Change is an inevitability of life. Ironically, the fact that “change will always happen” is the only real thing we can count on in life! We cannot always control change, but that does not mean our life path has to be at the complete mercy of random, unpredictable circumstance.
As a busy executive, are you at the mercy of events or are you in control? Do the changes roll in so fast that you find yourself struggling to stay afloat? How do you view the changes that are happening around you?
You can shake your fist at the sky, or sulk to show that you are mad at the world, or you can accept that truth that nobody escapes change. These tips are intended help you be mindful of your potential, to hone your ability to manifest positive results and to learn that sometimes you must simply “go with the flow.”
12 ways to embrace change to increase effectiveness as a busy executive:
1. CHAOS IS OPPORTUNITY. Big changes, especially unpleasant ones, are like storms that clear the air. Rather than perceive this as a disaster, strategically keep note of the pros and cons of the situation. Learning from a chaotic change and then implementing a series of positive changes can earn you kudos for your ability to handle a tough situation.
2. REFLECTION, NOT PANIC. Be the calm at the center of the storm. Realize the need for rational, intelligent thinking and connection with your higher self. Often we receive answers that tell us exactly what we need to do when our mind is still. This is also a way to earn the respect of your colleagues and team.
3. AVOID STINKING THINKING. When change happens unexpectedly, some people engage in “stinking thinking.” Try to avoid thinking negatively of yourself, your coworkers or the situation in general. Avoid words like “should”, “not” and “can’t”. Remember, the idea here is to increase your effectiveness – negative thought will not make that happen.
4. BE ACCOUNTABLE FOR YOUR ACTIONS. Being honest with yourself about what role you may have played to manifest an unpleasant change is one of the best ways to respect yourself and maintain your own integrity. If the change occurred because you made a mistake, then learn from it and move on. Accountability increases effectiveness.
5. DON’T PLAY THE BLAME GAME. Rather than change, many people create reasons why they are incapable of change. One of the favorite tactics of ineffective executives is to blame all of their woes on others, especially their team members. Even if there is someone to blame, obsessing over it will not help in correcting the situation.
6. CONSIDER ALL OF THE FACTS. When in the midst of change, many people find it hard to “see the forest through the trees.” As an executive, try to develop a perspective that takes everything into consideration and not just your point of view.
7. BE PROACTIVE, NOT REACTIVE. A reactive individual is at the mercy of change. A proactive manager takes action to make the best of it. Acting first keeps you out ahead of change and in control of it.
8. DON’T SWEAT THE SMALL STUFF. During periods of great change it is very common to find every little thing to be just another source of stress. Learn to distinguish between what is worth worrying about and what isn’t.
9. AVOID MISERY LOVES COMPANY. During times of change an executive is likely to have coworkers or others who will want to sit and ruminate over the “terrible” situation. Refuse to participate in these types of pity parties. They breed self-sabotaging negative thoughts and behaviors. They also lead to a lessening of respect for your position.
10. BE READY WITH A SMILE. People who smile are considered to be more flexible and adaptable to change. People who look stern are considered to be rigid personalities that are not capable of personal growth. Change is all about personal growth, for you and your team. A smile can make all the difference in these times.
11. GO WITH THE FLOW. Present an easy, casual and friendly attitude that shows off your flexibility, yet at the same time portrays your persistence in the face of obstacles and adversity. This attitude will lend itself as a helpful guide through the river of change that is happening all around your company or organization.
12. REWARD YOURSELF. Too many executives only reward the good behavior of others in their organization. Do not do this. If you have mastered some aspect of change that you have found very difficult to conquer in the past, remember to reward yourself. This reinforces your subconscious mind to repeat the beneficial behavior.
Remember, the only thing you can be sure of is change. Is there anything more boring than a life without change? Embrace the lessons that life has to offer you and grow from them. Use them to teach and lead as you strive for more effectiveness in all you do.
DeLores Pressley, motivational speaker and personal power expert, is one of the most respected and sought-after experts on success, motivation, confidence and personal power. She is an international keynote speaker, author, life coach and the founder of the Born Successful Institute and DeLores Pressley Worldwide. She helps individuals utilize personal power, increase confidence and live a life of significance. Her story has been touted in The Washington Post, Black Enterprise, First for Women, Essence, New York Daily News, Ebony and Marie Claire. She is a frequent media guest and has been interviewed on every major network – ABC, NBC, CBS and FOX – including America’s top rated shows OPRAH and Entertainment Tonight.
She is the author of “Oh Yes You Can,” “Clean Out the Closet of Your Life” and “Believe in the Power of You.” To book her as a speaker or coach, contact her office at 330.649.9809 or via email at email@example.com or visit her website at www.delorespressley.com.
Dunn-Edwards Corp. was a model of inefficiency when Karl Altergott arrived as president of the paint manufacturer three years ago.
“We drew a diagram of all the trips it took a manufacturing associate to build our product,” Altergott says. “It was 23 to 25 touches just to make a gallon of paint. When you laid out the spaghetti diagram and really just mapped out here’s a person making a gallon of paint and kind of track them over the course of a day and what they do, it became quite evident that it wasn’t efficient from a financial standpoint. It didn’t allow us to build the product we needed to build in a timely fashion.”
Dunn-Edwards had two plants. One was in Arizona and had been built in the early 1970s, while the one in Los Angeles was built in the mid-1940s. Both were extremely antiquated and lacking in modern automation capabilities.
“When we hit peak demand in 2006, we weren’t able to keep up with demand and since then it just further deteriorated,” Altergott says.
The pressure eased a bit for the 1,500-employee company, though not really in a good way, when the recession hit and the housing industry took a plunge.
“If we ever reverse course, which we knew would happen, we wouldn’t have had the capability to support that,” Altergott says. “Our biggest challenge was trying to figure out how to address that and then how do we deploy capital to fix manufacturing while reducing costs and bringing us into the 21st century?”
Make a decision
Despite the aging facilities Dunn-Edwards was dealing with, it still would have been easy to blame the economy and put off a major financial commitment to upgrade the company.
“We didn’t need the capacity today,” Altergott says. “So why invest the money? Why take critical dollars and deploy them in a down economy and take a contrarian approach to the market and invest in manufacturing when the economy is in a declining mode?”
You do it because it needs to be done. And when Altergott looked at the lack of modern technology and the massive inefficiency involved in simply making a gallon of paint, he knew something needed to change.
He began by determining if the existing plant could be renovated.
“Can you fix your current plant? Or something this old, do you just scrap it?” Altergott says. “So we did a lot of analysis on what it would take to fix our current facilities. We looked at and modeled out building on a green field, updating our current facility, building a new facility on our current location or building a new facility at other locations. We just mapped out a number of different models before we selected the correct approach to take.”
When you are entering into such an important process, you need to be clear about whether information should be shared or kept confidential. In this case, at this stage, Altergott wanted to keep discussions behind closed doors.
“You have to have confidence that they are not going to share the knowledge that they know,” Altergott says. “If people can’t be in that role, they are not going to be employed in the company. It’s as simple as that. If they want to be part of the team, they have to be part of the process.”
Altergott and his team of about six people developed a list of scenarios. He was open to hearing fresh ideas, but they had to be plausible.
“You don’t want to rule anything out, but it’s got to be within reason,” Altergott says. “It’s a manufacturing facility. We’re not going to build a new plant in Texas when all our business is here in California. So we had multiple scenarios and each one had a different cash flow model, payback and return on investment. We looked at how we were going to finance the different options. We continued to refine it and refine it every couple of weeks depending on the data we had.”
As you’re working through any type of process, whether it’s building a new plant or buying a new printer for the office, you need to make sure people know what responsibilities they have and then hold them accountable.
