Mike Kahoe was not happy with the 15 percent increases for health insurance premiums that his company, Group Management Services Inc., was facing each year. It was time to take control to lower health insurance costs for the 50-some people on the plan.
Once Kahoe, president of the $24 million professional employer organization, searched for some information, he was swayed over to a plan of wellness for his business. He believed he could cut the health insurance premiums significantly ? and there were other benefits.
“At the end of the day, you have a bunch of people who you work with that are healthier and happier,” he says. “And that means happier customers.”
Here are some of the steps he took to reach his goals.
“One of the first steps is to get nurses to test everybody’s cholesterol and blood sugar levels, height and weight and so on,” he says.
This will establish some base-line statistics that you can work on to improve, and the recommendation that some health behaviors need to change has more substance coming from a health professional.
“You should use nurses rather than staff,” Kahoe says. “A lot of times, it’s delegated to an HR person who tells you to quit smoking or says you should quit smoking. I just don’t think it’s very powerful. I think when a nurse or a doctor tells you, it’s a different story.”
The company leader needs to support the efforts.
“Don’t be afraid to get involved in it personally. Take a look at yourself first,” Kahoe says. “People tend to replicate your behavior; for example, if you’re out back smoking a lot, I think it’s bad for the company.
What Kahoe found out about his personal base line became a driving force for the program.
“Honestly, at the time, the thing that was most shocking was that I might have been the biggest violator of all,” he says. “I was smoking two packs of cigarettes a day, working hard and not watching what I was eating. I was also on the obese level, and I really didn't like that term associated with me.”
The second step is to develop the programs by getting information from health sources on popular initiatives such as smoking cessation, weight loss and healthy eating programs.
“We just put together some programs and some incentives for people to quit smoking and live healthier lifestyles.” Kahoe says. “We had some weight-loss competitions and things like that.”
As soon as he knew what his initiatives would be, Kahoe devised ways to make it easier to stay focused on goals.
“There has to be a carrot, and there has to be a stick,” he says. “I think the people that are making bad choices in their behavior should pay a little bit more for health insurance. I mean it takes a little bit of work to be healthy, to get on a treadmill for a half-hour a day or whatever it takes. I think those people should be rewarded for the work they put in.
“If you are a smoker, you pay a little bit more for your insurance, but can get a bonus if you quit; if you are a nonsmoker, you actually get another contribution to your health savings account every year to help fund your health insurance.”
As a last step, you should invest in tools to help employees reach their goals. Kahoe built a workout room where there are treadmills, an elliptical machine and weights.
“It gets very heavy usage,” he says. “The goal is just one more way to get people involved.”
After the programs have been in effect for some time, you should see some impressive results.
“We are down to single digits for the percentage of smokers, we cut in half the obesity numbers and the overweight numbers. Our health insurance costs were cut in half and continue to go down every year. Your people are just healthier. You should get less sick days and a happier environment.”
How to reach: Group Management Services Inc., (330) 659-0100 or www.groupmgmt.com
When Mike Kahoe, president of Group Management Services Inc., wanted to start some wellness initiatives at his company, he knew that peer involvement would be a key point.
Getting people involved starts with your initial event, which is a type of health inventory. You should make it voluntary to participate in the health professional-run event, which includes blood pressure, cholesterol tests and blood tests. With some promotion, you should get a high rate of involvement in the kick-off event. You want to get as many involved as possible to be a success.
“We had almost 100 percent participation,” he says. “People need some awareness and a little bit of a nudge sometimes.”
A good idea is to open the programs to all employees, not just the ones enrolled in the health care plan. This will help unify the participants even more. Team members will give each other encouragement.
“It would be a complete failure if you don’t get the employees inspired,” Kahoe says.
A smoking cessation program featuring a bonus for quitting can start small, but with participation and positive results, it will likely grow.
“A lot of people will encourage each other,” he says. “Once it catches on, and 10 people quit smoking, I think the other people could figure out that they could too.”
Each year, as I prepare for our annual Evolution of Manufacturing event, I embark on a deep dive into the issues affecting American manufacturers.
