Robin Sheldon had reached a critical point in the life of her business.
Through her strong will and determination, she had built Soft Surroundings from a small business that produced a single catalog for women’s clothing in 1999 to one that has seasonal catalogs, a chain of retail stores and an e-commerce website.
She didn’t do it entirely on her own, but Sheldon was definitely the driving force behind the company’s growth. However, she was beginning to realize that if she wanted the company to continue to expand, she was going to need some help.
“When you are part of a creative process as well as the traditional business side of the business, it’s very hard to let go of getting your fingers into absolutely everything,” says Sheldon, the company’s president and founder. “But there comes a point when you realize that you’re putting your business in jeopardy by doing this.”
Sheldon needed to get more people involved in the management of the 530-employee company. She also had to find a way to prioritize the really important things that needed to be done and separate those from the tasks that either could wait or didn’t need the same amount of effort to complete.
“So what that led to was the assessment of the type of people we needed to be hiring with what particular skill sets,” Sheldon says. “For myself, it was a matter of setting up my goals with parameters and guidelines that would get me to the point where I could let go.”
The challenge for Sheldon would be setting up that structure so she could get more comfortable with delegating tasks.
Know your priorities
Part of the problem Sheldon has when it comes to delegating is the high level of confidence she has in herself.
“I have an expectation of myself that is probably way too perfect and hard for anybody else to achieve,” she says. “I’m going to expect more from myself than I am from anybody.”
The result is that Sheldon believes she can do it all. And she saw no reason why it couldn’t be done to the absolute best of her abilities. But she finally started to understand that perfection isn’t always necessary.
“I realized I have to be satisfied with ‘good enough,’” Sheldon says. “I have to identify the few areas where it had to be great.”
There are certain tasks in any business that don’t have anything to do with the customer and have a negligible effect on the bottom line. These are tasks that just need to be done.
“You’re not going to drive yourself over the edge of the cliff trying to make it perfect,” Sheldon says. “You can get it ‘good enough,’ and that’s going to be good enough.”
Then there are things such as the photography that appears in her seasonal catalogs.
“We spend a great deal of money and time on our photography to give the customer an aspirational experience that is emotional so she forms a connection with the product,” Sheldon says. “She understands we are trying to do more for her than just sell her stuff. That’s a place we don’t give. You don’t want to settle on things that are integral to your brand.”
The solution for Sheldon to determine what requires maximum effort and what just needs to get done is a formula known as good, better, best.
“When people come to me and say, ‘I have 10 things that I’m supposed to have done in 48 hours,’” Sheldon says. “I’m being told that all of them are equally important. I ask them to go back and discuss it and come back and tell me if it’s a good, better or best. That helps people a great deal. Sometimes you have to talk to other people involved to see if you’re headed in the right direction.”
It was a lesson Sheldon wanted to impart on her team, but one she also needed to try to follow herself.
Have a plan for delegating
The next step for Sheldon was to accept that within those priority tasks that need to be done right every time, it would be OK to delegate.
“It’s a process,” Sheldon says. “You have to put some good planning behind it. But in order to do that, you have to have the right people. You have to have a very clear understanding of what motivates each individual person. They are not the same. You can’t treat them the same.
“You have to learn each person and figure out how you’re going to make them happy in what they are doing, productive and wanting to do more.”
One of the biggest mistakes you can make in business is assuming that with a few brief words in your office, an individual can take a task and run with it.
“You can ruin a perfectly good career if you take somebody who is a super performer for you and you elevate them into a management position and don’t give them any management training,” Sheldon says. “Before you know it, you have a perfectly good person who has such good skills, but now is floundering in the job because you didn’t give him or her any management training.”
Develop a plan for the person you want to give responsibility to and then share your plan with that person. Take the time to see how the person feels about it and go over areas that you’ll need to work on with the person.
“I have high hopes for being able to give you some new responsibility and I know you’re up to it,” Sheldon says. “I’m thinking this is the area that we will work with and here’s the goal. Let’s sit down together and come up with how we’re going to do this.”
A key barometer that helps Sheldon know if she’s done her job training or if she needs to do more, or perhaps has chosen the wrong person, is whether she hears her name invoked as tasks are being worked on.
“‘Robin says,’” Sheldon says, repeating the phrase she doesn’t want to hear. “If I’m hearing that too much, it means people aren’t taking responsibility for their own work and they aren’t becoming their own experts. They are having to rely on my name to get their jobs done.”
Sheldon’s goal is to make sure the person has all the knowledge and skills to make it happen on their own.
“They don’t need to use my name,” Sheldon says. “They will build their reputation and their confidence by saying, ‘This is what we need to do, and I believe this is the way for us to do it.’”
Help your people
If you run into a situation where you have a leader who isn’t invoking your name but is struggling with the role of leadership, you need to step in and give them some support. Sheldon recalls a manager he was training who wasn’t getting respect from the people she was trying to lead.
“She had to follow up on projects and things that needed to be taken care of regularly,” Sheldon says. “She just couldn’t get their respect. We worked on that for six months together.”
What Sheldon found was that this new leader was struggling with the language she used to engage people in tasks.
“One of the areas we dug into was, ‘How do you get your point across in a pleasant way? How do you get people to want to help you and want to do what you need them to do?’” Sheldon says. “There’s a whole psychology there, and we studied it. Now she is a power negotiator, and she’s still here.”
The act of delegating has to be about more than just you saying to your employees, ‘Hey, you need to do this now.’ It’s a process that you have to be actively engaged in if it’s going to be successful.
“For me, things get tested,” Sheldon says. “It could be our clothing design. It could be our creative print design. It could be copy. It could be many things. As soon as I can get to a comfort level where I’ve seen it go the way I’d like it to go three or four times in a row, then I back off. I only check every now and then.”
When you do check in on how your people are doing, don’t just look for problems.
“None of us probably give positive feedback as often as we should,” Sheldon says. “If your business is moving fast, chances are you might be leaving that out and that’s so important. Along with positive feedback is making time to care about these people.”
The numbers show Sheldon is making the right moves with her business as the company hit $120.8 million in 2011 revenue. Two new stores were announced in Boston in September, and Sheldon feels good about the future. She says keeping it fun will be a big key.
“If you don’t allow people to feel they are having some fun in their job, you may lose them sooner than if you give them a little relief now and then,” Sheldon says. ?
How to reach: Soft Surroundings, (800) 240-7076 or www.softsurroundings.com
The Sheldon File
president and founder
Born: New York
Education: University of Denver. I was actually working on an English lit degree, which had nothing to do with what’s happened the rest of my life. I wanted to write, but not in journalism. I was not a business person or thinking about business much at that time. It’s an unusual situation, not one that most women would find themselves in today. It’s interesting how somehow the business finds you.
What was your first job?
I was a research assistant to a newspaper in Long Island, N.Y. I started to fall in love with the written word. I have a book that I’m working on and I do it when I get a moment to breathe. Maybe I will get to finish it someday. It’s a mystery, certainly fiction.
What is the best advice anyone ever gave you?
In the world of business, it’s, ‘Know your customer.’ I guess that came from Dennis Pence, who is president and chairman of Coldwater Creek. If you can put yourself in your customer’s shoes and see what you’re doing from their perspective, it will change the way you do things and it will make you more successful. We all get lost in our own little world and think we know why we’re doing things. Sometimes we’re doing things that the people we’re trying to do them for don’t want.
Know what tasks require maximum effort.
Help your people achieve their potential.
Make sure you praise a job well done.
Often overlooked in discussions about improving Ohio’s economy is the fact that actions taken by state and local governments are primary drivers of the cost of doing business. Their ability to levy taxes and impose costly regulations directly impact a company’s bottom line. When governments are inefficient, they need more revenue. When they take a command and control approach to regulations, they often become an obstacle to growth.
To ensure a strong, competitive economy, we need efficient governments that tax less and provide greater value. That’s why the Ohio Chamber of Commerce and our state’s eight metropolitan chambers undertook an important study issued in December 2010, called Redesigning Ohio. It offers a road map for transforming Ohio’s state and local governments into 21st century institutions.
Burdened with an unprecedented fiscal crisis and a projected $8 billion deficit, state government leaders were at an important crossroads. They could continue to accept the status quo or they could embrace reforms aimed at improving services and heightening productivity through greater flexibility and innovation.
The ideas advanced in Redesigning Ohio provided a framework for thinking boldly about ways Ohioans can receive more value for their state and local tax dollars.
Redesigning Ohio offers 10 specific areas for reform. The first proposes changes to the budgeting process itself by employing a unique approach called Budgeting for Outcomes. Two other innovations, Charter Agencies and Entrepreneurial Management, incentivize greater efficiency by providing more freedom to manage in exchange for less funding and by bringing market-based competition to government services.
