Matt McClellan

Sunday, 31 December 2006 19:00

Ideas for growth

No matter the industry, a company’s leader needs to keep the big picture in mind to succeed. That’s why Jim Fisher, president of IdeaStar Inc., always takes the long view with his business.

In 2005, the Web developer was named to the Weatherhead 100, which showcases the fastest growing companies in Northeast Ohio, on the strength of revenue growth of 154 percent from 2000 to 2005. Over the same period, the company has also increased its work force more than 70 percent.

Smart Business spoke with Fisher about his hands-off management style and why sometimes you just have to cut your losses.

Q: How important is delegation?

You have to delegate, and you cannot attach strings to it. Find people who are smarter than you to run the place, and don’t meddle. You have to let them do the best that they can. If you are involved with all the decisions, you’re going to go crazy. You need to hire strong managers and let them do their job. That way, you can focus on long-term, long-range things.

It’s always said that the president of a company is either way behind or way ahead but never right where the company is that day. You’re either thinking about a product and where should it be in such and such a time, or you’re thinking about a decision from a long time ago.

Q: How do you deal with a bad decision?

You get past it as quickly as possible. Identify it, and then you take the hit as soon as possible and get it over with.

If you let it linger or fester, it’ll just kill you. If you have a bad hire, just get past it as fast as you can. Or if a project is not working out as planned, it’s better to just cut your losses and move on.

If you don’t cut your losses and move on, the losses become greater and greater until they become insurmountable. You just get deeper and deeper into the problem, and it needs to be fixed as soon as possible.

Q: How do you manage growth?

Once you decide you’re going to grow the business, you can’t be halting or halfway about it. You have to do it, just move forward and do it. Then evaluate it after you do it.

But if you have second thoughts about it, or you’re just worried, then you shouldn’t do it. You’re just making the whole situation awkward and difficult for the entire company.

It’s like in the military: If you need to take that hill — OK, go for it! Don’t be wondering if you should be doing it while you’re doing it.

The other challenge with growth is making sure you have enough resources available to move forward. It’s like you have a kitchen that only has food for 10 people, and all of a sudden you have 20 people, but you still only have food for 10.

You’ve got to expand your resources, your supply lines. Make sure those are in place before you grow.

Q: How do you know when it’s time to expand?

Obviously we look at the cash flow. Also, we look at new job bookings. How far ahead are we booked? When customers finally make a decision that they want a product, they want it right away. You don’t want to have your developers triple-booked and hopping from project to project.

Once we get those indications that there is a backlog that looks like it’s going to sustain for a while, then we will add the staff.

Q: How do you motivate workers?

We respect them. That goes a long way with them being motivated. They know that their work isn’t going to get picked apart. Also, we will be there for them. If they have a crisis in their life or a problem, we don’t hardball them about the work, we help them through it. Sometimes they need us, and we want to be there for them.

It gives all of us a comfort level that the company cares about them. Even my role as president, I know my company cares for me, too. It works both ways. They are there for me; in the company, I’m just one of the employees.

If an employee is thinking of going to another company, they weigh that very carefully. The care and camaraderie they have here weighs in their consideration.

Q: What advice should every CEO live by?

Don’t make enemies on your way up because you’ll see them again on your way down. It’s a small town, and everyone knows each other.

You want to maintain good relationships with everyone you do business with. Even if it’s a difficult situation, it’s better to work it out than to make enemies.

HOW TO REACH: IdeaStar Inc., www.ideastar.com or (216) 674-1600

Sunday, 31 December 2006 19:00

Prestigious growth

Anyone can steer a ship through smooth waters; the key is always watching for the storm on the horizon and adjusting your course accordingly.

That’s how Ronnie Hollis has grown Prestige Staffing between 80 percent and 105 percent per year for the last four years, with estimated 2006 revenue of $18 million and anticipated 2007 revenue of $20 million to $35 million. The company, which fills temporary, permanent and contract positions for businesses across North America, employs 55.

The average age of employees is 26, and such youth, coupled with the company’s anticipated continued growth, means that training is critical. “Our goal is to create leaders, not just manage them,” Hollis says.

Smart Business spoke with Hollis, CEO of Prestige Staffing, about how he keeps employees motivated and the importance of finding weaknesses even when things are going well.

Q: What is the most important skill for a CEO to have?

A CEO has to be humble. Nobody has all the answers, and if you’re humble, you’ll take advice from others, and you’ll need advice from others. It may be an entry-level person; it may be your right-hand man who has been with you since the beginning.

If you’re not humble, you’re going to try to call every shot without gathering the pertinent data you need to make a decision. Other people have brains, too, and you have to use them.

Hire smart people, and be smart enough to take their advice. You’ve got to have good gut instincts, because sometimes there are decisions to be made, and the data’s not there. You’ve just got to have the courage to take some leaps of faith.

Q: What is the biggest trap a CEO should avoid?

Contentment. If, as a CEO, you don’t stay focused on the big picture, the company’s not going to grow. If you become content, the company becomes content.

If you become stagnant and content, your staff is not going see opportunities. If they’re not going to have opportunities for themselves, they’re going to leave. Your people are your most valuable asset, and the best way to keep them around is to keep creating opportunities for them.