“You can’t outsource leadership,” Altergott says. “Every year, I have a plan that has probably 300 unique items on it. Every one has a name, a date and a deliverable. We meet every quarter and we go through that list item by item by item. People have to have things done. If they’re not done, I ask them why it didn’t get done. You don’t come to my meetings quarter after quarter and just say, ‘I didn’t get anything done.’ It just doesn’t work that way.”
As this process drew to a close, it became clear that the best option was to buy a spec building in Arizona that measured 300,000 square feet and could be transformed into a paint manufacturing plant with relatively little trouble.
“It was just an empty shell,” Altergott says. “It was built to be sold to somebody”
That somebody ended up being Dunn-Edwards.
Develop a plan
Altergott and his team approached the company’s board of directors and got the OK to proceed with turning this spec building into a paint manufacturing plant. It was now time to figure out how to make that happen. The one thing Altergott knew for sure was that he would NOT be leading that effort.
“During the construction phase, there are millions of decisions that need to be made every day,” Altergott says. “My job is not to be the project manager of this project because I have a whole company to run in addition to having this facility built.”
This would end up being a $40 million project and one that would shape Dunn-Edwards future for decades to come. So it was crucial that the project was given the proper attention and importance.
To that end, Altergott did not choose one of his own people to head up the construction team.
“One of my vice president subordinates wanted the job and I explained to him why he wasn’t going to get it,” Altergott says. “Once I hired Mark, who is my vice president of manufacturing, he clearly understood why I hired him. This other gentleman has really blossomed in the organization and he’s put himself into a position where if a job were to open up again, he’s in a great position to backfill it now because he has learned a lot in the last two years.”
If you’ve got a project that you view as being critically important to your company’s future, you can’t worry about bruising someone’s ego on your team.
“I’d simply ask, ‘Have you ever built a $40 million plant before?’” Altergott says for a response if someone is offended that you didn’t pick them for an important post. “If you’ve had that experience, we can go in that direction. But if you haven’t, we have to hire somebody in here who has the ability to really pull this off. You still tell those people they are valued and they have a future to grow within the company. But at this particular juncture, they didn’t have the qualifications that I was looking for.”
What you should be looking for is someone with experience managing a project similar to the one you want to carry out.
“For a project like this, I hired an engineer,” Altergott says. “Some plants are run from a maintenance perspective and some plants are run from an engineering perspective. I made sure I had a strong engineering mindset in the development of this plant. When it gets to flow dynamics and flow characteristics and the paint manufacturing plant, I really wanted a big engineer to help optimize the design for efficiencies and not just look at maintainability.”
You need to find the right person that matches your needs and the needs of the project so that you don’t have to worry about it. Well, worry as much about it.
“I don’t see how I could have done both,” Altergott says. “On the front end, from a strategic standpoint, I was heavily involved. Once we had the go decision, I was involved weekly with a conference call and understanding the pace and making decisions on things that were problematic. But I stayed out of everything else.”
You will never address every concern in planning for a project and you will never get through a project without at least one unexpected problem. And you’ll probably have several problems, some of which may cause you many sleepless nights.
“It’s never seamless,” Altergott says. “No matter how well you plan, there’s always things that you don’t anticipate. You have 1,000 decisions and 980 of them are great, but 20 will kill you. We had some bad data in our SAP system. You put bad data in and you get bad data out. So it took us a couple of runs through the process to cleanse the data so we could get better consistency in our deliveries.”
Altergott used his weekly meetings to get updates on what was happening and stay in touch and tried to stay away from his people working on the plant the rest of the week.
“We’d go through all the major issues that were surfacing that week,” Altergott says. “What are the big things that are not getting done? What is behind schedule? What is causing challenges?”
When problems do come to your attention, resist the urge to jump all over the leader you chose to lead the project and question why he didn’t anticipate the problem.
“I made a point to make sure he never felt as though he blew anything when we had some challenges,” Altergott says. “I made a point to bring him under my wing and say, ‘We’re in this as a team.’ When you move this quickly and make this many decisions, a couple times, you have a couple fumbles. As long as we get it fixed, and we did, it’s all good. When you see one of your subordinates and they are a little frustrated at the end of the table, you just need to bring them back in and tell them that it’s going to be OK. Provided you have the right person and you know that they are. If they’re not the right person, that’s a different scenario. But if you know they are one of your stars, you don’t just let them dangle out there.”
Despite the challenges, the project to construct a new paint manufacturing plant took about 27 months. The difference in efficiency brought about by the new facility and its automation capabilities was striking.
“It was 23 to 25 touches just to make a gallon of paint,” Altergott says. “Now we’ve got it down to two or three using our new automated system.”
The days of conveyor systems running from one building to another and then another are history too.
“We have over 1,500 automated valves that are all computer actuated,” Altergott says. “Historically, everything was done by hand and turning valves on and off and sometimes not even using valves. By using a lot of computer technology and using a lot of automation, we were able to really improve efficiencies by having it under one roof.”
It wasn’t easy though and the thing that surprised Altergott most was that much of the heavy lifting occurred as the project seemingly neared completion.
“Spending the money and building the plant is the easy part,” Altergott says. “Turning it on is the hard part. It’s everything. The complexity of a lot of automation just adds to it. Automation is great when it’s all up and running. But turning it on, just like debugging a computer system, it can be quite aggravating.”
How to reach: Dunn-Edwards Corp., (888) 337-2468 or www.dunnedwards.com
The Altergott File
Karl Altergott, President, Dunn-Edwards Corp.
Born: Los Angeles
Education: Bachelor of science in engineering, Loyola Marymount University, Los Angeles; MBA, Graziadio School of Business and Management, Pepperdine University, Los Angeles
How did your experience in the U.S. Marine Corps as a fighter pilot shape you?
You see so many great leaders when you are in the military. Gen. James F. Amos, the current commandant of the U.S. Marine Corps, is someone who I have met before. He actually taught me when I was a young captain and he is a great leader. When you see these strong leaders, you really understand what leadership is and how they take care of their people. And yet, they are very focused on the mission at hand. What I really learned out of the Marine Corps is the decisions you make are life and death, which are different than you do in the business world. No matter how crazy things can be in the business world, at the end of the day, I’ll go home to my family. You don’t always have that closure in the military.
Altergott on CEOs who fear talent: They want to be the smartest guy at the table and that’s the death of an organization. I’ve seen a lot of people struggle with it. You’re limiting yourself. I looked at my own personal success and growth and if I want to sit there and handicap myself by having subordinates that are not as intelligent as me, that’s a personal reflection of me and the success I will have. All you’re doing is handicapping yourself. Why would you build a team that is subpar just so you can be the smartest guy at the table? To me, that makes no sense.
As CEO of St. Petersburg-based Interstate Logistics Group Inc., Tim Higham spends most of his time either motivating and recognizing employees or focusing on growth opportunities for his company. Because of Interstate’s considerable expansion over the years, Higham has further increased his involvement in both areas. However, he was initially reluctant to relinquish control over others.
“I think that’s the challenge most CEOs have,” Higham says. “I’m able to do a lot of things, but I can’t do a lot of things all at the same time. So I’ve had to learn how to trust people and to delegate very important tasks to people, knowing that they’ll get it done the right way.”
Smart Business spoke with Tim Higham about how he’s grown Interstate to a projected $30 million in revenue in 2011 by building trust and accountability with employees.
Pay for the best. I’ve never micromanaged people, but over the years, what’s happened is, I’ve let certain people do things that made a mess of it. I noticed a few years ago I was basically becoming more of a micromanager because I was fearful. I was afraid that they would mess up again. I had to pull myself away from that and basically insert professional employees — and professional employees meaning you pay for what you get. You can’t hire very strong middle managers and pay them minimum wage. You’re not going to get the kind of people who can perform the way you want them to. So my style has changed by being willing to pay people that are very well qualified, and those people cost usually a lot more money.