Redesigning Ohio also proposes pension and civil service reforms that harmonize the public and private sectors and regulatory reforms that use incentives to boost voluntary compliance. In the health care arena, the report urges the government to leverage its buying power to foster greater competition, lower costs and better results. Redesigning Ohio also offers ways to reduce the cost of the criminal justice system and urges a more thorough and regular review of tax credits, exemptions and deductions.
Finally, Ohio has a costly and outdated system of 3,700 local governmental units that must be brought into the 21st century by enhancing productivity and promoting greater collaboration.
Now, two years after the release of Redesigning Ohio, the same nine Chambers of Commerce have issued a Redesigning Ohio Update. The new report details the progress that has been made and sets out the next steps in this critical transformational process.
As a result of bold actions taken by Gov. John Kasich and Ohio lawmakers, clear progress has been made in reforming our criminal justice system and Medicaid program. Most importantly, the reforms are not just reducing costs; they are also improving results.
One of Gov. Kasich’s first actions established the Common Sense Initiative, which focuses on creating a more jobs-friendly regulatory climate in Ohio. CSI has achieved a number of successes that are making Ohio’s regulatory process more transparent, efficient and less costly for businesses.
Also in 2012, the Ohio Legislature enacted public employee pension reforms that are an important first step in ensuring the long-term solvency of those funds and reducing the cost for taxpayers.
During the past two years, many local governments and school districts embraced greater innovation and collaboration, but additional work remains. The successes highlighted in the Redesigning Ohio Update can serve as excellent models for the additional work ahead.
Today, our economy is improving. Unemployment is at 6.9 percent and tax revenues are increasing. But, we cannot allow these improvements to justify a return to the status quo. With Redesigning Ohio as a guide, we must continue the work necessary to transform our state and local governments into 21st century institutions. ?
Linda Woggon is executive vice president of the Ohio Chamber of Commerce. As Ohio’s largest and most diverse statewide business advocacy group, the Ohio Chamber has been an effective voice for business since 1893. To contact the Ohio Chamber, call (614) 228-4201 or visit the website at www.ohiochamber.com.
One of the most significant and enduring ways to increase business profitability is to continuously evaluate your cost structure and reduce costs where possible without sacrificing quality and customer satisfaction. You need to reduce both direct costs of producing your finished goods and business overhead.
Your profit improvement program should help you identify specific steps for cost reduction. These steps often include lowering total delivered costs with your suppliers and reviewing production processes and systems to eliminate waste.
Define material content
You want to start with an evaluation of each category of your cost of goods sold. This evaluation requires each category to be identified with the actual dollars spent and its percentage of sales.
The next step is to look at material content, which is usually your largest cost of sales category, both in actual dollars and as a percent of sales. It is not uncommon in industrial products for your material content to be between 40 and 60 percent of sales. Reducing material costs will immediately and directly benefit the bottom
line and does not require any working capital.
The next thing you need to do is define the specific material content of your products.
Work with suppliers to reduce cost
Companies should be sure to develop a global supply chain for procuring material and evaluate the suppliers for their ability to deliver on time with the required quality and lowest possible cost. Intensive Internet searches, referrals and supply chain conference seminars are all useful for finding and evaluating suppliers.
Displaying your products at supply chain open-house events can also be very effective for developing new sources of supply. Effective supply chain partners will constantly suggest product improvement and cost-reduction ideas.
Adopt an open-door policy for the supply base. You should always be willing to talk to anyone who has a potential way to help you reduce cost and improve quality.
Stratify material purchases
The ABC methodology stratifies all materials and parts purchased by a company into three groups. The A parts are the most expensive and critical to the company’s operations. They will make up 70 to 75 percent of your total material spend, but represent only 5 to 10 percent of the total number of part numbers you purchase.
B parts represent 20 percent of your material spend and about 20 percent of the total part numbers purchased. C parts represent 5 to 10 percent of your material spend but represent 70 to 75 percent of your total number of part numbers purchased. This stratification gives you and your supply base the focus to work on reducing the greatest costs.
Next you want to develop and analyze a purchase price variance report. Ask yourself what your actual spend is versus standard. What are the year-over-year changes? You should evaluate your supply chain’s delivery and quality by developing a scorecard to know how delivery and quality are influencing your total costs.
Another way to reduce material content and costs is product redesign or product simplification. Product simplification is the discipline of integrating the greatest performance functionality into the fewest number of parts using the most suitable and cost-effective materials and manufacturing processes.
Through product simplification, cross-functional product development teams have found that the rigorous combination of design and process innovation can significantly enhance market desirability and engineering efficiency.
Not only is it a team-building experience, but it is also a business opportunity that typically nets significant cost reduction and improved efficiency without sacrificing quality or product performance.
Make an effort to become a greener company by recycling. This can contribute to reduced total material content and increased profitability.
Matthew P. Figgie is chairman of Clark-Reliance, a global, multidivisional manufacturing company with sales in more than 80 countries, serving the power generation petroleum, refining and chemical processing industries. He is also chairman of Figgie Capital and the Figgie Foundation, a member of the University Hospitals Board of Directors, corporate co-chairman for the 2013 Five Star Sensation and chairman of the National Kidney Walk.
Rick Solon is president and CEO of Clark-Reliance and has more than 35 years of experience in manufacturing and operating companies. He is also the chairman of the National Kidney Foundation Golf Outing.
In the 40 years that Gary DeJidas has worked for GAI Consultants Inc., he hasn’t faced challenges quite like what he faced four years ago when the economic downturn dealt a hand of stagnancy, cutbacks or shutdowns. However, in those years, the GAI chairman, president and CEO hasn’t been as excited as he is today for what lies ahead for the $90 million engineering and environmental consulting firm.
“I’ve taken the position that yes, this is a downtime, but it is a great time to strategize and position for future growth,” DeJidas says. “We’ve grown to more than 800 employees now with 26 offices in 11 states. A lot of that growth has occurred in the last three to four years.”
The economic impact GAI experienced forced DeJidas and the business to buckle down and find ways to diversify offerings to rebound from hard times.
“The biggest parts of our business — our energy component, our transportation component, municipal services and real estate development — were greatly impacted by the economy,” DeJidas says. “As work either seemed to be delayed or actually shut down, we really had to adjust to the available work that was in the marketplace. It had a ripple effect through a number of our lines of business.”
Real estate development almost went to zero, municipalities were forced to cut their capital projects and states sidelined their department of transportation work. In the company’s Orlando office, nearly half of its 100 employees had to be let go due to the slowdown in work. DeJidas made adjustments and turned his focus on strategic acquisitions and growth initiatives.
“Because of the situation with the economy, most of us have had to right-size with the available amount of work that was out there,” he says. “We’ve managed to do a reasonably good job navigating through all of that.”
Here’s how DeJidas has adjusted to today’s business reality through acquisitions and smart growth at GAI Consultants.
When your company goes through a shock like GAI experienced because of the impact the economy had on its business four years ago, you can’t afford to hesitate when moving forward.
“No. 1, you have to make up your mind whether or not you’re going to be a risk-taker,” DeJidas says. “If you’re not a risk-taker, then you’re probably going to crawl in your shell and just hope it gets better. When I say a risk-taker, I mean a calculated risk.”
During the economic downturn, no one knew what to expect next. You could say the same about what’s in store for 2013. You just can’t be afraid to take chances.
“I don’t think any of us knows what the year is going to bring, but you have to stay optimistic that it’s going to be better than this year and not be afraid to take opportunities when they present themselves,” DeJidas says. “That separates a lot of CEOs in this world — those that are willing to take chances versus those that will be more conservative in what they do.”
He has taken the position that you have to jump at opportunities rather than sit and wait for an opportunity to gift-wrap itself.
“I’ve taken an optimistic view that we’re going to be successful, and when things start getting back to where they were in terms of economic vitality, we’ll be positioned to go a long way,” he says.
Strategically, GAI has been trying to grow its business in both new markets and new services. The company has expanded its markets in the Northeast, Southeast and Midwest, stretching as far as Wisconsin, which has been aided by new service areas.
“In the service areas, we’ve added things like airport-related services, nuclear support services, real-estate-related services and our objective is no matter what a client needs, they can find it here at GAI,” DeJidas says.
To make these additions successful in a time of economic downturn, GAI made the decision not to cut vital parts of the company.
“One of the things that a lot of companies do when things get tight is they cut things that will help them grow and develop,” he says. “Over these last three or four years, we have maintained all our training programs. If you want your staff to respond, you have to continue, even through tough times, to feed their career development objectives and look in those types of directions.”