There’s little doubt we operate in a global economy, where the same basic economic factors of supply, demand and pricing affect all manufacturers, no matter their location. However, several elements that American manufacturers must deal with distinguish them from their global brethren.
First, American manufacturers are being squeezed at an accelerated pace never seen before. Prices are down. Service standards and customer expectations are up. And the demands of quicker turnaround times are on the rise as well. Further, American manufacturers must increase production levels using fewer employees and less overtime in order to effectively compete.
These new global realities extend beyond the manufacturing realm and are reflected in the slower-than-expected economic recovery — represented by lagging pace of employment growth and only gradual reduction of the national unemployment rate. Simply put, the future American manufacturing work force will look and operate much differently than it did just five years ago.
My deep dive included visits to manufacturing facilities in industries as diverse as snack foods, steel, personal care products and labels. Despite any obvious differences based on products and methodology, several commonalities stood out.
Chiefly among them is the pressure by customers for greater quality at a better price. Big-box retailers, such as Walmart and Target, have accumulated such immense purchasing power that they’re effectively able to dictate their own payment price. This has done little to help American manufacturers get their expenses in line.
Next, American manufacturers must be more agile in all aspects of operations. While forward-thinking activities like forecasting and planning will always remain, there will be more of an emphasis on quickly identifying quality problems, supply shortages and demand shifts. Manufacturers will no longer have the luxury of these being lagging indicators they can analyze after the fact. They must monitor them in near-real time and be able to act accordingly.
Finally, underlying all of this is the grim realization that the hangover from the Great Recession of 2008 will continue to linger far into the future. And that, it seems, means more changes are on the way. Those who understand and are willing and able to adapt will do well. The others will just simply fade away.
If the past few years are any indication, we’re probably in for more of the same: Tighter supply chains, leaner organizations, greater pressure from globalization, more emphasis on innovation and sustainability, and a focus on customer service.
However, competing today, as well as in the future, requires much more. It requires a systematic change in the mindset, which recognizes that the business models that worked yesterday may no longer be relevant and the operational and delivery systems currently in place should be constantly tested and re-evaluated for efficacy.
Customers today are looking wherever they can to find greater value in their business relationships, and anything manufacturers do to meet those goals will mean the difference between success and failure.
Only one thing is certain these days — if you’re not adapting to the changes, your business has probably begun its march toward obsolescence.
The 2012 Evolution of Manufacturing honorees, whose stories you will read below, have demonstrated the ability to navigate their organizations well and better position themselves to compete in a more challenging global economy.
Later this month, we invite you to join us at the 2012 Evolution of Manufacturing Conference at Hyland Software, where you can learn more from these companies as well as participate in a town-hall-style discussion with three dynamic business leaders from Pringles, Visual Marking Systems and L’Oreal USA. They will talk about big-picture ideas that will offer action-oriented advice that you can adapt within your own organization.
Read more about the honorees:
Barry Wolfson joined Tervis at a time when the company was expanding nationally, increasing sales and enjoying double-digit revenue growth. From the outside, it was a CEO’s dream. Internally, the company’s 700 employees could barely keep up.
“When your business is growing 60 percent a year, it’s everything you can do to just focus on running the business day to day,” says Wolfson, CEO since 2010.
“I just think that there wasn’t an opportunity for anyone to say ‘Hey, we need to step back for a moment,’ because there really wasn’t time to step back.”
By restructuring the business in a way that allowed it to scale, Wolfson has helped the company — known for its tumblers that “keep hot drinks hot and cold drinks cold” — manage the demands of fast growth.
Smart Business spoke with Wolfson about the keys to scaling a fast-growth company.
Set your timeline. There were things that we put on the timeline that we said, ‘In 2011, we need to get these things done.’ There are other things that we’ve started to work on during the year and say, ‘OK, now over the next five years, where do we see the company going and what are the capabilities that we have to put in place to get there? So there were short-term things — less than a year — that were very critical for us to do… and then the other is developing this longer-term vision and strategy for the company. Phase one was a little bit of an Extreme Makeover Tervis edition as we just put in place the basic capabilities to support growth. But the phase that I’m in with my senior management now is a little bit longer-term vision in terms of what products and markets do we want to focus on.