Meet efficiently. There are two types of meetings. There are efficient meetings and really long meetings. So here, each meeting is not allowed to last more than one hour. That’s the tops — one hour. If you can’t get a meeting done in an hour, there’s a problem. It’s a case of get things on the table, hash them out, have a discussion and then end the meeting and then off you go. Some companies just have nothing but meetings, meetings, meetings and nothing actually gets done. What meetings are for is to efficiently take say five, six, 10 people and rather than have five, six or 10 conversations, it’s to get the same conversation all at the same time with the right people.
Acknowledge strengths. As companies get bigger, your ability to affect the day-to-day things becomes less and less and less, but your ability to be able to motivate people becomes more and more and more. I’ve got a 9-year-old son, and my son responds very well to encouragement and to a pat on the back. … As I encourage and point out good things to my 9-year-old son, he tends to want to do more of the good things and less of the bad things. I ignore the bad things when they’re not really important, but I focus on encouraging and pointing out the good and positive things that people do. As human beings, me and you, everybody wants to be encouraged. They want to feel important. They want to feel that they count and they matter. If I focus on the things that they are doing well, overall I can tell you 99 times out of 100, your typical human being will then gravitate toward doing more of the positive things and less of the negative things.
Keep people updated. We go over every single aspect of every part of the company in an overview type of environment, but we tell them the numbers for the company for the last month, how things are trending and forecasting. We tell them the revenue. We tell them the profits. We tell them about new hires and expenses and we try to keep them involved. We try to teach them that this is a business, and we want them to feel that it’s their business. Because if they feel it’s their business, they are much more cognizant about making sure that they don’t waste money. I tell the employees probably more than I probably should. But because I tell them that information, they seem to grasp that they are part of this, not that they are working just for a company with a name and they don’t really care. They feel that this is their business, and if they feel that this is their business and they are connected to the business, then they are much more willing to go the extra mile.
When a company has excellent leaders in place who motivate and engage the work force toward clearly defined goals, then a company is well on its way to achieving success. That’s because leadership and accountability are the keys to a strategy’s successful execution. Even though these ideas seem simple in principle, having people truly understand and take accountability for their roles and responsibilities can be more difficult than one might think.
For example, when our company’s leaders mapped out our strategy, we also discussed their role in the execution of that strategy. However, these initial discussions revealed that some leaders saw success as the mere attainment of goals, while others saw the value in the development of their people. It soon became clear that we had to further clarify our leaders’ expectations and what accountabilities they had to their people and our results. We knew that we needed to get everyone on the same page so that when we spoke of leadership, everyone’s minds jumped to the same concept. We also had to be clear that a successful leader attains results by bringing the team along in the journey.
So to elicit discussions in our twice-monthly manager meetings around the concept of leadership, we decided to start a reading program. Over the course of one year we read five books together that covered different leadership styles. The goal was to look at what worked and what did not work in the books, as well as how we were currently using these concepts or how we might see them working in the future. During the discussions, we also created a one-page document that spelled out the expectations of a leader in our organization.
In our conversations about leadership, there was much talk around accountability in regards to setting clear goals for all team members and then holding them to the results. We talked about the need to set clear and reasonable goals that encouraged team members to stretch themselves — goals that were achievable but still challenging.
One of the most important points on the topic of accountability was setting an expectation of communication. Every leader and team member needs to take full accountability for achieving results. If things are on track then the leader can encourage and praise the progress. If things are not going as planned, then the leader and the team member can work to remove roadblocks to attainment. We made it clear that the team member must take the responsibility to communicate any delays ahead of the completion date, so that the leader can assist in getting the goal back on track.
It is important to note that the idea of accountability is generally received very well by people, until they are the ones who are personally held accountable for results. The first response when things are not going well is usually an excuse: “I would have achieved the goal if …” This must be met with a reminder of accountability in building a plan to achieve results. Only when the leadership actively follows up at regular intervals will it able to help keep team members and goal attainment on track.
While having a culture of accountability and positive leadership takes a lot of work and demands role models at every level in the organization, that work will pay off in so many ways. I have witnessed a team that is confident in its roles, knows what needs to be done and will freely communicate when things are not going quite as planned. By making this leadership and accountability a priority, you’ll witness your team members embrace their work and take real ownership of what is accomplished.
Virginia Albanese is president and CEO of FedEx Custom Critical, North America’s largest critical-shipment carrier. The company provides 24/7 service throughout the United States, Canada and internationally, delivering hundreds of thousands of critical shipments each year. She is also the chairwoman of the Greater Akron Chamber of Commerce and serves on a number of other boards to benefit the Northeast Ohio community, including Akron Children’s Hospital and The Boys and Girls Club of the Western Reserve.
When Jeffrey Bowman stepped into the president and CEO role at Crawford & Co., he knew it wasn’t just the top leader that was changing — the organization was going to need to, as well.
“I use the term ‘acting with a sense of urgency,’” he says. “It was changing the speed to be a global organization and being able to demonstrate that we were a global organization with global clients. … Crawford is actually 70 years old this year as an organization, so a lot of organizations around the 60- to 65-year mark really get themselves to where they have to go through some cultural changes.”
One of the things he saw that needed to change was how the company shared its plans with employees. Typically, plans weren’t shared at all with those working at the insurance company. When nobody knew the plan, people tended to not care what other areas of the organization were doing, so silos had been built across the business.
“We had silos in our organization between various divisions,” he says. “We weren’t sharing best practices around the globe in either management information or technology. We had a very siloed effect around what we were doing around that. We didn’t have a head office that was really dictating to our overseas operations exactly how we expected them to behave as a public company and as a large organization.”
To get the organization acting more as one, he knew he would need to come up with a good plan and hold people accountable. His hope was that in doing these two things, Crawford would start to act more cohesively and become better positioned for the future.
“It’s a journey, and your strategy helps you lay that journey out because you can never change a culture immediately,” Bowman says. “You have to work at cultural changes, and you have to work at the messaging in organizations.”
Create a plan
The first thing Bowman had to do to get the company operating more cohesively was create a strategic plan.
“It’s like a journey — you have to have a point you want to get to,” he says.
Start with what the basics of your organization are — why you exist and finding a way to support that.
“It was really a case of bringing it to a focus of, ‘That is where we start — our mission, vision and value proposition are critical to the organization,’” he says. “Then your strategy comes out of that. … It becomes the focal point of what you do. It’s how you send your messages out. Your vision has to dictate how you behave.”
Bowman looked at many different facets of the company in creating a plan, including talent management, products, financials, dealings with clients and company culture for employees.
“You have to have different parts in the strategic plan,” he says.
As you identify the things that you want as part of your plan, you have to be open to changing it based on what other people say, regardless of whether that person is a clerk or a senior person.
“You have to outline those issues which are important, and what you want to do is make sure you can talk to anybody in the organization about it,” Bowman says. … “They have to have an understanding of what you’re trying to do.”
Bowman and his team created the strategy for Crawford within his first 100 days. They also mapped out what they called the storyboard, which was a breakdown of what they were trying to create in their overall strategy.
“Do you know all of the constituent chapters within the storyboard?” Bowman says. “Does it match the strategic goals we’ve set from the group point of view? Don’t overengineer it. Make sure the execution over a one-year or three-year goal is possible. It’s like MapQuesting something — you start somewhere, and you have an end-direction of where you want to get to. Your vision becomes your destination.”
Another key to creating your plan and map for getting there is to make sure you clearly define what you’re saying you want to do.
“You can wordsmith sentences that become ambiguous,” Bowman says. “What you have to do is create a series of effectively executable plans that are then absolutely easily translated.”
For example, you might say something such as, “We’re going to increase sales around the world,” which is a very wide open statement.
“Increase is a good word,” Bowman says. “Sales is a good word. Around the world? What does that mean? It has to be more defined than that. What’s the marketplace? What is the product we want to grow? That’s where a lot of strategies have to be planned in the sessions that you do prior to laying those strategic plans out.”