Much like maintaining training initiatives in the company, DeJidas decided to turn his focus on areas that would benefit the business versus stressing over areas that weren’t adding value.
“The first thing to look at is what markets are responding right now,” he says. “If you have services that could be offered to that industry, you should strategically position yourself to do that. It’s really about finding areas that look like they are going to be strong financially in the coming years and trying to strategically move yourself in that direction.”
To achieve success in different areas that you haven’t been in before, you have to be nimble.
“You have to be able to say, ‘I’m heading in the right direction, or I’m heading in the wrong direction,’” DeJidas says. “You have to be able to see what’s working and what’s not working, whether it’s in a market area or a service area and make some adjustments.”
Make good on acquisitions
To take advantage of new opportunities in areas that GAI saw potential, DeJidas looked for acquisitions that could help give the company a foot in the door.
“It’s always better to go into a new market with an established reputation,” DeJidas says. “We’ve tried to go into markets and just position a person there and start from scratch. That’s a very hard way to go. That’s why the acquisition way, even if it’s a small firm with a good reputation that has been in that market for a period of time, is a much better way. That applies to services, too.”
If you attempt to break into a new market or service with no prior experience or history, you will have a long journey ahead of you to establish your business. DeJidas and GAI have used the economic downturn as an aid to make acquisitions that will benefit both parties.
“There are a number of really good firms that have had to struggle the same way everybody struggled, and some of these firms don’t have the types of resources that we have,” he says. “What that has resulted in is the number of firms looking for partners — someone to come in and acquire the firm and provide the resources for the firm to grow and develop.
“That’s where we’ve been very successful in identifying those opportunities with firms that I feel are very good firms but are casualties from the economic situation that we’ve been faced with for the last several years.”
GAI has been doing acquisitions for nearly seven years now. In 2012 alone, the company went through four acquisitions and saw revenue improve 15 percent over 2011.
“The biggest thing with acquisitions is finding a firm that has a similar culture even before you start talking about money or anything like that,” he says. “People in general have a very difficult time with change. So if you acquire somebody whose culture is dramatically different than yours, then they’re going to struggle and you’re going to struggle. You have to make sure culture is very similar.”
Sometimes it’s easy to ignore how cultures will match up because the opportunity at hand is so great. You have to strike a balance or success will be very difficult.
“I always lean toward the culture because if you’re acquiring good people and the firm has a good reputation, the odds are in your favor that you’ll be successful,” he says. “Is there a balance? Sure there’s a balance. A lot of times companies focus on the practice versus the business.
“What you really need is a blend of the two. You’re trying to obtain a balance between the quality in the services you provide and the ability to run it as a successful business.”
On top of finding a business that will improve your company and that is a cultural fit, you must also be able to identify strong leaders who can help your business grow.
“Make sure you have key individuals who are familiar with the business that you can really put trust and faith into once the acquisition occurs,” he says. “They are the ones that hold the key to the business and have all the client relationships.”
Ultimately, the key to a successful acquisition is doing your due diligence throughout the process.
“You have to go through an extensive due diligence examination,” DeJidas says. “Sometimes it’s hard to uncover all the rocks and see what’s under all those rocks.” ?
How to Reach: GAI Consultants Inc., (412) 476-2000 or www.gaiconsultants.com
- Don’t be afraid to take risks.
- Find new areas to grow your products or services.
- Make strategic acquisitions to grow your company.
The DeJidas File
chairman, president and CEO
GAI Consultants Inc.
Education: Went to Point Park University and graduated with a B.S. in engineering and also received an MBA
What was your first job and what did you learn from that experience?
I worked at a gas station years ago when gas was 25 cents a gallon and you would get your oil checked and you tire pressure checked and your windshield and back window all clean. The thing I learned from that was service. It was all about servicing the customer.
What is the best business advice you’ve ever received?
Never ask people to do something you wouldn’t do yourself. Lead by example.
What excites you about GAI’s future?
I think we are very well positioned to move forward dramatically. In 10 years that I’ve been CEO we’ve more than doubled our size. I’m excited to start thinking about the next 10 years.
If you weren’t a CEO, what is a job you have always wanted to do?
I’d like to be a professional golfer, but I’d probably starve. I would like to be a teacher and someday I may teach. I enjoy speaking in front of people and I enjoy teaching. With what I know, having the chance to share that with others would be very satisfying to me.
Peter Kellett is an attorney. He’s also the chairman and CEO of his firm, Dykema Gossett PLLC. But Kellett will be the first to tell you that he is more than just an attorney leading attorneys.
Behind Dykema’s approximately 400 lawyers in 11 nationwide offices is a support staff that interacts with the firm’s clients on a daily basis, handling administrative tasks, billing and accounting, and other tasks essential to prompt and comprehensive client service.
If those employees aren’t engaged in providing an excellent client experience, it can damage the relationship before an attorney has a chance to sit down with a client.
Since becoming CEO a year ago, Kellett has made it a point to recognize the important role each person plays in the client experience, and he has focused his efforts, along with the efforts of his leadership team, on uniting every person, in every position in the firm, around a common goal: serving clients with the highest possible standards.
“It is a work in progress, but I am deeply committed to improving all of our levels of client service,” Kellett says. “That is not to suggest that they have been deficient, but in this environment today, it is really important to distinguish any service — whether it be a legal service or any other type of service — in how you deliver service to your clients and customers.”
Driving that level of customer service throughout Dykema — which generated $174 million in revenue during 2011 — has required Kellett and his team to remain vigilant in listening to customers and maintaining a dialogue with employees, as he continually gauges the needs of clients and works with his staff to figure out the best way to meet those needs.
To start promoting a comprehensive client service philosophy, Kellett had to broaden the firm’s concept of what it means to serve clients.
“I believe, and our management team believes, that the notion that the only service a law firm provides to clients comes from the lawyers is mistaken,” Kellett says. “Survey data would show you the average client has more interpersonal contact collectively with the nonlawyer staff than with the actual lawyer who might be representing them in a given matter. There is so much support that goes into the client relationship. It could be making sure an invoice for services is properly formatted or making sure a communication is properly delivered. If a client wants to see something by email, we have to make sure it’s delivered by email and not snail mail.”
They are matters that might not be directly related to the actual legal work done for a client, but if the firm fails to handle the support tasks in an efficient and effective manner, it will eventually have a negative impact on business.
“The services delivered by people who aren’t lawyers comprise much of what the client sees, and quite frankly, you can fall down in that regard if you aren’t careful,” Kellett says. “It’s so important to the client’s overall feeling regarding how they’re being served by the firm.”
With that in mind, Kellett went directly to Dykema’s clients, soliciting feedback on the service experience that the firm was delivering. Representatives from Dykema interviewed many different clients, asking questions related to a number of different client service areas. The firm representatives brought the feedback gleaned from the interviews back to the leadership team, which then used the feedback as a component of a firmwide client-service training initiative.
“We report the information back to the membership of the firm in a way that is understandable and teaches different lessons about what we do really well, as well as the areas in which we can look to improve,” Kellett says.
“We have also brought in specialists to do client service training workshops — in fact, we recently had an officewide session for all our nonattorney staff, which was moderated by an expert in client service delivery. The goal of the session was to try to raise consciousness on everything related to client service.”
The feedback and the client service training workshops produced a set of client service standards that all staff members at Dykema are expected to know and promote. Kellett and his team fashioned the standards into a set of basic statements that clearly outline, in a straightforward fashion, what the firm will deliver to clients.
“It’s nothing that is high-level, but it is straightforward and understandable, and it transcends different practices and offices,” he says.
Kellett’s initial information-gathering process finished with a follow-up component. Late in 2011, firm representatives conducted a series of follow-up interviews designed to gauge the process that the firm had made in improving its approach to client service.
“We went back to the first group of clients we interviewed and talked to them again,” he says. “We asked them to honestly grade us. How did we do in responding to some of the things you wanted to see us implement on your behalf?
“Then we go back to the office and hold people accountable to that feedback. If someone here at the office is in charge of managing a client relationship, you are expecting them to lead on this issue of improving, responding to and being attentive to the things your client wants to see you deliver.”
Motivate your employees
Providing excellent client and customer service is important not only to the people you serve outside the organization but also to the people you employ internally.
A focused company is a healthy company with employees centered on a set of common goals. That, as much as improving the client service culture, was a motivating factor for Kellett.
“I would tell anyone in leadership that it is important to develop a comprehensive customer service plan, not just for the value proposition but also for the health of the organization,” Kellett says. “You’re trying to do more than just motivate. You’re trying to excite.
“If you are in a service business, you want to get your people excited and feeling very positively that they know what is expected of them. Because if folks in a service organization don’t know what is expected of them, they won’t always do what is optimal for service delivery.”