Take a forward-thinking approach. This is not something that happens in one day, that you go from ‘This is the right way to do it’ to ‘You can’t do it this way.’ It happens over time.
When you are in senior management, you have to look a little bit further down the road and say [what’s] fine today are the things that we need to do differently. It wasn’t necessarily changing every aspect of the business. Tervis has been a successful company for 65 years and so it’s a matter of saying ‘Hey, what can be preserved the way that we’re doing things and what needs to happen differently to be able to continue to grow profitably, and grow in a way that makes sense for all involved?’
Allocate resources. It was first huddling with my senior management team…then between us prioritizing here are the things that we believe in our experience and at our level that we needed to do and the time frame of doing them. We went through that process, identified a number of things that we needed to get after, and then it was a process of saying, ‘What are the resources involved in doing this — people and investment capital?’ At that point, it’s engaging with the ownership of the company and getting their support in making the investments that we needed to make both in people, systems and plant equipment.
Build a deep bench of talent. You look at how fast we’ve grown — there are many, many people in the organization who have not been here very long. So continuing to develop a culture and the key people in the organization is something that I spend a lot of time on. Generally, besides the culture, it’s continuing to develop intellectual capital that’s required in the business. Develop people from within with additional skill sets and complement that with bringing people in from the outside that can give us different perspectives on the various levels of growth and business that we are trying to achieve.
Think sustainability. Sustainable growth will come from us continuing to reach out to a wider audience of potential customers in various different markets and geographically. Staying very fresh, relevant and innovative in our product offerings is something that again fuels growth.
You have to be very intentional about the growth. We don’t see growth for growth’s sake. We want to be a strong consumer brand out there in the marketplace that is a high value brand. We don’t want to grow just to sell more tumblers. … Resisting that growing for the sake of growing is extremely important in a business that has the opportunity to grow.
How to reach: Tervis, www.tervis.com or (888) 508-8859
Jeremy Rayl has witnessed a lot of industry change since he became the third generation to take leadership of his family’s transportation company in 2007. But he knows that today’s stricter regulations and compliance standards are just the beginning.
“There’s a big fundamental change coming in transportation,” says Rayl, CEO of Akron, Ohio-based J. Rayl Transport Inc., which operates approximately 200 tractors and 600 trailers in the U.S. and Canada.
Yet while other trucking firms have struggled in the past years, Rayl’s company has opened up four new locations, made several acquisitions, grown sales and increased employment by 135 percent to 240 employees in the last five years.
Rayl says the company has stayed competitive in Akron and other areas by being able to identify opportunities, which a CEO needs to be able to do in both a bad recession and a good economy. One of the benefits of doing business in Akron is the access to capital from the area’s large banks.
“With my industry, if you don’t have access to capital you’re not going to have the ability to grow, let alone survive,” he says. “The ability to attract and retain companies here in Akron would center around the availability of capital.”
Because his company has many moving parts and variables that make measuring profitability difficult, Rayl also knows that having a well-defined cost model is absolutely essential in today’s business environment. Ultimately, not understanding your cash flow down to the penny is a critical mistake for a leader, because that’s how you recognize areas that can damage or improve your business.
“If you don’t understand the risks that are out there, then you’re being naïve to the potential things that could possibly bankrupt your company,” Rayl says.
“It’s being able to identify these opportunities and being able to accurately identify our costs, what our revenues need to be and really understanding what drives profitability for our company.”
ROI is the first area Rayl looks at when considering business investments, though the return doesn’t necessarily need to be in dollars. It could also come in the form of improved quality, service level or safety. Either way, the return has to warrant the risk that you are taking on.
“It has to have some sort of measurable ROI and it has to add value to the company whether it is dollars saved or overall quality improvement,” Rayl says.
As the company goes forward in making new acquisitions and adding more U.S. locations, Rayl looks for areas where there is already more demand than the company can support.
“If we open up a new location, we’re already going to have preexisting customers there ready to give us business before we even open the doors,” he says.
By breaking down the risk versus reward and return, Rayl makes calculated investments that meet the changing demands of customers.
“It gives us flexibility and the ability to change as customers needs change, whether it be supply chain solutions, whether it be more efficient delivery options or just reporting for those customers to measure how well they’re satisfying their customers with on-time deliveries,” Rayl says.
