When Jason Bernal started teaching at YES Preparatory Public Schools 15 years ago, he began every day by picking up students in a van — and he quickly learned that going the extra mile would be routine in this job.

“I would have four stops, picking up students in a van and then bringing them to school every single day,” he says. “I can’t tell you the amount of time that just not me but every teacher put into every single student.”

He often took students home at night, when they stayed after school to crack the books.

As a charter-managed school organization whose goal is to give low-income students exposure to high-quality educational opportunities, YES Prep knows about engaging both teachers and students. In a big-city setting, where in the past, quality education for low-income families was hard to find, YES Prep has a current enrollment of 7,000, a waiting list of 7,000 students and is recruiting to boot.

“Our big focus is increasing the number of low-income Houstonians who will graduate from a four-year college or university,” Bernal says.

In order to graduate from the high school, students have to be accepted to a college or university.

“Currently, we have 80 percent of our kids who have graduated from college come back to Houston to work. From the very beginning, we always talked to our kids about, ‘We want you to be leaders in your communities. We want you to go to college, and we want you to come back and work in your community.’”

Driving that kind of visionary change begins with people who have a mental picture idea of what the educational process should be like, Bernal says.

Here’s how Bernal, president of the 700-employee organization of 11 schools (and growing) uses engagement so students and teachers will burn the midnight oil — and help drive visionary change.

Get in at the ground level

Every vision has a beginning, and every company has a founder. Chris Barbic, the founder of YES Prep, wasn’t satisfied where his children were going after they left his sixth-grade classroom. It was the impetus for the open-enrollment YES Preparatory Public Schools, which operates on $77 million revenue, including state funding, donations and fundraising efforts.

Simply defined, a vision is where you want to be or what an organization wants to realize at a certain point in time.

“To YES Prep, it’s really just raising that bar and how we meet the needs to make sure that every student becomes successful in life,” Bernal says.

Getting quality front-line managers — in this case, the teachers — is so important that numerous steps are taken. If applicants pass the first screening process, they then go through a series of interviews. The candidate is then interviewed by a school leader, the equivalent of a principal, who sets up a sample teaching lesson for the person to be delivered to a class — where the candidate can be viewed in a virtual on-the-job experience.

While the hiring process takes an extensive look at the candidate, it’s only the beginning of how deep YES Prep will go to support the right teacher.

Mold your new faces

Call it on-boarding or orientation, the process of bringing new employees into the fold is receiving more attention now from companies and organizations than ever. And no wonder when there is so much competition for good talent.

“When we are hiring brand-new teachers, we have to make sure that they have the necessary training to go into the classroom day one and be an effective instructor,” Bernal says. “We don’t have time for a teacher to get his or her feet wet for a few months or even a year.”

A Teaching Excellence program trains the first-year teachers, starting in July before classes start in the fall. This intense two-week induction program focuses on the basics: what it is to be a YES Prep teacher, what the expectations are and best practices to be a good teacher.

While that step is similar to what happens in many fields with new employees, the next step is less common but is very effective.

In addition to the training, the teachers are paired with an instructional coach, a non-evaluative mentor, Bernal says. The coach meets weekly with the new teacher.

“That is extremely important,” he says. “There are lots and lots of observations, lots of communication.”

Once a month, on Saturdays, the teachers also have professional development time as well as on Wednesdays when schools are let out early to accommodate the program.

The Wednesday sessions are kind of quality control meetings, organized by grade level, and they address concerns and other issues.

“You have your logistical items of what has to be taken care of, but you spend the majority of the time in those meetings talking about individual students and how you can meet students’ needs,” Bernal says.

“You need to have a full network of support counselors at every school so when you have a student that is a concern, you’re not a teacher on an island. In fact, we make sure that our teachers bring up those concerns with other teachers in the meetings or with school counselors to ensure that we find a way to help the student.”

Consider salary bands on merit

When it comes to the subject of wages and salaries, it’s one topic no company or organization can afford to ignore. Some companies put a salary cap on positions, limiting advancement and often denoting a dead-end job.

However, YES Prep realized that there are some people who just want to teach and be great teachers so a pathway called Teacher Continuum was created, a system on how teachers are paid based on performance and not tenure.

“With the Teacher Continuum program, we have teachers who start out at in a certain band; if you are a first-year teacher, you start off at the novice level,” Bernal says. “Then you can move throughout the bands to mastery teacher. So based on how your performance is throughout the year, you can move into a higher position.”

This is the second year of the program, and there are no mastery teachers yet.

“A big part of this is that we don’t want to lose great teachers and people who don’t necessarily want to go on to be administrators,” he says. “They just love teaching. We want to keep those teachers. It gives teachers the incentives just to continue doing really well in the classroom.”

Commit with a contract

Another part of the engagement process involves a contract — contract learning, while not a new concept, serves in a way to bind the teacher, the student and the family.

“We sit down with the parents, talk about what YES Prep is, and we have the teacher sign a contract basically stating that the teacher will be there with the students 24 hours a day, seven days a week, to ensure that that child can receive the support to go to college,” Bernal says. “Parents do the same thing; students sign the contract too.”

YES Prep keeps the contract all the way through graduation. Though not a binding legal document in the strictly legal sense of a contract, the support the document provides offers one more layer to the commitment process that can lead to graduation.

Actually, 100 percent of the seniors are accepted to college and matriculate, but this is a tricky statistic because students who are retained as juniors or choose to leave the school on their own accord aren’t calculated in that number. A little more than 90 percent of the class is retained each year. Currently, 72 percent of alumni are enrolled in a four-year college or university or have graduated.

While some critics may require numbers to provide success rates, Bernal sees it otherwise.

“I think the nice thing today is our next campus, Campus 12, will be opened in 2013 by a YES Prep alum,” he says. “More than 20 of the students that have graduated from YES who went off to college have now come back and are teachers, administrators, school leaders and school directors. It is really cool to see how this whole thing comes full circle.” ?

How to reach: YES Preparatory Public Schools, (713) 967-9000 or www.yesprep.org

The Bernal File

Jason Bernal

President

YES Preparatory Public Schools

Born: Denver. I’m a big Denver Broncos fan. Later, when I was in third grade, we moved to Montana.

Education: I graduated from Helena High School and went to Montana State University-Billings. I have a bachelor’s degree in Spanish and a master’s degree in educational leadership from Sam Houston State University.

What was your first job?

During college, to try to make ends meet, I did what any college kid would do — shovel snow before class, and in the summers, I worked for the city as a garbage man.

Who do you admire in business?

Our founder, Chris Barbic. He was the visionary for YES Prep. He is definitely the one whom I look up to. Another one is my sister, Michelle Berg. I would not have gone into education if she didn’t encourage me to apply for a job with YES Prep.

What is the best advice you ever received?

When I took this position over, I had a case of nerves when I started, and Chris Barbic said, ‘Just be yourself.’ Maybe it’s too simple but that’s the best advice. Things won’t work out if you are trying to be someone you aren’t, and it’s going to come across as not being genuine. That has gotten me through a lot of difficult situations.

What is your definition of success?                      

When I think about success at YES Prep, I think I always want the best for students, to provide great opportunities for them. It’s students going to college, graduating from college, doing something that they love to do and being leaders and seeing that every day. I think that’s an easy way to define success for our kids. And I want to be able to create opportunities for our staff members, too, so they excel, so they grow professionally, and that they are doing things they never thought they would be able to do.

 

Published in Houston

Interviewed by Dustin S. Klein | dsklein@sbnonline.com

When Marcelo Claure got into the mobile phone business in 1997 as it was just getting started, there were 1 million mobile phones sold a year. Today, there are 1.7 billion sold every year.

The founder, president, chairman and CEO of Brightstar Corp. lives and breathes the fact that massive growth and change are part of the territory. Smaller, more powerful and robust smartphones and wireless technologies are being developed constantly.

“Change is part of our culture and our game,” he says. “We need to adapt to change. Being a distribution company at our core, we’re constantly changing suppliers, not just to change but because they become less and less relevant.”

What started as an effort to be the leading distributor of mobile phones in Miami soon became the leading distributor in Latin America.

