people. You can do some networking, leverage some social media. We find that there is always someone who knows someone who knows someone.

We take them to a ballgame or go out for a drink, go out for a bite to eat (to spend time with the candidate outside the office). Sometimes little things like seeing how an individual candidate treats a waiter or a waitress can be very revealing. Anybody who is going to treat a waiter or waitress disrespectfully is going to treat a report the same way.

Stay in touch. I write a newsletter every two weeks here, and it’s something that I refuse to delegate and that gives me a voice to the company. We have an office in Philadelphia, and we have an office on the West Coast in Seattle, and this keeps me in touch with everyone. I just write an introduction, so maybe 400 words, and I’m writing a piece on whatever I believe is relevant at that time, but it always reinforces what we believe in.

I hold town halls on a minimum of a quarterly basis, sometimes more. They’re plugged in (in Seattle), we conference them in. And I also write a blog on Ad Age at AdAge.com, so they can also read what I’m thinking.

They get it. I convey it in all ways, through my newsletter, through talks to the company, through my director’s meetings. Everyone understands. Fortunately, we have such good people here that I really don’t have to push very much. If anything, they’re pushing me just as hard. We have people who care so much that it hurts. We’ve been told that we ooze passion.

How to reach: Brownstein Group, (215) 735-3470 or www.brownsteingroup.com

Wednesday, 26 August 2009 20:00

Rising to the top

Look, Mitch Creem already knows you’re going to ask him for the one-size-fits-all answer.

I mean, you don’t think you’re the first person to ask Creem about a career filled with victories in handling distressed organizations — highlighted by one bottom line turnaround of roughly $100 million — do you?

“Everybody always looks for the silver-bullet answer, what can they take away from it and use somewhere else, but there were so many factors,” Creem says.

But, really, there has to be one trend that keeps popping up in a 25-year leadership career, right? Perhaps something he’s used to push through tough times in his current CEO role at USC University Hospital and USC Norris Cancer Hospital.

Maybe a more concise question will help: Has he seen a root theme to those struggling organizations he’s helped fix?

“Part of the reason why they were losing so much money was the employees were feeling bad about themselves and the organization, feeling disenfranchised and neglected and even disrespected by the senior management team,” Creem says. “So much of turning around an organization is turning around the psyche of the employees and making them feel that they’re important, that the organization is wonderful and that they are, too. And that they understand the business, they understand what’s going on and we listen to them, and if we can listen to them, we do very well.”

Now we’re getting somewhere. There may not be a perfect answer, but employee empowerment is something that Creem has learned to laud over the years. It’s a lesson he was preparing to bring to the two hospitals, months before the April 2009 transition in which the University of Southern California took ownership and people had to adapt overnight. The hospitals and the roughly 2,000 employees weren’t quite in the dire straights that Creem has seen before, but they still needed an overhaul.

Here are a few thoughts from Creem on how to build an empowerment culture that can be a game-changer for any organization.

Hire and empower doers

OK, so you’re trying to empower people. But you can’t be a personal cheerleader for every employee and you can’t spend months on every hire to make sure new people are entrepreneurial. What Creem has learned through the years is that you need more self-starters in your management team to start the process.

“I’m looking for people who I feel are ‘doers,’ people who can actually get things done,” he says. “You come across a lot of people who know theory, know management theory, know what’s happening in an industry, but you really need people who can take and translate good management ideas into action and can do that through delegation and getting their people behind them. That’s a trait that’s really important to me: people who can get things done and then they also have to be good people people who can motivate, manage and inspire their subordinates to reach new levels of performance.”

Putting those thoughts into practice is something that Creem has worked on over the years, and the first step to finding a doer is about taking the time to get to know someone.

“It is hard on paper to do it,” he says. “I make sure that I meet with them at least two, if not three, times and I try to get past the first interview where I feel like we’re both really selling each other and, in particular, I’m trying to sell them on the organization.”

But anyone can do multiple interviews. At USC, Creem makes the most of his second or third chances with a candidate by focusing on how people handle real-life situations that call for action.

“I can see more about the person and ask them questions about how they would handle certain situations and what would they do in this particular job and give them some scenarios to work through with me on how they would approach it,” he says. “Have they had similar situations, and what have they done in similar situations?”

He’s not looking for a perfect answer, he just wants to see the person taking charge of the situation. Further, a doer will show a flash of that trait by flipping the interview back to you.

“I can see it by questions they ask me,” Creem says. “How would I support them, how much latitude do I give them, how much autonomy. And then I give them examples of situations and how would I handle it, and I can get a strong sense of whether they can get things done or not get things done, and I can also get a better sense of their technical competency.”

Along the way, Creem also puts people through his personal litmus test: putting them in a room with an established doer or two.

“It’s also important for me to have them interview with other folks that I feel are doers, and I ask these people to tell me frankly whether they think they’re a doer or not a doer,” he says. “Are they a doer or are they a theorist?”

Once you’ve hired some doers, you have to let them do. When you have motivated managers, they’ll want to have a heavy hand in decisions for an organization’s direction. You have to let that happen.

“A good leader has to be very thoughtful and open-minded about the decision-making process,” Creem says. “Particularly in the environments where I work, it’s very complex environments and visions that I make can often have profound implications on patient care or patient service.”

But, of course, there’s the old leadership paradox that comes with inclusion: You still have to make decisions in a timely fashion. Creem does that through his managers. He can’t be at both hospitals 24 hours a day, so he congregates a core group of managers to design and implement the big-picture things.

That’s tricky, because having 40 empowered people in the room will lead to 40 strong opinions. When it comes to big issues, it’s about having a smaller group. At USC, it’s usually six senior leaders: the chief financial officer, chief information officer, chief marketing officer, chief human resources officer, chief operating officer and chief nursing officer. When there’s a specific issue with compliance, marketing, etc., the heads of those departments are brought in. Once you have a small, focused group, then you can let everyone express his or her opinion.

“I try to drive people toward a consensus, and I often find that during that process I can get many different points of view on the table at the same time,” Creem says. “I can create a sense of participation and transparency in the decision-making process, and I find that as long as everyone is involved, they’re less likely to be upset with the outcome if it’s not theirs if they feel they are part of the process.”

Establish the right systems

Creem’s second key to a game-changing culture is putting systems in place that recognize and reward the entrepreneurial behaviors that will make front-line employees self-starters.

“It seems like every year we have to do more with less, so we try to create a spirit of empowerment and entrepreneurialism so that we can always find new ideas and different ways of approaching old problems,” he says.

That sounds good, but, again, with 2,000 people, he doesn’t have time to sit down for quarterly reviews with everyone to discuss that. Still, he can start the process by telling hospital employees times are different and then take the opportunity to share and reward those who exemplify the systems he’s trying to put into place.