That goes for adapting to new industry regulations, as well, such as the now tighter limits on “hours of service” or the number of hours that drivers are allowed to drive in one week.
“Every single hour of that driver’s availability is that much more valuable,” Rayl says. “So it is very important that we are operating that asset and that driver as efficiently as possible to maximize the amount of miles and deliveries in a week that that driver and equipment can do.”
By identifying opportunities ahead of time to invest in new technologies and equipment, he positions the company for future competiveness.
“It represents an opportunity for us,” Rayl says. “If we can be a leading company when it comes to safety standards, equipment standards, driver standards, we’ll be that far ahead of the competition when these new rules are enforced, and they will be coming soon.”
How to reach: J. Rayl Transport Inc., www.jrayl.com or (330) 784-1134
Akron invests in biomedical
Over the past 35 years, Akron has successfully transformed itself from the rubber capital of the world into a diversified business climate that supports more than 600 metalworking, electronics, machining, advanced materials (polymers) and biomedical technology companies. In the past six years specifically, the city has devoted a major economic development effort and significant private capital investment towards attracting companies from this last area.
The most recent investment came in 2011, when a new vehicle was created to further attract and create new biomedical company investment in Akron. Akron Bioinvestments Funds LLC was created by the city’s Akron Development Corp. and was funded by private organizations including Medical Mutual, First Energy, Cascade Capital Corp. and Northeast Ohio Medical University. It is a $1.5 million loan fund aimed at providing financial support for the commercialization of high-potential biomedical early-stage companies that are close to market entry.
There are two components of the fund. First, $1.25 million will be dedicated to the Rapid Commercialization Loan Fund, which will include loans in the $100,000 to $250,000 range that are approved based on the merit of the applicant’s business plan and feature low interest rates and flexible repayment schedules. In addition, $250,000 will be dedicated to the Product Development Fund, where grants of $25,000 are awarded based on proof of product concept, market assessment and business plan development.
A major goal of the initiative is quick turnaround time on all funding requests reviewed. This new availability of funding is expected to draw both national and international interest from companies in the biomedical field to Akron in coming years.
Raquel “Rocky” Rodriguez was physically starting a new Miami law office from scratch. She didn’t have a team of employees. She didn’t have an actual office yet. From a support standpoint, however, she had a stacked deck.
Joining McDonald Hopkins LLC as its newest managing member in 2011, Rodriquez had the rich culture and resources of a firm with an 80-year history of client service success.
“So it really was very much of a start-up operation, except that I had a really good solid team supporting me all the way,” Rodriguez says.
Smart Business spoke with Rodriguez about the keys to entering a new market, starting with finding and developing a strong team of employees.
Use your network to find talent
One is to let people know that we are here through selective marketing, through interacting in the community, getting the word out, introducing the firm. The other is using my personal contacts to recruit the kinds of lawyers that we are looking for. We identify the practice areas we need, the client type, the personality set and either directly approach those lawyers or through my contacts identify who those lawyers are and then use those relationships to reach them.
Seek complementary skill sets
The biggest leadership challenge when you are expanding a firm or growing an office is being able to identify in potential [hires] the kinds of qualities that you want to reinforce in your firm while also adding capabilities that fill whatever gaps you may have.
You have to recognize that you have weaknesses because nobody is perfect, and nobody has every skill that they need for every job. Then you need to surround yourself with people who have the skills that you are lacking to compensate for them, which means that you have to be very self assure and confident rather than worried about people showing you up. You succeed by other people around you succeeding.
When you are interviewing associates or other staff as well as partners, you like to know that they have succeeded at, what they have done and know what their track record has been. You want to know that they are hard working and that they are not just going to coast. You want to look for indicia of people who always demand more from themselves.
Use interviews to find cultural matches
You work very hard at hiring people who contribute to the culture and who like the particular culture of the firm. Every firm evolves as it gets larger, but there are certain core principles in terms of how people relate to each other and the way that the firm serves its clients that cannot be compromised.
I like to know why they are speaking with us. What is it about their situation that they would like to improve on and what are their long-term personal and professional goals? I like to know about what they do in their free time when they are not being a lawyer. I like to know what their approach is to clients and practicing law.