Once they had set a three-year plan, he put it up on Crawford’s website, which may not seem like a significant thing to do, but for this company, it was.
“The strategic plan was a very interesting part of it because No. 1, the company had never really communicated with its employees what the strategic plan was,” Bowman says. “We created that within the first 12 weeks, and then we put it on our website, so not only did our clients see what the strategy was, our employees did, our investors did, our bankers did and anyone else did — and our competitors did, and I think that was a very good thing.”
Even in having finished creating it, he knew he would have to continue to refer back to this plan and storyboard as he moved the organization forward.
“A strategy document is a living document,” he says. “Events change, and you have to change an organization to implement the goals.”
Once he had an overall plan in place, Bowman then had to create goals that would both advance the organization but were also achievable so he could hold people accountable to meeting them.
“The biggest issue is taking it and translating it into executable goals,” he says. “It’s a very simple process with a strategic plan. You make people accountable for the results that come out of it. That’s by spending a lot of time understanding the benchmarks that we talked about and making sure that it’s a sensible plan, and it’s not an academic exercise. There are a lot of strategic plans that are more academic than they are practical. We’re looking for accountability. We’re looking for results. If you have a script and a way you’re working, then people are much more inclined to follow that journey.”
One of the things that Bowman and his team spent a lot of time doing was dissecting the number of goals that were achievable.
“You can put down lists and lists of goals — you’re not going to achieve all of them,” he says.
They look at which goals are most important, and they make that distinction by looking at them as they relate to the vision and mission.
“You then link that to the goals you’re trying to achieve,” he says.
There had to be consistency in terms of strategy, financials and the objectives that they were trying to achieve.
Another element of this process was Bowman had each country leader prepare an initial budget and objectives, and those went up to regional reviews. After that, they went to the head office, and he and his team would go through those to make sure there’s a link between what the company is trying to do at a corporate level and what’s going on in those regions and make sure they eliminated duplications around the world.
For example, as part of the efforts to eliminate the technology silos, Bowman appointed a global chief information officer for the first time in the group’s history. Previously, there had been an IT director in the United Kingdom, United States and Asia-Pacific. Before this, they may have only talked once a year and were each doing their own thing. By creating one head position, it would eliminate those duplicate efforts and put the whole company on the same IT strategic road map.
Bowman also made sure to hold people accountable to meeting goals. Just as the board of directors rates his performance each time he announces the quarterly results, he needed to do the same for his people.
“Make sure people understand what they’re accountable for,” Bowman says. “They do things that they understand much easier than things that they don’t understand.”
The key to doing this effectively is using data to help you determine what’s best for them to focus on.
“The world we live in, you get swallowed up in the amount of data you’ve got,” he says. “You have to cut through and say, ‘What is the important data that you’re going to measure people on?’”
He says you have to decide what’s important and track that. Crawford creates a lot of dashboards and produces a lot of analytical information to make sure it’s using its assets in the best way.
Bowman also uses financial incentives to make sure people stay on track. He put a compensation program in place for senior management, which went a long way in the organization. In this plan, 20 percent is based on the group, 60 percent is based on their division and 20 percent is based on their personal performance. By dividing their incentive up in this way, it causes them to look beyond themselves. As a result, he sees more cross-selling among divisions.
“It effectively brings in an approach where people are interested in what’s going on in other divisions,” he says.
Aside from silos breaking down, Bowman has seen other clear changes in Crawford over the past three years.
“Nobody gets frightened about strategic planning,” he says. “People understand what they’re accountable for. It enables us to do more detailed return on investment calculations, understand areas that we need to manage better and where we need more urgency.”
Crawford did struggle as many of its clients suffered through the recession — one whole unit depends on workers’ compensation claims, and with 9 million people relying on unemployment benefits, that area certainly took a hit. But despite those challenges, it has gotten through well. While revenue went up and down during the recession, total revenue has grown overall from $1.05 billion in 2007 the year before Bowman took over to $1.11 billion last year. As the organization looks forward, it will continue to tweak its strategic planning to ensure it stays on track and doesn’t get stuck in the past.
“The thing about a strategic plan is it’s a living document,” he says. “You’re always looking at accountability and making it better. It’s a mindset.”
How to reach: Crawford & Co., (800) 241-2541 or www.crawfordandcompany.com
The Bowman file
What was your first job as a kid, and what did you learn from it that still applies?
I worked in my father’s engineering company handling payroll. I was 15. It wasn’t a huge company. I played soccer and that was one of my passions. [I learned to] work hard and keep your nose clean.
As a child, what did you want to be when you grew up?
Professional soccer player. I nearly got there. That was still my passion.
What’s the best advice you’ve ever received?
I’ve had quite a lot of mentors — I have a father who was an engineer and things were very straightforward, as most engineers are. There’s a logical approach to it. His advice to me was make sure you understand and communicate with people in the right way.
During my business life, before I got into the insurance industry, I worked in a couple of different industries. I worked in the record industry. … My age comes out here. ‘Saturday Night Fever’ and ‘Grease’ — I was involved in those, managing the distribution of the records. I had a boss at that time who was a northerner from the United Kingdom who was probably the most frightening individual I’ve ever worked for, but he was the most direct, he was the most honest, and he told it to you exactly as it was. What I think a lot of people don’t like these days is they don’t like being told the truth, and this guy managed me with a steel fist in the organization and taught me attention to detail, and that was a really big thing from my point of view. That stayed with me. Read it properly. Understand it before you say something.
I can recall being on a dais at a national conference, not really engaged in the act of listening to the speaker. In fact, my facial expressions and my body language screamed that I was very disinterested. I did not realize how this was coming across, until one of my loyal staff members in the audience managed to catch my eye, and with one blunt stare and tilt of her head, she mouthed the words, “People are watching you.”
I understood how important it was for a leader to project confidence and interest, even if they are simply in a “listening mode.” This is one of those great soft skills that is often misunderstood and far too many times underutilized. Honestly, how hard would it have been for me to at least look interested and engaged? The lack of focus on my part not only reflected badly on me but was simultaneously a bad reflection on my organization. This lesson taught me that leaders have influence, even if they aren’t uttering a word. As a leader, people are watching you at all times. In fact, people are watching that you may not even know about. This is one reason why the soft skills are so important in leadership.
One of the leaders I really admire is the former chairman of PepsiCo, Roger Enrico. Roger was asked about how an organization could drive accountability and results by improving effectiveness in a few key overlooked areas. Expecting an answer that would be along the lines of productivity, managing to the bottom line, growing net revenue etc., Roger quickly focused on another area. He stated, “The soft stuff is the hard stuff.”
A value-centered leader, I believe, will recognize that the soft stuff really matters. Respect, integrity, teamwork and excellence really do have a place in the everyday functioning of leaders. At my organization, we refer to those as the R.I.T.E. way to work. Let’s explore what those four things really mean.
Respect is having compassion or empathy for others and valuing others’ expertise and perspectives, while also holding oneself to a high level of integrity.
Integrity means that we are personally and professionally responsible to each other, our donors and volunteers and that we are fostering an environment of trust and setting the standard for accountability in our industry.
Teamwork means that through collaboration with internal and external partners, we generate the greatest impact on health and human service needs in our communities.
Then, lastly, excellence refers to striving to excel in all areas of performance, improving our workplace through continuous learning, providing world-class customer service and creating an atmosphere of growth, allowing everyone to reach their full potential.
I view people as our greatest asset. The gesture of speaking to the staff, asking questions and showing interest is more than the nice thing to do. It is a vital business strategy that far too often goes unattended in today’s workplace. I like to walk around our office, and ask people if they know our mission, vision and business goals. It gives me a chance to engage them in conversation, first at the organization level, then at a personal level. It is vitally important that you know your team. Not just the ones at the top, but, all of them. Each is a vital and key link in the success of the organization. Ignoring this will ultimately bring an organization to its knees. Those that see a genuine leader, who really cares about them, will go the extra mile. Call it “soft stuff,” if you wish. I call it vital and necessary for overall success. People are watching, and I hope you are paying attention.
