J. Louise Larson

Sunday, 26 August 2007 20:00

Survival of the fittest

In Michael P. Glimcher’s world, there are just two constants: change and communication.

Glimcher is president, CEO and trustee of Glimcher Realty Trust, a Columbus-based real estate trust with a portfolio of thousands of retail tenants nationwide. Its ranks include a who’s who of American department store legends, like Nordstrom and Macy’s, and mega bookseller Barnes & Noble.

The company specializes in ownership, management, acquisition and development of enclosed regional and super-regional malls, many of them located in the country’s top-growing metropolitan statistical areas.

Understanding which new retail development concept is coming out, means finding new customers who are on the front end of growth and taking advantage of industry trends.

“The experience we can deliver to the customer is really critical — it’s a great balance between left and right brain,” Glimcher says.

Change is built into every step of Glimcher’s business process. Keeping his customers’ customers in mind means applying innovation, and the only way to do that is to create a culture where people aren’t afraid to try something new.

When Glimcher took the reins of the company, he started looking at ways of refining the company’s scope and becoming more efficient.

In mid-2005, the company owned 41 properties in 18 states, aggregating 24.4 million square feet of gross leasable area. Two years later, Glimcher had trimmed the quantity to a total of 29 properties in 16 states aggregating approximately 24.3 million square feet of gross leasable area.

Refocusing the business has done little to change Glimcher Realty’s square footage but has made big changes to the kind of property it owns.

“We had over 100 community centers at one point, now we have four — it was a matter of refocusing the business,” Glimcher says. “We’re really focused on mall-type properties now. We sold a lot of older legacy, small community center assets. We want to grow, but it’s not about growing in size but growing in quality — enhanced quality in a huge way. We’re really focused on quality. We always want to upgrade the quality of our assets, of the team. We operate under the thesis ‘Quality Matters.’ How can we constantly upgrade ourselves and our access to capital, assets, teams? It’s what we talk about all the time; it’s what we live.”

Preparing for change

Reshaping an organization that could adapt to those kinds of changes meant making changes in personnel. There was a lot of talent with longevity and tenure in the organization — and room for adding on.

“At the point I really took over, I recruited,” he says. “We had a core team, people who had been there 10 to 15 years. We also recruited in long-term talent, quite a bit of it, and several people with good public company real estate experience. It was time for people with outside experience we could learn from.

“It’s always good to get a fresh set of eyes and different experience on board. Sometimes when you bring in new people, you get more out of the people you have — their vantage point changes.”

Effecting personnel changes in an organization with 1,000 employees requires a delicate balancing act.

“I think history matters, and people who have been here and been dedicated are important,” he says. “It’s more art than science — it’s intuitive, and organizations need fresh ideas and new people looking at things from time to time.”

The effort to bring in new blood paid off. “We’ve had some great achievement in our core properties since we’ve made these changes,” he says. “You can debate whether it’s cause and effect or just that we’re performing better as a company, but it’s proven to be effective, with higher occupancy, higher sales, an enhanced environment in the corporate office and in the field.”

Change comes with a price tag, and those resistant to growth and evolution missed the boat at Glimcher Realty Trust. Some of those employees with longer tenure were unwilling or unable to adapt — and adaptability is a key characteristic in such an evolving industry.

“We’re going to evolve and change,” Glimcher says. “People who wanted to stand still really said they wanted to go backward. Part of evolving is that not everyone makes it. It’s a tough thing, but it’s a reality.”

Communication

The one constant, change, has made the other constant, communication, necessary.

Glimcher uses everything from a company intranet to town-hall-type meetings in which nothing is off limits. Some want to submit their ideas anonymously through e-mail or by phone, and the company obliges and provides all sorts of different avenues of communication because people communicate differently.

Glimcher says communicating change effectively means keeping the channels open for a free flow of opinion.

“My style is to be incredibly open,” he says. “I like to create situations where anyone in the organization can feel comfortable sharing anything with the most senior people in the company. We try to be incredibly accessible and open.”

Being open to suggestions from any level of the company can help you be more effective.

Glimcher says regularly investing in the company’s portfolio to keep properties in tip-top shape means renovations, new furniture and keeping up with design trends. With dozens of properties to watch over, properties can occasionally get overlooked — and out of date.

“We had a meeting where people from the field came to the office,” Glimcher says. “And a junior person from the field spoke up and said, ‘As a company, we haven’t paid enough attention to this property. We need to step up and reinvest in this asset.’”