You have to be a friendly and approachable person, but you also have to recognize that there are boundaries, particularly in the workplace. You are not there to be everybody’s best friend. You are there to lead them and help them succeed.
A critical trait is to be able to communicate your vision, your goals and your expectations very clearly. If you don’t communicate clearly, people will assume that they know what you want, and you may not get what you are expecting.
You set clear goals. You agree on timelines and then you follow up on a regular basis to make sure that you are on track.
Do your part
If people do not see you contributing the effort, they are going to feel like you are unfairly dumping work on them. It doesn’t mean that you have to spend every waking hour in the office or constantly connected, because I do think that it’s important to unplug every once in a while so that you can do your strategic thinking. It does mean that you have to be willing to take on the hard work that you are asking other people to do.
How to reach: McDonald Hopkins LLC, www.mcdonaldhopkins.com or (305) 704-3990
Company Facts: McDonald Hopkins LLC
Headquartered in Cleveland, Ohio
Size: more than 130 attorneys in six strategic locations, including Chicago, Cleveland, Columbus, Detroit, West Palm Beach and Miami
About: The company has an 80-year track record of counseling clients as a business advisory and advocacy law firm
As he looked around at his executive leadership team, Alain Couder saw no clear disorder or conflict. The reason that his company’s leadership was not effective had nothing to do with a particular leadership style or group dynamic. But then again, the issue wasn’t really what people weren’t doing at all. It was that they didn’t realize what they needed to do.
“They didn’t know what they didn’t know,” says Couder, the chairman and CEO of Oclaro Inc.
Oclaro — the product of two startup companies worth more than $200 million apiece — had quickly emerged as a tier-one company with potential to reach No. 1 in its core optical and high-powered laser markets. After completing three more acquisitions, it had risen to third in its industry and become an employer of thousands of people around the globe. Yet, that meant many of the $393 million company’s employees, who had come from smaller companies, now lacked the skill set required to operate in a larger, global company.
“To get all of those startup people and turn them into a company that can be operating at $500 million in revenue and get to $1 billion was my biggest challenge,” Couder says.
Choose the right people
With a career that included working at both large corporations and small startups, Couder knew from experience that Oclaro was not prepared to scale for the next phase of growth.
“Because of my background working in companies like IBM or HP or others that are really well-structured and well-organized, it was clear to me that Oclaro was not that way,” he says.
So he began the process of putting in place a new leadership structure — one that that made sense for Oclaro’s new size and objectives. He hired an external consultant to go into the company and take stock of its operations, people and processes. By using an outside consultant to evaluate his team, he was able to eliminate partiality and really find out who would be able to help scale the company.
“Specifically what you learn is that they go into the company and see how you operate,” Couder says. “They see what information systems you are doing. They speak to your managers and then they tell you, ‘This guy knows what he is doing and this guy needs to learn or needs to be replaced.’”
After getting this feedback, the first decision Couder made was to replace three of his key executives. While these personnel decisions can be difficult to make, a CEO has to be confident that the leadership team he or she has in place will be able to lead effectively when moving to the next stage.
“I choose an executive team that is appropriate for the size of the company,” he says.
“I make sure that I treat the people who are leaving well, but that I put in place people who are stronger and can help me scale the company to the next level.”
When you are growing a company significantly, you want to bring on executives who have experience and past success in their area of expertise. They also need to have the right personality and values to be a good cultural fit at the company.
“[It’s] are they going to be able to work in a constructive fashion with the rest of the team?” Couder says. “If you bring in someone who has a very different set of values than the ones that you have in place for the company now, then it just doesn’t work well.”
How do you identify the people who can scale successfully?
“It’s talking about what you want to achieve,” Couder says. “You create a dream of what can be achieved and then you explain what it takes to do it.”
When you start doing that, you’ll have some people who are enthusiastic and some people who start to resist change.
“I work with them and coach them and try to help them improve, but at some point in time when the company scales, some people are going to scale with the company and some people are not,” Couder says.
Once you’ve explained the vision, it’s more worthwhile to focus your time and resources on the people who seem energized about the vision for growth rather than on to trying to convince the opposition.