As a CEO, if you get content, you’re dead. Whatever numbers you hit this month, great. Let’s beat them next month, and every month. You’ve got to reinvest that money in your company for opportunities for your people. You can’t be too greedy. The temptation is there, especially in a successful company. You didn’t make it by yourself.

It doesn’t have to be in pay; it can be in opportunities. Create opportunities for your people. In return, they’ll make you a bigger, more successful company.

Q: How do you avoid stagnation and contentment?

You have to be able to identify weaknesses before they become problems. When a company is doing well, it’s easy to just sit back and watch it and enjoy it. But in reality, what you should be doing is identifying weaknesses before they become problems.

Where are you weak? Where can you get better? If you don’t fix it, it’s going to become a huge problem for you, and that can stunt your growth. I don’t care how good you’re doing; you have to look for weaknesses.

Yesterday in the weekly meeting, we had our best week ever, and we’re on track to have our best month ever, but the meeting was about an area I found that we need to work on. I focused more on that weakness.

You have to celebrate your successes and all that, but the clich is that there is 90 percent you’re doing right and 10 percent you do wrong. My job is to always identify the 10 percent we’re doing wrong.

Q: How do you attract and keep quality employees?

Why do you get up and go to work every day? Well, you want to be successful at what you do; you want to make as much money as you can, and you want to have a successful career. So your vision must be built around giving people those opportunities.

Our vision is built upon giving our employees everything they would want from a job so it becomes their career, not just a job. We give them a career path they can be happy about, and they feel like they are a part of creating something.

Q: How do you do that?

You have to make sure there’s no division between management and staff. So many times, leaders just try to tell people what to do. You have to get out there and show them. They have to feel like you’re in it with them.

A lot of companies use classroom training. We avoid that. We try to roll up our sleeves, get out there and show them how to do it.

HOW TO REACH: Prestige Staffing, (770) 200-3565 or www.prestigestaffing.com

Friday, 24 November 2006 19:00

John Westrum

It was 2001, and CEO John Westrum had had enough of squabbling over lot sizes at township zoning board meetings. To remedy the situation, he took Westrum Development Co. out of the suburban real estate development business. Now, instead of cookie-cutter homes, Westrum is putting his creative side to use revitalizing underdeveloped properties in urban areas. As a result, the company — which had been at $100 million with 70 employees — fell to seven employees after Westrum sold off its suburban developments. Since then, as a result of his new business model, Westrum has grown the company to 80 employees generating revenue of $78 million in 2005 and more than $100 million in 2006. Smart Business spoke with Westrum about how he changed his company’s reputation and why he encourages employees to challenge his ideas.

Find a niche in your industry that you can enjoy. You have to decide how you want you and your company to be perceived. Find the niche within that expertise that you have that gives you the self-esteem that you want.

In the mid-’90s, the general trend in society was to not like the suburban residential developers. There was really a hatred toward them. I didn’t like doing something society didn’t like, and I thought I was good at understanding market niches.

So I sold all the suburban stuff and retooled to be an urban developer and go where people wanted us to go. We went from being considered almost a devil out there tearing up cornfields, and we changed into the angel reclaiming abandoned and underutilized properties in urban centers and depressed neighborhoods.

We’re doing the same thing, we’re just doing it in areas where there is a desire for you to come in and do things creatively.

Hire team players who can think. The key part that I look for is a motivated and intelligent person. The order of priority first would be intelligence, secondary is drive and motivation, third is their compatibility with others to work on a team, the last one is their expertise in the business.

We actually try to hire folks with expertise, but not so much expertise in the business because you have to buy in to that team-building program. If you come in to the program and you want to be a super-star, it’s just not going to be a good fit.

When I interview people, I don’t even look at the resume. I see if I feel they fit into the company mold and if they can be compatible with the team. Because if they’re not, it’s not good for anybody.

My son is 13 years old and plays on a football team. All the kids go out there and say, ‘What position do you want to play?’ Well, every one of them wants to play quarterback or runningback or wide receiver. Then someone has to say, ‘Look, kids, you can’t all do that. Someone’s got to snap the ball, someone’s got to play guard, someone’s got to play tackle. Let’s figure it out. You’re the best-suited for this position, you’re the best-suited for that position.’

If the tackle always thinks he should be the runningback and is annoyed about that, then he’s not going to do his job right. That’s why, as a CEO, you have to leave your ego at the door.

Emphasize personal responsibility. The theme of my management system is democratic decision-making and autocratic implementation. We’re into consensus-building, we all agree on what the goals are, we assign people to get to those goals as a team, and then we plow forward.

It means the group makes a decision about what the results should be, and we break down the tasks and they volunteer to be the person responsible and they set their own due dates. There’s an acronym called PRIDE we use; it stands for ‘Personal Responsibility In Delivering Excellence.’

We emphasize the personal part. It’s not where I say to people, ‘You have to do this, you have to do that.’

We all decide what we have to do, and if some people don’t pull their own weight, there’s usually other people there to back them up.

Empower your team to challenge your ideas. The biggest pitfall a CEO can face is his own ego. That’s why we clearly go with the democratic decision-making and autocratic implementation. It really comes down to the fact that there’s nobody in our company that is afraid to challenge a decision.