“We try to create reward and recognition programs where we can celebrate managers and employees who have come up with new ideas. ... We also just want to highlight and celebrate people who are trying to do new and innovative things throughout the hospital,” he says. “So the more we can identify the kind of behavior we want to model and make it visible to our employees, the more they can learn what behavior we’re rewarding and promoting.”

Those steps are done through things most companies do: newsletters, company meetings, meetings with middle managers, town halls, etc., but the key is to do it consistently — as in every time — and to specify the behaviors you want. With that, highlighting the rewards helps. For example, USC has a strategic partnership with the Los Angeles Dodgers and gives away game tickets to employees with other rewards and awards during high-profile hospital celebrations like Nurses Week.

“During those weeks of celebration, we have the opportunity to give awards to employees that exemplify the values and virtues that we are holding in the highest regard,” he says.

You also want to get it started by being a touch point. While Creem wants his managers to handle the overall leadership, the early stages of empowerment mean you have to hear thoughts on daily systems that are out of whack. Empowering people means you have to give them tangible ways to see they have a voice. Creem gives everyone at the hospital his e-mail and tells them to shoot him ideas. But don’t think that just letting employees touch base with you will do the trick. If it’s an issue best handled by someone else, Creem forwards it on. Still, responding is important.

“It’s really important to respond to every e-mail,” he says. “And let them know that we’re going to try to push forward this idea or maybe try to explain what else is going on in the organization that would give them a different viewpoint, give them more information to work with as to why certain things are the way they are.”

When you’re doing that, any piece of information that you take and use must be publicized.

“Certainly, with respect to minor changes in benefit structure or some policies that we were implementing, we talked about how voices of the employees have helped us stay on the straight and narrow,” he says.

For the record, people won’t immediately bang down your door with ideas. At USC, Creem got about 200 e-mails from employees during his first 45 days. But the more you respond, the more momentum you’ll create. Further, building that momentum takes some personal stories that people can take to the masses. Early on at USC, Creem had a nurse come to him about an initiative for a patient program.

“She came all the way over to my office to drop off a letter — she was a little bit nervous to talk to me — but we ended up talking about it anyway,” he says. “I saw that she was nervous, so I decided that we should have a talk about some of her ideas and she wanted to be involved. So these are the kind of things that I see throughout the organization that make me realize it’s working, it’ll take root, (but) it will take some time.”

Doing those things helped in the first steps at USC: They didn’t lose one employee the day of the ownership transition.

“With a new CEO, some new managers, I don’t think everyone understands what response they might get,” he says. “But my sense is that the spirit is lifting. People are becoming more vocal.

“The word is getting out that we’re approachable and that we’re eager to hear from everybody. And I think slowly we’re starting to hear from everybody.”

How to reach: USC University Hospital, (888) 700-5700 or www.uscuniversityhospital.org; USC Norris Cancer Hospital, (800) 700-3956 or www.uscnorriscancerhospital.org

Wednesday, 26 August 2009 20:00

Ms. Communication

M. Valeriana Moeller has heard all of the opinions, and she wouldn’t mind hearing them again.

Generations of leaders have spilled ink all over how-to books for the right way to describe organizational communications, but Moeller does it with a simplicity that belies the work she does in dealing with a few thousand employees and more than 20,000 students as president of Columbus State Community College.

“We talk, and we get people involved,” she says.

And so Moeller has had conversations with everyone she can to better understand the issues she needs to work on and help create a working vision for CSCC. Along the way, Moeller, who will retire in June 2010, has led CSCC to massive growth — it has become the largest community college in the state, added additional programs and built partnerships with four-year universities.

Smart Business talked with Moeller about how you figure out your skill set and how you can get information from all sides while staying on track.

Create an atmosphere of improvement. I meet with my team weekly and then I meet with them individually, and they also know that any time they need anything they can come to me. Sometimes it’s, ‘This is what’s happening; I need to bounce this off you,’ and we go and we talk about that.

I will also tell someone, ‘This meeting, this presentation, whatever, let’s talk about how it could have been better and how did you feel about what you did.’ You just have to engage people into talking and letting them know that everything is not a do-or-die situation, but that there’s room for improvement and we want everyone to be better. I want feedback when I do things because I want to know where could I have been better.

Build consensus without getting off track. The best advice I’ve ever received is to stay focused because in a leadership role in a large organization like Columbus State there are many things happening all the time. There are people happy with what you’re doing, there are people who don’t like what you’re doing, and it’s very easy to allow those external factors or even internal ones to distract you from your goals. I always say, ‘What is it that I’m trying to accomplish?’ You move forward, and you keep saying, ‘This is the goal,’ and you move forward with that. It doesn’t mean that you don’t listen to what people have to say because that’s always important. You’d hate to be going down a road and someone is trying to tell you there’s a block further up and you didn’t listen only to get there and have to turn around.

You listen to other people, and sometimes someone is saying, ‘That’s the dumbest thing you are doing,’ and then you have to say, ‘What makes you say that?’ And maybe it’s just not been explained well, so it’s a matter of communication. And sometimes people are repeating back to you what they think you told them and what they repeat back is not what you told them. And you have to take some responsibility for that and say, ‘Maybe I didn’t communicate this the way it was to be communicated.’

Now, sometimes there are people who want you to do things that are not part of your mission. I get people saying, ‘Why don’t you offer baccalaureate degrees?’ Well, that is not our mission, and in the state of Ohio we’re not allowed to do that. And sometimes they want to have a debate on this, well there’s nothing to debate. Whether I even agree with them doesn’t matter, I don’t get to do that here. Now, sometimes you’re trying to pursue something, like when we’re building facilities, and someone says, ‘They’re going to put the door over here; do you realize what that will do to the movement of people through the building?’ So you have to go look at that or have someone look at that, and say, ‘Putting the door there is not the best thing; go change that.’ So it’s always trying to move forward. You don’t say, ‘You don’t know anything about doors, forget it,’ or, even if you didn’t agree, you check it out and say, ‘You know, we looked at it, and it might not be the best option, but we don’t have a better one.’

Figure out your skill set. One of the things that’s very important for any president or CEO is to spend some time reflecting on the things that you do well and the things where you’re not as successful as you’d like to be. Be honest and candid with yourself and then say, ‘OK, is this something I can learn or is this something I really am not going to be good at?’ Some of us are introverts, some of us are extraverts and we just are, that’s part of what really makes us, that’s the part we love, and that’s the part we also know doesn’t serve us well. So you have to be honest with yourself and say, ‘I’m not very good at this and I am going to hire someone who is very good at this.’

Hire for a complementary fit. I strongly believe that you have to have a passion for what you’re doing. In our case, we are a community college; we serve many students who didn’t have the opportunity to go to college … so you have to have people who are committed to our mission. So I hire people who are committed to the mission. I want them to have the skill sets that they need to have to do the job, and then I look for people who will complement my skills. I’m not good at everything and so I want people who think differently from me, and then we can debate and dialogue about what needs to be done. I find that I really don’t want everyone to tell me, ‘Yes, Val, let’s go.’ I want someone to challenge the new ideas, come up with new ideas, so we can think outside the box. That creates a good team where people respect each other and bring up new ideas, and then we talk about it and move forward.