After the meeting, the junior manager asked Glimcher, “Are you upset I spoke up?”

He responded, “I’m not upset you spoke up — I’m only upset you didn’t speak up sooner.”

Based on the employee’s recommendation, a $10 million rein-vestment was added to the following year’s renovation budget.

“It doesn’t mean that everyone that speaks up gets $10 million,” he says. “It does mean the person had a valid concern and that I think we can generate the revenue to offset that investment.”

New blood brings in new ideas, and Glimcher welcomes infusions of both. A recent addition to the team had a suggestion after looking at the process for approving the deals that Glimcher Realty Trust deal-makers made.

“We’d always had that process,” Glimcher says. “But he thought it seemed to be slowing down deal-making because it took so long to get back to retailers with an answer. He said, ‘I think there’s a better way of doing it.’”

Sure enough, there was a bureaucratic kink in the deal pipeline that had been quietly plugging up the process for decades and was soaking up precious time that could have been profitably leased out. Upon close examination, Glimcher realized that statistics documented a majority of the deals coming in for approval eventually were proven to meet budget. Based on that one new employee’s keen observation, the process has been revamped. Now, rather than formally going through everything prior to approval, the system checks for variances — for the exception to the rule — and the process has been trimmed.

“We’ve probably cut out three-fourths of the work and have the exact same result,” he says. “Now, if transactions meet budget, they’re basically preapproved. We’ve cut weeks off. We approve deals faster, sign leases sooner, stores open sooner, and therefore, property rents sooner.”

Shaving weeks off the start dates of hundreds of leases has made a significant impact on the company’s bottom line.

“It’s not just easier and less stressful on people — it has a great economic value to it,” Glimcher says. “It’s not just about process — it’s about what the result is going to be. You get a better result with a better process and that’s the real win.”

While building on the company’s 48-year history, Glimcher has brought a new flexibility to the business mix in an effort to value individual contributions and to honor doing things the best way instead of the usual way.

“A lot of things we do as we have from the beginning,” he says. “On the other hand, we’re open-minded. If someone has a better way of doing things, we can change things tomorrow.”

This type of thinking has helped Glimcher grow from $204 million in total revenue to $309 million in total revenue in 2006.

Keeping an atmosphere where anyone can bring something to the table means improving access, and Glimcher has worked hard to do just that.

“We have an open-door policy, a first-names-basis policy,” he says. “We try to create an environment in the enterprise where everyone is equal. We try to think of ourselves as one — that everyone makes the collective whole stronger. We try to talk about it, but we also try to live it.”

Thinking of the collective benefit has led to increased ownership — and that’s another win for the company.

“We think about it in terms of property teams who live with their assets like home,” he says. “We’re not coming to property they’re looking after for us — they take ownership. If the physical plant’s not right, they want it to be right. They’re going to put things in order because it’s their home. There’s a great dynamic when people in the enterprise feel that ownership. In the field, it’s not my mall or the company’s mall — it’s their mall.”

Being publicly traded also helps. “We have many associates that own stock in the company, that have equity ownership, so it is their company,” Glimcher says.

It all goes back to the kind of ownership demonstrated by the junior manager who garnered a $10 million renovation for her property by speaking up, Glimcher says.

“The property is going to have a renovation and that talks to our openness,” he says. “She cares so much about her property that she was willing to come out of her comfort zone and take the CEO to task because she wasn’t happy with what was going on with her property. ‘Why are we not taking care of my property the way I think we should be?’ She clearly had ownership of the asset. If she didn’t, she wouldn’t have spoken up.”

HOW TO REACH: Glimcher Realty Trust, www.glimcher.com

Thursday, 25 September 2008 20:00

Industrial evolution

As chairman and CEO of Allied Mineral Products Inc., Jon K. Tabor has watched sales expand tenfold in two decades.

But that growth didn’t come overnight, and it didn’t come easily. In that time, he’s had to learn the value of getting the right people around him, trusting those people and preparing them for change.

His favorite example might be from when he bought Allied in 1980. Tabor had moved from sales manager all the way up to chairman throughout a decade with the company, and a slim window to buy the producer of monolithic refractories came up.

“It was a trying time — it happened right before the Christmas holidays, and we didn’t have a lot of time to do it,” Tabor says. “As I recall, there was a tax law change at the time, and the owner wanted to take advantage of tax savings. We had about a month to call the banks and to buy them out.”