For example, if we go out to a site and I say, ‘We really need to put a fence around that model,’ they don’t just cower and say, ‘Well, the CEO said to do it, so we’re doing it.’ Everybody feels comfortable saying, ‘Well, we looked at that and that fence will make people feel they’re trapped in their community. Why don’t we use hedges?’ or something like that. Always empower your team around you, allow them to feel free and feel comfortable challenging your decisions.

I surround myself with extremely intelligent people who are motivated, and I focus on the results and let them achieve those results in their own way.

Communicate like regular people. We have what we call ‘hats off’ meetings. We’re all just people; we’re all just adults who have come to a meeting.

You may be informed about things, but you are allowed to ask anything of anybody. You’re allowed to challenge them; you’re allowed to compliment them.

The ‘hats off’ meetings just really allow people to feel comfortable about communication. I might get a little annoyed sometimes if I’m trying to get some work done and people come bopping into my office, which is why we try to do most of our communicating through e-mail and regular meetings. But if someone feels strongly about something, speak now or forever hold your peace.

It allows for a much more comfortable environment. And people feel respected and desired rather than they’re just here to make money for somebody else.

HOW TO REACH: Westrum Development Co., (215) 283-2190 or www.westrumhomes.com

Friday, 24 November 2006 19:00

Dave Reder

Dave Reder found out the hard way that moving your business to a new location is never easy, but it was worth the effort. When Reder recently moved his company, OKI Systems Inc., into a larger facility, it created a hectic environment in the short-term, but he says the investment will pay off in the long-term. In addition to the company’s physical location, he also invests in his workers — the 400-employee company has 173 service technicians, all of whom are coached by an organizational development director. The materials handling company had 2005 revenue of $80 million and is poised for further growth at its new facility. Smart Business spoke with Reder, president and CEO of OKI Systems, about how he helps his employees improve themselves and gets them more involved in the business.

Hire leaders and delegate to them. I have a hands-off style; I’m definitely not a micro-manager. What I try to do is hire good people, train them and get out of their way.

You get a lot more done that way, and people develop a lot quicker because they are making decisions and learning from their mistakes. Plus, you attract good people because good people don’t want to be micromanaged. They want to have the freedom to be creative and try different things.

CEOs have to be aware of what’s going on and have a pulse on what’s going on, but I don’t think they need to be involved in day-to-day happenings. We look at trends, and if we start seeing any trends going the wrong way, we may have to get involved more than we were. But if things are going as they should, a leader doesn’t need to be involved on a day-to-day basis in-depth.

Delegation is something anybody can use. Business is business; it doesn’t matter what business you’re in.

Look for employees with a strong work ethic.

The two things I look at most, one is attitude and the other is work ethic. If you have a good attitude and a strong work ethic, you can be successful at anything you do.

We can teach you the business, but if you don’t have a work ethic, or you don’t want to work toward it, or you don’t have a good attitude toward it, you don’t have a chance.

Focus on training. Training is critical. You have a lot of people who want to grow in an organization, but they’re not sure how to do it or what they lack. What our organizational development director does is say, ‘Here’s where you are, here’s where you want to go, here’s the things we need to do.’

Some of the things they help them with, you need to do on your own. But you find out quick who really wants to grow and who just talks about it, because there is some effort involved on the individual’s part as well as the company if they want to grow.

Training and development can’t just be something you do when you have time. It has to be a constant focus for somebody. That’s why the organizational development director has been phenomenal for us. People are excited that they have an opportunity to grow.

They sit down with him and say, ‘Here’s where I am, and that’s what I want to be. Help me get the things I need to get there.’

Lead with integrity. Don’t be afraid to make the tough decisions. I think a CEO can learn how to do that. You don’t want to take too long to learn it, but it is learnable.

Integrity is the most important thing you can have. If you don’t have integrity, you will never be successful as a CEO or in many other places, especially with what’s going on today. If your employees don’t have confidence in you and the way you’re leading the company, you’re not going to be able to get the good people we’re talking about. And without the good people, you’re not going to be able to grow or sustain the business.

People do not want to work for someone who doesn’t have high integrity.

Show employees they’re important. We’ve implemented a gain-sharing program, so if the company does well, the employees share in the successes. It keeps everybody involved and a part of the business, and shows what they can do to have an impact on the business.

It’s about trying to show them how they’re important to the company. I meet with employees in open forum, no agendas. We talk about what’s on their mind and what concerns they have. People really feel good about the fact that I sit down with them hear what they have to say.

Then we’ll do what we can to address their concerns, so they feel like they have a voice on what goes on at the company.

Look within your existing customer base for growth. Try to look at areas where you can grow business without a lot of additional overhead or resources. We’ve tried to figure out how you can cross-sell or leverage a relationship in one area to gain business in another area.

We’re trying to cross-sell where we already have a relationship. We try to go in and sell everything we can do for them, because it’s a lot easier to sell to an existing customer than develop a brand-new customer. We try to do a lot of cross-selling in accounts where we may be doing business with them in one area and try to round out that account to do business with them in all the areas we can.

For CEOs in other industries, it would depend a bit on product mix. One of the things you do when talking about growth is look what areas they could grow into, and it might be areas that they can cross-pollinate — if that opportunity doesn’t already exist in their company.

They can find things to do that are in their customers’ plans that could tag along with what they are already doing and leverage those relationships.