“Then we said, ‘What about in the U.S., too?’’ he says. “Then we said, ‘What about the world?’ Today, we are the world’s largest distribution company.”

And it couldn’t have happened without a concerted effort to find executives who could operate in a dynamic, changing environment — very different from the traditional executive.

“They’re very unique and hard to find; at the beginning, we made a lot of mistakes,” Claure says, describing how the talent was having a difficult time keeping up with the technology.

But under Claure’s leadership, Brightstar has attained unprecedented growth, expanding to 51 countries in only 15 years. With $6.8 billion in revenue and 5,500 employees worldwide, the company is in a great position today, realizing growth in all areas. Here is an inside look on how to deal with frequent change, explosive growth and the necessary talent to rein it in.

Take an ‘on-your-toes’ approach

Claure says a large part of how you deal with change is your approach. If you can establish a team that is always on its toes, that’s one of the first steps to what in simplest terms is a two-part culture.

“Change forces you to have a culture of innovation and a culture of ‘What’s next?’” he says. “If you look at what our company is today and what it was 10 years ago, it’s a completely different company.

“We are a lot more service-oriented now; from being a trader of mobile phones to today, we’re a leading supply chain company in our industry. We’re one of the leading insurance companies in the arena. We’re the world’s largest buy-back and trading company. Pretty much one thing is always thinking of what’s next.”

Many companies who stay on the cutting edge of technology look for individuals who are often the type to be called “early adopters.” These employees stay up on all the latest developments and are eager to try the latest product, even before all the bugs are out of it. However, an executive with impressive credentials doesn’t always equal an early adopter.

“We thought that by bringing big executives from big firms they would automatically yield success,” Claure says. “We couldn’t have been proven more wrong. The type of execs that fit our profile are the innovators and people who are used to building stuff, who operate in a changing environment, are very different than your traditional executive who is pretty good at grabbing something and keeping it constant or making it grow at suboptimal levels.”

It’s a somewhat painful process of trial and error. You are looking for a good fit when the tolerances are very narrow.

“We’ve learned and figured out the profiles of what makes somebody flexible at Brightstar,” Claure says. “Definitely it’s enough flexibility and adaptability to change and willingness to try new ideas, to bring new ideas to the table and to do different things in the course of their career. That’s what makes an executive at Brightstar shine.

“We’ve gone through a lot of hits and misses, but I think we’re getting better at recruiting the right talent.”

Be flexible to evolve

Once you think you have the right talent in place, you will be in a position to stress that, as the technology evolves, the company has to evolve with it.

“You have to build the culture and company that is ready to be flexible and be able to change pretty fast,” Claure says.

“If you look at the players we’ve dealt with since our founding, we’ve seen the rise of Motorola and Nokia. Nokia is struggling. If you look at where we’re working today, the focus now is on, ‘How can we offer a high-end smartphone like an iPhone or Galaxy for lower-income people so they can pay us a dollar a day?’

“If you go back 15 years ago, would we ever think that was possible? Absolutely not. So we’re used to change, we’re used to mobility. If you just see my industry, Apple was nonexistent there 15 years ago; today, it takes 75 percent of the industry profit.”

What began as a distributor is transforming into a service company for Claure.

“We’ve built our services around the phone and leveraging the structure we have around the world,” he says. “It’s pretty unique. Today, we run supply chains for some of the world’s leading operators.”

An entrepreneur is always looking for ways to expand his or her business, and Claure set his focus on ancillary products and services in that vein.

“We now buy more than 25 million used phones from consumers, we recycle them and we sell them in American markets,” he says. “Then we focused on the consumers who are accidentally losing their mobile phones; we launched an insurance company.”

Insuring the devices filled an expanding need in the market. Devices are misplaced, lost, dropped or stolen every day because, in part, of their convenient size.

“We wanted to be in the insurance business so we bought a small insurance company,” Claure says. “We fix our systems so they can scale, we fix the management team and then put that insurance business into our 51 different countries so that it immediately explodes our growth. Our insurance company has grown 450 percent in the 1½ years since we bought it. Next year, it will grow 1,000 percent.

“Then we figured out that retailers needed help in managing the growing wireless complexities so now we manage wireless categories at the world’s leading and biggest retailers in the world.”

Learn to use your advantages

Once you have been evolving your business in tune with how the industry is evolving, you often get a very good sense of where trends are going so that you can make some solid predictions, which can lead to expansion.

Claure says in addition to those skills, an advantage can be had in just being a bigger company.

“Being big now means ideas come to your company — a lot of people come with them,” Claure says. “That’s a lot easier now. Now your job is to pick the right idea, pick the right product and solution and make the right decision. It was a lot harder seven to eight years ago when you had to invent everything. We’re very good at identifying and saying we want to play in a specific business.

“We’re constantly being approached by smaller entrepreneurial companies. We buy them or partner with them or figure out other ways and then put them into the Brightstar platform. It gives them pretty amazing growth. It’s a lot more fun now when you can choose than it was before.”

As competitors try to encroach upon your space, use your experience and foresight to decide what new partnerships to explore.

“More than mobility, we’re going to experience in the next few years the connected world,” Claure says. “Everybody has a mobile phone today. There isn’t much more to mobile phones but not everybody is totally connected.

“Today, each person probably has a couple of devices — like tablets and your phones. If you look at the future and what’s expected by 2020, we’re going to have 50 billion connections, which means every human being is going to have a connection. So what does that mean?”

He sees opportunities to wirelessly connect smartphones, computers, digital cameras, cars, refrigerators, washers and dryers — whatever. It all will be connected.

“We’re moving toward a completely connected world, which means new supply chains need to be formed to operate that connected world,” Claure says. “There are new ecosystems, new businesses and new players.”

It all boils down to who has the capability to execute, he says.

“The keys are how do you execute? How can you scale? How can your systems and people scale?

“We sit in a position where we have sufficient business for the next couple of years. The potential with this business, if you execute an opportunity, then nobody tells you how good you do, that’s expected.

“But when you screw up or do something wrong, news travels fast, and that’s a problem.  We need to make sure we continue to do what we do. Never take our customers for granted. Make sure we execute. A lot of activities we execute are because customers are outsourcing to us so their expectation is that we’re going to do a lot better with price than they used to do themselves.” ?

How to contact: Brightstar Corp.,  www.brightstarcorp.com or (305) 421-6000

The Claure File

Marcelo Claure

Founder, chairman, president and CEO

Brightstar Corp.

Born: Bolivia.

Education: Claure holds a bachelor’s degree in economics and finance from Bentley College in Massachusetts. He also received an honorary doctorate degree of commercial science from Bentley College and an honorary doctorate degree from the Universidad Tecnica Privada de Santa Cruz.

Claure on how to deliver exceptional service: Talent, talent, talent. I spend 40 percent of my time interviewing new talent. I have replaced 80 percent of my management team in the last two years and the reason for that is the people who got us to a certain point aren’t the same people who are going to get us further.

Out of that 80 percent, half are still with Brightstar but they’re not the leader, the same COO, CFO, CTO. A company’s most important asset is its talent base. For every company and every industry, if you have great people running your company, great things will happen. If you have mediocre people in your company, bad things will happen. You might be good for a certain period of time in your company; it doesn’t mean you’re going to be good forever. Talent management is a very important process.

Secondly, you have to do the painful exercise of investing in having the right systems and processes. It’s painful because it’s expensive but also because it’s disruptive. Every time you have to implement a new ERP or a new warehouse management system, your initial reaction is delay. Delay — but then you pay for the consequences later on.

We’re learning. For example, I won’t tell you the customer but in a very large country we grew faster than our systems. There was a point where we couldn’t shift devices. They were like, ‘Oh my God.’ Those are problems you can’t fix at once. Those are problems that you have. … As we build our new products and services, we have to be dedicated to investing to make sure we can scale our systems, people or processes.

 

 

 

Published in Florida

Lisa Schiffman has always been an entrepreneurial, creative person throughout her career. She is always looking for opportunities to do things differently or start something new. At Ernst & Young LLP, Schiffman has been given those opportunities to make a difference as the Americas director of marketing and communications, Strategic Growth Markets.