Gary G. Godsey is CEO of United Way of Metropolitan Dallas. He has more than 30 years of experience at the CEO level, managing nonprofit organizations around the United States. Godsey is an accomplish speaker and leader in the nonprofit sector.
When Michael Fetsko lands a contract to build a train system, it’s not because he is the best salesman in the industry. He gets contracts because he has dedicated himself to driving industry-leading innovation that has helped build Bombardier Transportation’s reputation as one of the best rail transit manufacturers in the world. When Bombardier was awarded the Hartsfield-Jackson Atlanta International Airport job, it was the innovation of Bombardier Transportation and its Systems Division’s automated people mover train system that won them the job at one of the world’s busiest airports.
Bombardier’s Systems Division faces a tough competitive market for their products. Fetsko, vice president of the Americas regions for Bombardier Transportation’s Systems Division, is constantly focused on innovative ideas and ways to stay ahead and on top of his industry.
“Ideas are encouraged, and our company encourages the divisions to do exactly that, to develop the next idea, the next game changer,” Fetsko says. “That philosophy is instilled throughout the company, and I think it is one of the foundations to our success.”
Innovation is ingrained in the roots of Bombardier. Even when Bombardier was just a small snowmobile maker, innovation and entrepreneurship is what led them to where the company is today. The Systems Division saw annual revenue greater than $1.3 billion in 2009, just a slice of Bombardier Transportation’s total annual revenue of more than $10 billion that year.
Here’s how Fetsko’s continuous drive and dedication to leading innovation at Bombardier has helped establish it as an industry leader.
Due to Bombardier’s commitment to being the best at what they do, Fetsko and his team need to always have an ear to the ground about prospective projects. A commitment to excellence and their ability to create strong business relationships help get them in the door.
“When we find out about projects, in this type of business, you really can’t walk into a particular city at the last minute and say, ‘Hey, I’m here to bid on your project,’” Fetsko says. “Our strategic plans take us out five plus years. We are already looking at the cities where we think and know transportation systems will be built. And we are going in and meeting with the decision-makers, the customers, the politicians and really trying to secure our foothold in that particular location. What it comes down to is building the relationships with the right people and making sure the community sees you as a viable player.”
Companies in big industries and companies that face tough competition have to rely on their ability to offer strong products that come with the support of the company from multiple areas. Bombardier is often selected because of its ability to provide the best price and the best value for the customers’ money. Bombardier’s drive for innovation is also a key factor.
“Over the last two years, for us in the Systems Division, (innovation) has become a core part of our workload,” Fetsko says. “We have 100-plus people working on various forms of innovating our products and making them better. For us, it really comes down to trying to stay ahead of the competition. It also impacts cost savings. We are working on product development right now called energy storage. We are trying to push the envelope to try and make our systems faster, more cost-effective, more energy-efficient, more environmentally friendly, and it takes a team of people to do that.”
Innovation is not just a one-off thing. If a company doesn’t work hard and continue to innovate, then it is not an innovative company. Fetsko and the Systems Division work continuously to encourage and drive innovation. Finding ways to innovate and ways for employees to bring new ideas forward are keys to the company’s success.
“It really starts at the group level, the transportation group level, and it gets pushed down through all the divisions,” Fetsko says. “Bombardier has an innovation website where we encourage employees to submit their new ideas. Each idea gets reviewed by a committee and a team, and, of course, not all of them can get implemented but many of them do. They could be simple ideas on how we might be able to save more labor hours to do individual tasks, or they could be ideas on how to create the next big product breakthrough. It’s highly encouraged, and there are a number of mechanisms we have in place for employees to submit their ideas and creativity on how we could better the business.”
Ideas like an innovation website and innovation meetings are smart and fun ways to encourage employees to submit their ideas. Without these mediums for employees to speak what’s on their minds, innovative ideas can go to waste and will only hurt your company. Three years ago, Fetsko even created a full-time position for someone to head up their innovation efforts.
“You’ve got to encourage innovation,” Fetsko says. “Part of that is you have to have people who are dedicated to leading the effort. You can’t just talk about it and hope it’s going to happen. I think that’s one of the reasons that we have been successful. Companies may not want to do it, because it’s an overhead kind of position, but we have found that it more than pays for itself in a lot of the ideas we’ve already implemented and things that we’re doing to better the business and better the product. You’ve got to have a person or a small team of people that are responsible for it and committed to driving it throughout the business.”
At Bombardier, they also have quarterly meetings where the top-level executives from the company’s numerous locations gather for a two-day discussion that is strictly focused on innovation, product development and product improvement.
“You have to look at where you want to go and what you’re trying to strive for your business to achieve,” Fetsko says. “If you want to achieve big things, you’ve got to dream big things, as well. You’ve got to put time into it. You have to run your product improvements like you would a particular project. They all have budgets they have to meet, and they all have schedules they have to meet, and finally, you have to make sure you drive it to completion.
“When we say innovation here, it’s not necessarily the next big breakthrough on a train system. It could be things on how we could manage our business better. It can even be discussions on a particular task and whether we can do it with less people and still accomplish the same thing. Can we get it done on time with the same quality perhaps for a lesser amount of hours? That all translates to cost savings. Innovation relates back to us being able to offer customers a lower price for a product in the future. When we say innovation, it’s more than just product innovation, and that’s why it’s encouraged by everybody. If you have ideas on how to make the business more efficient or how we could improve the business, that’s how we make better products.”
Of course, with any new product or innovative idea, testing has to be done before that idea can be declared innovative and useful to the company and to its customers.
“Some customers are reluctant to be the guinea pig for some things that are new,” Fetsko says. “One thing that we do here very well within our division is our expertise to build a transportation system from the ground up. Integration, testing and commissioning are our core areas of our expertise. When we put something new into a project and the customer says, ‘Yes, I’ll take it,’ from our standpoint, it goes through a rigorous level of internal testing and external testing. We go through rigorous design reviews with our customers, so these types of ideas if they are new and get implemented, really go through a high level of scrutiny.
“Everything has to pass through our safety group as part of our governance. They are the ones that have to give the final blessing that a system is safe to carry passengers. Anything that gets implemented that’s brand new or might get integrated into a system goes through that sequence of testing and conditioning, so both the customer and Bombardier are confident it’s going to work.”
Bombardier uses test tracks to make sure its products are up to the company’s high standards and are tested a second time once the product gets shipped to a customer.
When innovation plays a big part in your company, it is often very difficult for only one person to overlook the entire operation. Fetsko says that he encourages and expects his employees to know how to do their jobs and to be independent enough to make their own decisions.
“My philosophy is to allow for accountability for running your part of the business,” Fetsko says. “I’m not going to step in and tell people what they’re supposed to do on a daily basis and how they’re supposed to go about it. We have levels of governance and reviews that are put in place so that we can review what is going on in every part of the business. The people here are empowered and are expected to run their part of the business. My style is not to micromanage at all, but I will routinely walk around the building and interact with the employees. To them, it really shows a sense of caring and says, ‘Hey, here’s the guy that’s running the business, but he spends a lot of time with the employees.’ Not necessarily telling them what to do — I don’t do that — but rather asking them how I can help and asking them how things are going and really telling them and showing them your appreciation for what they accomplish for us every day.”
Establishing a culture where employees know that they are empowered to do their jobs is critical for a corporate environment that is innovative.
“The one thing you have to focus on is to set up a structure so that people feel empowered to do their work,” Fetsko says. “You have to make sure those parts of your business and leaders of those areas can handle the work and that they’re not too overburdened with trying to manage too much. You verbally and physically have to tell people what you expect from them.