How to reach: Columbus State Community College, (614) 287-5353 or www.cscc.edu

It could be said that the fate of Ulta Salon, Cosmetics & Fragrance Inc. was changed because Lyn P. Kirby is not a morning person.

A finalist for the beauty retailer’s top leadership role in late 1999, Kirby had to catch a 6 a.m. flight to Dallas to meet with the company’s chairman. She had plenty of ideas and materials to review on the flight, but again, it was early.

“And I had left all my materials at home,” says Kirby, Ulta’s president and CEO. “I was about to spend four hours with the chairman, so I needed to create on this plane something to speak to him about.”

Not giving full faith to the charm of her Australian accent, Kirby began to solidify ideas about completely overhauling the business by turning it into a retail experience superstore.

“So I actually penned what has ultimately become the mission and the vision for the company,” she says. “Which includes the four E’s, which is to provide an experience for women by providing them with entertainment, education, escape and then the last one was aesthetics, which I always used to joke was how the Australians spelled it, with an E — which they do not.”

Maybe it was that joke or maybe it was the fresh ideas for turning the company around, but the chairman stuck his hand out at day’s end and offered Kirby the job.

Of course, that was the easy part. When she accepted the position, her new charge was to convince corporate employees and people in Ulta’s roughly 70 stores that had been doing business as a discount beauty store for eight years that everybody could do an about-face and make a new company. And while she was doing that, she also had to make sure the vision she’d put so much stock in was working.

Make a strong introduction

Kirby knew that many employees would still be attached to the prior positioning of Ulta, so she went right at the issue on her first day.

“I did not believe that was a long-term winning strategy,” she says. “And my first day on the job I knew people were going to be embedded in that past, so after I got through the this is who I am, this is the vision that I want to paint for us, this is why I want to paint it, I said to them, ‘Not right now, but over the next few months, I’m going to ask you to make a decision, and the decision is, after you’ve had more time to process this and spend some time with me, whether you can share this vision with me or whether you can’t. And if you can’t share this vision, I’m going to ask you to move on to a place where you share that company’s vision, because what I cannot do is have people stay who don’t share the vision because there’s too much work to be done.’”

Over the next few months, Kirby dealt with the hard decisions at the highest levels of the company.

“A few months in, there were people who had not been able to make the decision to leave the company that clearly did not share the vision, and I needed to have some tough conversations,” she says. “And I did.”

Kirby says it’s fairly obvious who is just hanging on if you spend a good bit of time floating through departmental meetings.

“It was very clear in day-to-day meetings who was grasping the new vision and who was completely open to trying to mold the strategies around the vision versus those who were just struggling and wanted to stay in the past,” she says.

Basically, those who lack commitment to big overhauls aren’t won over. Take the merchant side of Kirby’s business as an example. She wanted a large marketing campaign around loyalty programs and newspaper inserts.

“If the merchants were not willing to do what it took to decide what was on every page of those books, what it looks like and redo that two or three times … that was a pretty good indication that they were not on board,” she says.

On the other end of the spectrum, you’ll see people throw themselves into the vision. The search word Kirby says you should be using is entrepreneurialism, as in those taking your vision to their own tasks.

“It was clear to see those people that were buying it, because they were working with me day in and day out and gained a passion to be innovative in the beauty category,” she says. “The word I use in here is actually entrepreneurial, and what I’ve always looked for in the team is to find people that are intuitive about their business, who are passionate about the business they are working on — and passion can be passion about product, but it can also be passion about the numbers if they’re on the finance team. Because out of the passion comes inventiveness, and so out of those desires, we have filled the ranks of our organization here in the corporate office with creative and/or entrepreneurial business leaders.”

As she looked for that entrepreneurial spirit, Kirby was able to deal with turnover and embrace the remaining members of her team and then begin to assess the holes she had.

Take simplicity to your front line

Still, having a bunch of executives behind an idea, believe it or not, is like having eight kings on a chessboard: You’re not going to get a lot of movement. Kirby spent 18 years at Avon Products Inc., and she learned something from her CEO.

“Jim (Preston) used to say to us, ‘Never forget who pays your salary. It’s not me; it’s the Avon lady,’” Kirby says. “It’s one of the great things that has always stayed with me. I repeat it to this organization all the time because that front line of the business, without them, we can’t execute anything.”

So Kirby had to get front-line employees behind her vision or it would die. That would take rewriting systems and expectations that were effective yet easy. First, she hired a store operations person who was behind her vision to watch over the processes.

Then, like looking for entrepreneurialism with her executives, Kirby thought it useful to go the one-word route to describe what she was looking for in front-line people so she could sum it up for anybody doing hiring. That word is approachability.

The industry was mostly composed of drugstores, which were not approachable because, Kirby says, they generally offered little help and were dirty. On the other end were department stores filled with commission-based help that most women find intimidating. But approachability gave Ulta an angle.

“So there’s this huge swath of space in the middle to offer women a nonthreatening experience where they could come and learn comfortably,” Kirby says.

Most of Ulta’s legacy employees had come from the drugstore heritage, so building that approachability required some new blood and better training.

“I put a very simple tenet in place to begin this transition to the right culture of approachability. When you’re interviewing a candidate for the store team, if they are not outgoing, if they don’t smile at you during the interview process, they’re not the right candidate for us, because they have to have that in their basic DNA,” she says.

Kirby also hit the road with her four E’s, explaining them to every store along the way. They may not seem relevant to other businesses, but there’s a wrinkle of genius to it. While the four E’s apply directl

y to Ulta, it’s the simplicity of the systems that acts as the main lesson. You don’t have to be in the beauty business to understand what customer experience means. It’s just one phrase, but it allows quick recall about everything from how customers shouldn’t have an intimidating retail experience to organizational functions like shelving products so people don’t have to look for them. Putting a vision into memorable pieces makes all the difference.

“It was a game-changing approach because they’re simple words, but I could give you six other strategies behind each,” she says. “It was really important for them to be able to remember the framework, because the execution can manifest itself in different ways. To be able to get the team to embrace the vision that we were not going to be discount beauty, that we were going to be a superstore … was a very big shift for our people on the front line. When I joined the company, the front line was only 70 stores or so. We’re now 320 stores and without that easy memory of what the vision gets translated to, day in and day out, by our front line, we would have never done it.”

Last edited by Dustin S. Klein on April 10, 2011 at 11:35 pm

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Revisions


Sunday, 26 July 2009 20:00

Second opinions

Go ahead and have a seat in Mina Ubbing’s office and, you know what, just call her Mina.

