Industrial strength Featured

6:53am EDT April 24, 2006
Working his way up the ranks at Ohio Transmission Corp. gave Philip Derrow an appreciation for his employees’ work at all levels of the company.

The president and CEO remembers a time early in his career at the industrial distributor and service center when some office staff looked down on the service technicians — highly skilled employees who wore uniforms and got dirty for a living. This attitude bothered Derrow, who recognized that line-level employees work hard, deserve respect and play an important role in the company.

That situation provides daily inspiration for Derrow as he leads the 290 employees of his $100 million Columbus-based organization, the parent company of Ohio Transmission and Pump Co. and Air Technologies. He believes management isn’t about management; it’s about the people you manage.

Smart Business spoke with Derrow about how he implemented his company’s mission statement and core values.

Write a mission statement and follow up on it.
When I first took over as chief executive in 1998, we had [mission statement] posters on the walls, and I would stand between the poster and the individual I was talking to and ask him or her what our mission statement was. I don’t think I had anybody repeat it to me. It wasn’t followed up with discreet action related to it, so it was meaningless.

Taking a lesson from some other successful businesses, a good mission statement is short, sweet and direct. Our mission statement is, ‘To dominate every market in which we choose to do business.’ No one ever knows or cares who came in second. Those are our aspirations — we want to be No. 1. We want to do the things that we can do to be the No. 1 supplier in our market.

And then we have some clarifying statements that say how, why and so forth to be the dominant player in our markets.

Identify the need for a defined corporate vision.
There was a situation a number of years ago — this was after we developed the mission statement and had been active in communicating what that was all about. I was traveling to one of our locations and talking about the kind of company that we are, in terms of how we treat people and how we want to act.

I got a pretty clear understanding that wasn’t how things were in that location. It was fairly far away from the center of corporate activity in Columbus, and it was clear that the employees at that location didn’t work for the same company that I did. It was disturbing. Not that it was awful, it just wasn’t what I thought we were.

The reality is it’s exactly what we were, for them, just not what I thought or wanted it to be. It wasn’t good. We had some turnover in that location. We had some other employee problems, and it was obvious that the reason was because we weren’t operating under same set of values from a management point of view.

Establish three or four core values.
Our key tasks initially were related to things we needed to do internally to strengthen the company. It was all about employees, culture and developing a culture of accountability.

As that progressed and started to bear fruit, it was time to change the focus to external, which was our customers and our suppliers. That subtle but important shift then made it clear that there was another hole, and that’s where we decided to tie the ‘how we are going to accomplish our mission’ by working with people who share our vision while being guided by our shared core values. We needed to identify what those were.

That started a relatively short process of saying, ‘Who, exactly, are we?’ because I thought we were pretty clear as to how we work, how we treat people, what we expect, what we do. Putting it in writing is not that hard; it’s making sure you actually live by it.

It’s well-established that if you make a claim of doing something or being something and don’t live up to it, that’s worse than not making the claim at all.

So we identified what our core values were — integrity, achievement, investment and balance. We believe that four is about the top number you can have; three is ideal in most (cases) because people can’t focus on more than three or four.

Define the core values for your employees.
The next most important step was defining the words. One of the other things I’ve learned over the years is people have their own definitions of words, and if you leave those definitions up to individual creativity, you won’t be talking the same language.

‘Integrity’ means different things to different people so does ‘achievement,’ ‘investment’ and ‘balance.’ We’re very careful to actually define those words as we want them to be understood. Otherwise, people will come up with their own meaning that might be different from what we intend.

Communicate values with employees, suppliers and customers.
They are on a poster in every office. We put our core values on the back of everybody’s business card. We continuously refer to it, and it has to come from the top as well as all levels of management. Then you start creating a culture of expectation among employees that this is who you are.

We know we’ve been successful in communicating it when our people hold us accountable. Then the challenge is making sure that we respond appropriately, either answer why we think it is consistent with the core value, or say, ‘You’re right, we’ve made a mistake, and we’ll do better.’

For us, every initiative that you take on in the organization — every management initiative, every sales initiative, every training initiative — has to be consistent with the mission and core values that we’ve stated. If it isn’t, we know that we won’t get buy-in from people.

It’s a benchmark for us in management to make sure that we do things that are consistent. If you don’t do what you say you’ll do, then you lose credibility with people, and everything else falls apart from there.

We refer back to the mission and core values as the justification for doing a particular initiative. As an example, we’re implementing a new cultural process whereby we assure that the things we do for customers actually matter to them.

As we do the presentations and educational process with our staff, the justification for this new process of serving customers is that it is consistent with honoring our mission and core values.

HOW TO REACH: Ohio Transmission Corp., (614) 342-6123