By training your people to deliver the best possible customer service experience, you’re investing in them. The end goal is to please your customers, but the entire process of customer service training is focused on allowing your employees to perform their jobs at a higher level.
“It is important that you are sending a loud message to your entire organization that you see value in your people,” Kellett says. “You are investing in them for a reason, and that is a powerful message to send. I found our staff has been very receptive and appreciative of the fact that management thinks they are important enough for management to invest time and resources in them.”
It’s especially important if you run an organization in which one group of employees often basks in the spotlight, while others toil in obscurity. With that type of setup, it can become extremely easy for resentment to build if those behind the scenes feel underappreciated.
Kellett prevented that at Dykema by ensuring that he crafted communication specifically aimed at the nonlawyer staff in the firm.
“When I’m communicating with the nonlawyer staff, it is certainly tailored more toward the likely activities they will be engaged in and the community they’re likely to be serving,” he says. “In fact, some of our internal staff’s client base is composed of their own co-workers.
“When it comes to our IT staff at the firm, a big part of who they serve is made up of users within the firm. That’s a really big part of the message, telling them that no matter what they do, they’re involved in client relations.
“If your service is internally focused, you’re still helping those who are externally focused to provide excellent service to your external clients. You are as important as anyone in that broad chain of client service delivery.”
Ultimately, the behavior you exhibit toward your employees is the behavior they will exhibit when dealing with clients and customers. If you communicate frequently and thoroughly with your people, they will do the same with your customers. And that leads to a stronger, more positive relationship between your company and the people who purchase your products and services.
“You can’t communicate enough with your people, and they can’t communicate enough with your clients,” Kellett says. “They want to be kept updated more often, rather than less often. You can never assume that they know what is going on just because they’re sophisticated or have been through the process before.
“Tell them more, when in doubt. Or you can always ask them to tell you when to stop talking and start listening. That is something we have learned collectively as a firm: Your people want to be kept apprised of what’s going on, as do your clients. And they want to know sooner rather than later.” ?
How to reach: Dykema Gossett PLLC,
(313) 568-6800 or www.dykema.com
The Kellett file
Education: B.A. in history, University of Michigan; Juris Doctor, Wayne State University Law School
What is the best business lesson you’ve learned?
I’ll give you two: One is to not try to do everything, or you’ll risk getting nothing done. You have to try to set priorities and not try to do everything at once. The other is something that I was once told: It’s amazing how much an organization can accomplish when no one cares who gets the credit. We’re trying to build teams that are focused on client service, with a shared-credit approach to that, and it has been really beneficial for us. Credit will fall where credit is due, but let’s not worry about that. If you have that type of environment, you won’t have people insecure or worried about getting their due.
What traits or skills are essential for a business leader?
First and foremost, it’s honesty. You also need to be a good listener. That doesn’t mean you have to listen to everyone ad nauseum, but you do have to be a good and fair listener. And ultimately, you have to be decisive. Admit your mistakes, learn from them and move on. If you can package all of that, you’re well on your way to being successful.
What is your definition of success?
Achieving a reasonable performance from a financial and business-goals standpoint, which preserves the culture and integrity of the organization. It requires a balancing act. Businesses are in business to do well right now, but you need to preserve the long-term integrity as well. If you’re chasing the top dollar, it can’t come at the expense of the culture.
PricewaterhouseCoopers was biding its time. Like many other professional service firms, the recessionary years of 2008 and 2009 kept the company’s leaders conservative in their people strategies, but they were also waiting and ready for growth to resume. Because when it did, they were ready for it.
“During the recession, we were really focused on retaining the people that we had across the firm, expecting that when things started to turn around and client demand increased, that No. 1, we’d want to make sure that we kept as many folks as we could by avoiding reduction in force during the recession — a big investment,” says Jim Henry, who was PwC’s U.S. client and industry leader before becoming the managing partner of the San Francisco market in 2010. “And then No. 2, coming out of it, we knew that we’d need to significantly build up our resources to match client demand.”
As the new managing partner, Henry walked straight into the hiring blitz. In just 24 months, he helped PwC San Francisco grow its head count from 1,000 to 1,400 people, all while retaining a top team in one of the most competitive talent markets in the country — the Bay Area.
Here’s how Henry builds a team of talent that can serve the needs of PwC’s clients.
Expand your search
At PwC, building a top-performing team starts with the hiring process.
Historically, the firm has been a big recruiter of entry-level employees, using local campus hiring as a primary source of new talent. However, as other Bay Area businesses have rebounded, it’s been more of a struggle to attract enough local students to build out the firm’s advisory, assurance and tax business lines.
“To meet the demand, we’ve really expanded our recruiting network to bring in people from schools outside of the Bay Area,” Henry says.
Today, about half of the firm’s entry-level hires come from outside the Bay Area, a significant change from the past. Companywide, PwC has also opened its campus recruiting programs, which used to target only local accounting graduates, to students from a variety of backgrounds — information systems majors, engineering majors and MBAs.
The firm has also put a greater emphasis on acquiring experienced employees from other companies to help broaden its capabilities in strategic and high-growth areas. And again, it’s achieved better results by taking the search national.
“It’s all about us having the right capabilities to serve clients in the areas of their growth strategy, their operation effectiveness, and making sure that they’ve got efficient and effective risk and compliance processes,” Henry says.
“We prefer to find local people, but given that the Bay Area is a really attractive place right now, how vibrant the economy is and that it’s a very desirable place to live, it’s becoming a bit easier to attract people here from out of the area. So we’re really approaching it as a national search in most of our experienced hiring.”
Today, the company utilizes a combination of internal recruiters and outside search firms to identify experienced hires who would be a good fit with the firm. Still, whether these efforts are local or national, the best recruiting leads tend to come from the firm’s existing employees.
“We’ve asked them through our internal communications, and then offer recruiting referral bonuses to help them identify talent that they think would be a good fit in the firm,” Henry says. “As a result, we’ve had more than 40 percent of our experienced hires come through employee referrals. That’s absolutely the best source.”
Offer helping hands
Just because someone makes it through the screening process doesn’t mean that he or she will have immediate success at your company.
As PwC has hired more people in entry-level positions and management roles, Henry has found that many people need help and support as they integrate into their new job and corporate culture.
“It’s critical that both the new people who join the firm and our existing employees have very clear and frequent feedback about how they’re doing and get the support they need to make sure that they’re successful,” Henry says.
One way the company helps employees adapt to the new environment is by plugging new hires into teams where they can quickly understand what’s expected of them. Working in teams allows people to seek guidance and feedback from more experienced peers, who can also serve as coaches and mentors.
“That’s really key to success,” Henry says. “As people are working in teams they better understand how their background and experience fit together with the rest of our people when they are out serving the needs of our clients.”
It also provides opportunities for different teams to learn about each other’s activities. For example, as it began adding more new people from other companies, the San Francisco office began holding a monthly “meet and greet” for its experienced hires.
“They bring their own lunch and meet at our office in a conference room,” Henry says. “It’s an open door thing for whoever is interested and available just to talk about their backgrounds and share some of what we’re doing in PwC.”
New teams are also encouraged to get to know other teams and find ways to complement their efforts if possible. The company’s new national sustainability team recently visited San Francisco to share its goals and learn how it can incorporate them throughout the firm.
“They’re getting their goals and priorities aligned and then trying to understand how they fit into the rest of the firm, someone who might be doing supply chain consulting or tax advice on moving operations,” Henry says. “Just about everything else that we do in serving our clients could have some element of sustainability. And that can be brought into making sure we’re creating the most value for our clients.”
Give people success models
Of course, offering competitive compensation is an easy way for employers to show people value when they bring them on board. However, long-term retention requires that companies show people an ongoing commitment to their financial and professional sucess.
As more people integrate into the company’s culture, Henry and his partners have looked for new ways to connect them to the goals of the business. One way is by helping diverse talent excel in the organization by having each partner sponsor three diverse individuals in the firm who represent strong leadership abilities.
“The sponsorship piece of it originated in our diversity programs, looking at the goal of trying to have the same diverse mix of talent at our leadership levels as we do at the entry levels,” Henry says. “What we find is with all the best work and coaching and development, we still have attrition for different groups at different career points.”
The sponsorship relationship goes beyond coaching. Each partner serves as a personal advocate for their sponsees, whether it’s by creating opportunities for advancement or nurturing their professional growth.
“That’s reflective of the work that we’re doing to make sure that we’re creating opportunities for people who really demonstrate the leadership abilities,” Henry says.
In addition to prompting positive feedback from clients, PwC’s diversity efforts have earned it the No. 1 spot on Inc.’s Top 50 Companies for Diversity in 2012.
