It used to take a lot of work for Don Ascione and his sales team to secure new business for his $15 million distribution companies, Continental Steel & Tube Co. and its subsidiary Continental Chemical USA.
“We were calling people up and soliciting their business, trying to find out … who would be buying titanium? – OK aerospace,” says Ascione, president and founder of the Fort Lauderdale-based companies. “Then we’d have to go find all the aerospace companies and say, ‘OK, Boeing, and try to find a buyer in Boeing, and get them to talk to you. It’s daunting.”
Ascione saw he could no longer rely on print advertising to generate leads as more and more buyers of industrial products moved online.
“People get impatient and you are talking to them on the phone and they want to see a picture of something – they’ll send you an e-mail and if it’s not there in 30 seconds they’ll say, ‘Where is it?’… The world has changed to instant gratification,” he says. “There is no waiting anymore.
“We looked at it and said, ‘OK, we’re not going to do print anymore,’ and decided to put all of our eggs in the Internet basket.”
Ascione’s online strategy was to make Continental’s online presence more credible but also more accessible to potential buyers. Without print, the Internet would be his sole sales channel.
With the help of long-time sales partner ThomasNet, Ascione approved a complete website redesign for both Continental businesses, updating the sites’ capabilities to include online product catalogs, SEO-driven language, e-commerce shopping carts and user friendly search functions. Each also developed a web presence on ThomasNet’s online distribution portal.
By utilizing the web effectively to showcase its strengths, a smaller company, such as Continental, built a niche for its specialty products.
“It provides an avenue for people to find us and to know what we do and what we are capable of providing,” Ascione says. “We have always been exporting for a long time, but our Internet strategy has allowed people in other countries to find us.
“It sets us in our niche products so that we can compete with the big guys. We’ve developed a relationship with our sources [so] that when somebody wants those particular items, we can be competitive that we can get the delivery. We can satisfy the end users’ requirements. We know that our price and delivery is going to be just as good as a Ryerson, or an EMJ or Alliance or any one of these billion-dollar companies.”
It also brings the customers to you.
“With the strategy that we have now, what happens is people call us,” Ascione says. “When they call us we’re in a better position. They found us and they’re looking for us to provide something for them. So they are receptive when we call back, when we respond back to them. When they do, we actually put a markup on it and try to make a profit.”
As more customers make purchases through your site, you can use web tracking to monitor which products are most popular with which customers, making changes to your online strategy as customer demands change.
“We’re updating on a regular basis our catalog and our content on our website. … As we develop more sources and better sources, and we have more information, we evaluate what kind of information we are able to provide to the customer and what they want,” Ascione says.
“We want customers to come to our site and find useful information and help them achieve their job and to make them and their company profitable. That will help us become profitable because they’ll find value in what we do.”
How to reach: Continental Steel & Tube Co., (954) 332-2290 or www.continentalsteel.com
David Harding knew there had to be a better way to reduce the stress at work. So he read an article about executive coaches, hired one, and set out to change the company culture with his newly minted purpose statement.
It was his “aha” moment. The revelation? Hiring the best people, trusting them and letting everyone share in the duties ? and share in the rewards.
“We dreamt that people would want to work here and would be lining up at our door to join the team,” says Harding, president and CEO of HardingPoorman Group, whose annual sales are about $30 million.
Once that vision is solidified, you develop the purpose. Harding finds this one fits the bill: “To make a meaningful difference in the lives of our employees.”
Finally, ask, “How can we deliver on that purpose?”
Then comes the action. Take away the autocratic management style. Put in a democratic style, where managers are allowed to run their departments. Take away the plant manager.
“We chose not to have one because everyone tends to go to him/her for answers,” Harding says. “Pretty soon you have a stressed-out person because the staff puts monkeys on his/her back.”
The culture revolution won’t be easy. It took Harding about two years to get his 154-employee graphic arts company turned around. Autonomy was especially problematic at first.
“It wasn’t a habit for them to make decisions, and so they would come to us and say, ‘What do I do here?’ and we would say, ‘You’re running the show; what do you think you do?’ and eventually, after you do that a few times, they understand: ‘OK, I need to be making my own decisions.’
“Instead of answering the question for them, you ask them to come up with the answer themselves. And nine times out of 10, it’s the same answer you give them, especially if they understand the vision of the company.”
Management, in a twist of the usual case scenario, should be accountable to employees, and not the other way around. This is the optimum way to benefit the customer.
“Think about it,” Harding says. “The people that can really provide value to a customer are the people that are closest to that process. In other words, the people that are closer to producing a product can probably provide more value quicker to a customer than managers. The reason is they work with that product every day and they know what improvements can be made. So it’s faster. They don’t have to go upstairs and say, ‘Is it OK if I do this?’ Of course they can do it. You should really turn the pyramid upside down and let them provide the value.