“Ernst & Young has always given me the resources, the space, the time and the trust to go down a new path and see what would become of it,” Schiffman says. “It’s really important to know yourself and what your go-to skill set is.”

When you’re in the working world, you have to know what it is that people come to you for as opposed to going to someone else.

“That’s a very valuable thing to know because it enables you to navigate things that leverage that most optimally and move away from things that underoptimize that,” Schiffman says. “Most people don’t ask themselves that question enough.”

Asking such a question is what gave Schiffman a eureka moment in 2008 when she had the idea to create an Entrepreneurial Winning Women Program at E&Y. The annual competition and leadership development program identifies women entrepreneurs whose second-stage businesses show real potential to scale up but need to overcome barriers — and then helps them do it through five crucial accomplishments: Think big and be bold, build a public profile, work on the business rather than in it, establish key advisory networks, and evaluate financing for expansion.

“We knew if we could apply our resources to these women, big things could happen,” Schiffman says. “When you look at what gets in the way and why don’t more women entrepreneurs get over that inflection point and realize that real strong growth curve, there were a number of things.”

First of all, in some cases, it’s a failure to think big enough.

“That recognition that you have something that can really get big and you’re the one who can take it there is probably the most important moment in the program, because from that, all else proceeds,” she says.

Another obstacle is sometimes women have more of a tendency to work in the business than on it.

“We can get caught up in some of the operational details and not necessarily recognize the need to step away from some of the daily operations,” she says.

“If you’re holding on to too many things and your head is down every day and you’re not thinking about what’s next, you can inhibit your own growth. If my role is the CEO, it can’t also be the CFO, COO and CIO. I have to bring that talent in.”

A great way to gain that talent is through advisory networks.

“One of the things that can help an entrepreneur a lot is being surrounded by people whose experience is different than yours, whose expertise complements yours and who can provide you some guidance,” Schiffman says. “An advisory network is really important because none of us has a full complement of experiences that are required to grow a company.”

Lastly, you have to consider what kind of financing options you’ll need as you grow. Ernst & Young helps women make contacts and build relationships with outside investors as well as gives them education about financing and expansion.

But the main takeaway from Entrepreneurial Winning Women is that you can’t be afraid to seek help when you need it.

“Don’t be afraid to ask questions on topics that matter that you don’t have the experience to know about,” she says. “People are a bit hesitant sometimes to probe and learn more. Most people are extremely generous and will spend a moment to offer some advice and insight from their own experience. We could all expose ourselves more to that and be better off for it.” ?

How to reach: Ernst & Young LLP, (215) 448-5000 or www.ey.com. Ernst & Young is currently accepting applications for this year’s Entrepreneurial Winning Women Program through June 28.

 

Click the links below to read about the 2013 Perspectives panelists and sponsors:

Published in Cleveland

cle_cs_perspectives_logo_0413What does Anthem do to support women in business? The same things we do to support every business leader — because women expect the same value, innovation and dedication as any other forward-thinking leader. How do we know? Our parent company was named a 2012 “Top 50 Company for Executive Women” by the National Association for Female Executives.

We also listen to the many women business leaders we serve to stay on target. Ohio is ranked No. 9 of the top 10 states for women-owned businesses. And as of 2012, there are more than 8.3 million women-owned businesses in the United States, generating about $1.3 trillion in revenue and employing 7.7 million people. Clearly, women have a voice in everything we do.

At Anthem Blue Cross and Blue Shield, that means working hard every day to improve the lives of the people we serve.

With the help of many successful women, we’ve been able to:

?  Make meaningful connections with our members — from online groups to personal health coaching.

?  Develop leading health plans that reflect diverse needs in a changing market.

?  Teach people how their healthy choices influence the people around them.

?  Inspire kids and their families to choose (and stick with) healthy habits.

?  Help lower health care costs with new plans, new payment models and new technology.

 

Thanks to all the women who lead by example, extend helping hands to our communities and pave the way for the next generation of successful women. ?

Denise Tomechko is vice president of national account management for Anthem Blue Cross and Blue Shield. Reach her at (800) 928-2902, www.anthem.com or on Facebook at www.facebook.com/HealthJoinIn.

 

Click the links below to read about the 2013 Perspectives panelists and sponsors:

Published in Cleveland

Interviewed by Dustin S. Klein | dsklein@sbnonline.com

With more than three decades of experience in the lodging industry, including the last seven years as president and CEO of LQ Management LLC, the company that owns the La Quinta hotel chain, Wayne Goldberg is a man on the move. The company’s two major brands, La Quinta Inn and La Quinta Inn & Suites, are in major expansion mode: La Quinta had 425 hotels at the end of 2005; today, it has more than 800, with 9,000 employees. The growth has been fueled in part by technological innovations that enable La Quinta’s customers to make fuller use of the technological devices with which they travel.

Goldberg recently talked with Smart Business about the technological modernizations and some of the other strategies he has used to drive La Quinta’s growth over the last few years.

SB: Let’s talk about innovation. How are you becoming innovative leaders in your space — not just in the properties, but how you market yourselves and build your brand?

WG: I’ll start with technology, because what I like to say is that I view us as the little engine that could. We have done some things that we’ve received a lot of recognition for. We were recognized this year by Technology Innovator magazine as Technology Innovator of the Year. In our little company of 845 hotels, we have done some very creative things.

First of all, what I would tell you is that the world has changed. It used to be that it was all about giving the guest the technology that they needed and wanted. You would make that technology available and put it in the room, whether it was a fax machine or the delivery of bandwidth to the room. The actual hardware and software — you gave the guest all of the technology they needed.

Today, it isn’t about giving them technology. It’s about giving them the capability of using the technology that they’re traveling with.

We’ve taken a different approach. We’ve done a number of firsts. In 2012, we launched a new mobile site, the first of its kind. On this site, we launched a platform called LQ Instant Hold. When you go to book a room, you’ll see a banner that says LQ Instant Hold. If you click on it, we will hold a room for you for up to four hours. All you have to do is enter your phone number. It’s unique.

We launched this in February, and by June, 40 percent of all our mobile bookings were coming through LQ Instant Hold.

SB: Are your properties franchised or company-owned?

WG: It’s a combination. It’s a different model than most of our competitors. In my view, this is another point of innovation; we own and operate 400 of our 845 hotels. We are significantly invested in the real estate and in the operation of our business, which I think is a big positive for us because we have real skin in the game.

We are going to our partners and saying, ‘Look, you need to change the bandwidth from 1.5 megs to 3 megs as a minimum standard. By the way, we can show you the return on the investment and the improvement in guest satisfaction. We can show you the reasons you should do it. And we’re doing it at 400 hotels. We’ve invested millions on our corporate side.’

All of a sudden, we have more credibility than someone just brand-building and telling people to increase profitability by spending money.

We don’t ask our partners to do anything that isn’t economical. It’s all about doing the things that are economical, and if it makes economic sense, then you can get the troops around those issues and initiatives and really make progress. But if you’re doing it just for the brand, where is the real economic value? And why would I do it?

I can tell you that being a franchisee of another brand — which we are — we see this all the time. We’re asked to do things and invest capital [where] there is no economic value. And, by the way, some of our competitors make money every time they require their franchise partners to do something by making them use certain vendors and products and then by taking a percentage of everything you’re buying. There’s a little bit of conflict of interest in that type of approach.

SB: Would you discuss your brand from both an ownership standpoint and a franchise standpoint. How has your brand changed and evolved?

WG: What I would tell you is that in 2000, we were 99 percent company-owned. We owned and operated 298 hotels, and we had one franchise property. What we have done over the last several years is our entire focus has been to leverage the brand, not the balance sheet.

For us, what that means is that we started the franchise business, and we decided we were going to grow our way out of a challenge we had of owning a large amount of older real estate.

Many of our owned assets are some of our older assets. In many cases, they were our inns. We’re one brand with two products. We have La Quinta Inns, which are limited-service hotels that operate in the upper end of the economy segment, and then we have the La Quinta Inn & Suites, which operate in the middle to upper end of the midscale category.