Establishing a “milestone rewards” program is another innovative step the firm has taken to show employees their growth potential. The rewards program gives employees special incentives as they rise to different levels within the firm. So a promotion to manager is now accompanied by a large cash payment or an employee who reaches the level of director is rewarded with a brief sabbatical.
“So when you’re promoted, there’s actually something that’s unique to that promotion on top of the normal compensation and reward system,” Henry says. “It’s those kinds of things that change the conversation from comparing dollars to dollars with one job to another to really understanding what people need and value at different points in their career.”
Build a rep
One of the chief reasons that PwC is able to entice experienced hires and new grads to its ranks is its reputation as an enjoyable and attractive workplace. In 2012, the company was named on Fortune’s top 100 best places to work for the eighth consecutive year.
“The really important aspect of people retention to me, aside from all the programs and different focus areas, it’s got to be an environment that people feel connected to, that allows room for innovation and that they can have fun,” Henry says.
Creating an enjoyable workplace requires leaders to be responsive to their people’s needs. Companies that consider options such as flexibility and work-life balance in addition to compensation will have an easier time keeping employees happy long-term.
“Flexibility seems to be the No. 1 issue that comes up as we talk to people in our surveys and direct feedback about areas that they think we can support and help them in their personal and professional career development,” Henry says.
Ask people what they need to be successful in their jobs, and then look for ways to support that, Henry says. PwC has each team work closely with its members to plan for their desired flexibility as they organize client service work. The firm has also adapted certain company policies, such as the flexible summer Fridays program, to account for the way employees want to work.
“Instead of telling people what day we think would be good for them to take off, we’ve now changed it to just say summer ‘flex days,’” Henry says. “Each week everyone should be working with their team, determining what flexibility they would like to have in their work schedule and building that into their team plans. For one person, it might be that they need a Tuesday afternoon off to do something, and for others, it may be a Friday. But that’s got to be something that’s very individual-based.”
Henry knows that another key ingredient in an attractive workplace is an atmosphere where people can let their hair down from time to time. So when it comes to having fun, he is happy to lead by example.
“We’ve done a lot of things here to just put a little humor into work and allow time for people to get together and hear the strategy but also have some celebration and some fun in the process,” he says.
For the firm’s Promotion Day celebration in June, Henry coordinated a celebration at San Francisco’s Port Mason entire office, emceed by an employee who works as a part-time comedian. And when the Giants made it to the World Series several years back, he showed his team that he was more than game for a practical joke.
“Someone got the crazy idea of the Giants wearing beards,” Henry says. “Therefore, I had to have a beard. Even though I didn’t grow one, because I can’t grow a good one, any time I sent out a memo with my picture, my assistant would Photoshop in a beard on it. And then I started wearing fake beards to meetings with our people. We had some real laughs with that.”
In just two years, Henry’s office has added more than 400 new employees, a clear sign that these people strategies are working. But, of course, the number that says the most about the firm’s success is its employee turnover rate.
“Studies generally show that people don’t leave companies, they leave their bosses if they go somewhere else,” Henry says.
“We are at record low numbers right now in San Francisco as well as in PwC for voluntary turnover. That’s maybe the best indication considering, in most cases, people vote with their feet.” ?
How to reach: PricewaterhouseCoopers, (415) 498-5000 or www.pwc.com
The Henry File
PwC San Francisco
Born: Pontiac, Mich., and grew up in San Diego
Education: Bachelor’s degree in accounting from San Diego State University
What would you do if you weren’t doing your current job?
Working in an emerging technology company.
What is one part of your daily routine that you wouldn’t change?
Working out in the morning — after my first cup of coffee!
What would your friends be surprised to find out about you?
I enjoy surfing.
What do you do for fun?
My wife and I entertain a lot at our house, and she is teaching me how to cook.
What are best pieces of advice you’ve gotten in your career?
First, as a leader you’ve got to have a clear vision of what’s important. And by that I’d start with what really are your values. What are you really trying to accomplish from a broader mission perspective? Then agree with your team on a few things that for the next year are most important that you are trying to accomplish. Consistently reinforce that in communication and monitor progress. The other thing I’d say is always be thinking about creating opportunities for people who may be your successor down the road.
Larry Feldman was living a double life. As assistant minority counsel of the House Banking Committee, his day job was dealing with Capitol Hill’s most pressing issues: the Chrysler bailout, alternative fuel sources and cradle-to-grave health insurance. But come lunchtime, he headed across the street to oversee an operation pretty much as critical to Washington’s well-being. Feldman, you see, managed the local Subway.
“I would do congressional hearings in the morning, run across the street, take off my jacket, put on my apron and stand behind the counter to make sure the operation was going well,” says Feldman, CEO of Subway of South Florida and Subway Development Corp. in Washington, D.C. “These lobbyists would look at my face and say, ‘You look very familiar.’ And then after lunch, I would run back, take off my jacket and do hearings.”
Since opening up his first Subway location 35 years ago, Feldman has grown his territory of restaurants to approximately 1,500 locations and 1,600 employees throughout Washington, D.C., Maryland, Virginia, Delaware and, most recently, South Florida. But his success hasn’t just earned him respect in the franchise world — it was Feldman who helped pioneer Subway’s development agent growth model in 1979 — it has also earned him a nickname: Mr. Subway.
By eliminating company-owned stores and empowering entrepreneurs to grow territories through franchised locations, Subway has become the largest fast-food chain in the world, surpassing the iconic McDonald’s with more than 37,000 locations worldwide. Here’s why the growth model is still viable and successful decades later.
As a business with locations worldwide, maintaining consistency across its many stores is critical to Subway’s reputation. So it’s important for owners like Feldman to have the proper controls in place to keep operations consistent and maintain quality throughout their territories.
One way the company does this by maintaining high standards of compliance for its store owners.
“We’re very, very strict in our requirements for compliance,” Feldman says. “Part of the support is 80 percent of my staff is made up of operations analysts. They go into the field and are in their stores at least once a month. They do full evaluations that start with cleanliness in the front window and go right on through the store, including marketing recommendations, attitude of employees — all of these things.”
Driving consistency internally is also why Subway doesn’t sell to professional chefs — who are tempted to try to “improve” on the business model.
“Chefs always are looking to create a better way,” Feldman says. “And while we’re always looking at our corporate offices to do that, and have a tremendous amount of success from franchisees who give us recommendations, it basically is that when you go into a Subway regardless of where it is around the world, that you know that you’re getting a consistent product. The look is consistent.”
For Subway, the food part of it and the product part of it can be learned and trained. The real work of the owners is growing the business in the community, from “the outside in,” whether it’s sponsoring local Little League games or working with not-for-profits.
“It’s understanding how to take those tools and get out there and market your business,” Feldman says. “We look more for people who will participate in marketing and bringing customers in, because we can teach you everything that needs to be done in the store itself.”
When the goal is consistency, you want store owners who are entrepreneurs, not industry professionals.
“They would come back after two weeks of training thinking they knew how to grow their business their way,” Feldman says. “But this doesn’t work as a large-scale concept. At the franchisee level — success is about following the model.”
Keep it simple
Subway’s simple operation — with no fryers, no grease traps, and a simple menu — makes it easy to run, and gives the company the control to easily manage food and labor costs. But how do you promote new ideas when you’re worried about overcomplicating your brand? At Subway, it’s by practicing “controlled innovation.” At the national level, the company sets aside an innovation fund specifically for testing ideas for the restaurants that are submitted to the company from customers or franchises. Every new idea goes through a thorough and carefully controlled approval and testing process.
“We can’t have everybody out there saying my grandma has a great recipe,” Feldman says. We need to go out there and try it.”
Recommendations are made through the franchisee development office. Approved ideas will go through a strict testing procedure starting with 100 stores, then 1,000, then 2,000 stores — which are checked for compliance — until the idea is reviewed for the entire system. Stores also must report daily and weekly through the computer on how many of the product are sold, what hours and so on. This info is sent to the home office in Connecticut where analysts examine the idea before sending their suggestions to corporate. The controlled process ensures ideas are only rolled out to the entire company that can be consistently executed and that complement its bigger health and price-value messages.
“So it’s not just an off-end product that’s left out there,” Feldman says. “It’s not just somebody that wants to test something on their own. There’s a very specific testing program.”
That’s not to say the company hasn’t adapted. A key reason that Subway has been able to stay relevant in the crowded fast food space is by proactively expanding its product mix to appeal to a wider range of consumers. As home of the $5 foot long, the brand has been able to capture a larger market share of people who see it as an affordable option. It was also one of the first to respond to the growing trend of health and wellness.