“In fact, there is a good book written on the subject called, ‘Employees First, Customers Second,’ and by making employees first they should know what the customer is wanting, too, and what the customer’s vision is, as well. So you have to connect them with the customer.”
If you hire the right people, it makes your job so much easier. Harding points out that his company’s turnover rate for 2010 was 9.1 percent. Statistics show that manufacturing companies average about 16 percent a year.
“There are a million things you can do to make sure a hire is a correct hire,” he says. “Pre-employment testing is one. Multiple interviews. Actually have the employee go through vocational-type tests.
“One time I even drove by an employee’s house, because it was a very important position I was hiring for,” he explains. “I actually could tell by the shape of his house and the garage whether he was an organized person or not.”
Did he get the job? Yes, and he’s now a partner.
How to reach: HardingPoorman Group, (888) 809-7741 or www.hardingpoorman.com
Bring on the feedback
Employee feedback through staff surveys will bring meaningful results in building a great company, says David Harding, president and CEO of HardingPoorman Group.
Each year, the 154-employee graphic arts company conducts a staff survey to evaluate where the company is headed and where it has been.
An outside firm conducts the process and answers are anonymous.
Some of the 35 questions include, “My supervisor is willing to listen to ideas I have about improving my job,” and, “I understand the values of this company and what is important to it.” Respondents agree or disagree on a scale of 1 to 10. Comparisons are made to previous year’s scores to see where improvement is needed.
“We take the average of all 12 questions about the manager and put it on their review,” Harding says. “That way we are telling the managers what’s important.
“The manager can see what his department’s low areas were. Then he can set a plan, or we can set a plan with him, for how he is going to increase those scores this year. You’re benchmarking the company. You can benchmark the manager.
“I’m proud to say that every year our numbers have improved,” Harding says. “I would hope that if you asked our staff if they ‘bought in to’ our culture, they would overwhelmingly say, ‘Yes.’”
How to reach: HardingPoorman Group, (888) 809-7741 or www.hardingpoorman.com
Michael B. Kennedy Jr. was wondering what was taking so long to get a computer rendering completed at KAI Design & Build. He stopped by the desk of the guy who was working on the project and asked what the delay was.
“He said, ‘I’ve been working on this for 25 hours over the past month,” says Kennedy, the 97-employee firm’s president. “If I had this software, I could have been done in five hours.’ A quick ROI in my mind and I said, ‘How much is the software that you need?’ and he said, ‘It’s $1,000, and they said they didn’t have it in the plan.’ You’re a $100-an-hour person and you just said you’re spending 25 hours. That’s $2,000.”
The situation drove home Kennedy’s strong belief in staying in touch with his people to collaboratively come up with the best way to manage a business.
“You really have to get out there and talk to your people,” Kennedy says. “Ask them, ‘Do you have what you need to do your job?’ It’s going to make your business more profitable and your people happier. There’s no way as president I can know what that person is doing in their cubicle to make their job more efficient. Unless you go around and talk to them and implement their ideas, you’ll never know.”
When Kennedy stepped in as president at the design and build firm in June 2008, he assumed the leadership role that his father had held since founding the firm 30 years earlier. He felt he had to prove himself worthy of being the leader.
“My position was to build that trust first,” Kennedy says. “I heard everybody out and asked them if they all had the tools to do their job. I do that with everybody from a lower staff member to an executive. Do you have the tools to do your job? Is there a way you can more efficiently do your job and how can I help you? Instead of a dictatorship, it’s an entitlement. I wanted people to feel like I had an open ear and they could trust me. Then I had to perform.”
That, of course, is the key. Anyone can go out and ask for feedback. It’s what you do with it that makes the difference.
“The difference is when you write it in a plan and put it on a shelf versus coming up with your missions, goals and strategies,” Kennedy says. “Those are the three boxes of a business plan. You’ve got your mission, you’ve got your goals and you’ve got your strategies. Then it sits on the shelf. How do you drive that down to the lowest level of your company? That’s where you need to write the initiatives to implement your strategies. Then you need measurable objectives that you measure yourself on yearly, monthly and weekly in your reports.”
Again, it’s the next step that is key. You need to have those conversations with people to see what they need in order to help you achieve your goals. When everyone is involved, you don’t have the disagreement over the need for software that Kennedy had to deal with. Everybody is on the same page.
“The last thing that is the most difficult thing once you get your initiatives and objectives in is getting the individual objectives at every level,” Kennedy says. “How does the receptionist and the assistant, what are their individual objectives to help us on the overall objective? It’s getting all those driven down.