“I’ve got monthly meetings with all the folks on my team. They are very short meetings, face to face, not through e-mail and not through the phone, to really interact on that basis is very important. If they come to me with a problem, I want them to come to me with three solutions or more, as well. I try to tell them, ‘Don’t expect me to solve all your problems.’ You’ll always have the folks that come in and say, ‘Hey, I’ve got a problem, what do you want me to do?’ My response to them is, ‘What do you think we should do?’ Certainly, I could give them my opinion, but I really try to encourage our folks and help them find solutions to their own problems. It comes down to empowering people and telling them that it’s theirs to do, it’s theirs to run. It raises a level of passion and it all translates to results.”
How to reach: Bombardier Transportation, (412) 655-5700 or www.us.bombardier.com
The Fetsko file
vice president, Americas regions
Bombardier Transportation, Systems Division
Education: Bachelor of arts degree and a master of science degree both in environmental sciences, from the University of Virginia; master’s degree in civil and environmental engineering from the University of Pittsburgh
What was your first job out of college, and what did you learn from it?
My first job out of college was working for a company called Ensr, and I worked as a geologist. They were an environmental engineering consulting firm. What I learned was how important it is for projects to meet their deadlines and their goals. I also got a lot of chances to travel and meet with customers.
What is the best piece of business advice you’ve received?
The best advice is the importance of relationships and developing relationships in your business, both with internal customers and external customers, and having that face time with them. People really appreciate that level of interaction versus conversing through phone or e-mail.
If you could choose one person, past or present, to have a conversation with, whom would you speak to and why?
Going back to my athletic days of playing football for the University of Virginia, one person I would really like to have a conversation with would be Lou Holtz. I have read some of his books and I am a fan of his style of leadership and what he has been able to accomplish as a football coach and what he has been able to accomplish with people who have played for him and passing on the values he’s lived by.
If you could have any superpower, what would it be and why?
If I could have a crystal ball and I could see into the future of what’s going to happen, that would probably help, as far as being able to make the right decisions and growing the business.
Mike Jackson was asked to bring some order to Adayana Inc. when he arrived nearly three years ago. The training outsourcing company had grown through numerous acquisitions, and the result was a cultural mishmash that left employees searching for an identity to latch on to.
“People wanted to have more rigor,” says Jackson, the 380-employee company’s president and CEO. “They wanted to understand how to do what we should be doing.”
Jackson began to work collaboratively with employees to develop a corporate framework that would provide everyone with a better sense of identity and purpose.
“I had some perceptions, but you can’t go only on perception,” Jackson says. “You need to validate. So I talked with some folks and just asked them how we could strengthen the company together.”
When you’re seeking feedback from employees, you need to make it personal.
“Don’t just talk with your employees or your leadership team or your direct reports about today’s business and what’s tactical and what’s on your plate,” Jackson says. “You have to ask them where they see both themselves and the company in three to five years. You have to do that regularly.”
If you don’t do this, you end up with the situation that faced Adayana: You have employees doing work without a clear idea of what it means or what it is leading them toward.
Jackson saw desire in his people and he saw energy to succeed. They just needed to know what their leaders wanted them to do to make that happen.
“If part of the aspirational vision for the company is to be a market leader, unpack what that means to individual behaviors,” Jackson says. “It’s about creating a tight linkage between the dreams of your employees and the aspirational vision for the company.”
Give employees a chance to contribute to how you’re going to accomplish your goal to become a market leader. Let them offer opinions on what needs to be done or what’s holding your company back from becoming a market leader.
“When you do that, you’re creating engagement, you’re building inclusion and you’re building ownership,” Jackson says. “‘The CEO is asking us to craft what we should be and what we should do.’ That’s powerful stuff. If you follow that activity with engaging others to actually build a tactical action plan to implement the strategy and initiatives that come from the senior leadership team, all of a sudden, you have a fully engaged team of employees who feel they are making a contribution to not only the what but the how. That’s where most employees live, anyway, in the how.”
It’s about putting an idea out there, such as becoming a market leader and letting your people play an important part in figuring out how to get there.
“You have to pass along that accountability and all the things that go with that,” Jackson says. “It’s about trusting people to pull it forward.”
Trust your people to carry some of the weight while you monitor their progress, break down barriers and offer assistance to help them achieve the big-picture goal. Show them that what they are doing is important.
“If I never ask how you are doing on progress toward that goal, you’re likely to believe that maybe it really wasn’t that important to begin with and it’s certainly not very important now,” Jackson says. “It’s the idea of creating feedback systems and making sure people are in the know about progress. If you don’t do that, you’re not going to empower anybody. You’re going to basically demotivate them because of inattention.”
Adayana has made progress toward becoming a market leader, evidenced by the growth in revenue from $20.8 million in fiscal 2007 to $44.2 million in fiscal 2009.
“There’s no magic. What there is,” Jackson says, “is execution.”
How to reach: Adayana Inc., (317) 415-0500 or www.adayana.com
Mike Jackson could hear the clock ticking as he assessed what was happening at Adayana Inc. Employees were part of the plan, offering him their feedback, but they also were eager to see results.
“You, as a CEO, have to act quickly to deal with the things that are patently ineffective in your company,” says Jackson, the 380-employee training outsourcing company’s president and CEO. “Fix those. If you don’t do that, after a period of time, employees will run out of the hopeful energy that you might have brought to them in the first few days, weeks or months you were walking around asking them how things were and what you should do to improve the company. You have to act.”
That doesn’t mean you should panic and make rash decisions.
“I’m saying once you get to an 80 percent confidence level that this is the right thing to do, do it,” Jackson says. “You actually put together a set of, ‘Here are the things that need to be done on a department-by-department and division-by-division basis.’ Make that part of the accountability of the respective manager so that he or she is able to see that you mean business.”
Walter Yager could see what was happening, and he knew he had to stop it. He was becoming a micromanager, a behavioral change that was hurting what he and his business partner, Jose Sanchez, had built at Alpine Fresh Inc.
“There was a specific instance where I got into a disagreement with one of the sales staff over a particular sale and I realized, ‘You know what, that’s not my role,” says Yager, the 4,000-employee fruit and vegetable grower’s co-founder and CEO. “That’s not what I’m here for. I need to take a step back.’”
Yager removed himself from “The Situation Room,” the 3,000-square-foot nerve center that housed most of the key leaders at Alpine Fresh. He was then promptly reminded that there was a good reason why he had hired these people to fill key positions in the company.
“I find they handle 90 percent of the things just as good as if I were there dealing with it myself,” Yager says. “The other 10 percent, they walk it over to me and we’ll discuss it. As a CEO, you have to be really careful not to micromanage because it really limits your ability to grow. It kind of stifles you and you’re also stifling the people you’ve hired to help you grow.”
Yager had rediscovered the value of his people. They help keep him up to date on the status of his farming locations across the globe. They help him gauge the potential benefits and risks of new opportunities that may come about. And they help him prepare for the unexpected challenges that are always looming when you’re in the agricultural business.
Yager needed to build solid channels of communication so that his top leaders would be ready for all of these things and not playing catch-up or asking a lot of questions because they hadn’t been kept in the loop.
Here are some of the ways he cleared these channels to help Alpine Fresh always be ready for the next challenge.
Set the tone
Asparagus is one of four items that Alpine Fresh is known for selling, along with berries, grape tomatoes and mangoes. When a change was made several years ago to the sanitary requirements to import products into the United States, asparagus was affected and Alpine Fresh had to respond.
“There were different vital sanitary requirements to import the product that significantly affected the quality,” Yager says. “It was a big disruption at the time. It was being able to adapt to that change and being able to decide what logistics you were going to use to sell a quality product. We had to make some quick changes to adapt and survive and thrive in that market.”
Whether you like it or not, you’re a role model for your people. Your employees and those on your leadership team look to you for cues on how to act and how to respond to things that happen in your business.