To manage the critical opportunity, Tabor leaned on one of his rules — getting the right help.

“I got an adviser who had worked for a bank in a high position and who owned his own business,” he recalls “He knew how banks worked — when you need something from them, they’re very tough to deal with, and when you don’t need something from them, they’re very easy to deal with.”

The adviser, who now sits on the company’s board of directors, knew exactly what the banks would end up demanding and giving in on. The resulting 10-year agreement was paid off in five years, proof positive that good advisers are key.

“I’d never dealt with a bank like that before — I probably would have agreed to more of what the bank wanted in the end than what I had to give them,” he says. “As I look back on it, I don’t know what I would have done without (that adviser).”

Today, Tabor is constantly thinking about how to keep instilling the principles that got him through the buyout to everyone at the $109 million company. To fully explain how he got the company there, he wouldn’t mind taking you through the last few decades at Allied to show you how to try new things and how to get the right people around you and involved in your evolution.

Get the pieces in place for change

In 1980, Allied’s business was at a domestic dead end. The industry was shrinking, and heavy manufacturing in general was getting the cold shoulder from state and federal governments.

“In order to grow and prosper, we had to look beyond our border and into new markets,” Tabor says. “In business, you can’t stand still. If you stand still, you go backward. What really helped us was that the electric induction furnace, which was becoming the major melting method for iron, copper and steel. That was where our products were being used.

“It helped us to grow even though the market was shrinking on us — we hit it just right.”

Confronted with less than dazzling numbers, Tabor knew something had to give — over time, if not right away — so he led a change in focus.

“We knew we wanted to grow the domestic business, not only in foundry but also into big steel, big aluminum and also the industrial markets,” he says. “Another thing we wanted to do was go international in the same areas. We wanted to begin making refractory shapes and wanted to add those to our product line. The other thing, we wanted to hire the right people to support those efforts. We did not have the people at the time to do the things we needed to do in order to grow the business.”

So to grow domestic business, Tabor hired people familiar with big steel, big aluminum and also industrial, which includes cement, power and wood-burning markets. Basically, he hired people who already understood where he was taking the company. Buying out several companies gave Allied a different line of products for foundries as well as a line of products specifically for aluminum, and an expansion at the Columbus plant gave them product flexibility.

With an eye on going international, Allied brought on board a specialist to concentrate on markets they’d never been in before. An extravagance? No, an investment.

“In China — where do we put the plant? He did the market research work, and we ended up in Tianjin,” Tabor says. “We’ve never looked back, and we’re on the third expansion of the new plant.”

After anticipating its foreign growth capabilities, the company kept an open enough mind to put in a plant in China that handles Asian customers, one in Holland that handles Europe, one in Brownsville that handles Mexico and South America, and one in South Africa that handles Africa.

The resulting worldwide wingspan brought customers from 85 countries around the globe.

Tabor says the importance of infusing new blood can’t be overlooked.

“You hire people; you try to locate them through contacts in the industry,” he says. “You get to realize there are people out there we could hire, many who had great talents and were not being adequately used at the company they were with. We were able to hire the right people to get us into those businesses.”

Having a team on hand to take regular, planned, deliberate looks at the company’s future path also has become an essential part of Allied’s business plan. In order to fully anticipate Allied’s foreign growth, Tabor had to have people who were specifically meant to look beyond the company’s comfortable borders.

“There’s the problem of recognizing opportunities, so we have an opportunity group,” he says. “We have a group of people who meet and talk about various opportunities that present themselves to the company and whether we have the wherewithal or the talent — the people — to go after it. If we do, we usually go after it.”

The opportunity group includes the vice president of sales and marketing, the vice president of corporate development, the vice president of research and development, the manager of research, the vice president of new business groups, and a few others.

They meet about every six weeks for a morning, and the length of the meeting depends on how much they have to discuss and if anything new has come up.

“We’ve become a very opportunistic company” Tabor says. “We have all these salesmen out in the field who see opportunities. Maybe we should look at this — or not. If you take off the blinders, there are more opportunities than you realize over a period of years. We’ve gone from status quo to a growth orientation.”

Find and keep good people

When the company made the decision to go into China, the move took foresight, but it also met with some initial resistance.