“Everybody at every level has to understand, ‘Well, how do I contribute to that? How am I measured against that?’” Kennedy says. “We started rewriting those objectives and metrics into their yearly evaluation so they know what’s expected of them and how they contribute to this business plan.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Michael B. Kennedy Jr. makes sure everyone at KAI Design & Build has a copy of the company’s business plans when those plans are presented. But it doesn’t end at that meeting.
“Each manager, through people’s evaluations, would talk to them individually on how they fit into that role and what we needed them to do,” says Kennedy, president at the 97-employee firm. “Then with the formation of committees, you put the vision out there and have committees in place that meet quarterly or monthly so they can have the buy-in of the plan and take ownership of it. You don’t want to just drive it down their throat. You want input and you want them to take some ownership of it. You explain the theory and concepts and why it makes sense and then you have them buy into it and own it.”
If you find that people that tend to be waiting on you to move forward with plans you thought you had communicated, you clearly didn’t make them feel like they actually owned their role.
“Or they don’t feel like they can make a mistake,” Kennedy says. “Depending on your business, maybe you don’t want them to be allowed to make a mistake. Or you need to define what level they can make decisions without asking you.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Matt Eggemeyer’s grandfather used to meet potential customers at tradeshows, build relationships and later invite them to the shop before quoting their jobs.
Those days are long gone.
Even 50 years of tradeshow success couldn’t pad Keats Manufacturing Co. from the changing times that accompanied the recession.
“Traditional sales methods weren’t working anymore,” says Eggemeyer, vice president and chief operating officer at the family-owned manufacturer of metal stampings and wireforms. “We certainly live now in an impatient society where people, if they need something, they’re most likely going to Google. … That’s where we need to be.”
Eggemeyer looked online to recapture lost revenue, refill the prospect pipeline and uncover new business. His first website looked fine but failed because it focused more on processes than products.
That’s when Thomas Industrial Network approached the 170-employee company about improving its website’s performance to better connect Keats with industrial buyers. ThomasNet’s first lesson revealed what Keats’ target market of engineers was searching for.
“They want to know what you’re making, not how you’re making it,” a sales rep told Eggemeyer. “So we started all over again and lost some of the superfluous stuff that owners tend to put in their websites, like long ‘About Us’ and histories and ‘Meet the Management Team.’ Nobody cares about that.
“I spent most of my time talking about terminals, clips, wire forms, lead frames, things that I make. Then we enhanced it one step further by adding the specs that are involved in making those parts — how thick are they, what kind of plating do they get, all the different sizes and dimensions — which make my website that much more attractive, especially when it comes to the search engines.”
This was a crucial shift in Keats’ website strategy. Eggemeyer navigated it by understanding what target customers would type into Google or ThomasNet’s search engine.
“I don’t think they’re putting in ‘small family-run operation in Chicago,’” he says. “They’re looking for a tin-plated 006 automotive terminal, or something like that, and they’re going to find me.”
Keats developed a new site to better convey the company’s capabilities, including examples of prior custom work and details like plating specs. The new site is also easy to use — when visitors find sufficient information about materials and machines, they can click to submit a quote request and attach their custom design.
Eggemeyer tracks solutions to analyze traffic and reveal where Keats’ site is being effective. Based on where traffic lands and how long it stays, he makes small adjustments to the site.
“I can’t just drop this website and leave it alone and expect people to come year after year,” he says.
After Keats launched the site in April 2009, it didn’t take long to see return on investment. Sales are up 30 percent and quotes more than doubled in one year.
But the home run, if you ask Eggemeyer, is the military customer that found and vetted Keats online before placing a million-dollar order to develop a metal clip for a plastic bullet.
“Would I have been able to get that customer back with the traditional sales methods?” he asks. “No, because they wanted to see that I could do the zinc plating and that I could hold certain tolerances. And that isn’t on a brochure I’ve ever done, and they probably wouldn’t be asking that of me at tradeshow — and I don’t know if I could have given them that attention to sit down and talk engineer to engineer. But that stuff was on my website, and that gave them the warm fuzzy that, ‘Keats can do it; let’s give them a call.’”
How to reach: Keats Manufacturing Co., (800) 532-8763 or www.keatsmfg.com
Take sales online
You already know how to make your website more effective, if you ask Linda Rigano. You’re already doing it offline.
“A good Web strategy starts with … creating a Web experience that replicates the company’s sales process,” says the executive director of strategic services at Thomas Industrial Network, which connects buyers and sellers through offerings like the sourcing site ThomasNet.com and a Web solutions group that improves website performance.
ThomasNet’s VSET strategy breaks that down:
- Verify. “The first step in the process is that a buyer wants to verify that you make what they (want),” Rigano says. “(If) I’m looking for a container and I see a big picture of the facility, I see a mission statement, but I don’t see a lot about containers, am I going to spend time there? No.”