As I said, we wanted to grow our way through some of the challenges we have with our own real estate, so we have sold some older hotels. We have identified hotels that we felt were obsolete or at the end of their life and took them out of the system and sold them.

We’ve done this a number of times. From 2000 to 2006, prior to our acquisition and public-to-private transition to Blackstone, we were 99 percent company-owned, approximately 70 percent of our properties were Inns, the average age of our hotels was 26.1 years, and about 70 percent of our properties were exterior-corridor.

Today, we’re 53 percent franchised and 47 percent company-owned, we’re 70 percent Inns & Suites, the average age of our properties is 15 years, and we’re 70 percent interior-corridor. And it absolutely enhances our brand when we move to interior.

SB: Let’s go back to wireless service. How is your company innovating with the delivery of wireless to La Quinta customers?

WG: For Internet, bandwidth has been and continues to be the key issue. We embarked on a program two years ago where we fundamentally changed the way we deliver bandwidth to our properties and changed our brand standards.

For most of our competitors in our space, the typical bandwidth requirement for a property is 1.5 (Mbps), so to speak. We began about two years ago integrating circuits, and now it’s almost like delivering bandwidth “on tap.” So you’re not paying for extra bandwidth that you’re not using. We’re only buying and using what is needed.

What we do is integrate circuits with a multitude of providers, and we deliver bandwidth to the hotels based on what is actually being used. It changes based on the usage, so that the bandwidth being delivered is sufficient for the property.

We also changed our minimum from 1.5 to 3 megs. On average, we’re closer to 6, and we actually have a property with 19 megs of bandwidth. Now, that property is a hotel where we have a contract with a dorm, and they have a whole building, and there are two students per room and they’re on the Internet 24/7, so in order to give them what they need, we deliver 19 megs. So that is an extreme and an exception. But we basically doubled our minimum.

And what we watch for is 90 percent of the capacity being used. When that happens, then you move and integrate an additional circuit and additional bandwidth.

SB: So you basically have bandwidth on demand and there’s a trigger point where you flip a switch and it’s on?

WG: Well, it’s a little more complicated, but we would change the bandwidth for that property based on what the usage is over a period of time.

SB: So it’s not just for a day or a week? You bump it up because you’re seeing the trends?

WG: Correct.

SB: How are you gauging and monitoring the system?

WG: We monitor the percentage of what is being delivered and the usage of what is being delivered.

SB: Is there a correlation between that and the room occupancy rate?

WG: It plays a part, and it’s a significant correlation, but it also has a lot to do with the demographics of the property. For example, if you’re in a location next to a technology park and you’ve got a sophisticated, technologically advanced consumer staying with you, they will be using more bandwidth, so you have to deliver more.

What happens in this industry and what used to happen with us is that there are small percentages of people using a large percentage of the bandwidth. What most of our competitors are still doing today is when folks are streaming video and using an inordinate amount of the capacity, they bump them off the system basically to make room for the folks that are just checking email. They’re not allowing people to use the kind of bandwidth they may require. ?

How to reach: LQ Management LLC, (214) 492-6600 or www.lq.com

The Goldberg File

Wayne Goldberg

President and CEO

LQ Management LLC

Education: Bachelor’s degree, University of Louisville

Goldberg on fee-based franchising: We have very strategically focused on growth through our franchise fee-based organization. Today, we are 70 percent Inns & Suites, and if we take our pipeline and take some things we’re going to do with additional assets, where we have identified some noncore assets, we’re going to look to divest.

In 2014, those numbers will change. The breakdown between Inns versus Inns & Suites will be 75 percent Inns & Suites. If you look at the average age in 2000 — 26.1 years — today, it’s 15 years, and in 2014, it will be 13. The average age has come down dramatically because the bulk of our new franchise fee-based has been new construction. Even the ones that aren’t new construction are much newer properties, because we’re not allowing anything out of the system.

Goldberg on growth: We were recognized in 2012 as the fastest-growing limited-service hotel brand. If you look over 10 years, we have grown 166 percent. Our closest competitor, Holiday Inn Express, grew 62 percent. And in addition to begin the fastest-growing brand in the segment over 10 years, we’re also the fastest-growing brand over five years. According to Smith Travel research, we’ve grown 62 percent over five years. The closest competitor is Hampton Inn at 43 percent.

Goldberg on evolving the company’s brand: Speaking to the evolution of the brand and the product and the positioning of the organization, last year we were recognized by Forester Research. We were recognized across all brands, full-service brands included, on customer experience. They asked how easy the company was to transact with, and whether you would transact with them again. We ranked No. 2 in consumer experience among all brands, one point beyond Hampton Inn & Suites.

Published in Dallas

Russ Gertmenian had just taken over as managing partner of Vorys, Sater, Seymour and Pease LLP when his first leadership challenge arose — the financial downturn of 2008-09. He realized that not only did he have an immediate problem of how to keep the company’s legal nose above water, but that there was a larger problem looming on the horizon.

“I’m not smart enough to know where the future is going, but what I know is that business is not going back to where it was,” he says. “I’ve been trying to remodel us in a collegial way so the next generation will have the most flexibility and be able to act in a very agile way fitting within our culture, to be able to adapt to whatever direction the marketplace goes.”

Gertmenian had to deal with changing the mindset that had developed over years of traditional experience and traditional thinking.

“The law profession was in an envious position over the period of time that I have been in practice; I got out of law school in 1972,” he says. “The law profession, and for large law firms in particular, was a growth profession. Firms were staffed with the idea that there would be additional growth year after year.

“We had an ability to price-power, meaning we could raise our rates as our expenses went up with relatively little pushback from our clientele because everybody was doing it. That all started to change, and 2008-09 really brought that into focus.”

Gertmenian had to look at his business model, which was geared to “we are going to be 10 percent bigger every year,” the company’s hiring expectations and morale among people who weren’t seeing the same kind of growth opportunities that they once had — “and managing people who never had to struggle to find work because there was always more than enough work to do.”

“That all has been a tremendous challenge in terms of what the law firms including mine needed to do. We needed to change our approaches so we had a mutually beneficial relationship in which our clients got what they needed and we were able to provide the services in a way where it made economic sense for us.”

Here are some of the tools Gertmenian used to develop a mindset to the new normal so the firm would survive for posterity.

Figure out your model

When the economy went into recession in 2008, it caused a lot of unrest in the business world, to put it mildly. Companies cut back their expenses, hoping that economizing would see them through. The thought was that in time, the economic climate would get back to where it had been; the decline was just cyclical.

“We never worried much into 2007 and 2008 about a downturn,” Gertmenian says. “We just assumed that bigger is coming. More, more and more. But I don’t think that is a valid assumption today.”

Once Gertmenian realized that point, he knew he had to figure out how to model the law firm, to modify it within the purview of what it was. This was so the next generation of lawyers there and the next generation of leadership would have the most flexibility to deal with the direction of the marketplace.

Rather than feeling adrift alone in an ocean of uncertainties, he searched for other professions having similar experiences in order for him to gain insights.

“Something similar was happening in the medical profession,” Gertmenian says. “People who were my age, in their 60s, entered a profession that operated in a certain way. Medicine has been transformed much more dramatically than law, in terms of how they operate. That just creates great anxiety and uncertainty among some of the older doctors, causing them to retire or to be unhappy — whereas the kids coming out of medical school today understand the gig.”

What he could see was that things evolve, and he had to view his job as getting his staff comfortable with evolution and change.

“I don’t believe you do that in most instances by simply decreeing from the top, ‘This is the way it is going to be,’” Gertmenian says. “So we don’t move as quickly as some of my partners would like us to move and perhaps as some other law firms move, but as we morph into what we are doing that’s different, we do it over a reasonable period of time when people are buying in to it.

“That has been good for us, and we have not jumped at all the newest fads. On the other hand, when we make some changes, over a period of time, there is real buy-in to it, and I think that gives us culturally tremendous strength.”

Talk about the situation

One of the first steps to take to change mindsets is probably no surprise to management or staff. It’s to communicate.

“You just talk a lot; I mean you really do,” Gertmenian says. “You talk about the realities of what is going on.”

If that takes rearranging the company structure to make it easier for dialogue, take that step.