“Early on, there was some resistance to change, there was a fear of losing jobs if we started a manufacturing plant outside of Columbus, there was a fear of the risk of going into China,” Tabor says. “We explained why we were doing it. Nobody stood up and said hooray. We had the non-believers, the believers and the fence-sitters. There were a lot of good reasons not to go to China at that time. But if you looked at China, with their 1.3 billion people and everyone who wants cars and homes and microwaves, there was going to be a market there someday, and that proved true.”

Once the China expansion was successful, with no effect on jobs at the Columbus operation, all former resistance dissipated.

“It was like smoke; it just went away. Success relieves fear, no question about it,” Tabor says, noting that international affiliates contribute half of the company’s profits now.

Beyond success, fending off employee resistance to a change also can come through showing the value people have by letting them have their own slice of pie. Allied has had an ESOP, an employee stock ownership plan, since the successful expansion. He recommends the move for companies looking for commitment and quality from its workers.

There’s a 12.5 percent contribution, based on the employee’s pay, that’s paid by the company.

“Being an owner certainly affects the attitude and work ethic in a positive way,” Tabor says. “When you have a program like this, where everyone shares in the fruits of the corporation, how can you go wrong? As long as you’re making the right moves as the president, and the stock doesn’t go down, you get 100 percent backing by the employees.”

Tabor’s business model calls for a lot of personal contact.

“We do a lot of traveling, visiting our manufacturing plants overseas and our customers,” he says. “We do interviews with all our employees every six months. We have an open-door policy, and we interview everyone twice a year from janitors to vice presidents. We talk about their goals, what they’ve accomplished, problems, complaints — just having a conversation is about 50 percent of it, so you get to know people who are here at the company.”

That Allied continues to grow is a result of Tabor’s resolution to keep to his leadership principles and make sure he has the right people in the right markets. While growth to $109 million is impressive in any business, it’s particularly noteworthy in Tabor’s business, where the number of foundries has dropped from 6,500 to 2,000 since 1980. As a result, he is more interested than ever in rewarding his people for their efforts.

“Our company has had amazing growth in sales and profits, and we continue to have excellent growth opportunities,” he says. “Whoever said you win with people was right on. The only thing I can add to that is that people around the world want the same thing. They want to improve their lot in life — these are the people you want working for you at your company anywhere in the world.”

HOW TO REACH: Allied Mineral Products Inc., (614) 876-0244 or www.alliedmin.com

Sunday, 25 November 2007 19:00

Dealer’s choice

For George W. “Buddy” Byers Jr., management is like professional football: You’ve got to pay to put the right players in place. Once you do, treat them right, and they’ll stay and play their hearts out for you.

Premium wages, autonomy and a literal open-door policy form the platform for an enviably low turnover rate and a winning team at Byers Auto Group. It’s a club that’s never had a losing season in 110 years of operation. From days of the horse and buggy to the era of the space shuttle, the company’s never ended a year in the red.

For Byers, the third link in a generational chain of family owner-stockholders and chairman of the board of Byers Holding Co., that’s a trickle-down thing that starts with good help at the top.

“Our whole company has been built on hiring good managers, hiring good people, hiring good telephone operators,” he says. “If a professional football team needs a new quarterback, they go buy one. They’ll pay millions of dollars for him. If we need a good manager, we find the best one in our area, and we try to hire them.”

And if that means paying top dollar, then it’s worth it in the end. “We try to pay high scale for good people,” he says. “We know what a market is for certain people, and we try to pay more than that. We find that if we do that and we pay well, they’ll stay with us, and they’ll do a good job. You have to have good employees to make money.”

Let managers manage

If there’s one thing Buddy Byers can’t stand, it’s too many rules in a business that changes every day. Those shifts in market conditions have made him a laissez-faire leader to some extent.

“You have to be ready to make decisions immediately about what to do. That’s the reason I don’t put any strings on people,” he says.

He’s taken note of recent media reports of autocratic leaders of major corporations who came in with rules and shows of authority and were shown the door. It happened at one of the brands of autos that Byers sells.

“Every morning, I was getting something from him about what I had to do,” he says. “After a year and a half, dealers said, ‘Hey, get rid of him,’ so they fired him.”

So when he hires a general manager for a dealership or promotes from within, he knows what he’s getting into. A wide swath of leeway goes with that, a kind of confidence that can unnerve a new manager at first.