- Search and evaluate. “That might be questions they’re asking that customer service person on the phone; it’ll be questions that customer service person is asking back: How many, what’s the material, what’s the size, what’s the quantity?”
- Take action. “This is what you want to do when you get off of the phone with somebody. Is customer service preparing a quotation? Are they sending more information? Are they taking an order? … It’s all about making it easier for that buyer to do business with you.”
How to reach: Thomas Industrial Network, (866) 585-1191 or www.thomasnet.com
It’s all about the green at Frito-Lay North America Inc., but in this case, it’s not just money we’re talking. Instead, the snack-food company has taken green to its company fleet and made efforts to make those trucks and its delivery processes more environmentally friendly.
One of the biggest initiatives that they’ve implemented is electric delivery trucks, but they look at many different ideas when deciding what’s best for their fleet.
“[We] figure out what applications really deliver the best results, and we call those out and find the best of the best initiatives and pilot those and implement them into our fleets,” says Mike McConnell, the company’s director of fleet capability.
Pilot programs are critical to figuring out what works for your organization. McConnell suggests first looking at whether an idea meets guidelines from SAE International, a global association of more than 128,000 engineers and related technical experts in the aerospace, automotive and commercial vehicle industries. The organization focuses on lifelong learning and voluntary consensus standards development.
Then look at what works best with the routes your trucks take. So if your trucks do a lot of highway miles at high speeds, aerodynamic products are likely the best options. But on the other end, if they’re in the city mostly and do a lot of starting and stopping, the electric vehicles are good solutions. You may need to employ a combination of efforts depending on the different fleets you have.
“What we’ve learned is there is not one size that fits all to improve the fuel economy and sustainability of a fleet,” McConnell says.
It’s also important that you make you sure you test any initiative you want to implement. McConnell says Frito-Lay pilots its programs before rolling them out.
“The suppliers will all give you data, but their data could be skewed depending who they tested it with and how the truck was used, so we like to do our own in-house testing and we do a lot of that,” he says.
His pilot launch for the electric vehicles included 21 trucks in Canada, Texas, New York and Ohio. When doing a pilot program, it’s important to be rooted in data.
“We know cost of maintenance, cost of fuel, cost per mile — we have a lot of benchmarking and internal scorecards,” he says. “On any project, we’ll look at what those key performance indicators are and say, ‘OK, what are we looking for, what are the thresholds for this being feasible or not,’ and we’ll monitor that.”
Lastly, you have to look at how much payback you’ll get in terms of environmental impact and return on investment compared to how many dollars you invest.
“What we found is in the past, there have been tradeoffs where you have to spend money and not get a big return,” McConnell says. “We really have to be able to find win-win situations where we can make a significant improvement in our environmental footprint while actually getting great payback on the investment associated with the technology.”
For example, they looked at hybrid technology, and while many companies are investing heavily in that arena, it didn’t make sense for Frito-Lay because their drivers are stopped a lot when they’re in selling and delivering to customers.
For Frito-Lay, the biggest initiative that can deliver on both is electric vehicles for routes that are 100 miles or less. While there is an increased ticket price for the vehicles themselves, they can eliminate all the fossil fuel associated with the vehicle, and then the cost difference between electricity and diesel creates a significant pay back on that investment — the company reduced its fuel consumption by 8 percent and grew the business.
McConnell says, “It’s a pretty significant impact if you think about it, especially with the volatility of fuel prices now a days.”
HOW TO REACH: Frito-Lay North America Inc., (800) 352-4477 or www.fritolay.com
Find plan that fits you
You can make a difference in the environment even if your business does not have a fleet of thousands of vehicles taking the road each day. That’s the message from Jason Mathers, project manager for the Environmental Defense Fund. The nonprofit organization helps businesses find solutions to environmental challenges.
“Anything an employee is doing for the company on behalf of the company, the emissions associated with that are part of the environmental footprint,” Mathers says. “Just because you’re not able to easily track something doesn’t mean it doesn’t exist.”
Figure out what impact your company does have in terms of the number of vehicles you put on the road and how much they are used. Encourage your employees to be better drivers by not speeding, idling or hauling unnecessary weight in their vehicles.
“You’re talking about vehicle efficiency and routing, driver behavior and all these things that have a very significant return on investment,” Mathers says.
If you do have fleets, look at the vehicles you have and whether a more fuel-efficient model could do the same job.
“If you can take a modest step over your entire fleet, that can add up to a significant impact,” Mathers says.
HOW TO REACH: Environmental Defense Fund, www.edf.org/greenfleet
Rob Meck likes to push people to see how they respond. When he arrived at Premiere Credit of North America LLC, that’s exactly what he set out to do.