HOW TO REACH: OKI Systems Inc., (513) 874-2600 or www.okisys.com

Saturday, 28 October 2006 20:00

Defining excellence

 When Luis Proenza became president of the University of Akron, he wasn’t exactly taking the helm of an Ivy League institution. The university had a reputation problem, and Proenza’s top priority was to change that.

It wasn’t going to be easy. Campus buildings were deteriorating, and Akron was the only university in the Mid-American Conference that didn’t have a student recreation center. Students were spending their tuition dollars elsewhere, because the university needed major changes to compare favorably to its peers.

“The university had never lifted its own image,” Proenza says.

His task was finding a way to make the University of Akron known as the premier higher-education institution in Ohio. Working with employees throughout the organization, he took an in-depth look at the state of the university, then developed a plan to shine a light on what was good and improve what was not.

“It was a declaration of strategic intent, with a sense of positioning the institution in the environment in which we found ourselves and having a goal that was not just a stretch goal, but one that fit the domains of what we had seen,” says Proenza. “It’s a way of talking about strengths, weakness, threats and opportunities, to get a clear sense of where you can go.”

Under Proenza’s leadership, the university has risen from stagnation and financed a $300 million campus revitalization project that included nine new buildings and the renovation of 14 others. Two new branch campuses have been created, and the university has built a wireless Internet infrastructure that has been recognized as the third-best in the nation by a 2005 Intel Corp. survey.

The University of Akron has also made great gains in college-ranking publications such as U.S. News and World Report and the Princeton Review. In 2004, Careers and Colleges magazine named it one of 14 “Schools That Rule” because of its cutting-edge curriculum, reasonable tuition and the opportunities offered to its students.

Here are some of Proenza’s keys to rebranding an organization.

Find a successful strategy
Marketing the organization as a leading academic institution required some thought and a clever plan. Proenza and members of his staff spent every Wednesday for six months unearthing documented facts and figures to support their claim of excellence. They called the sessions “Wild On Wednesdays” or simply, “WOW.”

“WOW was a metaphor for the fact that we had found a lot of academically documentable excellence that nobody had bothered to catalogue,” he says. “It made us all go ‘Wow,’ and it also surprised people.”

Those facts and figures became the focal point of a series of radio and TV ads highlighting “The Akron Advantage.”

“When we found as much as we did, we felt it was a natural thing to start telling the story,” says Proenza. “Virtually every ad you see says we are setting the standard for student success in Northern Ohio. Then it hits a point on bar passage rates, or nursing licenses or student competitions. In short, it projects an image of the university based on exciting, important facts that position the university as a leader.”

Relentless communication
After the strategy has been agreed upon, you still have to get everyone on board. That is a difficult challenge at any large organization with a diverse workforce, and Proenza says the key to getting that crucial buy-in from everyone is involving them from step one.

“What we’ve tried to do is involve everyone in the generation of a vision,” he says. “Our fervent hope is by uniting everyone around a powerful vision, people will more easily know what each of them contributes to the attainment of that vision. We’ve spent a lot of time communicating the vision, encouraging and energizing people around the vision and trying to show different segments of our employee groups just how the different pieces of the puzzle come together to empower that vision.”

Under Proenza’s plan, every employee is critical to the improvement of the organization. Whether the person teaches algebra or washes the windows of the student center, if they do their jobs well, the plan works, and the organization prospers.

“For example, you have the grounds crew,” Proenza says. “Just making the place look better contributes to the definition of excellence.”

Putting those pieces together is one of the highest hurdles a CEO faces. Just ask anyone who has tried to manage independent employees who are all working on their individual goals. Proenza jokes that coordinating everything from the faculty to the grounds crew is like herding cats, but he gets it done by hammering home his vision until it becomes enmeshed in the very fabric of the organization.

“It’s relentless communication,” he says. “You talk about it until it resonates — over and over in different groups and different settings, individually and in groups of 10, 20 or 100,” he says. “It’s never done. A friend of mine used to say this business is like talking to a parade. No sooner than you do it, there’s a new fresh face around here.

“So you’re repeating it and repeating it, and just about the time you’re thoroughly exhausted by it is when it barely begins to make a difference.”

Lead and delegate
Proenza says a CEO can be the catalyst for change in any organization. The leader just needs to show that he or she is invested in the organization.

“Simply by walking around and talking to the staff and making modest suggestions or complimenting certain things that are being done and calling attention to other things that need to be done — that creates a sense that a leader cares about the environment, and things begin to happen,” he says.

Those things can happen even sooner if your people believe wholeheartedly in your vision. To get that belief, Proenza says you need employees to know you are behind your plan 100 percent.

“You have to project energy if people are going to feel like there is something to follow,” he says. “You have to project some degree of enthusiasm for what you are espousing or proposing. You have to have a rationale for moving from here to there — that’s the concept of foresight in that context.

“It’s really the three E’s of leadership: Encouragement, enthusiasm and energy. If you’ve hired a person who has the requisite knowledge as you’ve assessed it, it’s simply a question of conveying to them an energy for the setting, the opportunity and hopefully giving them a bit of enthusiasm.”

Of course, no one can be everywhere at once. Proenza oversees the university’s $350 million budget and provides leadership to 4,500 faculty and staff members. So how can you be sure your vision is being carried out at every level?

That’s where the importance of delegation comes in. It’s a fine line to tread between managing and micromanaging, so he focuses on the big picture while instilling in his employees the importance of getting the little things right.