In the past five years Subway's variety of products has increased dramatically, all tied to the health offerings. But the company has also carried out these changes in a very conscious way, Feldman says. The company has been successful at adding the healthier options because they are just that — options.
While it now provides things like calorie counts, reduced sodium options, and diabetic menus and healthier menu items such as salads, flatbreads and lean meats, Subway has also kept its indulgent subs like its BMT, meatball and steak and cheese. Diners can still add mayo or a bag of chips.
“Choices should be there,” Feldman says.
“That has been a tremendous part of our growth; but the fact that I can also come in and get that indulgent sub as well and I’m not a health food franchise — I’m here for everyone.”
The importance of keeping it simple has only been verified by the company’s testing of newer concepts like Subway cafés, designed by Feldman’s office for national in response to landlord’s looking for a more upscale Subway. In addition to the regular menu items, Subway cafes include offerings such as paninis and gelato.
“What we found was that the landlords thought that these big fancy law firms and investment firms that the people would demand all these fancy things,” Feldman says. “But when we opened these restaurants, more than 80 percent of the purchases are still our traditional Subway fare. So people are still coming down and getting their tuna sub or cold cut combo.”
Feldman points to four areas that have been critical to Subway’s success: product, control, simplicity, and support. The brand’s ability to adapt and grow while maintaining simple and consistent operations has helped make it ubiquitously appealing while allowing it to go places other fast food chains can’t, for example, YMCA’s, school systems, colleges, universities, and hospitals.
“If you’re a food service director in a hospital, you’d say, ‘Why would I bring a McDonald’s into the lobby when our whole message is about health?’ Feldman says. “And then when you look at other competitors and they’re still back in the 80’s as a sandwich concept with some increasing regard for things like calorie count and health message because they have to be, because the public demands it.”
But Feldman says that it’s the last pillar — support — that’s played the biggest role in the company’s success.
Before the company’s development agent model, support for restaurant locations typically came from corporate employees. Now that’s changed to where franchisees have a local team to back their success anywhere in the world.
“When you live the community you have someone that’s a phone call away,” Feldman says. “It’s not calling the corporate office and saying ‘Hey, I need help when can you send somebody down?’...as opposed to somebody who could be there that day. And that’s why Subway has been so successful. We have boots on the ground in every single city in the U.S. and now in 102 countries around the world. So if I have a problem, I am there and being supported.”
The company also has one of the lowest franchise fees in the country, which Feldman says points to the profitability of the concept. Rather than making the money on the sale of franchises, the company makes money off of the profitability of the stores that it helps succeed. Having all four pieces — product, control, simplicity and support — is really what’s allowed Subway to “build a better mousetrap” than competitors in the marketplace, Feldman says. During the worst economy, Subway’s numbers are staggering. It’s achieved continual upward increases in customer base, marketing and advertising and average unit volume.
“These are all things that are basics, but I think over the years we’ve really forgotten those basics,” Feldman says. “Now more than ever, now that people are really concerned about their dollar and where that goes — you need to show them that you are the best, that you bring the best value to them, and you are there for them if there are issues.
“For us it really is a Cinderella story, in that we were very different then than we are now. When I went to college the only choice was a foot long sub. The menu was very limited. There probably were about eight sandwiches. Now, Subway has become more of the healthy alternative. We have morphed into the concept where everyone can go to get their lunch, their dinner and now their breakfast.” ?
How to reach: Subway South Florida, www.southfloridasubway.com, or Subway Development Corp. of Washington, www.subwaydcw.com
CEO, Subway of South Florida
CEO, Subway Development Corporation in Washington, D.C.
Born: Brooklyn, New York
Education: B.A., University of Bridgeport, J.D., Brooklyn Law School
What would you do if you weren’t doing your current job?
Be a lobbyist in Washington, D.C.
What would your friends be surprised to find out about you?
I cry at sappy TV commercials and movies.
If you could have dinner with one person you’ve never met, who would it be and why?
President Clinton. His caring and concern for the world and its people is admirable.
What do you to regroup on a tough day?
I watch a great action movie.
What do you do when you’re not working?
I spend time doing anything with my family.
About six years ago, Doug Dunn and some his peers at other bus dealerships around the country began to sense that their industry was undergoing a significant shift. So a group of them sat down to take stock and talk things over. They concluded that while their market was quickly maturing, their branch of it — the dealership sector — wasn’t keeping pace.
“I had gotten into this business back in the 1980s when it was just getting started,” says Dunn, CEO of Atlanta-based Alliance Bus Group, a company that today operates seven dealerships in the southern and eastern United States and generates annual revenue of $120 million. “Transportation needs were starting to explode in a lot of cities, and most people bought buses that were converted school buses or they just ran 15-passenger vans. Transit budgets were starting to really catch some wind, and the commercial needs around airports were exploding. It was a good business to be in.”
By 2007, however, the bus industry was starting to grow up. Most of it was, anyway.
“We started seeing some consolidation on the manufacturers’ part,” Dunn says. “And the customers started getting a lot more mature too. They started knowing a lot more about buses than they did before. As a dealership, you needed a lot of infrastructure to keep up with these changes.
“One of my favorite sayings has always been ‘Volume speaks volumes.’ You need a lot of volume and a lot of product to catch the attention of manufacturers, from the areas of support and pricing. It wasn’t easy operating as independent, single dealerships.”
It was time to get bigger or get out.
Unite the colonies
Dunn’s company at that time was simply called Bus Group. It operated dealerships in Atlanta, New Orleans and Jackson, Miss. Those dealers operated almost as if they were separate companies, with outdated software systems, too much overhead, inadequate service facilities and no centralization of business functions to achieve efficiencies.
Getting bigger wasn’t going to be easy. While several other dealers had shown an interest in joining forces with Bus Group, the company saw that it would need to integrate these outposts into a more smoothly functioning unit first.
“We began to see that we wanted to make the transformation from a locally owned and managed dealership into one more national in scope, with all of the benefits that come from that,” Dunn says. “The synergies would make a lot of sense: being able to consolidate inventories, to have better training programs for our salespeople, to achieve the economies of scale of insurance consolidation and things such as that. All of this made a lot of sense, so we decided we wanted to pursue it. But, first, we would have to lay the groundwork and get organized.”
The key elements to achieving this expansion plan were centralizing the company’s operations by creating a corporate office in Atlanta, investing in a dealer management software system, expanding and upgrading the dealerships’ service facilities, and then, after all of that groundwork was laid, leveraging buying power by expanding and acquiring new dealerships.
“We designated Atlanta to be the corporate office for functions such as accounting, finance analysis, HR and legal,” Dunn says. “We reached out and used some different sources to add an assistant controller, some other accounting people, an HR manager and some financial people to help us run the business as an ongoing, larger organization.
“Getting the right people on the bus — pardon the pun — was a major focus for us.”
The task of centralizing the company’s operations and making the outposts operate more uniformly forced Dunn to change his management style.
“This is one of the things that has been a challenge for me,” he says. “I had to almost completely change the way I operate. I had always been very hands-on with my dealerships: everything from parts inventory all the way up to dealing with the largest fleet customers. As you start getting larger, though, you need to start assembling a different kind of team.”
One of the toughest challenges Dunn faced was taking the dealer principals he had been working with — “the lone rangers,” as he calls them — and showing them how to work within the framework of a large corporate entity.
“It was a difficult transition, and it took time to get it working smoothly,” Dunn says. “To go from basically running your own shop for many years to becoming part of a team running an integrated auto distribution business in a more corporate environment, with all of the associated checks and balances in place, has been a challenge for all of us. But these guys have been wonderful to work with. All along, they’ve had the right attitude to make this happen. And I’m very proud of where we are right now.”
The dealer management software system proved to be a challenge to install and get running smoothly. The system, which centralizes all of Alliance Bus Group’s data and operations and is accessible 24/7 from any computer with Internet access, enables Alliance’s personnel to address customer service questions immediately with reference to any of the company’s departments.
“We launched the software system in 2010,” Dunn says. “It’s a complete dealership management system, similar to what automobile dealers use. It drives our entire process.”
The software system has a wealth of features. It has a contract manager for Alliance’s sales force. It interfaces with the company’s website so that as employees add and delete inventory items, the information is immediately uploaded to the site.
On the parts and service side, the system handles all of the company’s shop tickets and parts orders. It also manages Alliance’s service work orders and its accounting functions.
“One the best things about it is that it’s all in the cloud,” Dunn says. “The information is on the software company’s server, and we can connect to it through the Internet from anywhere. It has completely changed the way we do business.”