“Reorganize the structure so that the people who are in charge of your substantive work groups are more than caretakers; they are really responsible for trying to operate their groups in a way that makes sense for the marketplaces they are in,” he says.

Those people, called group heads, are empowered to be stewards of their areas, having significant input to the requirements and direction of the group.

“For instance, they need to decide how many people they need,” Gertmenian says. “What are their future hiring needs? Where do they see the opportunities? Where should our people be most active in terms of trying to develop skill sets and where should they be most active in terms of trying to penetrate the market for new work? Where is the market going to be in five years?”

Gertmenian charged the group heads with making those determinations.

Be patient, however. He says it took two to three years to get the concept sold and in place so that today it is absolutely accepted.

“They are responsible in a very real sense for the direction, size and emphasis within the group,” he says. “Also, they are responsible for getting their people to understand how to best provide the services in those areas and the particular clients that can be done in an economical way yet that satisfies the needs of our clients,” he says.

The “group heads” structure broadens the management responsibility.

“I think we are getting really good communication with our lawyers at those levels,” Gertmenian says. “You just simply can’t talk to 350 or 400 people on a regular basis about what’s going on in their practice.”

Recast the mold of your customer

Another necessary step in making over mindsets is to relook at what your customer wants. If you’ve always had a picture that your customer liked A, B and C, in the new normal today, that customer might prefer D, E and F instead.

“Today, I don’t think clients are willing to pay for overkill,” Gertmenian says. “And we have a generation of lawyers that wasn’t schooled that way, that wasn’t trained that way. We’ve got to get them to accept the new workplace reality in a way that is constructive and a way that, frankly, allows them to train younger people to accept that.

“It is difficult for them to train people that way because that is not their gut instinct.”

If you have been delivering overkill to a client who may be satisfied with less, those procedures might well need to be revised.

“You have to understand that there are things the client really cares about and things that are just part of the cost of doing business,” Gertmenian says. “You have to provide excellent services that meet your client’s needs or you will lose your clients.”

In two words, it’s about “working smarter” — putting in the time efficiently to fill the customer’s order so that he or she is satisfied.

How do you decide if you are so efficient in trimming down costs that it may affect your customer service?

“It is certainly a possibility, but frankly, I think our lawyers will tell us that,” Gertmenian says. “Our clients will tell us that too. The biggest obstacle to some of the changes that we’ve put in that way has been our lawyers who have been concerned. We’ve looked at it, and we have massaged it, then we put it in and when we are not getting that negative feedback saying, ‘I told you so,’ I have a pretty good feeling we are not losing clients and we are not losing market share. I’ve got a pretty good feeling it is working.

“In fact, we have been able to attract some additional business because of the basic health of our law firm and the changes that we have been instituting in terms of being becoming more efficient for them.” ?

How to reach: Vorys, Sater, Seymour and Pease LLP, (614) 464-6400 or www.vorys.com

The Gertmenian File

Russ Gertmenian

Managing partner

Vorys, Sater, Seymour and Pease LLP

Born: New York. I was raised primarily in New Jersey. My family spent six years in Minneapolis, but my wife and I are both from the East Coast.

Education: I went to college at Rutgers University and Columbia Law School.

What was your first job and what did you learn from it?

I used to caddy when I was real young, and I think I got paid $2.50 a golf bag. The first real job I had as far as punching a time clock was when I was a bagger at a grocery store at eighth grade or ninth grade. I learned that you needed to pack the bags carefully because otherwise if you put eggs at the bottom, they broke and you had customers coming back to complain. It made me go to work on time. I felt pretty lucky to have the job.

Whom do you admire in business?

I was trained primarily by the late Art Vorys, senior partner here. He had more impact on me than anybody in our law firm in terms of my approach to the practice. He was a ‘can-do’ guy. He had a kind of a Marine mentality: listen to your clients and help them get to where they want to get to. And don’t tell them why they can’t get there. Your job is to figure out how to get there. John Elam, who was a managing partner in this firm, really influenced me in terms of culture of the firm, how to look to the law firm in terms of promoting our roles within the community, how to give back to the community and how to try to meld lots of people into one unit.

 What is the best business advice you have ever received?

With Art, it was, ‘Work hard and help your client get to where they want to get to.’ With John it was, ‘The institution’s the most important thing we’ve got going here. It’s the reputation of this institution which we cannot allow to erode in any way or it will have an impact on the law firm long term.’ From my parents, it was, ‘Look in the mirror, and if you can say, “I am trying to do the right thing and I am working as hard as I can work at it,” that is all you can do. Be happy with yourself.’

What is your definition of business success?

In my view, sitting in the law firm, I would say it is maintaining and increasing the reputation, the integrity and the continued vitality of my firm. If I can posture it in a way to develop the next generation of management, and model it in a way that gives the law firm and its future lawyers the greatest ability to deal with the marketplace successfully, I will consider what I have done to be successful.

Published in Columbus

Larry Dorfman, APCO’s chairman and CEO, learned a cold fact of life the hard way: If your business is heavily dependent on another market sector and that sector takes a hit, you’re going to take a hit too.

And, boy, did that other sector take a hit. New car sales in the U.S. fell by almost exactly half in a little more than a year, says Dorfman, whose company sells extended warranties at 1,800 franchise auto dealers around the U.S. and commonly goes by the name of its extended-warranty brand, EasyCare.

“New vehicle sales dropped from 16.9 million to 8.7 million, basically in a 15-month period,” he says. “Used car sales suffered significantly too, but the hardest hit were clearly the franchise dealers.”

Dorfman didn’t have to go looking for danger signs. They came rolling at him like a tidal wave.

“You could literally see the volumes starting to slide, and we were attached directly to the number of cars that get sold at any given store [dealership],” he says. “If a store sells 100 cars, then you know they’re going to sell a certain number of extended service contracts. And if that 100-car store suddenly starts selling 50, then both of us have a problem. That’s just the way it is.”

It didn’t take long for Dorfman and his leadership team to figure out what they needed to change. APCO’s business was too dependent on car sales. The company had to find a way to broaden its base.

“Our benefits at the time totally focused on how many cars got delivered to a customer at a franchise dealership,” Dorfman says. “We started to recognize that we were on what we call a two-legged stool. Whichever way the car business went, that’s the way we would go too. Now, our company was founded in 1984, so we had been through a couple of recessions. We’d been up and down on a couple of these rides. Of course, nobody knew what this one was going to be like. But you sure could feel it coming.”

Set the table

APCO’s leaders quickly concluded that the stool on which their company’s fortunes were perched needed a sturdier base. Dorfman and his team knew that building that third stool leg would be absolutely critical to APCO’s long-term health, so they attacked the project meticulously and deliberately and from several angles at once.

In fact, APCO’s leadership team had set the table for these base-broadening measures before the downturn really started to seriously kick in — just as they began to sense it coming. Ford Motor Co. had bought APCO back in 1999 and had been operating as a subsidiary for about seven years.

For the first few years, that arrangement had gone swimmingly. But as Dorfman saw vehicle sales leveling off and creeping downward in late 2006 and early 2007 and with Ford increasingly sinking into debilitating debt and cash-flow problems in mid-2007 after more than a year of deliberation, APCO’s employees and equity partners purchased the company back from Ford.

“We bought it back, and then, from that point, the market continued to dribble down a little bit,” Dorfman says. “And, fortunately, we were able to start making some decisions — some investments — that we could not have made under Ford. This was one of the critical reasons that we wanted to buy the company back. We could see that they weren’t going to invest in our company.”

Then the stock market crash hit in 2008, and business went into free fall virtually across the board in the U.S., including automobile sales and, consequently, APCO’s business.

“One of our key financial measures is trailing 12-month EBITDA,” Dorfman says. “We watch that very carefully. And we went from $28.7 million at our peak — that would’ve been about ’06 — to $12.5 million after the crash, in ’09. So what do you do?

“Well, you know, the first thing you do is you take the gun out of your mouth. No, I’m kidding. Obviously, this didn’t all happen in one week. But it did happen pretty darn quick.”

As they saw the nose-dive gathering steam, APCO team members started looking for ways to get their company off of its two-legged stool and build a firm third leg for balance.