“A leader needs to be visible and attentive to detail, but not engaged in every little detail,” he says. “You can’t think of every detail, and if you try to think of every detail, you certainly don’t need people to delegate work to, and you also wouldn’t have time to do things yourself. It’s really an awareness of detail and communication of detail but not an involvement in the detail. The key is creating an awareness that the detail is important without taking over other people’s responsibilities.”

Half the battle is having the right people in place to get the job done. Proenza takes the qualities listed on a resume and the impression he gets from interviews and combines them with an assessment of the person’s match with a particular position.

“You need people to pick up a vision, pick up a strand and run with it,” he says. “A leader creates the context in which others devote their productive energies. If that context is related to a vision, those creative energies get reasonably harnessed to an outcome that contributes to that vision.”

If you find the right people, then you can comfortably delegate more authority to them, freeing you up to focus on the vision for the organization.

Proenza says one of the most important tasks of a leader is to convey a sense of possibility. For a strategic plan to be successful, the entire work force must keep believing in the power of the vision, and relating to it emotionally. That is why planning is a delicate exercise in balance.

“You take your best instincts of where you are and where you see things going and try to envision that future,” says Proenza. “If you know Hamel and Prahalad’s book (“Competing for the Future”), it’s like trying to define a competitive space for your organization and moving toward it. In the business literature, the trite side of it is looking at strengths, weakness, threats and opportunities and trying to make a coherent story out of that and go forward.

“If you have a pretty good sense of where the industry is going, you try to match that up and hopefully try not to be so far ahead of the game that it makes everybody feel you’re either crazy or disconnected from reality. It’s trying to create the best possible picture of an achievable future that is still different enough from today but exciting enough to not be frightening.”

How to reach: University of Akron, www.uakron.edu

Wednesday, 25 October 2006 20:00

Growth lessons

 Years of experience have enabled Tony DeGeorge to make smart decisions, but one of his best was allowing his employees to make the decisions for him.

DeGeorge’s work force is made up of employees who have previously held jobs running hotels or motels. He hired them knowing they’d know exactly what to do in his absence, because they’ve all had experience being the boss of a small business themselves.

His strategy is working, as the hotel and motel broker anticipates 2006 revenue of between $30 million and $32 million, up from $25 million in 2005.

“To be successful, you have to know your business and love it,” says DeGeorge, president of Greene, Canfield, DeGeorge. “You’ll never be able to motivate the people around you if you don’t.”

Smart Business spoke with DeGeorge about how he’s handled the challenges of growing a business and communicating his vision to his employees.

How do you empower employees to make decisions?
It has to come from the background of the people we’re choosing, which are all former hotel owner-operators. They’re all part of small business, they started with small business, and they understand the nature of keeping a small business running. Anyone is able to do anything. They are very capable of making decisions.

There’s no punishment for making bad or wrong decisions. Any decision is a decision that we all look at, no matter who has made it. If there’s a problem, we go back and analyze it.

That way we all learn from it, and next time we can make sure a correct decision is made. But we see very few times there’s a decision in this office that was made that the others don’t agree with.

How does having employees who can make decisions benefit the company?
It takes a lot of pressure off of everyone. They think things through, go with the gut reaction, which is typically the best reaction. A lot of times, our decisions have to be made pretty quickly, and they’re able to at least not stall the process, and make a decision and go forward.

In today’s world, with fax and e-mail, people don’t want to — or understand why they have to — wait. It’s become an electronic world where things move very quickly, and people want to see the process continue. There shouldn’t be any delays in that process.

How do you know when it’s time to expand your work force?
There’s never a good way to know. There’s a time when you feel you just can’t handle the load. We’re struggling with that right now, when is it time to do an expansion rather than try to work everybody a bit harder?

But you don’t want to burn out anybody, so there’s always that struggle. You’ve got to watch the people and make sure they’re not overtaxed.

How do you guard against growing too fast?
Growing too fast could be a definite pitfall. Markets change, and there’s always surges, peaks and valleys in all the growth areas. Be aware of where you’re at and stay focused on where you want to go.

Having a long-term plan is a must. Just stay focused, see if you are meeting your goals.

Strategic planning is important for any business. There are a lot of people who don’t want to grow their business. It isn’t always about growth.

We have stifled ourselves because we don’t want to overgrow. Right now, at a peak, we don’t want to get into an overgrowth situation.

Are you concerned with revenue when you are growing?
As you grow, it’s part of it. As your goals move with that growth the revenue will follow. We try to have a team effort and stay focused on the client and stay focused on who we’re working for.

Service is so important. Most companies don’t understand the word service anymore. You take your car in for service and it says ‘Service’ above that door, but they don’t understand what the word means.

It’s amazing to me. The hospitality business is pushing people and standards, and that’s what we as a company are trying to do — just push that standard.

HOW TO REACH: Greene, Canfield, DeGeorge Ltd., (727) 447-8383 or www.gcdhotels.com

Wednesday, 20 September 2006 20:00

Powerful growth

 Like a bodybuilder searching for perfect six-pack abs, Geoff Dyer is never satisfied.

In addition to the 28 clubs his company, Lifestyle Family Fitness, operates in Florida, he has opened eight clubs in Ohio, with two more on the way. Dyer is also expanding in Florida and plans to double the company’s size in three years. It’s a daunting task, but the effort is paying off as the 2,100-employee company’s revenue grew from $34 million in 2003 to $53 million in 2004 and $85 million in 2005.