In the two years since Alliance centralized its corporate operations and installed the dealer management software, the company has acquired dealerships in Lewisville, Texas, Carlstadt, N.J., and Orlando, Fla. These acquisitions bring Alliance’s total number of business locations to seven.
Blending the new dealerships into Alliance’s corporate system, especially with regard to the dealer management software system, has been problematic, but it is growing less so as the company gets accustomed to the process.
“The integration of the new dealerships is getting less difficult as we do each one,” Dunn says. “With the first one, you know, you almost want to kill yourself, the second one, you just get real sick, and the third one, you sort of catch it in stride. That’s the way the process has gone for us.”
Dunn says conviction, clear communication and decisiveness have been keys to Alliance’s ability to successfully integrate the new dealerships into the company’s corporate structure.
“You can’t lose the faith,” he says. “It can be lonely at the top, and it’s easy to get discouraged, but I’ve learned that when you start feeling a little uncertain, you need to start communicating more. Get out and really research the situation, and then go at it with everything you’ve got.
“Gather as much data as possible, analyze it quickly, decide what’s important, follow up expeditiously, and then make the best decision you can. And once you make a decision, go for it. Don’t back off.”
That last point — not pulling back from decisions once they’re made — was especially important to Alliance as it moved through the process of acquiring the dealerships and assimilating those organizations into the company.
“If you make a decision and then you back off from it, everybody will start to question all your decisions,” Dunn says. “It can make it difficult to pursue an effective course going forward when people … you know, they may not necessarily lose confidence in you, but they may start to think you’re not as committed to something as you should be.”
With seven locations in six states spanning from Texas to New Jersey, Alliance Bus Group has expanded its reach from what was once a group of small, loosely connected “lone ranger” dealerships to a large regional bus distribution network. The greatest advantage Alliance has gained as a result of this expansion is its ability to offer more interesting and potentially lucrative opportunities to its employees.
“This is a different game now,” Dunn says. “I have the ability to take a good sales manager in Texas and promote him to be the general manager in New Orleans or Orlando. I’ve never had that opportunity before, and when you start talking about a company and the opportunities for people inside it, you know, that’s pretty special.
“As I’ve gotten older and seen things, what gives me the greatest pleasure is to see people that have come on board in the organization, worked hard and developed, and then benefited from it, for themselves and their families. That’s what gets me fired up most nowadays.” ?
How to reach: Alliance Bus Group Inc., (866) 287-4768 or www.alliancebusgroup.com
THE DUNN FILE
Chairman and CEO
Alliance Bus Group Inc.
Education: Mercer University, bachelor’s degree in political science; Vanderbilt University, MBA
What was your first job, and what business leadership lessons did you learn from it?
I was an intern for a natural gas company my second year at Vanderbilt, and the senior vice president made me an offer to stay and fill a hole, which was director of personnel for a 600-employee utility. One of the first things I had to do was negotiate a contract with a pipefitters’ union. So I went from the academic world down to the front line about as fast as you possibly could go. I got instant management experience, immediate personnel experience, and more legal stuff than I cared to know about. That worked out well for me. It was a great springboard into what I’ve done since.
Do you have a central business philosophy that you use to guide you?
I try to rally the troops constantly by staying in communication with them, and I strive for clarity to make sure people understand what I want. Also, I’ve always been a data hound. I try to stay on top of as much relevant data as I can get.
What trait do you think is most important for an executive to have in order to be a successful leader?
I think it’s perseverance. Staying with it; staying on top of the important things. Deciding what’s important and what’s not. You don’t want a dollar chasing a dime.
What’s the best advice anyone ever gave you?
That would be from my father, who has passed away. He was an executive for 48 years with Delta Airlines. His advice to me was, ‘Decide what you want to do, do what you like and never worry about the money, because it will always come.’ That has always worked for me.
As the daughter of her company’s founder, Karen Caplan is a hands-on leader.
That’s a good thing and a bad thing. The good thing is, she has detailed knowledge of everything that happens at Frieda’s Inc., the specialty produce wholesaler she leads as president and CEO.
The bad thing is that knowledge can sometimes draw her into operations-level matters that take time away from matters of strategy and goal setting for the company at large.
At times, it is a challenge for Caplan to simply cruise at 30,000 feet, without the cockpit radio humming to life with a request to dive in for a closer look at a certain project in a given department.
“I’m guessing it’s pretty common for most CEOs, especially if they’re homegrown, as I am,” Caplan says. “It’s so easy for somebody to come in and get you dragged into some detail that you don’t really need to worry about.”
In the more than quarter-century that Caplan has led Frieda’s, which produces revenue in excess of $50 million annually, she has learned how to keep her distance from matters that don’t require her attention by delegating responsibilities, building a sense of mutual trust with her employees and, quite simply, learning to say no.
“I don’t quickly react when someone asks me something or requests I get involved in something,” Caplan says. “Earlier in my career, my knee-jerk reaction was to solve the problem. But I’ve found that’s not the best way to lead a company. I’ve been very vocal throughout the company that I’m not a detail person. I say it to myself; I say it out loud. It’s going to mess things up when you get me involved in the day-to-day stuff.”
Set it down
Caplan’s mother, Frieda Caplan, who now serves as the company’s chairman, founded Frieda’s in 1962. Caplan joined the business in 1977, followed by her sister and COO, Jackie Caplan Wiggins, in 1983. With the business developing into a family affair and Karen taking the reins as president and CEO in 1986, she began to take stock of herself as a leader and how the mother-daughter leadership dynamic at Frieda’s would behave moving forward.
Caplan says the tendencies of her mother and sister initially spurred her to develop boundaries regarding leadership responsibilities. As a young executive, she enrolled in a Dale Carnegie leadership course, which gave her the initial framework for effective delegation.
“My sister and mom are both ‘knee-jerk reaction, everything is urgent, solve it now, do it now’ kind of people,” Caplan says. “I remember taking the course, coming back to work, and I remember saying to them, ‘When you have a really urgent issue, write it down on a piece of paper, set it aside and let it sit there for seven days.
“‘If, after seven days, you look at the paper again and the problem is still a problem, I want you to mention it to me at that point.’ That eliminated 99.9 percent of the issues, right there.”
Caplan also learned to stay away from areas of the company that didn’t overlap her background in sales and marketing. Through trial and error, she quickly learned that if the issue involved pricing or logistics or other areas apart from her background, she was more apt to make a problem worse by getting involved in the matter.
Over time, and through repetition of the message, Caplan has empowered her employees to tell her when she’s complicating matters through her involvement.
“Pricing and logistics are very tactical matters in our business,” she says. “I give direction, but when I get involved any deeper than that, it’s just not a good thing. And my employees know it. Everyone gives me that look that says ‘Karen, stop.’
“I’ve given everyone around me permission to tell me to stop. I feel very strongly that I can’t just have a bunch of ‘Yes, Karen’ people around me. If all you’re going to do is tell me yes, I don’t want you here. I want you to stand up and tell me what is going on. You’re not going to get fired for it. In fact, I’ll actually respect you more.”
Make it cultural
To ensure that the strategy people aren’t dragged into tactical or operations matters, you need a clear organizational structure with a separation of responsibilities. Often, the most effective way to create and maintain a firm organizational structure is to incorporate it into your strategic planning and core values.
If the concepts of personal and team accountability are promoted as part of the culture you live each day, they stand a much greater chance of taking root as foundational principles that everyone in the organization embraces.
“Everybody knows their responsibilities,” Caplan says. “The key is to have a high level of trust with the people you work with.”
Caplan says the best strategic planning processes are often homegrown. Third-party consultants can help you craft your strategy, mission and vision, but if they aren’t leading you in the direction you want to take the business, you’re probably wasting money and time.
“About five or six years ago, I said I was sick of strategic planning and tired of hiring consultants to take me and a group of my high-level people off-site to form a consensus around the company strategy,” Caplan says. “I cannot tell you how many times that did not work.
“So my sister and I decided that we knew what we wanted to accomplish. We worked with our CFO, who is excellent in strategy, and the three of us met for about two hours a week over the span of a few months, creating our company vision, mission and strategy.”
Caplan and her sister centered the company on four key values: personal accountability, service orientation, trust and playing fair.
“Those are what we stand for,” she says. “If you cannot trust the people on your team to do what they’re supposed to do, to go the extra mile and show personal accountability, you have the wrong people on your team. And that is how I feel confident in delegating the tactical issues. There is a very high level of trust in our company. We talk about it every day, and we show it through our actions.”
Hire for trust
Effective delegation requires a sense of trust throughout your organization, and trust needs to develop as a pillar of your culture. But the pillar will crumble if you don’t hire trustworthy people who align with your company’s values.