She doesn’t want you or any of her roughly 2,000 employees to call her Mrs. Ubbing, even though she is Fairfield Medical Center’s president and CEO.

Courtesy titles were always used for the bosses she had while she was working her way up the system at the $189 million, not-for-profit health care system. So when she took over in June 2001, she took the formalities out of it, because she wanted to take FMC’s culture in another, more collaborative direction.

“Since I was promoted from within, I had always gone by my first name and typically the hospital administrator is referred to as Mr. or Mrs., well forget that, I was Mina the day before I got the job, I’m Mina today,” she says.

And so she is. But while she may just go by Mina, her effort to build a friendly and collaborative culture wasn’t just about smiles and more employee outings. Collaboration from employees equals more effective patient care, and that, after all, is the reason FMC is around. So while she wanted a happier culture, she worked to put the proper systems in place to keep that culture moving forward. It started by evaluating what kept employees from doing their best through balanced peer reviews. To make sure the evaluation process is truly effective, Ubbing has also done assessments of her own strengths and weaknesses to make sure she’s giving FMC the right push from the top. And, along the way, she’s taken to hearing out just about anyone who has advice on ways to improve evaluation processes to keep FMC on top of its game.

Create a fair evaluation system

When Ubbing decided that she wanted a more collaborative culture, she quickly ran into a problem: She wanted ways to evaluate people on that without bringing out a discipline stick.

“We look to really make a change in what we’re doing so that our employees in the future will be much more focused toward employee effectiveness than toward employee discipline,” she says.

So, while it took some tweaking, FMC now uses 360-degree peer evaluations that gauge collaboration, using input from people’s immediate peers. To give a fuller perspective, the system allows departments to evaluate co-workers from other departments through in-house customer surveys. Finally, to respond to employees who complained that they didn’t get to comment on their bosses, people get to review their immediate supervisors with the next boss up the chain. It’s an honest look in the mirror, which means FMC had to realize sometimes the finger of blame was pointed back at management.

“At the management level, I’ve seen some eyes opened, and I’ve seen some people really change as a result of what they heard,” Ubbing says. “If you’re emphasizing teamwork and working collaboratively, you have to know that. That’s a message you may not want to hear, but it’s an essential message.”

The essential part of that has been a better look at external and internal things people handle daily.

“You don’t do it with the idea of terminating somebody, but, ‘OK, what do I do with this to help them,’ and in a couple of cases, we found a situation where people were simply overwhelmed,” she says. “They were stretched too thin; we were taking advantage of them.”

When you’re doing such evaluations, Ubbing warns that your default setting has to change to thinking that flawed internal systems may be more of the problem than the person.

“If they’ve been there for a while, ask what’s going on, where are the barriers,” Ubbing says. “You work together to solve the problem instead of replacing the problem and perpetuating it and bringing someone in who is set up to fail as well.”

To Ubbing, it’s also worth spending the extra time to correct small things that come back from evaluations instead of starting over with an area of your business that may have an internal flaw.

“Frankly, we spend about 52 percent of our budget on human resources,” she says. “The investment in your people and the development of your people has to be a huge priority, that’s where your money’s going. If it wasn’t a huge priority, why would you let the money go there?”

So as part of a more fair evaluation process, FMC has changed the way it deals with employee difficulties.

“The first step is to have an honest conversation,” Ubbing says. “So often a high-achieving employee will be reluctant to say, ‘Hey, I’m in over my head.’ Sometimes you have to do an intervention to get there. Usually, you become aware when things just don’t match up. You know that they’re a really good employee and yet you’ve got these indicators of deadlines missed, poor employee satisfaction. ... If you look to that and say, ‘What can I do to help,’ as opposed to, ‘You need to be replaced,’ you’re in a whole different world.”

With all of this openness comes the obvious caveat that crimes against professionalism must still be handled quickly.

“You falsify a record, you steal something from us ... there are still things that will lead to termination or, as the new expression is, help you park your car at home,” she says.

And, while you have to give people a chance to step out from under a stressful situation, you have to make them realize there are limits to the help you can give them.

“That’s the best thing I know to do, be available and being accessible,” Ubbing says. “When someone comes to me with a problem, a need, whatever it is, saying, ‘OK, this is what I can do,’ and it may not always be what they want me to do. But saying, ‘This is what I can do, this is approximately when I can have it done, this is how I’ll let you know when this is accomplished,’ or, ‘This is who you’re going to hear from next on this.’ And tell them like it is — don’t sugarcoat it. I’m a little bit blunt, and you build trust over time when you don’t try to sugarcoat things that don’t deserve to be sugarcoated.”

Diagnose your weaknesses

When you’re looking to fully evaluate your company to help with direction, a self-evaluation is an important part. Ubbing knows the most successful organizations have diversity in thinking and skills at the top, and as talented as she is, she knows she can’t keep all the balls in the air by herself.

“I always hire among those with whom I’ll be working most directly to my weaknesses and not my strengths,” she says. “I don’t need six Minas here; I need one and people who can supplement my skills with skills that are not mine.”

In order to find out what skills someone would need to complement you, you have to do a survey of your own skills. That means taking a moment to figure out the things you know to be your weaknesses.

“I’m not clinical at all, my background is finance and accounting, obviously I’m going to hire some very good communicators that are very well trained in the clinical aspects of the organization and can handle that,” Ubbing says.

Beyond obvious gaps in your own skills, you have to be willing to understand who can do some of the things you can with higher efficiency than you.

“Our CFO is much more detailed than I ever was as a CFO, and he enjoys the analysis,” Ubbing says. “I can still interpret a financial statement and develop a budget. … I just know that there are others who can do them much better.”

Another indicator of where you need more help is in things you just don’t enjoy doing — that may be telling. You can’t delegate everything on that list, obviously, but it may be a sign you’re not efficient in some things.

“Sometimes it comes around, and this is the advantage of being a CEO, it comes around the things that I don’t enjoy doing,” Ubbing says. “Of course, there are things I don’t enjoy that I have to do.”

CASE other companies for ideas

Throughout both her self-examination and the process of creating better systems for collaboration at FMC, Ubbing has come up with a philosophy regarding improvement systems: Take them wherever you can get them.

“There’s an expression, and I don’t know where I learned it, and you have to keep it in the legal, moral and ethical context, but it’s called CASE: copy and steal everything,” she says. “The point is, go to your colleagues if you’re hit with something and you don’t know what to do about it. You don’t have to invent solutions. Has anybody else done this? I’ve got networks that I can go with that and get that. Sometimes when you just talk to someone else about the problem you’re having, verbalizing it takes you back to a potential solution.”

Ubbing is constantly putting her problems into the context of other organizations and people. Internally, she often bounces ideas off her experienced CFO. She recently returned from a trip to Chicago and threw some things at him.