But Dyer, president and CEO, is not stopping there.

“Securing a position in Columbus, Ohio, opens up the states that are in close proximity to that, and gives us an opportunity to build a 30 to 50 club group in the Midwest,” he says.

Smart Business spoke with Dyer about the procedure behind his business’s phenomenal growth.

What skills does a CEO need to be successful?
The CEO has to be prepared to be surrounded by superstars. Some CEOs are reluctant to share the spotlight.

You can’t be an expert in all things, so to be an effective CEO, you’ve got to hire the best you can hire in all divisions of the business. So not being intimidated by being surrounded by great people is one important thing.

Also, a CEO has to be a charismatic leader. My job is to share the vision, identify the strategy and get people excited about the vision and mission of the company. What is the big, hairy, audacious goal, and how do we achieve it?

As the company gets bigger, the CEO has to maintain the culture, so the people always feel proud to be part of an organization that’s connected to its people.

What do you look for in your employees?
People often ask, ‘What keeps you up at night?’ The only thing that makes me lose sleep is losing someone who is a valuable employee. The human capital need is a never-ending challenge.

For anyone to be successful in business, they need to be passionate at what they do. So we find people who are passionate about fitness and teach them that if they listen and learn and have good role models, they can develop a permanent career in the fitness industry. That’s pretty exciting and appealing to someone who likes this business.

Our first job is to let them know that there is a career path and what it entails; our second objective is to train that person so they can grow. At the end of the day, passionate people are attracted to and stay with companies that are learning organizations, places that enable them to get ahead in that organization.

How do you make decisions?
When you’re approaching $100 million in revenue, it’s easy to lose sight of how important it is to watch the revenue and expense line of the business. Whenever it comes to a decision that needs to be made, I try to get the person making that decision to think as though they own the club themselves.

We don’t make decisions as a big business where money doesn’t mean anything. We’re trying to take things back to their most simplistic form.

At the end of the day, the thing that’s made us successful is listening to our members and responding to their needs, and paying attention to revenue and expenses. Other things are important but not as important as those four areas.

What pitfalls does a successful CEO avoid?
Losing focus. It’s easy to think you can be good at all things, but at the end of the day, you can only be good at one thing.

You’ve really got to stay focused at driving your core business forward. There are so many options to make your business different, to make it bigger, to make it smaller, but you should keep a consistent business model and stay true to it.

Also, you’ve got to be careful to grow properly. Don’t grow for the sake of growing. You’ve got to be continually realigning your growth strategy. Every business is evolving at such a fast pace, if you don’t continually rethink what your brand stands for and what makes it unique, you’re at risk of becoming stale.

Completely understanding how your brand differentiates you from your competitors is a big part of the role of the CEO. If you’re not different, eventually you can get overtaken by competition, so you have to continually develop ways to make you different from your competition. You’ve got to continually reinvent yourself because what you consider to be differentiators are really duplicable.

You can have the biggest facility, and then someone builds a bigger one. We all have the same equipment, but continually trying to understand what makes you different is an important role of the CEO.

HOW TO REACH: Lifestyle Family Fitness, (727) 456-3100 or www.lff.com

Tuesday, 19 September 2006 20:00

Peter Provenzano

 Peter Provenzano is no stranger to fast growth. His company, SupplyCore Inc., which was a million-dollar enterprise in 1998, had grown to $166 million in annual revenue by 2005. The integrated supplier of maintenance, repair and operations materials made the Inc. 500 — a list of the nation’s fastest-growing private companies — from 2000 to 2004, and has developed contracts with the U.S. military and other civilian agencies. But with all that growth, did SupplyCore outgrow its infrastructure? Provenzano says the company probably did so a number of times, but coped by adding to the human capital side and changing the company’s physical space. Smart Business spoke with Provenzano, president and CEO of SupplyCore, about how to deal with the challenges of fast growth and manage your business effectively.

Get the big picture, but don’t get in the way.
You have to not only fly at 40,000 feet, it’s important to be able to swoop down from time to time and look at the veins on the leaves on the trees. Good leaders are able to have that 40,000-foot view, but they are also able to get down and look at the veins on the leaves on the trees — but they are smart enough not to get stuck there.

That’s what I try to do. Sometimes we’re successful, but not always. You guide the company at a strategic level, giving people responsibility and making them accountable but not necessarily getting in the way.

You want to be able to look out over the hood and down the road, but you also want to see what’s right in front of you. It’s a balancing act; one of the ways you do it is having strong analytical tools in the organization.

Listen to your hunches, but also get the facts.
You have instincts and assumptions in business, and you go out and try to validate it with facts or try to prove those assumptions wrong.

You get a hunch, you go out and gather the facts, and based on that, you make your decision. Gathering the facts could be talking to your leadership team, it could be talking to a customer, or it could be research. We try to make fact-based decisions here that are outgrowths of our assumptions.

And you don’t always have all the facts. Sometimes you have to go to some degree with what your gut told you, but you try to get as much information as you can, depending on the speed you have to make the decision with.