“I came on board in July 2009 and was cast with the challenge of transitioning a mature, but small entrepreneurial accounts receivable management firm into a leading national accounts receivable management firm with the ability to grow both immediately and rapidly,” Meck says.
He began meeting with company leaders to gauge who could work well under the pressure of pursuing growth.
“Too many managers, especially during the turmoil we were going through, and it’s such a huge transition, automatically retreated and didn’t want to take a lot of risk,” says Meck, the 400-employee company’s president and CEO.
He wanted people who could step out of their comfort zone and grow with the business. So he engaged them in strategic projects that contained a certain element of risk and working side by side and made an assessment of their abilities.
“I try to be a mentor with all of them and one of the things I do with them is try to roll up my sleeves with them and work on projects,” Meck says. “I really had to pick who the keepers were, and we had a lot of people we wanted to maintain. We put those people in specific areas that we really wanted to build on, strong people that had loyalty to the company and adherence to our values. We also recognized there were a lot of people who weren’t going to stay.”
Testing people doesn’t have to be throwing them in the deep end to see if they can swim. Work with them closely to discover their talents and abilities. Make it clear that mistakes are OK, as long they are made in the pursuit of progress.
“Reaffirm with them that the failure of you trying something and taking that risk isn’t career ending,” Meck says. “You can learn from that mistake. You’re not going to get punished for trying something that was an educated risk. … In a competitive world, if you don’t take some risk, you’re never going to be the top-ranked performer in your industry.”
The fear of taking risks is what holds back many entrepreneurial businesses.
“A lot of them struggle with the fact that building the infrastructure is a fairly significant expense of non-revenue generating, nonprofit making individuals,” Meck says. “If you’re going to invest into it and do it right, it costs money and it could affect earnings.”
Meck was willing to take some of those risks and he found other leaders who also thrived under pressure. But there were some who didn’t fit his mold and that led to his move to bring more than 30 new managers from 20 competing companies to Premiere Credit.
“Bad turnover is when you lose one of your top performing, most compliant, loyal and dedicated employees,” Meck says. “Good turnover is when you lose some of your lower performing people who don’t buy into your values. We knew that if we did not adhere tightly to our core values and have everyone buy into them, the company would not be as strong as it could be.”
The ability to make those tough decisions and take a few chances along the way is often the difference between a company that grows and one that plateaus.
“A lot of entrepreneurs really have loyalty to the people who made them successful,” Meck says. “It’s hard to keep them on the payroll and hire someone else who has that higher skill set and still maintain your financial business model.”
Meck is confident the steps taken thus far have Premiere on a path to growth.
“Our performance on every one of our clients has improved dramatically in the last year with people buying in to our new cultural values,” Meck says.
Catch your breath
Rob Meck moved quickly to make changes at Premiere Credit of North America LLC. So quickly, in fact, that he had to institute daily wrap-up meetings to keep track of it all.
“I was afraid we were losing track of all that we were doing,” says Meck, president and CEO at the 400-employee accounts receivable management firm. “So I set up executive debriefs at 5:30 every night for the top four executives for what was hopefully 15 or 30 minutes max. It was just a brain dump of everything that happened today.”
Maybe you don’t need a meeting every day. But Meck says it’s crucial that you make sure everybody is running forward at the same pace.
“As fast as we were moving, within a day, we could have had two executives taking different projects that were in opposition to each other,” Meck says. “It also served as a team-building exercise. It was a great way to end the day so that we all knew we were on each other’s team.”
Even though the pace has slowed a bit, the meetings continue.
“It helps communication,” Meck says. “It’s such an important part of the communication every day with our senior management team.”
HOW TO REACH: Premiere Credit of North America LLC, (888) 403-1637 or www.premierecredit.com
Bob Grote knew what the next morning was going to bring and it was eating him up inside. The recession had taken a toll on business at J.E. Grote Co. Inc. and now he had no choice but to lay off employees.
Or so he thought.
“I went into a restaurant, a little watering hole where I sometimes have a bite to eat,” says Grote, president at the 170-employee food slicing equipment manufacturer. “A guy I kind of half know came up to me and said, ‘Man, you look depressed.’ I said, ‘Yeah, I am. I think I’m going to have to lay some people off.’ He poked me in the chest and said, ‘Come on Bob, you can do better than that. You don’t have to do what everybody else does. Be creative.’”
Grote began to ponder what this casual acquaintance had just said to him and the wheels began to turn in his head.