“I came back, and our CFO was in the office early and we were talking about it, and I said, ‘This is what I think we need to do,’” she says. “And I could see some hesitancy, so I said, ‘Let me tell you why I think we need to do that.’ And just talking through that led us to another point, and that really makes a difference, being able to have those conversations and have them calmly and agree to disagree. That’s something I’ve learned over time. There are days I’m not the best at it, but … I’m better at it more days than not.”

Getting better at that is part of her own career development, as she’s learned a simple mantra along the way that she’s happy to share with other leaders.

“Stop,” she says. “Not every problem can be solved in a minute. Look at what others are doing and listen for the needs of others. Look not only at what they are saying but also body language and other hints about what is really in their hearts and mind. You don’t have to answer every question on the spot.”

By doing that, she says you’ll be surprised how often the answer will come if you just float the problem out instead of insulating yourself to find a solution.

“Through our efforts in communication and making myself available to talk with stakeholders, sometimes somebody very distantly related to an issue in the thought process will show up and say, ‘Hey, did you ever think about this?’” Ubbing says.

You still have to look for opportunities for improvement wherever they’re available. FMC has had a few head-to-head turf disputes with Mount Carmel Health Systems over the years, but when the two collaborated on an emergency care center, Ubbing stumbled into a new training opportunity. Mount Carmel was fully trained in Six Sigma, so when it called looking for a way to get the organizations better acquainted, Ubbing had a way to break bread. She asked for help with Six Sigma, and Mount Carmel helped FMC build a relationship with the company that taught it the system to get them started with the program.

“Again, that was just gathering information and looking for opportunities,” Ubbing says.

By taking the time to improve systems of evaluation at every level, Ubbing has seen great strides in FMC’s overall culture. She says it’s not always a tangible thing, but it has created ways for nearly 2,000 people to collaborate.

“We’ve moved the culture of this organization to be more open and friendly and to work more collaboratively,” She says. “The cultural part is a little less tangible, but I’m pretty proud of that.”

How to reach: Fairfield Medical Center, (740) 687-8000 or www.fmchealth.org

Thursday, 25 June 2009 20:00

Game face

Brian Farrell keeps “Pong” around to help him with perspective.

You remember “Pong,” right? The two-dimensional tennis game is a ’70s classic, but you don’t often see the kids running home from school to fire up the Atari these days.

That’s because the industry has evolved itself into one of wireless controllers and online gamer networks. And so Farrell, the chairman, president and CEO of THQ Inc., has never let his company sit still while the gamers crave more realistic shooting action or better story lines. When he arrived at THQ in 1991, the company only worked in licensing, but today, his 2,000 employees put the company’s fate in its own hands, creating innovative games from its own studios

“Look at the music industry,” he says. “The business model changed, the music industry tried to reject it and consumers rejected them instead. We’re committed not to be in that. Our consumers are online, they’re consuming online, let’s go there with them, let’s lead them there.”

Along the way, Farrell and THQ have suffered through downturns that have had Wall Street calling for a coroner — losing rights to a wrestling game that made up 50 percent of its revenue at the time and the dot-com bust at the turn of the century. But each time the company has retrenched itself, and as a result, it pushed out 13 consecutive years of growth.

“So we’ve faced these challenges; that’s one of the reasons that although we’re driving very hard on this current turnaround, we’ve faced at least two other periods of pretty severe adversity,” Farrell says. “You put together a plan, get people on board by communicating with them honestly about what the challenges are and what we’re going to do about it, and then you put your head down and go do it.”

So when THQ posted its fiscal 2009 net sales of $829.96 million, its first year without growth since around the time the Nintendo 64 hit the scene, Farrell looked back to other times when changes needed to be made and used that basic format. Starting by using his already planned travel to address the troops, he later made sharp cuts and then got everybody to focus on the task ahead.

Constantly touch base with the troops

Farrell isn’t a big fan of airports.

He’s been around the world and home again, with more layovers than he cares to remember, and his next journey starts soon. But good times or bad, he believes you start by taking your objectives on the road and letting people hear them from you. Once you’ve done that, you hear what they have to say.

“I try to go out and visit our creative studios at least once a year and do a Q&A,” he says. “But tell them, ‘Here are the five objectives; here are the goals.’”

Schedule these trips ahead of time, regardless of your situation. That way, if times are bad, you’ll already have trips planned.

“I actually have an annual travel calendar starting out that puts all the key things like when our shareholder meetings are, our board meetings, and then I set a travel schedule and try to be as efficient as possible,” he says.

These meetings are about direction. And when things start to go bad, you can use them as context for where the issues are and how they can be addressed.

“So what I try and do is really educate people,” Farrell says. “… Here are the issues we have to face and, look, if I could wave a magic wand and fix the problem I would, but it’s more about, ‘Hey guys, here’s the problem and here’s how we have to address the problem, and like most things in life, there are no easy answers; let’s be thoughtful.’”

Beyond widespread travel, Farrell uses a basic format to get feedback on the company’s direction: an agenda-free brown-bag lunch. This is probably something that you’ve heard of before, but for Farrell, it’s how you drill down for details from people.

“I don’t want more than seven or eight people in the room, and it’s actually been very rewarding,” he says. “You think people might be afraid to speak up with the CEO in the room, but I say, ‘Look, this is just, no harm no foul, say it like it is,’ and boy, it’s interesting what you hear.”

From there, internal issues come forward. But here’s the rub: If you give people an open forum, you might just be inviting people to throw mud. Farrell stops that by letting everyone know he will do quality control checks, keeping names anonymous but using the information he acquires.

“What I try not to do is make it such that it became a forum so if people had to bitch, they could use that,” he says.

If, for example, someone says product marketing isn’t doing its job, Farrell takes that feedback to the marketing guy and asks about the issue that was raised to get their take on it. And whatever the outcome is, Farrell gets back to the person who brought up the issue with his decision.

In one lunch, a product developer told him that three more months on a certain game’s development would make it perfect. So Farrell sat down with the studio head and asked for more information. That particular case was one of Geppetto caring a bit too much for Pinocchio, as the developer wanted a game that was more than perfect.

“The feedback I got was … if we give three more months it will cost an extra $3 million and, commercially, it will make it incrementally better, but to an ordinary user, they’re not going to see that,” he says. “So it was good feedback, and it created a good dialogue, but I got back to the guy and said, ‘Here’s the feedback I got. We’ve already got a great game; to make it “great plus one” is not worth three months and $3 million,’ and he appreciated that I got back to him.”

Address your issues quickly

Throughout 2008, Farrell was finding that the Q&As and brown-bag lunches were increasingly focused on the economic downturn

“We reported a sales decline for the first time in many years, (along with) a fairly substantial operating loss, and that’s something that’s been very difficult both on a personal level and for a culture that has known nothing but success for 13 years,” he says.

So, like pulling a Band-Aid, THQ took a look at the issue and dealt with it quickly.