We have a highly interactive decision-making process. At the end of the day, more often than not, there’s consensus. Probably more often than not, your gut’s going to be telling you the right thing, but you have to go out and validate it. You’ve got to ask questions, and you’ve got to get answers.

You’re going to make mistakes, but you want to correct those mistakes very quickly. Minimize your mistakes, maximize your successes, but move quickly in all cases.

Give your employees potential for growth.
We try to not only make it an exciting place to work but an opportunistic place to work, where people see future opportunity and associates feel there is enhanced opportunity for them down the road. It could be through promotions; it could be through challenging new projects.

Those — coupled with a positive, uplifting culture — are the most important things. Our people here are used to a high degree of stress, as a result of the pace of growth we’ve had.

We try to keep it busy, not stressful. Our associates are used to performing under pressure, because of the flexible, adaptable changing environment.

We’re in a constant state of change here, and people grow to be comfortable with that.

Set your goals, and communicate them.
Focus; don’t spread yourself out too far. Don’t try to have too many priorities. Listen, but be decisive.

Be inclusive from a knowledge-gathering standpoint. Align the organization with your priorities, and make sure everyone knows what the focus and the priorities are.

Sustaining the rate of growth is a challenge. You want to ensure that you are highly responsive to your customers, but you’ve got the cultural integration of multiple sites and new employees coming on, and all the challenges that go along with that.

We don’t necessarily change the culture; it’s more like merging the cultures over time. Culture is really about behavior and setting the expectations, and over time, people need to meet those expectations. Over time, we try to align our organizations’ behaviors.

We do that by establishing a clear mission, by organization and understanding what the vision of the company is. You’ve got to set goals and communicate expectations to individuals, and show them how they fit into the overall objectives of the organization.

Set the example for your employees.
Honesty and ethics and values play a major role. You try to have activities that are extracurricular that the organization can participate in. You want to be fair, but generous at same time.

You are setting an example every day. We try to set an example in community, whether that’s a local community or national. Our associates are very committed to both, and that’s a result of us being committed to both. Whether it’s sending a care package to troops in Iraq, or cleaning up litter in downtown Rockford, our associates have come through for us.

We’re a learning organization, which comes along with being adaptable and flexible. We’re not afraid to ask questions, not afraid to go out and learn new things. We don’t assume that we already know. That’s what comes first: A yearning for knowledge, trying to sort it out.

We are certainly driven to succeed. We want to be successful at what we do, and we want to serve our customers well and win new opportunities and perform well at those opportunities.

You have to do it as a unit, like a football team. It’s not any one individual that makes it happen, it’s the unit. That’s really what it’s been. It’s been a unit of associates executing for our customers, trying to bring efficiency and value to the process.

HOW TO REACH: SupplyCore Inc., (815) 964-7940 or www.supplycore.com

Monday, 18 September 2006 20:00

Changing direction

 Dan Ellsworth and his brother, Chris, co-founded World Micro Components Inc. as a broker of electronics, but faced a challenge when they needed to change the company’s focus to become a hybrid distributor.

The move met with resistance from employees used to the old way of doing business, and the company’s customers also had not changed their perception of the business. Informing employees about the company’s new direction was the first step to changing their mindset.

“If we can change our thinking internally, we can change the perception of our people, which will, in turn, change the perception of our customers,” Ellsworth says.

Although the process is ongoing, World Micro has had steady revenue growth of about 30 percent each year, with 2005 revenue of $11.7 million.

Smart Business spoke with Ellsworth, president and CEO of World Micro Components, about the importance of clearly communicating to employees, and why you shouldn’t keep secrets.

How do you keep employees involved in the workplace?
We tend to be transparent in our management style. We’re open for employees to see; we don’t keep any secrets. There’s no managers’ meeting. We keep it real clear.

We set real objectives, let them know where they stand and where they’ve got to be. Just keep an open-door policy. Being candid, honest and open-minded with our employees is very important. If we can employ those three characteristics, we’re all on the same page.

We tend to hammer in our mission statement over and over to our employees. We also let them know on a daily, weekly and monthly basis what our goals are as a company. When they know that, we can give them our annual goal and say, ‘This is what we’re trying to do in sales for the year.’

Then we break it down for them. This is what we have to do per month, per week. This is what you, the salesperson, has to do per day, and if you achieve these daily goals, we’ll be able to achieve that annual goal.

Make that clear to them in a consistent and straightforward manner.

How does having an open-door policy benefit both employees and the company?
They know where we stand, we know where they stand, and they’re clearly understanding what management’s goals are. They know our objectives, and we can let them know what they’ve got to do.

Letting everybody play on the same field allows us to keep a real open environment.

People know where they stand. There’s not a lot of guesswork. An employee doesn’t have to say, ‘What do I have to do today?’ Those objectives are in his mind; he knows exactly what he has to do.

The main advantage is there’s no ambiguity, there’s no questions about what a person is supposed to be doing. They know their job, and they do it.

How have you managed growth?
We started with a 100-square-foot office 12 years ago, and we’ve added one person at a time. We’ve done all that and remained debt-free, and now we’re at about 40 people total. I encourage slow and steady growth.

Don’t try to hit the ball out of the park. Be happy with doubles and triples, and even singles. That type of growth doesn’t break your infrastructure, it doesn’t throw you in all this debt, and it keeps everybody sane.