“The first thing we did is we looked at how we approach the business,” Dorfman says. “What we saw was that our business was totally affected by whether the dealer sold a car today or not. We knew that had to change. So we asked ourselves, ‘How else can we do what we do and stay who we are but, at the same time, move away from being so dependent on car sales?’”

APCO decided to focus on what it saw as an underappreciated and neglected area of its dealerships: the service department. It developed a software program called EasyCare SOS — Special Owner Services — to help its dealers better manage their customer relationships.

“It’s literally a CRM [customer relationship management] program,” Dorfman says. “It helps dealers manage their customer relationships throughout the ownership life cycle of the vehicle. We built this software to make sure consumers are approached the right way — that they’re notified properly but not overnotified when their vehicle is due for service, what specials are available, etc.”

The program has worked so well that APCO guarantees dealers a 500 percent return on their investment.

“We started that piece, EasyCare SOS, from scratch in late ’07 with two people,” Dorfman says. “Today, it has 36 people in it, and it contributed 8 percent of our profit this year.”

Invest in technology

In addition to forming EasyCare SOS, APCO made other investments. The company formed a retail division, it created a certified used car program in partnership with Motor Trend magazine, and it bought a company called CoVideo that had developed a sophisticated video email technology.

“The CoVideo technology allows you to create and send a video email as quick and easily as you could type and send a text email,” Dorfman says. “It’s very personal and immediate. You’re looking right at the person’s face: ‘We want to let you know it’s time for your vehicle to come in for service. Click here for an appointment.’ Or: ‘Hello. Thanks for the time on the phone. I enjoyed it. I look forward to seeing you when I come in next week. We appreciate your business.’”

APCO invested $900,000 in the CoVideo technology to build the infrastructure and create apps to deliver large quantities of video email efficiently to an array of mobile devices: iPhones, iPads, Androids and BlackBerrys. The company plugged the technology into its EasyCare SOS program so its dealers can use it to send video updates to their customers instead of regular emails.

“We did all of this during a down market,” Dorfman says. “In so doing, we turned digital customer interaction into a much more personal process.”

All of the investments have begun to pay off for APCO. The company’s key metric, trailing 12-month EBITDA, is growing again, and the company has paid off a substantial portion of the debt from its buyback from Ford Motor Co.

“Trailing 12-month EBITDA is back up to about $16.7 million from a low of $12.5 million in ’09,” Dorfman says. “So we’re back up 25, 30 percent. And that’s while making these major investments to grow the business.

“Also, we’ve paid our debt down to about $20 million during very tough times. We’ve built a broader base, which has expanded us further into our own business and actually outside the car business with CoVideo. This puts us in a strong position to continue to make more investments to grow the company.”

Choose partners wisely

Asked what advice he would offer business executives whose businesses are facing similar challenges, Dorfman ticks off several suggestions: Choose your business partners carefully, focus on delivering more than is expected of you, keep a finger on the pulse of your business, and stay ahead of the game with regard to expense management.

“You’ve got to have great partners, great clients and great employees,” he says. “You can’t ask more of somebody than the time and effort that you’ve taken to build a relationship with them. You can’t go to the bank and make a $300 deposit and then go back five days later and take $10 grand out. The bank doesn’t do that. And neither do customers, partners, investors.

“Your chances of being able to make a withdrawal are a lot better when you’ve made a substantial deposit. And what we did for a few years before and during this downturn is we continued to make deposits with the people we work with so we had a base to work from. Building that base really helped us.”

Dorfman says the most important thing he has learned while leading APCO through the financial crisis is that executives should never let market conditions dictate the pace of their business.

“If you buy in to everything people say about the market, you’ll be out of business in no time,” he says. ?

How to reach: Automobile Protection Corp., (678) 225-1000 or www.easycare.com

 

The Dorfman File

 

Larry Dorfman

Chairman and CEO

Automobile Protection Corp.

Born: Brooklyn, N.Y.

Education: University of Georgia

What was your first job, and what business leadership lessons did you learn from it?

I grew up working in our family’s office equipment business. I was in sales. I was given a car at age 16, and I had to pay for the gas and insurance with the money I made selling. My dad was my mentor — actually somewhere between my mentor and tormentor — and in both cases, he did a good job. He exposed me to a lot of opportunities, like learning how to go out and make cold-call presentations to businesspeople. And, you know, at 16 or 17, that’s a pretty interesting game plan. You learn quickly. And my dad was always there to go back to and talk about what worked and what didn’t.

Do you have a main business philosophy that you use to guide you?

One of the key things we learned as we went through the recession is we changed our philosophy from the hard sell to building a relationship with customers. I grew up in a hard-sell environment. But I think people have changed. They don’t like to be hard-sold anymore. Salespeople have to understand that you can’t ask more from a customer than what you’re willing to give them — your time, your effort, your knowledge.

What trait do you think is most important for an executive to have in order to be a successful leader?

Don’t be afraid to make a decision.

What’s the best advice anyone ever gave you?

You can’t take more out of a relationship than you put into it. I learned that from an instructor at a communications course I took in 1985 that was geared toward getting people to understand and learn to communicate better. It was a personal and business growth course.

Published in Atlanta

When the recession rocked the auto industry in 2008 and 2009, Automobile Protection Corp., which sells extended service contracts to car buyers, got rocked just as hard.

Larry Dorfman, APCO’s chairman and CEO, learned a cold fact of life the hard way: If your business is heavily dependent on another market sector and that sector takes a hit, you’re going to take a hit too.

And, boy, did that other sector take a hit. New car sales in the U.S. fell by almost exactly half in a little more than a year, says Dorfman, whose company sells extended warranties at 1,800 franchise auto dealers around the U.S. and commonly goes by the name of its extended-warranty brand, EasyCare.

“New vehicle sales dropped from 16.9 million to 8.7 million, basically in a 15-month period,” he says. “Used car sales suffered significantly too, but the hardest hit were clearly the franchise dealers.”

Dorfman didn’t have to go looking for danger signs. They came rolling at him like a tidal wave.

“You could literally see the volumes starting to slide, and we were attached directly to the number of cars that get sold at any given store [dealership],” he says. “If a store sells 100 cars, then you know they’re going to sell a certain number of extended service contracts. And if that 100-car store suddenly starts selling 50, then both of us have a problem. That’s just the way it is.”

It didn’t take long for Dorfman and his leadership team to figure out what they needed to change. APCO’s business was too dependent on car sales. The company had to find a way to broaden its base.

“Our benefits at the time totally focused on how many cars got delivered to a customer at a franchise dealership,” Dorfman says. “We started to recognize that we were on what we call a two-legged stool. Whichever way the car business went, that’s the way we would go too. Now, our company was founded in 1984, so we had been through a couple of recessions. We’d been up and down on a couple of these rides. Of course, nobody knew what this one was going to be like. But you sure could feel it coming.”

Set the table

APCO’s leaders quickly concluded that the stool on which their company’s fortunes were perched needed a sturdier base. Dorfman and his team knew that building that third stool leg would be absolutely critical to APCO’s long-term health, so they attacked the project meticulously and deliberately and from several angles at once.

In fact, APCO’s leadership team had set the table for these base-broadening measures before the downturn really started to seriously kick in — just as they began to sense it coming. Ford Motor Co. had bought APCO back in 1999 and had been operating as a subsidiary for about seven years.

For the first few years, that arrangement had gone swimmingly. But as Dorfman saw vehicle sales leveling off and creeping downward in late 2006 and early 2007 and with Ford increasingly sinking into debilitating debt and cash-flow problems in mid-2007 after more than a year of deliberation, APCO’s employees and equity partners purchased the company back from Ford.

“We bought it back, and then, from that point, the market continued to dribble down a little bit,” Dorfman says. “And, fortunately, we were able to start making some decisions — some investments — that we could not have made under Ford. This was one of the critical reasons that we wanted to buy the company back. We could see that they weren’t going to invest in our company.”

Then the stock market crash hit in 2008, and business went into free fall virtually across the board in the U.S., including automobile sales and, consequently, APCO’s business.