“If we go out and hire a general manager and he’s been working for other dealers where there’s control, he can’t believe he can spend $50,000 on advertising and not ask about it,” he says. “That really helps him. He can make decisions quickly. If he had to get approval, he wouldn’t get anything done. We’re relying on him to make a good call.

“I had one manager that every time he wanted to do something, he’d call me. ‘Don’t call me. Just go ahead and do it,’ I’d tell him. He’s definitely living up to it. If you give them a lot of responsibility, they make a better manager, I believe.”

You also have to keep a close watch on what your employees think of the organization and deal with potential problems so that you keep your turnover low.

An annual employee satisfaction survey, which can be completed anonymously, seeks to gauge how happy Byers’ 780 employees are. The answers get close scrutiny as Byers and his team seek to keep morale finely tuned.

“Our employee satisfaction is very high,” he says. “I’d say the automotive business probably has a lot of turnover, but if you pay good wages, you won’t have turnover.”

And while the economy’s rumblings over the past 18 months have caused many businesses to cut back, Byers hasn’t let a single employee go.

“They’re too hard to replace,” he says.

Open doors

There’s a distinctly egalitarian thread running through the company’s cultural upholstery.

For the head of one of the top 10 privately owned companies in Columbus, which had sales of $315 million in 2006, Buddy Byers’ doors are very open — literally.

“I have a door, but it’s never closed; I don’t even have a key to it,” he says. “If a manager has a serious problem, he knows where he can go to talk with owners to discuss it with them. In many companies, to get to the owner or CEO is very tough. I’m on the same floor as the girls who do the title work.”

Three years ago, the company instituted random drug screening for employees and drug screening for all new hires. Through the luck of the draw, it turned out to be an immediate test of the company’s round-table philosophy.

“The first person to be called up at random happened to be me,” he says. “The girl was afraid to tell me. I told her, ‘Tell me what doctors to go to, and I’ll do it.’ I did it.”

Byers passed; others did not. A few employees left the company because of positive drug tests. Others were weeded out before getting a job offer.

It’s all part of the egalitarian philosophy, and it applies to all members of the family.

Almost six decades ago, Byers started humbly in the parts department; his late uncle and CEO before him, Frank Byers Sr., started in the service department and was famed for being able to fix just about anything at the dealership. Each family member who comes in earns his or her place, learning the nuts and bolts of the car business.

“They’ve all started not as bosses,” Byers says. “There’s no family member who’s just put in as vice president. They have to earn it over 10 or 20 years.”

Being an effective leader sometimes means doing more than just business.

“Every day, we have an employee that has a problem, and we definitely try to help them — you’ve got to be a doctor, a lawyer, a banker and a marriage counselor,” he says. “You’ve got to be all those to keep employees happy.”

And if you are running a family business, you have to lead by example. Giving family members within the organization special privileges can lead to trouble.

“We don’t have a lot of rules, and we’ve survived,” he says. “But I’ve always taught them that we have to be there — we expect the employees to be early, so for us, it’s the same. I’m the chairman of the board, coming up on 60 years I’ve worked here, and I think people respect me being the boss. I’m here; I eat lunch with them every day. I think that’s very important — being close to the employees.”

Keep the customer satisfied

Over 11 decades, service is what Byers says has differentiated his company in a crowded market.

“If you could buy a car for $100 less somewhere else and we were $100 more, it’s surprising how many people would pay $100 to get the service or to get the name,” he says. “Our name is very well-respected. I wonder what the name Wendy’s or McDonald’s is worth to their companies? Millions.”

Byers’ branding consistency extends outside the dealership doors to the neighborhoods where Byers Auto Group is a good corporate citizen, to the boards Buddy Byers sits on and to the day each December when the company rolls out a list of 30 lucky charitable organizations it donates to in a $250,000 charitable footprint.

And with ad campaigns that can easily shell out $50,000 in one fell swoop, Byers is keenly aware of what his marketing dollars yield — and how to protect that investment by swiftly addressing customer complaints.

“It takes about $800 in advertising to get a customer in — if it’s a $300 adjustment, you’d be stupid not to give it to them,” he says.

When he talks about customer needs, the name of the Wendy’s mega burger chain comes up more than once. The uniform standards across every franchise — of every chair and every napkin from a single source and every floor and every restroom immaculate — appeal to his meticulous nature.

For Byers, cleanliness is next to profitability. “If it’s dirty, it’s not good,” he says. “If it’s a good environment, people like to buy. The key to pleasing the public is a good environment.”