Also, keep the money the company has made in the business. I’m 50 percent owner, and my partner, Chris, is a 50 percent owner. We’ve kept a lot of the capital inside the company. Having an excellent credit history from a personal and business standpoint also helps, because we are debt-free.

When people look at our credit scores, like other businesses, they realize we are a very low credit risk. That helps us to purchase goods at lower prices, because the person we are purchasing from realizes they are going to get paid.

What skills does a successful CEO need?
You have to have the ability to attract people, to lead by example and gather the respect of your employees and your people. If they don’t respect you, you really have nothing. Just give them the ability to look up to you.

Hire people who are smarter than you are. Try to build the company like a manager builds a baseball team. We want to find the best person for the position, and we expect performance out of that person.

One of the pitfalls some managers fall into is they want to keep everybody in the dark. If that person is too smart, they say ‘I don’t want someone smarter than me.’

We’re completely the opposite, we want to hire people who are smarter than we are and who are experts in their particular position so we can have a real solid team and win.

HOW TO REACH: World Micro Components Inc., (770) 698-1900 or www.worldmicro.com

Sunday, 30 July 2006 20:00

Don Woodring

 When Don Woodring began consulting for Strategic Distribution Inc. six years ago, he asked his new co-workers about the company culture and was stunned when they told him the No. 1 priority was “Cover your ass.” That comment stuck with him, and he knew something at the company had to change. As he gained more responsibility, Woodring worked to establish a culture that would foster excellence and attract quality employees to SDI’s 350-person work force. Today, as president and CEO, he leads a $136 million company that provides supply chain management services for 1,200 customer locations in the United States, Mexico and Canada. Smart Business spoke with Woodring about how he manages his company and how he has created a successful company culture.

Be patient.
How do you change the culture of a company? It’s a big challenge, because it takes an awful lot of time.

Sometimes companies actually write down core values that dictate the culture and sometimes they don’t, but they still exist. We were in a culture that was pretty ingrained. The first thing you’ve got to do is publish what your new culture is going to be. And once you publish that, as the CEO, you have to talk about it, and you have to practice it. You have to embody all those core values that you create as an organization.

If you publish core values and you never talk about them again, they’re not really worthwhile. It’s important that you communicate those and you talk them into existence.

Patience is an important virtue to have, and one that I’m not that great at. I don’t always take enough time to really reflect on how much progress we’ve made as a company.

I’m constantly driving for the next change, because I think if you don’t have that attitude, unless you’re in an industry that’s not going to change, you leave yourself susceptible to mediocrity.

Get input, but be decisive.
I’m a very inclusive manager. I don’t sit in a room and make decisions myself and put out some dictum that we’ve got to do X, Y or Z.

I typically include the people who would either be impacted by the decision or have great input into the decision before I make it. I’m a relatively communicative person, everything from formal or informal one-on-one meetings to formal, bi-weekly staff meetings where the purpose is to share information and drive to solve problems.

I also think I’m very decisive, and in a leadership role, you’ve got to be very decisive. At least make a decision. Waiting for other things to happen before making a decision can kill a business.

Invest in your employees.
When you hire somebody, it’s important to try to ferret out in the hiring process what is important to that person. I take a lot of pride in trying to understand the goals of everyone who works for me. And it’s not only my job, it’s my responsibility to help them achieve those goals.

You can either hire somebody with a ton of experience or you can hire somebody with a lot of talent. I’m a guy with a strong preference for hiring somebody with talent versus the experience.

If you hire somebody who’s got a lot of talent, you need to invest in that talent. So if they’re weak in the finance side, you invest time in them attending a seminar or something like that.

Other things I look for when hiring is conviction in their thoughts and ideas. I don’t want somebody who will work for me who is loyal to me and that’s it, who will just say yes to me. I’m looking for people who are convicted in their ideas, but at the end of the day, when we make a decision, that they are committed to that decision, as well.

Hire a high-powered team.
You’ve got to really invest in that team, personal investment, long-term investment all of those kinds of things that will enrich that person in their job. Once you have the solid team behind you, you’ve got to entrust those people to make the right decisions. And then let them make mistakes and let them make successes and create successes. Trust your people. That’s really the key to everything.

Be a flexible employer.
Companies are often faced with certain constraints they have to deal with. In terms of compensation, you have constraints; in terms of relocation, you have constraints.

One of the things I take a lot of pride in is that we are an extremely flexible employer. I can’t tell you how many different people have the ability to work out of their house. And I think it goes back to the old axiom: People just want to be treated fairly. If you trust people and you treat them fairly, you’ll get paid that back in spades.

Get everyone on the same page.
Execution against your direction is the most critical thing that can either direct your success or direct your failure.

I’ve had some great successes in a lot of different arenas. Right now, I have probably the best team I’ve ever had in my entire experience here. But that’s not always been the case.

I’ve had some people who had poor execution on their behalf and in pretty critical roles. Execution is the one thing that can either create success or create failure for a company.

Part of my management style is you sit down and agree to what the path is. You put together an action plan. You agree to what needs to be done, who needs to do it, and when it’s due.

And then you track that formally, and then you track, ‘Is it due, is it done or is it not complete?’ Adding some formality to that process helps you manage that process, and having it in writing makes sure everybody understands the same concept.

How to reach: Strategic Distribution Inc., www.sdi.com or (215) 633-1900

Page 69 of 69