“If you show patience and don’t panic, everybody around you will have the same feeling,” Yager says. “If the leader panics and is erratic, then the people around you are going to get nervous. What I try to communicate is that there is a solution to every problem.”
Yager has grown used to dealing with sudden changes and being forced into a position where he has to respond quickly. But that doesn’t mean it’s always easy.
“We’re dealing with perishable commodities,” Yager says. “Your factors are changing almost minute by minute. You may have a vision of how you want things to go, and all of a sudden, it changes because climates are changing in certain areas of the world or demand curves change or political situations change. It’s difficult when at any given moment, I know what my vision is, but it can change. Trying to offer a stable vision is the most difficult part.”
The key for you is to reinforce a can-do spirit. Encourage and recognize those individuals who offer solutions to problems over those who are content to wait for you to provide a solution. Give those people a real chance to be part of the solution and to feel like they can truly make a difference for your business.
“I tend to talk more to people that are part of the solution,” Yager says. “They are problem solvers on their own and that tells me they are thinking on their own and I value their judgment. They are not afraid to make a decision. They are not afraid to think.”
Again, it’s your reaction to a problem that will go a long way toward determining how your employees respond to it. Of course, there may be times where you don’t even need to respond at all.
“What type of problem is it?” Yager says. “Is it a spot problem or is it a systemic problem? If it’s a spot problem, then I would expect it to already be fixed and be done with it. If it’s a systemic problem, I would look at what we’re doing wrong that is causing this problem.”
Maybe, in the case of the asparagus situation, you haven’t done anything wrong. Whether that’s true or even if it is a problem that you caused, you need to keep your cool.
“There isn’t a problem that can’t be solved,” Yager says. “We just have to think about it and think it through and we’ll find the solution for it. There is nothing, short of the sun not shining, that is going to put an end to our existence. We just have to keep thinking and keep adapting.”
Engage through goals
Yager is not a big believer in burning the midnight oil to get the job done. Rather than praise an employee for doing so, he would more likely wonder why the employee wasn’t able to complete the task during regular work hours.
One of the ways you can help employees prioritize their workload is to give them a means to set and pursue goals. It provides a venue to discuss what they are doing and gives them a chance to feel like they’re making progress in their work.
“What we’re trying to inspire out of them is the thought process and how they view themselves and how they view their role in the company,” Yager says.
One of the keys to making the goal-setting process work is to make sure the goals are able to be objectively measured.
“We’re trying to get more eco-friendly with paperwork reduction,” Yager says. “So one of the goals for somebody is we want to have it where all the documents are electronic. We need to get an electronic scanning system so we can scan everything and reduce the amount of paperwork. So that was one of their major goals.
“It has to be something that you can objectively measure whether they did it or didn’t do it. You don’t want it to be subjective, because then it’s going to be a gray area and they’re going to argue that they did it and you may argue that they didn’t do it. Make sure that they keep it objective.”
Employees should have someone to meet with and review the goals they’ve come up with. It’s not that you’re trying to censor their goals. You’re just trying to make sure they are helping both the employee and the company.
“The supervisor will review it, and depending on the employee, I’ll review some of them,” Yager says. “There might be a little back and forth where I get back to them and say, ‘Listen, this one is good. This one isn’t good. We need to look at something a little different.’ It may take a month before you come to a consensus.”
Make sure both the supervisor and the employee get a copy of the goals. Monitor the goals throughout the year to check on the employee’s progress toward achieving them.
“At the end of the year, we’ll whip it out and say, ‘Hey, you did it or you didn’t do it,’” Yager says. “The key is you have to be objective. It can’t be, ‘I want to increase sales.’ It could be, if I was one of the salesmen, ‘I want to get X customer to start contracting one of the items that he is not currently buying.’ It has to be something that anybody can measure objectively.
“You really find how people view themselves in the company and how lost some people are and how focused other people are. By doing that, you’re helping them to get focused on what you want them to do. But it’s coming from them, so they’re clear on what they want to do.”
Yager believes there is also benefit in giving employees personal goals to pursue through their work.
“A friend of mine in the industry, he told me about a book that he wrote,” Yager says. “The gist of it was that it was a cleaning company with a tremendous turnover problem. You can imagine a cleaning company. People don’t want to be in the cleaning business for the rest of their lives. So they hired this business guru to figure out how to prevent people from leaving. To make a long story short, they went in and they interviewed the employees and they set this program: ‘What were the employees goals and dreams? What did they want to do in life?’
“Obviously, you have to be realistic. My dream in life is to have a G5 and a 100-foot yacht, but I have to be realistic. You try to get them to have a realistic goal. How can we as a company help you achieve it? It’s a personal goal. It’s not a company goal. I want to get a new car in a year. I want to be able to buy a house. Whatever it is they want to do, you set out a plan. This is how we’re going to help you achieve your goal. As a consequence of that, their turnover rate went to zero because everybody felt better about where they stood and where they were headed in life.”
One of the results of this goal-setting process at Alpine Fresh has been a clearer identity of purpose for employees.
“People are working toward their goals,” Yager says. “They are not working toward them every day, but you have a year.”
The benefit of giving employees goals to pursue has been most clearly evident at the middle level of the company.
“At the top level, people are at the top level for a reason,” Yager says. “At the midlevel, they have a better understanding of what their role is in the company. Those are the people that can make a difference. A great quarterback needs linemen to protect him. Those are the people doing that for you.”
How to reach: Alpine Fresh Inc., (800) 292-8777 or www.alpinefresh.com
The Yager file
Co-founder and CEO
Alpine Fresh Inc.
Born: San Francisco, Calif.
Education: Bachelor degree, finance, University of Florida
Who has been the most influential person in your life?
Jesus Christ. He’s a guiding light in trying to do the right thing. Our director of sales is John Lyons. Years ago, when he was with us, we were relatively new, and we were having some logistical issues. He came to me and he said, ‘We have a problem. We don’t have any product, and I don’t know what to tell the customer. What should I tell the customer?’ And I said, ‘Tell them the truth.’ He looked at me like I was talking Chinese. ‘What do you mean? In business, you tell the truth?’ (Jesus is) just a guiding principle to try to do the best we can and try to be as truthful as we can in what we’re doing.
What’s the best advice anyone has ever given you?
One of our first bankers who we went to get financing from to work on this project, he said there will always be another deal of a lifetime.
We argued that there wasn’t and that this was the deal we had to do. Of course, we did it and lost money at it. Usually, when you lose money is when you learn your best lessons. You tend to not listen when things are going well. We didn’t learn it right then and there. It may be a deal of a lifetime that you pass up on. But there will always be another one.
Ralph Scozzafava had just walked off the plane, but he already knew Furniture Brands International Inc. had a safety problem at one of its factories in Mississippi.
“The guy that picked me up at the airport had some dried blood on his pants from one of our key associates on the production line that had just cut their finger and been brought to the hospital,” Scozzafava says.
Unfortunately, safety wasn’t the only concern for Furniture Brands when Scozzafava arrived in early 2008.
“We were low on cash and we had a pretty big debt balance and really some liquidity questions and concerns,” says Scozzafava, the company’s chairman and CEO. “We also had declining margins and increasing administrative costs to the point where our operating margins were approaching zero and ended up negative very quickly. There were a lot of things happening at the same time, all taking us to a very difficult place.”
But before he could address any of those concerns, he had to get people in the company to realize that there was, in fact, a problem that needed to be addressed. The furniture retailer has 6,500 employees in the United States and 2,000 more employees abroad.
“A lot of folks just thought, ‘Hey, we’re going through a bit of a rough patch,’” Scozzafava says. “If we don’t tell people where we are, in a lot of cases, they just don’t know. So it’s informing. We have a problem here. It’s an issue. We have to change, and we have to change intelligently and quickly.”
It was time for Scozzafava to start talking and get everyone moving on the changes that needed to be made.
Start a dialogue
One of Scozzafava’s most pressing concerns, in addition to making the company safer for employees, was that he needed to generate some cash for Furniture Brands. The company was losing a lot of money.