The no-surprises policy extends to every customer contact — and that often starts on the phone, he says.

“All of our operators are overpolite,” Byers says. “If the caller has to go two or three different places to find the answer to a question, that’s bad. They’re instructed to do what they have to do to keep the customer happy. Don’t be a sourpuss, that’s all.”

And when Byers goes out for a good meal, at Wendy’s or a five-star restaurant, that’s what he expects, too. Snooty waiters don’t impress him much, but a courteous and friendly wait staff?

“That’s a double tip,” he says.

HOW TO REACH: Byers Holding Co. and Byers Auto Group, www.byersauto.com

Tuesday, 25 September 2007 20:00

Loud and clear

Bob Irwin will tell you the path to becoming a $2 billion company is paved with good communication.

In just two years, Sterling Commerce Inc. has grown from more than $460 million in annual revenue in 2004 to $650 million projected for 2007, and there are no plans to slow down.

Tripling those numbers will require a clear and simple plan and great communication, but fortunately, that is Irwin’s specialty as president and CEO, as well as his top priority.

The AT&T subsidiary is surging forward, tasked with helping 80 percent of the Fortune 500 thrive in a global economy by solving complex business process challenges.

“We are on a path to being a $2 billion company by 2012,” Irwin says. “That’s a goal we are aggressively pursuing. ... The strategy we have had is the strategy we have, and it will be what we have in the future — the focus is how do we capitalize on that strategy.

“How do we really get done what is possible, given the opportunities we have, the great markets we’re in, the customers we have and the great people we have. How do we really seize that opportunity?”

With 2,800 employees in 17 countries and major locations in places like London, Paris, Tokyo, Toronto, Bangalore, India, and S©o Paolo, Brazil, the single uniting force is communication. At Sterling Commerce, that means every communication needs to be simple, clear and easily understood by everyone, regardless of his or her office location, time zone or language.

A three-word mantra

Just three little words can describe Irwin’s management mantra: simplify, clarify and enable.

He says his $2 billion business plan is to simplify down to the essentials, to clarify for everyone and to enable them to go execute.

“It all comes back to simplify, clarify, and come back every quarter and refresh,” Irwin says.

His intensive business-planning process is built upon his experience as the company’s top sales executive in 2002.

After becoming president and CEO in early 2007, he worked to develop a detailed business plan and to codify it — by region, as it’s a global company; by product, as there are seven lines; by industry, as there are six main industries; and by quarter throughout a five-year time period.

The reason for such an exhaustive business plan? “So I can stand up in front of any group, clearly articulate that this is what it looks like, and more importantly, as each quarter passes, I can stand up in front of these groups and say, ‘Here’s what we said, here’s what happened, here’s what that means in terms of the plan,’” he says.

Irwin says that if five years worth of charts sounds elaborate and difficult to follow, it doesn’t have to be that way.

“What’s fundamentally important to me is to have a clear plan, a very defined strategy and business plan behind that,” he says. “It should be one that’s logical, that makes sense and can be done, and to ensure that all four parties [customers, investors, advisers and employees] understand it — getting and keeping everyone on the same page. Getting everyone on the same page is important; keeping everyone on the same page is powerful.”

Irwin’s theory is that repetition is the source of all knowledge and that communication is a lot like advertising, and therefore, requires repetition.

“The single biggest problem with communication is the illusion that it has taken place,” he says. “Human beings are not preprogrammed or prewired to hear, assimilate and understand every single word a person says. People learn in different ways, and it takes time to assimilate what’s been heard to understand it. It takes repetition to understand. It matters not what I say — it matters what you hear. Simplify and clarify, and you can enable people to understand the message. You have to repeat it often, using other avenues.”

Those other avenues include e-mails that Irwin sends out on topics of interest to employees.

“Core pieces of information, communicated in multiple different venues through multiple different mediums,” Irwin says. “Essentially the same information, delivered in different ways, at different times and with increased frequency.”

Winner’s circle

Undeterred by oceans of distance, Irwin has developed global meetings as tools for communications. Town-hall meetings are held one day each month. Generally, there are at least two town-hall meetings, handled by Web conferencing — one for the Western Hemisphere at noon Eastern time so it’s not too early for California and not too late for Brazil or Europe. Then there’s one at 6 a.m. Eastern time for the Eastern Hemisphere, which puts it at midafternoon in India and early evening in Japan. The miles between offices are easily bridged by technology — although it does odd things to Irwin’s hours as he facilitates the distance meetings.