“We saw that growth was not going to take place (in this economy), so we cut back,” Farrell says. “We cut back quickly and aggressively, and, again, it goes back to the tenets we talked about — we communicated directly to the employees, very honestly, here’s what’s going on, here’s what we’re doing about it, it will affect jobs, you will be notified in a certain way.”

That began with Farrell being the one to address the issues. As soon as senior leaders realized that cuts had to be made, he got out in front of the company and told them that cutbacks and job losses were coming. To keep the process quick, though, the senior leaders set a date by which all cuts would be made and communicated it to employees.

“Again you do it in front of them at company meetings,” Farrell says. “I’ve done more all-employee e-mails in the last three or four months and been very clear: ‘Here’s what the issues are, here’s what our plan to attack it is, and here’s the effect on you. Yes, there will be jobs lost, and by March whatever, you will be advised.’ It was no spin and everything’s cool. It was, ‘We have to take some very direct and very deep cuts, but here’s what we’re doing and here’s why we’re doing it, and by this date, it will be done.’”

While some employees will appreciate that honesty and that approach and even though it will make things better for you long term, don’t expect it to improve morale during the hardest stretches.

“I did get a couple of e-mails back from employees saying, ‘Brian, really appreciate the honesty and directness,’ which actually kind of blew me away, but I think we have to be realistic,” he says. “When the world is running down, house values are down, people’s stock portfolios are down, the companies they are working for are struggling, [and] to have expectations people aren’t struggling with that would be unrealistic. I didn’t do it to keep morale high; I did it because that’s how you’re going to keep people believing in the vision of what can happen. Say, ‘It’s not happening now, don’t feel good, but we’re doing it fast, and here’s how we’re going to do it.’ So things aren’t good, but here’s how we’re going to get there from here quickly.”

Get back to work

When that fateful day in March passed, Farrell woke up the next morning and did what he’s done in every other downturn THQ has faced: He got up and went to work.

“One of the things I insisted on is if we’re going to cut, we’re going to make the decisions and do it quickly and not study ourselves to death,” Farrell says, recalling something he learned as a young basketball player at John Wooden’s school. “He had a great quote, ‘Be quick, but don’t hurry.’ It’s so common sense. Don’t hurry to make mistakes, but execute quickly once you make a decision and so I said, ‘March 31 we’re done, guys. Done, done, done.’”

Once THQ was done with the work force cutbacks, Farrell put his game face back on.

“Right at that time, we had two product launches coming out; we had this highly rated game called ‘Dawn of War II’ for PC, and I sent out an e-mail: ‘“Dawn of War” just hit No. 1 in six different markets; congratulations to the team,” he says. “A couple of weeks later, we shipped a new WWE brand extension. Again, ‘We just shipped this great game that’s getting good reviews, it’s got positive momentum at retail, and, oh, by the way, we have “Ultimate Fighting” coming out and “Red Faction Guerilla” coming up.’ Once the bad is behind, then start rebuilding confidence and promoting the proof points. And, again, no BS, but share the successes to give people reasons to believe again.”

Farrell also didn’t let employees see a CEO behind closed doors sulking over the company’s downturn. When THQ released “UFC 2009 Undisputed,” a fighting game for which the company partnered with Ultimate Fighting Championship, Farrell played UFC President Dana White in Times Square after the two rang the closing bell for NASDAQ (Farrell lost, by the way). It was time to move away from the turbulence and get back on track. For Farrell, that means putting the focus back on innovative games and staying ahead of the evolution of the industry. Doing that doesn’t mean you’ll avoid every misstep, it just means that you attack them when they come and then get back to work. That attitude is what’s kept THQ floating through tough times.

“One of the big lessons is we have to create a culture that anticipates and manages change,” he says. “And we haven’t always done it perfectly or even well. We’ve had our missteps over 18 years … but I will say our batting average is pretty darn good.”

How to reach: THQ Inc., (818) 871-5000 or www.thq.com

Tuesday, 26 May 2009 20:00

Changing the game

Forgive Philip H. Urban if he makes running a billion-dollar business sound simple.

He’s sitting on the back of a bus with some senior executives from Grange Mutual Casualty Co. talking casually about how the insurance provider has nearly doubled in size, to $1.3 billion in revenue, since he joined in 1999.

He’s relaxed as he goes through the story because this portion of his annual bus tour is almost over. He and his senior leaders hit the road to do 16 large presentations across 13 states for independent agents selling their product.

But almost lost in his demeanor is the fact that a bus tour like this didn’t exist before he came to Grange. The company was doing well, but it wasn’t the standout provider in an extremely crowded field. What Urban brought to the company is a philosophy that he now shares at every graduation for the company’s management class.

“Figure out what’s expected of you and then exceed that expectation in terms of performance or delivery,” he says. “If you want to stand out and be successful, the clearest way is to figure out how you’re going to be measured and do a better job than that, then you stand out. It’s that simple.”

But that simple isn’t exactly simple. In his 10 years with Grange, Urban has overseen a transformation in the way his 1,600 people do business with independent agents. A lot of it was Business 101 to him, but the rub was exceeding expectations. That mindset started with Grange completely rethinking its advantage in the market and building off of that. Along the way, the company changed hundreds of processes and ingrained a new philosophy into its culture.

So while Urban, who announced in May that he will be retiring in February 2010, shrugs it off now, a trip back to 1999 shows a glimpse into how he grew Grange.

Plan your trip

When Urban joined Grange, it was already a strong company, but he thought it could grow into much more. When you want to take on that challenge, you start by understanding what you can and can’t do already.

“You have to figure out what current skills and abilities your organization has,” he says. “Then you have to figure out if there’s a big gap between where you are and where you want to go and can you even close the gap.”

So he sat with his senior leadership team and board for a conversation about success.

“We spend a lot of time talking about what is success, how do we define it, what does it look like,” he says. “And that helps us then assess our current capabilities and skills and then you can do a very basic gap analysis: Here’s where we are, here’s where we need to be, how do you get from here to there, and for us, it’s really three things. We think about our mission statement, which is why we’re here. We think about our vision, which is that exciting view of the future, and then we think about the cultural aspects of our company that we want to preserve.”

Urban believes there is a three-step process to the assessment, starting with a sit-down meeting with your leadership team to plan your trip.

“Think about it like you’re going to plan a vacation,” he says. “The first thing you have to figure out is where you’re going to go, so we spend a lot of time saying what do we want to look like in five years, 10 years.”

When the trip’s planned, you need to do a critical success factor analysis, looking at what things have to be present in your industry for success.

“You take any industry and you can make a pretty long list of all the things that need to be present for a company to be successful in that industry,” Urban says. “I’ll use as an example the fast-food industry. You have to have a good menu, it has to be cheap, it’s got to be quick, you have to be at an easy to get in and out of location, you have to have a drive-through — you get the idea. So when you do that analysis for the insurance industry, let’s say there are 50 things that need to be present for you to be successful. Then we do an analysis to say, ‘All right, of those 50 things, which do we really have in good measure today, and which of the 50 don’t we have in good measure?’ And then you prioritize the ones you want to work on and that creates a work plan for getting your company to be in the game.”