“We had over $300 million in debt, we had $27 million in cash, and we were losing money on the operating line,” Scozzafava says. “You don’t last long with a business of our scale if you’re doing that. So the big thing for us was to generate cash.”
In this type of situation, you can’t just go to your people and say, ‘Hey, we need to generate more cash.’ You need to show them what they can do as an individual or as a group to help you solve your problem.
“If they don’t have line of sight, ‘What do I need to do to help?’ you’re not going to get the full engagement that you really want to get,” Scozzafava says.
In other words, spare the corporate lingo and Wall Street clichés when you’re speaking to your employees.
“Use words you would use with your family,” Scozzafava says. “Relate some interesting stories. Try to make things sticky if you can. The state of the union address as told with your best formal English doesn’t help. If you use every business cliché in the book, you’re not sincere. If they feel like you’re not sincere, if it feels packaged, they’re not going to listen. It’s not going to be compelling.”
Scozzafava needed to get his employees engaged in coming up with a solution for the company’s cash concerns.
“I tell our folks, ‘I’m going to tell you everything I can as fully and clearly as I can as many times as I need to so you fully understand,’” Scozzafava says. “And then I’m going to ask lots of questions so you can do the same with me. If you have that kind of dialogue, there’s really nothing up anybody’s sleeve.”
It has to be a dialogue, meaning two-way communication, and the best way to achieve that is to get out of your office.
“You’ve got to penetrate the organization,” Scozzafava says. “My direct reports will feed me info that is good, informative and interesting. But if I want to know about the supply chain, I’m going to go down on the factory floor and talk to a lot of people. If I want to know how our retail stores are doing, I’m going to go to retail and I’m going to ask a lot of questions and visit 10 stores.”
And if you want to know about a possible safety concern, you’re going to go visit one of your factories.
“I went on the factory floor and saw what we were doing and how we were operating the equipment and I knew we had a safety problem,” Scozzafava says.
Scozzafava discovered that multiple factors were leading to the cash issues. Safety problems were caused by improper use of equipment and were affecting product quality. This was affecting the margins and ultimately leading to the problem with the cash.
It’s the kind of information that you can only get when you approach your research with an open mind.
“The temptation is I want to bucket things,” Scozzafava says. “I’ve been doing this for 30 years and I’ve observed a situation and the knee-jerk reaction is to say, ‘Oh, that’s just like …’ and name a situation, something you’ve gone through before. When you do that, sometimes you miss it all together. Most of the time, you get it close, but you miss the nuance and you really can’t get a good clear assessment.”
As you begin to generate dialogue and ideas to make your company better, you need to create accountability to make sure that the ideas are investigated and implemented if they turn out to be viable.
Safety was one of Scozzafava’s biggest worries with his business.
“What are the safety ideas?” Scozzafava says. “We’ll put them on a bulletin board. Those ideas have initials next to them. Who gave us the idea? They have a date of when we’re going to evaluate it and get it solved and when we’re going to implement it.”
An idea was raised to install sewing tables in one of the factories that could be raised or lowered to help eliminate repetitive motion injuries.
“When are we getting the tables in?” Scozzafava says. “When is it getting installed? When is it finished? It’s about the idea, evaluating the idea and putting people in place who are accountable. Put their names next to the task and then finish the job.”
When you create ideas or metrics for employees to live by, they need to be ideas that are objective in nature like the sewing tables.
“There are certain things that you can measure very well,” Scozzafava says. “Those are very data-oriented things that you should use as the core of what you measure. The things that become matters of opinion, if you make that a focal point of what you’re doing and lots of people give their points of view, you’re going to struggle. Cut-and-dried measures are always the best.”
Work with each department on what it specializes in and help the department come up with measurable goals that help the company.
“So for example, 2008, we’re here to generate cash,” Scozzafava says. “But we’re also going to work on building our brands, and that’s the work the marketing people will do. We’re also going to work on getting more efficient in our factories. That’s the work the supply chain people will do. You can go down the road. The finance team has to centralize finance and accounting and accounts receivable and accounts payable and credit. That’s the work they have to do. So there’s the singular big goal we’re all working on and then there are pieces within the company that individual groups do to make us better.”
You have to keep pushing the importance of initiatives and making sure accountability is part of all of them.
“You think you’re saying it enough, because you’re thinking about it all the time and you’re talking to your direct reports or your executive team about the same subject all the time,” Scozzafava says. “So that repetition is something you just assume is going through the organization. And it’s not. One of the things I’ve learned is you have to tell them, you have to tell them again, you have to tell them what you told them, you have to ask if they understand it, tell them again, have them repeat it, quiz them.”
So if you think you’ve delivered your message enough after all that, you might want to do it just one more time to be sure.
When you ask employees to help make your company better and they step up and do just that, you need to show them that you appreciate their efforts. By doing so, you increase the odds that others will follow their lead.
“Good people want to do well,” Scozzafava says. “They want to be part of a winning team. If they see their peers somewhere else within the company performing very well and being recognized and rewarded for that performance, they typically not only want to mirror that, they want to do better. If you get the right people and treat them right and tell them what they need to do and listen to the ideas they have, it’s powerful.”
You can show your appreciation in a number of ways. There are the gift cards and cash bonuses that all employees are grateful to receive. But your ability to show appreciation and gratitude can also go a long way toward helping your business be successful.
“When you have the title, until they meet you, there is always going to be some kind of trepidation,” Scozzafava says. “People want to get it right or they want to make a good impression. If they see you as a regular person, if you get information and you do something positive with it and you’re not looking around trying to zap somebody or catch somebody, pretty soon they understand what your intention is. If it’s a positive intent, they’re going to share more and more with you.”
Scozzafava’s ability to get people to buy in to his effort to turn things around at Furniture Brands is showing some signs of success. While net sales dropped from $1.7 billion in 2008 to $1.2 billion in 2009, the steady loss of cash seems to have been stopped. And safety on the job is better than it’s ever been before.
“It all goes back to the build, win, deliver, grow strategy,” Scozzafava says. “[Employees] know that’s what has taken us from losing $400 million in 2008 to losing over $100 million in 2009 to making money through the first three quarters of . They know if we stick to that strategy, if we’re aggressive and prudent about how we change, differentiate and do things better, we’re making the problem go away.”
The key is to stay focused on helping your employees help you.
“If you expend your energy and feel spent, you’re probably not doing enough within the organization to drive the kind of morale and camaraderie and high-performance culture you want to create,” Scozzafava says.
How to reach: Furniture Brands International Inc., (314) 863-1100 or www.furniturebrands.com
The Scozzafava file
Chairman and CEO
Furniture Brands International Inc.
Born: Danbury, Conn.
What was your first job?
I worked for my dad; he was in the refrigeration business. One guy, one truck. Probably from age 6 to 7, I knew all the tools in the toolbox. I could wire things, run pipes, weld, I could do a lot of stuff. I haven’t done it recently. But give me the stuff, I’m sure it would come back.
What is the best advice you’ve ever received?
Hard work and common sense. My uncle said if you can just master those two things, you’ll be successful in anything. He was an entrepreneur who did very well and had no education and those were the two pieces.
If you could sit down with anyone in the world, past or present, who would it be and why?
I’d like to have dinner with my dad.
Scozzafava on public speaking: I’m real big on bullet points. I’ll have slides without many words on them. I may have a little scrap of paper in my hand that may have 6 or 7 thought starters on it. Each message that I’m trying to get across, I try to have an accompanying story.
I try to make it engaging. I draw people out of the audience a lot. I’ll call people by name and I’ll ask them to stand up and talk about things so that the message is what I’m going to call multi-medium. Part of it’s on the screen, part of it’s in a video, part of it’s a story from Ralph, part of it’s a story from the audience. You have a lot of different stimuli coming at you.