“It is weird, doing a town-hall meeting at 6 a.m. by yourself,” he says. “It’s just me, there’s no audience. People are thousands and thousands of miles away. It’s a different experience.”

Enlisting the power of recognition to keep clarity of focus, the company launched a new program called the Winner’s Circle in August. A quarterly series of company gatherings organized by region, the events are accompanied by parking lot bands and barbecue, as well as pats on the back. Inside, a videoconference provides an update on company strategies — more importantly, it’s a litany of the successes of team members. If a new product was released by the engineering department, who on that team did it? Irwin wants to know — and he wants the rest of the company to know.

“He’s on video in Dublin, person X who did thing Y,” Irwin says. “We call them upfront and tell their story. We will also have customers, live or on video, talking about how Sterlites [employees at Sterling are referred to as Sterlites] made a difference to them. When you get right down to it, it really is all about the people and what great Sterlites we have, bringing quality products, services and support to our customers. It could be anybody significant. We tell everyone about it, bring you up on stage, make a big todo of it and give you a big round of applause. We recognize you.”

He says sales departments have long relied on bonuses and incentives to keep employees fired up. The Winner’s Circle takes recognition to the outer layers of the organization.

“I’ve been in a sales career, and it’s easy to overstate the financial rewards,” Irwin says. “The best you can do to motivate employees is to publicly recognize them in the moment of their accomplishment. It has to be public. It’s one thing for the manager to pull the employee aside and say, ‘Hey, you did a good job on this. Well done, I’m proud of you.’ Do that same thing in public, and it will have six times more powerful an impact on that human being.”

A global gathering that recognizes Japanese employees in front of their San Francisco peers, and vice versa, can be a logistical nightmare, but it’s worth it.

“It’s important for any company to recognize the achievements of all departments that don’t usually get recognized,’ he says. “We need to build the understanding that what I do, what you and what everyone does is important to this company.

“The importance is to celebrate and recognize the success of human beings — of our Sterlites — in that quarter. At the end of the day, our success at Sterling Commerce is driven by the quality, the capabilities, the skills, the talent, the competencies, the passion and the commitment of our people.”

Future growth

While the company enjoys a relatively modest market share in the application software business, that’s about to change.

“Establishing leadership is our first prong, that’s built on supply chain and demand chain management,” Irwin says. “The new market we’re going to enter is payments management.”

Sterling’s recent acquisition of four companies — TR2, Yantra, Nistevo and Comergent — has put them on the road to an increased market share and a deeper toehold in the industry. Those acquisitions got Sterling into new markets and brought new customers into the fold of their base of almost 30,000 customers to accelerate growth.

Extending the company’s solid market share in integration software will mean expanding the markets the company competes in.

“There are three markets we don’t compete in that are tangential or adjacent — service-oriented architecture, security and business intelligence,” he says.

Signing up channel partners, alliances and joint ventures with other companies will extend that reach. As an example, an IBM retail solution has Sterling Commerce products imbedded in it.

For each of those key business areas, there are two ways to thrive: organically — by marketing better, selling better, becoming more effective and more efficient — or through acquisitions. The key is carefully selecting which opportunities to pursue.

“It’s important to focus our time and attention, energy, and resources on a simple, clear plan of attack to realize the opportunities ahead of us,” Irwin says. “We have so many opportunities we could pursue. There are so many good products, so many good markets — and we have so many wonderful customers that it’s easy for us to have an idea a day of how we can take advantage of the market, sell a product, expand customer relationships.

“We have a bouquet of opportunities and a banquet of opportunities. My biggest challenge is to make sure that we’re focused, that we have a simple plan, that it’s clear to everyone, and that we enable everyone at Sterling to focus on the task at hand.”

It starts with focusing on what Sterling already has. “If we want to expand markets in which we compete, we take products we have today and build out,” he says.

“That’s a clear and simple path to $2 billion — all we have to do it execute. Nobody would say we have to change the world or reinvent Sterling. Everyone would say, ‘Well, that makes sense.’ It’s a lot of work, it doesn’t sound easy, but that makes sense. Any of those constituents would say that sounds completely consistent with the strategy we’re known for. It doesn’t sound like it’s changed much, it’s just getting more clear on how to get there.”

HOW TO REACH: Sterling Commerce Inc., www.sterlingcommerce.com