During that process, identify anything your company excels at or specializes in, and that can be your calling card.

“Identify if there is something about your company that you can either build on that’s already there in part or you can create, something that makes you successful, something that makes you different from the competition and it’s something that’s hard to copy,” Urban says.

Your company can be successful without taking these steps, but you’ll never be the go-to person in the market.

“If you want to be a true outperform company, you need to have at least one sustainable competitive advantage, otherwise you’re just going to be kind of average,” he says. “So you go through that process and maybe the good news is you discover you’ve got something that you can build on and that leads you to being in a position where you can outperform.”

Strengthen your strength

While you may be excited to see that you have a game-changing advantage in the marketplace, Urban says that’s not the end of the process.

The senior leadership team at Grange realized in the summer of 1999 that its sustainable competitive advantage was its relationship to its distribution channel — the independent agents selling the product. But just leveraging that type of advantage isn’t enough.

“You remember I said a sustainable advantage has to have three characteristics, it has to make you better, different and it’s hard for the other guys to copy,” Urban says. “So we said, ‘Well, our relationship with our independent agents really could be that.’ But we also noticed that there are a lot of other companies in our space that would sort of claim that position themselves, so we asked ourselves, ‘Are we really different?’”

In order to fully challenge an assumption, you have to take a step back to think about who is best served by your advantage and the processes you could create to strengthen that. Urban knows independent agents represent several agencies, so he worked on figuring out what led them to their final decision.

“So if you ever wonder what is it that causes an agent to pick company A versus company B, versus C, there are lots of reasons that go into that particular selection,” he says. “But when we thought about it, we said, ‘Human nature being human nature, what if we made ourselves the company that is so easy for the agents to do business with that they would most likely pick us.’”

From this came a process Grange calls EODB — ease of doing business.

“The idea was to figure out what agents wanted us to do differently that would make it just flat simple for them to use us so that literally they would think, ‘Oh man, I want to put this customer with Grange because they’re just really easy to get the product quoted, to get the policy issued, have the claims handled, etc., etc.,” he says.

This is another time where you can’t get tripped up by how simple Urban makes it sound. That process involved hundreds and hundreds of changes to even the most basic portions of the business, such as creating a paperless system for independent agents. In fact, the system is still being tweaked at this moment.

But the willingness to constantly challenge and improve upon a market differentiating strength has made Grange the destination in the insurance business.

“When there’s ever a survey done on which company is the easiest to do business with, we win every time,” Urban says. “And we know that that position has enabled us to get really a preferred position in the majority of agents that represent us.”

Include it in your culture

While all this was going on, Urban didn’t forget all these processes would affect a culture that he loved. When you have to mix a new idea into an existing culture, he says the trick is to add it as an enhancement to what already works.

“The first thing you do is you codify the culture,” he says. “You step back and you say, ‘OK, what are the things that exist in the culture today that we want to make sure get perpetuated?’ And they’re pretty basic things. Things like, we want to work together in a team environment. You want to have people that are open and will tell you what’s on their minds. ... And those become the basis of your core values, and then you make sure that everybody understands those.”

It starts with putting managers on the hook for using them daily, something many leaders don’t take seriously.

“They usually have a sheet of paper with, here’s how to be a good manager and one of the steps on there is have core values, so they come up with core values, they check the box and say, ‘OK, got that, let’s move on,’” Urban says. “But there’s so much more. You have to implement it; you have to hold people accountable for it.”

At Grange, that means putting those core values in the measure of someone’s performance.

“Everybody at Grange has performance objectives; part of their performance objectives are how they live and demonstrate the core values in how they function at the office,” he says.

At Grange, 20 to 30 percent of an employee’s performance rating ties directly to his or her use of the core values, which have come to include making EODB a priority. The employee’s overall rating then ties to merit increases and promotions.

“So you might have one, teamwork, and the performance instrument will list four or five behaviors that are present when somebody’s really good at teamwork, and so, the evaluator can look at the individual and look at these behaviors and make a reasonable assessment,” Urban says. “It’s clearly subjective, but it is still a pretty good way to give an indication if the person is exhibiting those behaviors or not. That’s not that hard to do, really, you just have to want to do it.

“When somebody is up for promotion, we take a look at the performance reviews, which is a demonstration of those cultural values to try to understand how the rest of the world sees that particular potential promotee, and that weighs very heavily in our decision.”

The end result is that the culture Urban loved when he came to Grange has expanded as the company has grown to 1,600 people, and those people understand that EODB is a core function of their daily business.

“That’s really a part of who we are now, that’s a big part of Grange, and I’m so excited to think that the majority of our people and the majority of our independent agents get it, they believe in it,” Urban says. “And we’re actually kind of flattered because we’re seeing more and more of our competition talking about ease of doing business, and we know they’re doing it because they’re hearing about Grange from our agents, and if imitation is the sincerest form of flattery, we’re feeling a little bit flattered by that.” <<

How to reach: Grange Mutual Casualty Co., (800) 422-0550 or www.grangeinsurance.com

Tuesday, 26 May 2009 20:00

Team player

From the time he came to the company, Jaideep Bajaj has understood that the genesis of success at ZS Associates Inc. is all about creativity.

But creativity itself cannot sustain a business.

Two decades ago, Bajaj was one of about 25 employees at ZS, and good client work was fueling rapid growth at the management consulting firm. But as Bajaj’s career progressed, he stepped into the role of managing director about six years ago and realized that while creativity was still king, ZS had 17 offices around the world, with roughly 1,200 employees, but no global standards.

“We had lots of very creative people, but 100 percent freedom,” he says. “Meaning, if you’re in London, you decide how many people to hire, you decide what you want to do, and it’s really not about that, it’s really about synergy that you have to have with each other globally. You have to have a consistent product development and product expansion strategy. That requires structure with the freedom to innovate, because we had this legacy of amazingly free work … and yet, there was a realization in the firm that to truly harness and compete, we do need structure, and so balancing this 100 percent freedom to innovate with the need for structure has been a fairly significant trick.”

So when Bajaj decided to attack ways to create systems while still keeping that creative fire alive, he started at the top, creating accountability for his senior leaders. With that in place, he created review systems that teamed people across offices together and had them graded from above and below. All the while, he tweaked hiring and training while putting a limit on how fast the company grew.

The results have helped the company get to more than $250 million while keeping alive an incredible growth streak that has averaged 20 percent per year for the last 15 years.

Start with accountability

As ZS began to grow outward, adding offices all over the world, Bajaj and other senior leaders noticed that while one office would have a killer solution to a problem, another would have no idea how to handle it. Similarly, there had been no minimums or maximums to basic systems such as head count.