Finding and hiring those people means putting job candidates through a thorough, exhaustive interview process — particularly for management-level positions. And if you hire people who don’t fit with your culture and values, you need to either find another place for them in the company or send them packing.
“A good mantra is ‘hire slow, fire fast,’” Caplan says. “We spend a lot of time in the hiring process. Our standard is we interview people three different times, by three different people, in three different places. Every time you bring someone back, they look worse. They always look fantastic on the first interview.
“You bring them back, someone else interviews them, and suddenly, they don’t look so fantastic. By the third or fourth interview, you’re probably starting to see the real person. So you don’t get hired at Frieda’s very quickly.”
During the interview process, Caplan and her team don’t want to know just about a candidate’s professional accomplishments. The interview process delves into the candidate’s personal life and personal motivation.
“In interviewing people, you can ask them about why and how they made certain decisions or how they prioritized their life,” she says. “I don’t want to simply talk about someone’s work life. I ask them about their passions in life, about the last book they read, about the things they do on the weekends. That tells me a lot.”
Once a hire is made, the pressure is on to take the raw materials that prompted you to offer the candidate a job and cultivate them in a way that allows you to get the most out of that person. You can plant the best seeds, but they won’t grow without adequate sunlight and water.
“The thing to remember is, your core values can’t be somebody else’s core values,” Caplan says. “They have to be your own. If I didn’t live personal accountability every day, if I wasn’t prepared for all the meetings I’m called to attend, if I didn’t respond to emails quickly, everyone would say, ‘It might be listed as a value, but it doesn’t apply all the time. Karen doesn’t live it.’
“So, whatever you say the company values are, those are the real values. You hire to those values, you live those values, and if someone isn’t living the values, you move them off your team — no matter how wonderful they might be in their position.”
How to reach: Frieda’s Inc., (800) 241-1771
The Caplan file
Fast fact: Frieda’s introduced the kiwi fruit to the U.S. in 1962. The company now distributes more than 600 varieties of fruits, vegetables and specialty food products throughout the country.
What is the best business lesson you’ve learned?
To treat all people with respect. Everyone gets treated the same, regardless of the role they perform in the company. When someone enters the office and I see them, I say good morning to them by name. You have to make sure that no one is anonymous. If you can address your people by name, you’ll have a much higher level of engagement.
Caplan on firing fast: It is never easy to fire someone. That is something else I learned at the Dale Carnegie management course. If you ever aren’t affected when you have to fire someone, you should probably get out of management. But if you are fair, if you have given someone every opportunity to correct their behavior, you can stick by your decision.
I remember with one individual — she hadn’t been with the company long — and I sat her down and said, “You’re not happy, I’m not happy, and we can’t continue this way.” That was pretty straightforward.
You know immediately if someone isn’t a good fit. What happens when you hire someone, within the first week, you know if you’ve made a good hire or bad hire. Every manager, every CEO will tell you the same thing. And if they weren’t what you expected, your gut feeling is to give them more time. We are so ingrained in this country to give everybody every opportunity to correct their behavior. But unfortunately, one week of tolerating becomes one month becomes a year. Soon enough, you have someone who has been on the team for more than a year, and you’re saying to yourself, “I knew they weren’t right for us from the first day on the job.”
When Affiliated Computer Services Inc. was acquired by Xerox Corp. in 2010, Natesh Manikoth saw an opportunity to utilize the resources and talents of one of the most innovative companies around and apply that innovation toward solving transportation infrastructure problems.
The acquisition of ACS, a $6.5 billion company, created Xerox’s Transportation, Central and Local Government Group, where Manikoth serves as chief technology officer. The 6,500-employee division provides system solutions for tolling, parking and transit.
“Xerox has a rich history of innovation,” Manikoth says. “One of the first business units to take real active advantage of that wealth of innovation talent within Xerox was transportation.
“We became very active partners with the research community in Xerox to tap into their brainpower to say, ‘You guys have been doing wonderful work with document management and producing world-class printers. How do we take that talent and apply it to solving problems for cities?’”
The division has developed roughly 50 percent of the tolling systems in the U.S. and parking systems in areas all over the country, and it provides public transit systems globally in more than 30 countries.
Here’s how Manikoth is using innovation across divisions to create better solutions in the transportation arena.
Solve the real problems
A lot of large technology companies have started to realize that technology becomes commoditized over time. Business becomes a harder game, and growth begins to stagnate. So Xerox made a conscious choice to supplement its technology offerings with services in order to grow.
“That was the rationale for the acquisition of ACS,” Manikoth says. “Now we are probably a 50/50 company between technology and services. The offerings we have solve real problems that our customers have.”
In transportation, throughout the last 10 to 15 years and going forward, the biggest challenge is more and more demand. The problem is you cannot grow infrastructure fast enough to deal with that increase in demand.
“You cannot build your way out of the problem,” he says. “So you are looking for how you can use the existing infrastructure more efficiently. What we help do is one way of saying, ‘I have this fixed asset called the road with five lanes. I’m only able to transport X number of vehicles through there. How do I now make it X plus 10 percent more?”
Xerox’s transportation group was at the forefront of electronic toll collection, which was a simple way of improving the toll process and increasing traffic flow. The combined forces of ACS and Xerox allows some of the best minds to contemplate those problems.
“All that talent has really been focused on document management and improving information flow,” Manikoth says. “ACS, on the other hand, used to be the people who did the work and built products to solve a particular customer problem but was not necessarily helping our customers think about what happens 10 years from now. That is what Xerox did extremely well.”
Do some thinking
Xerox thought about document management and information flow and what the offices of the future might look like. Now those researchers have the opportunity to sit down with stakeholders in cities to think about what the cities of the future are going to look like.
“Seventy to 80 percent of GDP in this country is generated from urban centers,” Manikoth says. “So if there is one problem we can help solve which will have the maximum impact, it is to make those urban centers more efficient.”
In L.A., Xerox is helping to modernize parking infrastructure. The key component there is real data analytics to predict parking availability so that people don’t drive around looking for a parking space. Xerox used a dynamic pricing engine to optimize parking availability.
Also in L.A., Xerox implemented a dynamic pricing mechanism to let people use high-occupancy vehicle lanes, which have been exclusively for buses and other high-occupancy vehicles. Now you can pay a toll and use the HOV lanes. It’s an example of a slightly underused infrastructure now being used to improve the traffic conditions in the area and having people pay for the privilege of doing that.
Think innovation, think savings
Xerox is also looking at how it can improve the systems it creates for infrastructure. One of the research things that Xerox is working on is power saving.
“The idea is these pieces of equipment consume a lot of power, but they might be sitting idle a lot of the time,” he says. “So how do you reduce the power footprint?”
The transportation group is working with Xerox around the technology it uses in printers to save power and is applying that to systems in transportation.
“To do power consumption in an intelligent fashion is an art and a science and they have tons of research surrounding that,” he says. “The same thing applies to the transportation infrastructure.
“There are lots of places where we have equipment, which is powered on 24/7, but people show up at peak times and use it heavily, and at off-peak hours, it probably isn’t used at all. So there’s potential for energy savings in those environments, and we are applying that in our devices in transportation.”
Over the past couple of years, there has been a significant shift in the research stemming from technology to the services market.
“You have to adopt innovative practices that are successful in your other lines of business,” Manikoth says. “The common theme I see is people ask the researchers, ‘What are the solutions you have?’ The ones who I see being more successful are the ones who have conversations about the problems.
“You cannot draw the connection between what was your domain and research by looking at what the researchers are capable of. The connections start becoming apparent if you look at the problem a little more deeply.”
To make these kinds of connections, Xerox brought researchers from three different labs into conversations with its business units and didn’t say which problems were going to be solved. They asked businesses to articulate their customers’ problems with questions such as, “If the customers had a dream that they got fulfilled, what would it be? What particular problem of their customer would they love to solve?”
“When the problem is posed appropriately, the solutions seem to match things which we have solved before,” Manikoth says.
“... The first step is to really understand what the problems are and what the customers want to solve. What is their desire? What is their dream and what problems would they like solved in a picture-perfect scenario and then bridge that gap. Figure out whether you have offerings or whether your partners can bring something to the table to solve those problems.”
The reason Xerox asks questions up front is to make sure the problem is being broken down to its essence and that the wrong problem isn’t being solved.
“In the Xerox world, we’ve split research into things where we are partnering very closely with customers and then we have really exploratory research as well where we think about what some of the big ideas might be over the next four or five years,” he says.
“... For the foreseeable future, we believe making these cities more efficient in all modes is going to be very important. We think we can make a profitable business there and at the same time help cities improve their infrastructure and services.” ?
How to reach: Xerox Transportation, (312) 529-3284 or www.acs-inc.com/transportation-new.aspx