“A good portion of our staff, be it engineering or in the shop itself, is really dedicated to the manufacturing of new equipment,” Grote says. “So when your equipment dries up, you have nothing for a lot of people to do. I came in and said, ‘What if I force vacation and go down to a four-day workweek for everybody in new equipment?’ You’re going to take vacation in the first half of the year until you run out of vacation. It doesn’t help my cash flow, but it reallocates my resources to later in the year.”
The response from his management team was shock.
“They all kind of looked at me like, ‘What?’” Grote says. “I got challenged by them saying, ‘Are we just wimping out? Are we just afraid to make the right decision because we’re fortunate to have the cash flow to support doing this? Are we just delaying the inevitable?’”
Grote had pondered those same questions. He decided it was worth the risk to try something a little different.
“Leaders truly underestimate the cost of retraining,” Grote says. “In an environment of unemployment, you can hire really quick and you can hire really good people. But at least in my business, because this is very customized work, it’s hard for a guy to contribute in some of these areas for a minimum of six months, sometimes up to a year. As I look at it, I’ve got to hang on to that core muscle.”
One of the land mines Grote had to navigate around was, “How do you do something that only inflicts pain on one segment of your work force?”
“I went to the departments that were going to be affected and spent a lot of time talking to them and trying to get them to complain and be OK with complaining to me,” Grote says. “I was constantly focusing on the future and reminding them that this is what it is. What’s paying our bills right now, guys, is all these parts and all this stuff that these other guys are doing. You want us to pay our bills so we can keep you around, too.”
Grote also spent time with those who weren’t being forced into February vacations.
“I reminded people that you better look busy,” Grote says. “I know you’re busy, but you better look that way.”
So the vacations were taken, and while there were a few nervous moments, business did begin to pick up in the summer, and Grote’s plan ended up working out.
“There was fear every day,” Grote says. “I ultimately have to answer to the shareholders of the company. I look foolish and wasteful if it doesn’t work out. But if you’re truly a leader at that point and you’re in that position to make that decision, if you think about what’s going to happen to you at that point, maybe you shouldn’t be the leader.”
Take time to listen
Bob Grote could have shoved his idea to avoid layoffs at J.E. Grote Co. Inc. down everyone’s throat and ignored the concerns of his management team. But he knew that wouldn’t do much for his stock as their leader.
“If you have a past experience of going back and changing your mind because they have a logical reason why you shouldn’t do your idea and you’re not just being stubborn, they will talk to you and explain their reasoning,” says Grote, president at the food slicing equipment manufacturer.
He wanted to hear their feedback because he himself had fear that maybe it wasn’t the right thing to do.
“I’ll either say, ‘Maybe you’re right, let’s go back and explore this,’ or, ‘I still think I want to do it this way, and I’m going to do it, but I see where you’re coming from,’” Grote says.
Either way, you show yourself to be open-minded when you make the effort to listen.
Unfortunately for Grote, he faced the same dilemma again in early 2010.
“My mantra was, ‘If this keeps up, I can’t do that again guys,’” Grote says. “Fortunately, it turned a lot quicker.”
Grote adds that his confidence in foreseeing the future in today’s world is pretty much gone.
“I don’t believe anything until I’ve got the contract with dripping ink on it and the smell of money in my office before I believe an order is here,” Grote says.
HOW TO REACH: J.E. Grote Co. Inc., (888) 534-7683 or www.grotecompany.com
Richard Howe wouldn’t call himself a “turnaround guy,” but based on his track record of turning around struggling companies, some of his peers might.
“I’m not a ‘turnaround guy’ just because I’ve done three turnarounds,” Howe says. “You get kind of branded that way, but I’m not really the turnaround guy. Really, I’m a business grower.”
As president and CEO of Inuvo Inc., Howe has already helped reposition the $50 million company to generate fourth quarter revenues 46 percent higher than the same quarter of 2009, which was also the year he joined Inuvo. Part of his strategy to accomplish this was improving Inuvo’s organizational structure to eliminate inefficiency and better carry out the company’s vision.
“I’ve run about a dozen businesses and three of them were turnarounds, and they all have similar characteristic traits to them,” Howe says. “One specifically, is the company has been excessive in its spending of money, so that needs to be curtailed. The costs need to get under control. Two, the team, the people around you often need to be changed, retooled and improved.”
One of the biggest expenses most companies have is in employee head count.
“I believe in team, so I spend a lot of time making sure we have the right people in the right roles in the company,” Howe says.
“You go through an exercise of evaluating staff. We created a system and the system had variables in it, different characteristic traits for what constitutes a great employee and what constitutes a not-so-great employee, and we rank ordered them. We took a look and said, ‘Going forward, what are the parts of the company that we’re going to focus on? From the collection of resources that we have and scores that we’ve gotten from everybody, who’s best to help us achieve the vision of the company?’”