“One of our key financial measures is trailing 12-month EBITDA,” Dorfman says. “We watch that very carefully. And we went from $28.7 million at our peak — that would’ve been about ’06 — to $12.5 million after the crash, in ’09. So what do you do?

“Well, you know, the first thing you do is you take the gun out of your mouth. No, I’m kidding. Obviously, this didn’t all happen in one week. But it did happen pretty darn quick.”

As they saw the nose-dive gathering steam, APCO team members started looking for ways to get their company off of its two-legged stool and build a firm third leg for balance.

“The first thing we did is we looked at how we approach the business,” Dorfman says. “What we saw was that our business was totally affected by whether the dealer sold a car today or not. We knew that had to change. So we asked ourselves, ‘How else can we do what we do and stay who we are but, at the same time, move away from being so dependent on car sales?’”

APCO decided to focus on what it saw as an underappreciated and neglected area of its dealerships: the service department. It developed a software program called EasyCare SOS — Special Owner Services — to help its dealers better manage their customer relationships.

“It’s literally a CRM [customer relationship management] program,” Dorfman says. “It helps dealers manage their customer relationships throughout the ownership life cycle of the vehicle. We built this software to make sure consumers are approached the right way — that they’re notified properly but not overnotified when their vehicle is due for service, what specials are available, etc.”

The program has worked so well that APCO guarantees dealers a 500 percent return on their investment.

“We started that piece, EasyCare SOS, from scratch in late ’07 with two people,” Dorfman says. “Today, it has 36 people in it, and it contributed 8 percent of our profit this year.”

Invest in technology

In addition to forming EasyCare SOS, APCO made other investments. The company formed a retail division, it created a certified used car program in partnership with Motor Trend magazine, and it bought a company called CoVideo that had developed a sophisticated video email technology.

“The CoVideo technology allows you to create and send a video email as quick and easily as you could type and send a text email,” Dorfman says. “It’s very personal and immediate. You’re looking right at the person’s face: ‘We want to let you know it’s time for your vehicle to come in for service. Click here for an appointment.’ Or: ‘Hello. Thanks for the time on the phone. I enjoyed it. I look forward to seeing you when I come in next week. We appreciate your business.’”

APCO invested $900,000 in the CoVideo technology to build the infrastructure and create apps to deliver large quantities of video email efficiently to an array of mobile devices: iPhones, iPads, Androids and BlackBerrys. The company plugged the technology into its EasyCare SOS program so its dealers can use it to send video updates to their customers instead of regular emails.

“We did all of this during a down market,” Dorfman says. “In so doing, we turned digital customer interaction into a much more personal process.”

All of the investments have begun to pay off for APCO. The company’s key metric, trailing 12-month EBITDA, is growing again, and the company has paid off a substantial portion of the debt from its buyback from Ford Motor Co.

“Trailing 12-month EBITDA is back up to about $16.7 million from a low of $12.5 million in ’09,” Dorfman says. “So we’re back up 25, 30 percent. And that’s while making these major investments to grow the business.

“Also, we’ve paid our debt down to about $20 million during very tough times. We’ve built a broader base, which has expanded us further into our own business and actually outside the car business with CoVideo. This puts us in a strong position to continue to make more investments to grow the company.”

Choose partners wisely

Asked what advice he would offer business executives whose businesses are facing similar challenges, Dorfman ticks off several suggestions: Choose your business partners carefully, focus on delivering more than is expected of you, keep a finger on the pulse of your business, and stay ahead of the game with regard to expense management.

“You’ve got to have great partners, great clients and great employees,” he says. “You can’t ask more of somebody than the time and effort that you’ve taken to build a relationship with them. You can’t go to the bank and make a $300 deposit and then go back five days later and take $10 grand out. The bank doesn’t do that. And neither do customers, partners, investors.

“Your chances of being able to make a withdrawal are a lot better when you’ve made a substantial deposit. And what we did for a few years before and during this downturn is we continued to make deposits with the people we work with so we had a base to work from. Building that base really helped us.”

Dorfman says the most important thing he has learned while leading APCO through the financial crisis is that executives should never let market conditions dictate the pace of their business.

“If you buy in to everything people say about the market, you’ll be out of business in no time,” he says. ?

How to reach: Automobile Protection Corp., (678) 225-1000 or www.easycare.com

The Dorfman File

Larry Dorfman

Chairman and CEO

Automobile Protection Corp.

Born: Brooklyn, N.Y.

Education: University of Georgia

What was your first job, and what business leadership lessons did you learn from it?

I grew up working in our family’s office equipment business. I was in sales. I was given a car at age 16, and I had to pay for the gas and insurance with the money I made selling. My dad was my mentor — actually somewhere between my mentor and tormentor — and in both cases, he did a good job. He exposed me to a lot of opportunities, like learning how to go out and make cold-call presentations to businesspeople. And, you know, at 16 or 17, that’s a pretty interesting game plan. You learn quickly. And my dad was always there to go back to and talk about what worked and what didn’t.

Do you have a main business philosophy that you use to guide you?

One of the key things we learned as we went through the recession is we changed our philosophy from the hard sell to building a relationship with customers. I grew up in a hard-sell environment. But I think people have changed. They don’t like to be hard-sold anymore. Salespeople have to understand that you can’t ask more from a customer than what you’re willing to give them — your time, your effort, your knowledge.

What trait do you think is most important for an executive to have in order to be a successful leader?

Don’t be afraid to make a decision.

What’s the best advice anyone ever gave you?

You can’t take more out of a relationship than you put into it. I learned that from an instructor at a communications course I took in 1985 that was geared toward getting people to understand and learn to communicate better. It was a personal and business growth course.

Published in Atlanta

I recently had the opportunity to go undercover in my restaurants for the reality TV show “Undercover Boss.” Typically when I visit our restaurants, the team is prepared for my arrival. The show gave me an unfiltered view of what’s going on in Moe’s Southwest Grill restaurants on the front line and provided me a fresh perspective on what our customers see and experience.  

What do you do to regularly take a pulse on your company? How do you learn about what’s happening on the front line? Do you know the issues your front-line workers are facing on a daily basis?

Work the front line

Although I trained in a restaurant when I joined the company, I’ll admit it was a bit intimidating working the cash register alongside a general manager on “Undercover Boss.” Our new employees work on the line in our restaurants for several days as part of their new employee orientation.

Whatever the position — coordinator, analyst or vice president — all employees participate and should understand what those associates do and what their guests or customers experience. It provides a new perspective on how the business operates and offers valuable lessons that you can apply in the office.

For example, when I went undercover, I learned that the process of labeling our produce is cumbersome, and I needed to fast-track our plans to automate that task. Additionally, I was able to get a good read on how projects we roll out from the corporate office are being understood in the field. Things change over time, so consider implementing a program where employees work the front line once a year.

Encourage engagement

I was constantly concerned about being recognized by the management team who I see at minimum on an annual basis. Moe’s holds annual regional meetings for our general managers, but everyone from the corporate team is also required to attend at least one, helping them to stay connected to the issues that GMs face in the restaurant every day. The team hears ideas on how to better operate their restaurants and how to improve service, and it also helps foster relationships between the managers and support teams.

What types of forums do you hold to encourage engagement among all levels of your company?

Market tours

Working on the front line helps you see what’s going on from different viewpoints within a location, but there are many other factors that impact stores based on their specific region. It’s important for senior leadership and key team members to get out into the field and do market tours.

Don’t wait for a crisis to happen; that shouldn’t be the reason you visit a market. Find a system that works — whether it’s a different city each month or an entire market once a quarter — and then bring back what you learned and share with the team.

The experience was exhausting, but I wouldn’t trade it for the world. Among other things, I’ve learned the importance of connecting one-on-one with the people who run the business and the value of listening without my president hat on. Getting to see the company from a different lens is something that will continue to be a priority for me for years to come. ?

Paul Damico is president of Atlanta based Moe’s Southwest Grill, a fast-casual restaurant franchise with more than 480 locations nationwide. Damico has been a leader in the foodservice industry for more than 20 years with companies such as SSP America, FoodBrand, LLC; and Host Marriott. He can be reached at pdamico@moes.com.