“You need to spend the time with the people who are enthusiastic and forget about the other ones,” Couder says. “Otherwise, you spend all of your time with people who are resisting and then do nothing in the end.”
Eventually anyone who has a “wait and see” attitude will either leave the company or decide to be part of the change and move with the enthusiastic people. The best thing to do is respect people’s motives and then focus on who can help you grow. While two of the executives that Couder replaced remained within the company, the third one left.
“They are able to drive their own lives and their own convictions,” Couder says. “And that’s fine. That’s part of change management. Not everybody is happy in a larger company. Some people are much happier working in startups and they should go work in startups.”
Empower your people
Leading an organization with more than 3,000 employees meant Couder and his executive team needed to start shifting their attention to more of the big-picture goals and high-level decisions of the company.
“You always need to shoot for the No. 1 position,” he says.
That means people lower in your organization need to shift to take over new responsibilities and decisions, as well.
“When you scale a company, you want to be able to move the decisions lower in the organization,” he says. “So this is the notion of empowerment.
“In a startup, the CEO is at the center of everything, is aware of all the decisions being made, in touch with every customer — he is involved in all of that. As you scale the company, if the CEO continues to do that then the CEO becomes a bottleneck.”
When you take a set of people with a startup mentality and ask them to manage in a larger, more structured corporate environment, you need to give them the right tools and support to be successful in that culture.
“It’s then helping the people you choose succeed in what they are doing,” Couder says.
“And as a result of that, the CEO becomes increasingly in charge of setting the right direction.”
To empower his managers as decision-makers, Couder implemented a global management training program for leadership teams all across the company. The three-day training program included approximately 80 managers and included twice daily training on leadership best practices.
“We coached them on leadership, how to make decisions, how to coach your team, how to train them, how to make them go, how to make them passionate about what they do, how you can create a team that is going to win together and all those kinds of things which are so important to success,” Couder says.
You and your people both want to feel comfortable with them making decisions independently. So first, you need to spend time giving them context of how to make those decisions and their impact on company.
“This is a part of the delegation and control,” Couder says. “As the company gets larger, I delegate more and more, but I want to make sure that we still have the proper controls in place and make sure that everything is moving the way that it should.”
By giving managers leadership best practices and skills that they can pass on to their teams, you push those practices out and the organization itself can become more nimble in decision-making for growth. Moving forward, a good measure of your team’s empowerment is how many decisions get pushed up in the organization. If it seems like too many, sometimes giving yourself some distance to think and reevaluate your own decision-making process can help you gain perspective. It also gives management a chance to brainstorm new ideas independently.
“One of the pitfalls is to always be acting and acting,” Couder says. “In fact, if I take a week of vacation, the team always comes back with new ideas and new things to be done.
“As you have a larger company, the best ideas are in the company. The CEO doesn’t need to have any ideas. He just has to listen.”
Dance to the same music
Lastly, when you are talking about scaling a global, multicultural organization such as Oclaro, which has operations in Europe, R&D in North America and manufacturing in China, to more than $1 billion in revenue, everyone in the organization needs to be working toward the same goal if you are to have any chance of success.
“You need to get the whole team and the whole company to be pushing and pulling in the same direction,” Couder says.
“So it’s also to encourage people to talk to each other and to learn from each other.”
That is where internal communication becomes incredibly important.
“There are three dimensions to the flow of information, top down, bottom up and also networking at the company level,” Couder says.
For a company that is growing very quickly, it’s vital to have good communication so that everyone’s expectation is clear and employees can work in harmony across different departments, divisions or operations.
“We need to make sure that we learn the same dance and that this dance fits the music,” Couder says. “Before in the company, you had different music and different sides and different dances, and therefore, the cooperation inside was a lot more difficult.”
To get everyone on the same page, Couder created a cross-functional task force to simplify and streamline some of the company’s key processes such as product life cycle, and train everyone — executive team included — on a set of leadership best practices. Part of that training included learning a standard vocabulary for operations that would be used by everyone in the company worldwide.
“You create a common language and that helps to have everybody dance to the same music across the company,” Couder says.