Rather than set a specific head count number of employees to keep or cut, you should simply look at ways to structure the leadership more effectively. Sometimes that can involve small changes in personnel, but in other cases — at Inuvo it was also a matter of consolidating subsidiary businesses — it can mean creating an entirely new organizational structure and changing out entire management teams and boards.
While making personnel decisions is always difficult, reassessing your leadership team is a key part of getting your company back to operating efficiently and profitably on a cash-flow basis. It also demonstrates to existing employees that you’re giving them the leadership they need to achieve growth.
“The whole company was re-energized and re-motivated when they finally realized that we actually did have a senior leadership team at the company that was committed to the success of the company, one,” Howe says. “Two, they felt like they were a part of something that was going to be very successful and grow.”
Howe saw that personnel headcount was the biggest expense base for Inuvo and a key area to improve cost efficiency; yet, before making these decisions it’s important to look at all your areas of business to examine cost saving opportunities.
“Every single expense line in the company we just systematically went down through them and said ‘Why are we spending this money? Why are we spending this money?’ And, is it giving us a return or not?’” Howe says.
Most important, once you have a plan to reduce expenses, you need to enact it quickly.
“When you first do a turnaround, you’ve never done one and you get in there and you tend to over analyze the problems,” Howe says. “It causes you to take too much time to make the kinds of expense cuts you need to make to get the operation under control.”
How to reach: Inuvo Inc., (727) 324-0211 or www.inuvo.com
There will always be unforeseeable challenges and problems that arise to threaten a company’s growth, but according to Rich Howe, the most successful business people are those who undertake such challenges with strong intent and determination.
“It’s one of the single, greatest characteristic traits that I’ve found in successful business people; it’s the sense of urgency,” says Howe, the president and CEO of Inuvo. “It’s waking up and realizing that today is the best day to call someone or do something or get something done. … I’ve just found that those people tend to be able to get the impossible accomplished.”
Even when things aren’t going their way, these people won’t let themselves be steered off course.
“In business, you are going to encounter rough periods,” Howe says. “It’s just going to happen. It seems like some individuals have the ability to get punched in the face and get back up and keep going, and others seem to not be able to deal with those challenges, and they end up failing as a result. The most important characteristic trait of any leader: Can you take a punch and get back up and keep fighting? And if you can, then there’s a good chance that you are going to be successful, because it’s the getting back up part that’s the key.”
Adam Adache needed to make a big change at Adache Real Estate LLC. If it was going to work, he couldn’t give in to the panic that was consuming much of the real estate industry.
“You have no option but to make it work,” says Adache, founder, president and CEO at the 20-employee real estate company. “You have to have that mentality. You run a business and a business is always susceptible to a bad economy and things that might happen along the way. You might have to change your business model. But in your mind, you have to be confident that you’re going to make it work.
“If you have that mentality, you’re not going to sit there and think about the worst-case scenario. You’re going to spend time analyzing and really diving into the heart of the problem and finding out what your true obstacles are. That’s when you’re going to make your decision and make your changes.”
The change Adache had to make was a merger of his firm’s project sales and marketing division with its bulk real estate division. The economic crash was leaving a growing number of distressed properties unsold and Adache needed a way to get them off the market.
By merging these two divisions, he thought the firm would be better able to use its resources to cobble together deals that would get the properties sold that were bringing down the rest of the market.
“We convert an offer that is rejected into a new opportunity and that new opportunity is still a revenue-driving opportunity,” Adache says.
The challenge for Adache was he couldn’t just gather everyone together and tell them, “Everything you’ve been doing is bad and it doesn’t work anymore.”
“When you’re coming in to sit down with your staff and tell them that your current model isn’t working, it has a negative connotation to it,” Adache says. “So you have to quickly know how to spin it into a positive. I talked about the successes we had in the current approach. I talked about how we need to make it more successful, which I think is what every company strives for.”
Be open about the obstacles your business is facing and why what you’ve been doing isn’t working anymore. But make sure you follow that up with a discussion about what needs to be done to get things turned around.
“You have to explain, ‘I’m right there with you,’” Adache says. “They have to buy in to the long-term opportunities of remaining positive. The only way they are going to do that is if you paint the picture why we’re months away or even days away from turning the company around for the positive. You have to paint the picture and then get them involved in painting the picture even better.”
As you move forward in the discussion and gather input, keep in mind that you need to be the one who puts together the plan that hopefully gets you out of your funk.
“Give some ideas and a general direction of where you’re going to sail the ship,” Adache says. “Along the way, you can make some detours based on the input of everyone you have. Be open and simultaneously searching for other options while you’re moving ahead, even if it appears you’re moving in the right direction and things are going good. You need a backup plan and a backup plan for your backup plan.”