“So there was a need for global scheduling systems,” Bajaj says. “There was a need for global head count hiring, because why would you overhire in Japan and then never use those people?”

When you begin to think about getting different people in different places on one page, it can seem overwhelming. But Bajaj says you wouldn’t believe how much low-hanging fruit is out there.

“The idea really was to think of the major levels that would have the quickest impact first, so we identified partner accountability as the first place to start off because you want to start with senior-most people being accountable before you start making the whole firm accountable,” Bajaj says.

But ZS didn’t want to completely kill the creativity that it had been built upon. Previously, partners had never been asked to submit any kind of plan. ZS didn’t want the exact opposite, where partners would feel they needed to spend all their time creating and criticizing each other’s plans. The best result was in the middle, asking them to submit overviews they believed they could achieve.

“So partners had to develop plans around their clients, plans around what they wanted to do and hold themselves accountable,” Bajaj says. “It’s not so much someone saying, ‘Hey, do this,’ it’s about, ‘What is your plan?’ and then giving them advice on how to improve the plan, so you do it in a fashion that’s consistent with the concept of being a partner.”

ZS then plucked another piece of low-hanging fruit: Creating basic systems to tie employees to units of business to make better sense out of productivity expectations, creating practice-area teams in areas where the most common client problems arise.

Beyond the 20-plus practice area teams at ZS, the company has also benefited from placing people together in skill tracks — they are sort of like minors in college, with expertise focused in a particular area. You may have offices in Milan and Chicago, as ZS does, that have only one person focused on operations research, but the two working together could create a track.

People can change tracks at any time, but their existence meant that suddenly ZS knew what gaps it needed to fill and that it would need to help with the hiring and recruiting required to fill those gaps.

“So if you are trying to change a staffing process, you make sure these tracks around the world understand what we are doing, question it, absorb it and become an element of change,” he says. “They have similar backgrounds, and they feel this unity, and there are global track leaders who can then leverage these tracks as part of communication and change.”

Though all of this has created better global staffing, ZS still allows for some flexibility in its hiring to fit in creative people — or stay a little short if the talent is not available.

“There is always room for great people, so an office may have a hiring goal of five people and they may have already hired six, but here comes No. 7 who is absolutely amazing and just walks on water, you are hired,” Bajaj says.

“Now, the flip side is you never lower the standard. You have a goal of hiring five people and you found only two that are amazing, you don’t lower your standards just to fit the head count because that’s going to kill you in the long run.”

Make employees pass the test

With some low-hanging fruit already on the table, ZS still needed to do a better job of ensuring that people were taking advantage of new systems meant to spark collaboration and accountability. In order to do that, you need to figure out who is excelling at those elements and who needs more work. Bajaj again started with senior leaders, as they all do peer 360 reviews.

“That peer input is part of calibrating me as a partner, part of keeping my culture consistent with the rest of the firm,” he says.

You can do that calibration by having senior leaders outside of a project review how it went. For example, when Bajaj does one for another partner, he reviews the work done on a project and then speaks with people on that team about the role the partner played, listening for overall trends, not one bad review.

“So if I’m doing a 360 on a different partner, I will interview the managers who used to work for that partner to try to make sure that what they have [to say] is being listened to,” he says.

And you can do that with more than just partners. After a project closes, everyone on the team is asked to review people below and above them — managers, for example, grade associates and partners.

Again, no one negative review costs anyone a job.

“Let’s say I’m an associate,” Bajaj says. “I get reviewed on every project by whoever the project manager was and so I may get reviewed by 10 different managers in the company for 10 different assignments over a six-month period and it’s the integration of those 10 that creates my annual review. That’s given to me by my manager, who summarizes it and says, ‘Here’s how people are talking about you. There’s this element called collaboration, and you’ve scored below average, and here’s the things people have pointed out.’”

People are also asked to write their own review and describe what collaborations they’ve done that have benefited themselves and others in the firm to drive home its importance.

“The things we value, we make sure they are reinforced in multiple systems,” Bajaj says.

In all, teamwork is one of about eight dimensions in what ZS calls its competency model. The model is an overall test, without which you cannot get promoted to the next level.

“So these dimensions are tracked over your career — same dimension but different measures of success and degrees of success are required as you progress up,” Bajaj says. “We prefer people to have every dimension, but very occasionally, we will compensate and say they were so much of an outlier on all these dimensions and this one they are pretty close, but if you fail completely on a dimension, you are unlikely to progress to future levels.”

And when people can’t improve, Bajaj says you can’t have any reservations about telling them to move on — even to the point of helping them find work.

“We’ll, of course, try to improve them,” he says. “And if they can’t improve, we’ll be open as to how their career will flourish better elsewhere. Because it’s not just about us being selfish and saying you don’t fit with us and you should leave. If their career isn’t progressing with us, it’s not good for them either.”

Set growth limits

While all the systems were being put into place to create accountability around collaboration, Bajaj realized there is one other thing that can kill it during growth: new people. You may think that a good company culture will indoctrinate new people, but there is a limit. ZS had a year when it grew nearly 50 percent, and upon review, Bajaj realized that it was the company’s weakest effort to date.

“Of course, financially it was a great year, but the more we looked back at it, the more we said, ‘You know, I think our customers gave us a break,” he says.

Thereafter, Bajaj and other senior leaders capped the company’s growth capability for one year, even if it meant turning down projects.

“Internally we feel that we never want to grow more than 25 to 30 percent because that almost breaks our back,” he says. “And, cumulatively in our history, we’ve done about 20 percent per year, and we think we can manage that in a very healthy fashion, but the years that we crossed 30, we could feel the stress in our quality.”

That number was brought about by an understanding of how important it is to mix people experienced with your company’s expectations in with new hires — regardless of the new hire’s industry experience.

“So really there is a healthy mixture of experience and growth that you have to balance because it’s really about growth long term and not about one breakout year where you just hire lots and lots of rookies,” he says. “Even if you hire experienced hires, they are still rookies in our practice areas and the expectation of customers from us.”

You also need to take a close look at your hiring and training processes.

“It all begins with the kind of people you hire and how you train people,” Bajaj says. “So we have this thing called a new employee orientation, so one of the things we do is, rather than simply share the practice areas at the firm and the technology of the firm, we share cultural norms of the firm, as well.”

Those orientation sessions include a class on company culture from one of the company’s founders and each of the firm’s senior partners runs their own three-hour session.

ZS breeds its culture into any new office through representation. Instead of opening an office with one existing manager who hires a new team, Bajaj says you can replicate your culture with strong forces in a new location.

“When we start a new office, rather than just hiring brand-new people only for that location, we’ll feed it,” he says. “Maybe up to one-third of that office with people from existing locations that represent our values and our culture and then recruit — rather than simply recruit 90 to 95 percent and just send one guy or two people.”

How to reach: ZS Associates Inc., (312) 233-4800 or www.zsassociates.com