 

 

 

Published in Atlanta

As a third-generation CEO of The Ruhlin Co., Jim Ruhlin has the construction business in his blood, sweat and tears. After nearly a century, the pressure remains to keep the family business running, passing the leadership from son to brother to son since 1915.

“It’s always tough having your name be the name of the company,” says Ruhlin, who became president and CEO of the construction services firm in 1996. “There’s a different set and level of expectations for you. I have a son in the business, and I think he understands that too. Because your name is Ruhlin, you’re watched a lot more closely.”

The Ruhlin Co.’s family culture is also one of the reasons Jim Ruhlin feels such a strong personal responsibility to the health, safety and well-being of his 350 employees — a sentiment that was demonstrated when an accident shook the company to its core in 2006.

“We had a death, a very unfortunate death,” he says. “You start to look to yourself, what you have done as a leader and what the company is doing. You felt like you had a good plan, but with something like that, when you take a hard look at it, you learn that your plan isn’t really very effective. That was the impetus to starting the safety program in terms of that’s a very hard lesson to learn.”

The incident didn’t just change Ruhlin’s attitude toward safety. He took it as a call to action to renew the company’s commitment to safety from its Sharon Center, Ohio-based facility to its general contracting, construction management and design-build teams across the country.

Smart Business spoke with Ruhlin about how The Ruhlin Co. has redeveloped its safety culture and the importance of holding employees accountable to safe work practices.

SB: Tell me about the genesis of The Ruhlin Co.’s safety best practices.

JR: My grandfather, my uncle and my father who preceded me were very concerned about people’s safety. The company was one of the first construction companies in the country to hire a full-time safety person, back in the early ’70s. So it has always been a part of our culture. As with everything, you have to grow it. You have to continue to move it forward with changing government regulations. But primarily you want people to go home safely at the end of day, every day. Injury-free is the key.

What we’ve done to grow the culture is we continue to raise its level of importance with all our employees, with our subcontractors and our suppliers. It’s a lengthy process. It’s not something that you can do overnight, and we understood that when we embarked in a different direction in 2006. It’s got to be a combination of things.

SB: What steps do you take to get people refocused on safety?

JR: The value of safety is individual to each different person. What we try to communicate is that we want people to be safe. We don’t want them to have any excuse not to be safe.

First off, you have to have a strong plan in place for how you’re going to execute the safety culture that you have. You have to have accountability. Without accountability, all the rules and regulations and pieces of safety equipment that you have out there aren’t going to make any difference. It doesn’t need to be draconian, but there has to be accountability.

And finally, the third piece of it, which really is the most difficult piece for any company, is you have to have the personal involvement of the people. It has to be behaviorally based. It can’t just be rules, regulations and days off or fired. You have to get into people’s heads to change their behavior.

SB: What are the keys to developing an effective safety plan?

JR: The most important thing is involving the people that you work with. It’s not a one-person thing. In 2007, we started an internal safety committee. It involved not only the management team in the company but our hourly field force. We as a group also work together to fashion the plan and to modify the plan.

Some of the best ideas sitting around a table, when you actually try to take them out and put them in place in the field, are terrible ideas. So it’s a collective effort of the team in how to keep people safe, how to keep them focused on hazards and the correction of hazards.

SB: How do you incorporate feedback from your team to make sure that your safety plan is relevant and effective?

JR: In terms of other hard knocks down the road, things change. You learn that ideas that you have aren’t practical in the field or are practical if you modify them slightly so that the people in the field can physically do what you’re asking them to do.

We actually have a program that if you send in a safety suggestion, you get put in a pool where we have a drawing every month. We give away $200 and $100 cash prizes and we have a quarterly drawing for a trip.

But you have to submit safety ideas or have a safe act to get into the plan. So it’s proactive. You don’t participate just by being here at the company. You have to involve yourself. And it’s worked very well. It’s given us a lot of excellent safety solutions and safety ideas over the past several years.

SB: How do you measure your progress?

JR: There are several safety measurements out there. The one we use primarily is the RIR, which is the recordable incident rate. It’s based on your number of incidents per 200,000 man-hours. We use that to judge our progress on how we’re doing. It’s also an industry standard. There are several companies that want you to have a certain RIR or lower before they will even let you work for them.

SB: What qualifies as an incident?

JR: For a RIR, it’s almost anything. It’s not a first aid. So if you get a cut and you can walk in and put on a Band-Aid, that doesn’t qualify. But a RIR is anything that had an injury where someone went to the doctor, received a prescription, had time off, had to have duties reassigned. So it’s those kinds of things that make it recordable.

SB: How do you keep people accountable to the safety culture?

JR: One thing that’s really new and excellent is what we call a ‘safety timeout.’ Our management team on the projects throughout the day, once a day, has to go and stop someone and talk to them about their safety concerns, about any safety suggestions that they might have.

It’s not a punitive thing; it’s simply, ‘Let’s spend a few minutes talking about safety.’ They approach not only our workers; they can approach the owners, representatives, subcontractors, truckers. Then that information every day is reviewed by the management team on the job.

It does a couple of things. It raises safety awareness, and also it’s brought some good safety suggestions in or things that need to be corrected on the job. That’s done on a daily basis and an almost instantaneous basis.

SB: How have you set expectations for the safety culture as CEO?

JR: I was talking to a group of workers not too long ago when we did what’s called a ‘safety blitz.’ We got the entire management team to spend a week going to all our projects, which covers a couple of states. It’s a lot of traveling, but we go out and talk to the workers. I said, ‘I hope you guys understand we pay you to be safe. We’re paying you a wage, and we want you to work safe, and so we’re willing to pay you your hourly wage to be safe.’

I think if people understand what that really means, they’ll start to get it. It’s not an expectation of production, production, production. Don’t get me wrong, if we don’t produce well, we don’t stay in business. But that production with safety is what we expect. We do [the safety blitz] twice a year, in the late summer and at the end of April.

SB: How does safety benefit your company in addition to creating a safer, healthier workforce?

JR: It raises our capital in the eyes of the workforce and the owners. That’s very important. It makes me sleep better at night. Obviously, it lowers our costs and has an effect on our insurance rates and our workers’ compensation rates, and the people that work here respect this company more because it does place safety at such a high level. The benefits, while you may not be able to measure them all, are many. ?

How to reach: The Ruhlin Co., (330) 239-2800 or www.ruhlin.com

The Ruhlin File

Jim Ruhlin

President and CEO

The Ruhlin Co.

Born: Akron, Ohio

Education: University of Colorado

Coming full circle: We started in 1915 and we built our first building as a schoolhouse out in Creston. That job was built by my grandfather and his brothers, and we have started demolishing that building. So it’s been in service for 98 years and we had the honor of rebuilding the school system, the Norwayne School District. They’ve moved out of that building, and so we’re going to tear it down 98 years later. It’s a very unique thing that not many companies get to experience.

Biggest market opportunities: heavy civil construction, larger projects, health care and education building, hydroelectric power

 

Ruhlin’s commitment to sustainability: To me it’s almost a logical extension of where we’ve been going as an industry and a world: Things need to last longer, work better, use less energy, and be less harmful to the environment. It’s been brought together under the collective name of sustainability, but in my opinion we’ve been moving there for a long time.

Best piece of business advice: Treat everybody the way that you’d like to be treated. I don’t think that there’s a better mantra out there. If you think about how you’re treating someone and you think would I like it if they were treating me this way, that’s about the best litmus test you’re ever going to get.

Where would you like to go that you’ve never been?

Being involved in this industry, I have had ample opportunity to travel. There has never been a dull moment, which is one of the things I really like about what I do. While I can’t name a specific place I would like to go I haven’t already seen, I can say my favorite place is being home with my wife, Susie.

What’s next for Ruhlin? My grandfather and my father and uncle handed me a company with an excellent reputation, and my job’s not to screw it up … I think we’re positioned to grow. We’ve grown some in the down construction economy. We’re adding onto our building. I’d like to continue to grow the company and move into some of the marketplaces that we haven’t been in that we’re getting a toehold in today. We’ve got an exciting five or 10 years ahead of us. 

 

 

Published in Akron/Canton