Most important, keep an open mind and an open ear.
“If you’re too hard-headed and not open-minded enough and you don’t listen to your people, you could crash and burn on whatever you’re doing,” Adache says.
How to reach: Adache Real Estate LLC, (954) 566-7400 or www.adachere.com
Lay it all out there
Adam Adache is all about projecting a winning attitude and being an optimist when things look bad. But that doesn’t mean he steers away from bad news that his employees at Adache Real Estate LLC need to hear.
“Our company, just like any company, hasn’t been averse to layoffs and the changing market,” says Adache, the firm’s founder, president and CEO. “Fortunately, we’re growing again and we are back on a hiring phase. But we had to make changes. When you have to lay off employees and cut pay, it’s not a positive discussion. In order to get them to buy in to everything, you can’t say, ‘OK, this person is laid off and your salary is cut. We’ll talk to you tomorrow.’ You have to spell out the short-term goals and long-term goals in a plan and explain how you’re going to overcome it.”
You need to find a way to stoke the passion of your people to help overcome this latest challenge.
“They can’t just say, ‘I’m going to do it because it’s part of my job,’” Adache says. “When you’re in business selling a product or service, it’s our belief you have to do it with passion. You can’t do it with passion unless you buy in.”
The way to build an online strategy is to forget about your online strategy for a second.
Carmen DeLeo, the general manager of CDM Electronics Inc., made that his first step when he and his team were trying to formulate the best way to build a presence on the Internet for the $20 million logistics and software company, headquartered in Turnersville, N.J.
“We put ourselves in the position of engineers and technical buyers — our main customers,” DeLeo says. “They’re the ones who are going to fit the profile for us. We thought about the things they would come to us for — specification of part numbers, drawings and so forth. So we started to decide what our customers needed, and let’s try to get as much information on the site as we can, and we can make it a 24/7 part of our customer service.”
Once you have identified what your customers need, you have to develop your site to meet those needs. DeLeo and his team partnered with outside firms, including business IT support company ThomasNet, to start the development process.
“They educated us on things like (search engine optimization) and other terms we weren’t familiar with. In addition to that, we spent a lot of time online, just playing around and experimenting,” DeLeo says. “We spent a lot of time just reading and stumbling upon different websites, seeing what some other companies were doing. We looked outside our industry, because there weren’t a whole lot of people in our industry doing this yet.”
Above all else, DeLeo says the quality of your site content should rule your decisions about how you market your business online. It’s great to have an eye-catching sight with attractive graphics and sound, but if the substance isn’t there to back up the style, you’ll never be able to leverage your site to help grow your business.
“If you supply the site with as much content as possible, it is only going to help serve your customers,” DeLeo says. “We’re still very early in this era. The computers that are doing the rankings of your website’s value to customers are still very rudimentary. At sites like Google, it is obvious humans don’t review the results. But they still do a remarkable job of returning what is relevant. Even having an ugly site with content is still better than a website without an adequate amount of content. If all you have is an address and a little bit about the company, it’s not going to do you much good.”
Regardless of whether you use internal resources to build your online presence or acquire outside help, you need to partner with people who will engage you in a dialogue. You need to bring different perspectives to the table to get the right look and the right content onto your site.
“You need development people who understand the real goal,” DeLeo says. “Sometimes, we don’t ask for what we want all the time, or there might be a better solution out there. That type of communication has to be the key, so when you’re selecting vendors for this service, you want people who you know you can communicate with. Experience is the number one thing with regard to that.”
How to reach: CDM Electronics Inc., (856) 740-1200 or www.cdmtech.com
Take sales online
By Brooke Bates
You already know how to make your website more effective, if you ask Linda Rigano. You’re already doing it offline.
“A good Web strategy starts with … creating a Web experience that replicates the company’s sales process,” says the executive director of strategic services at Thomas Industrial Network, which connects buyers and sellers through offerings like the sourcing site
ThomasNet.com and a Web solutions group that improves website performance.
ThomasNet’s VSET strategy breaks that down:
• Verify. “The first step in the process is that a buyer wants to verify that you make what they (want),” Rigano says. “(If) I’m looking for a container and I see a big picture of the facility, I see a mission statement, but I don’t see a lot about containers, am I going to spend time there? No.”
• Search and evaluate. “That might be questions they’re asking that customer service person on the phone; it’ll be questions that customer service person is asking back: How many, what’s the material, what’s the size, what’s the quantity?”
• Take action. “This is what you want to do when you get off of the phone with somebody. Is customer service preparing a quotation? Are they sending more information? Are they taking an order? … It’s all about making it easier for that buyer to do business with you.”
How to reach: Thomas Industrial Network, (866) 585-1191 or www.thomasnet.com