“When we talk between different geographies between China and the U.K. or California, we have the same terms and the same words,” Couder says. “We know exactly what we are talking about. There is now no ambiguity in what we want to do.”
When it comes to top-down communication, Couder believes that there is no replacement for meeting with your team in person.
“Through the questions, I get a pretty good understanding of what they know, what they don’t know and what kind of progress they are making,” he says. “That is one measure I use, and unfortunately I can’t find any replacement for travel. Video conference is great, but it doesn’t work for that. …You need to feel and communicate your actions with the people.”
Couder schedules a half hour with each of his direct reports three times a month to talk about their progress and maintain alignment on the organization’s goals. Whenever he travels, he also meets with his leadership teams during brown bag lunch sessions to find out what is working, what isn’t and offer his support to meet any challenges.
With a strong, empowered team that has everyone pulling in the same direction, Oclaro is no longer a bunch of pieces, but one united company that can scale successfully for growth.
“If you want to be able to be organized as a company, you can be empowered but within a certain context, within a certain set of processes and methodologies and tools that are common to everybody in such a way that it boosts harmony in the way we work,” Couder says.
“We know that we now have the best practices and the tools, and the means and the people involved to be able to compete in a much more effective way.”
How to reach: Oclaro Inc., (408) 383-1400 or www.oclaro.com
The Couder File
Chairman and CEO
Education: Paris, Ecole Superieure D’Electricite
First job: Teaching in Africa at the Abidjan University
What would your friends be surprised to find out about you?
I have raised six kids and have nine grandchildren.
What do you to regroup on a tough day?
Hiking in the mountains is my favorite getaway.
What is your favorite part of the job?
Do you have an innovation tip?
You always need to invent a better way of doing what you do, a better way of communicating, a better way of writing a memo, a better way of making a presentation. It’s not only about product innovation. It’s about finding ways of doing things better in a smarter way. It’s about working smarter, not only harder.
Couder on choosing the company’s name: Oclaro is the new name that we choose to merge Avanex and Bookham. We are big believers that when you merge two companies of similar size and you have one which is acquired and the other which is the dominant … by adding a new name and a new set of values, that helps in fact create a new company. Oclaro stands for optical and clarity, which is how we created the name.
Jeff Heintz isn’t bragging when he says the legal firm where he is managing partner, Brouse McDowell LPA, made it through the recent recession without missing a beat ? it’s a matter of fact that the firm only had a few scratches.
“We did OK because we stuck to what we did best; I think our reputation served us well,” he says.
Once Heintz realized that the 92-year-old company’s brand was the best weapon in his arsenal to fight the recession, he instilled a way of thinking to bolster that premise for the 120 employees.
“We adopted the philosophy that we are going to control the kinds of things we can control,” he says.
The first premise pertains to the quality of work, an obvious aspect that can be controlled.
“If you work hard, and you have high character, and you behave in a manner that is befitting of things like ‘A Lawyer’s Creed’ and ‘A Lawyer’s Aspirational Ideals,’ good things are going to happen to you,” Heintz says.
“If you develop skills that enable you to help your client as a technician and develop the feelings that enable you to discern how best to direct your client, whether or not a particular strategy has short-term or long-term benefit, then you can become a trusted adviser,” he says.
“There’s no better feeling in the world than being a trusted adviser, somebody who works hard, develops a business and builds it into something grand, and it is the centerpiece of that person’s life and perhaps that person’s family,” he says.
Place a high premium on community involvement, and feel an obligation to give back to the extent you can by participating and furthering the efforts of nonprofits and volunteering because it is the right thing to do.
“It also gives your people an outlet other than just coming in and putting on their miner’s helmet and cracking away at work. It keeps them fresh, focused and gives them some perspective.”
Dedication to clients can also be controlled.
“We’ve had relationships with clients that go back decades,” he says. “We’ve been through tough times with clients and we’ve been there for them. This time it was tough times for everybody.”
With a relationship that has developed trust and understanding over the years, there are often mutual benefits.
“You and your clients benefit from the strength and depth of your relationships because businesses across the board were facing issues that they never faced before, having to consider choices that they never considered before, and I think it is a considerable comfort to them to know that when they would pick up the phone to call their advisers, it’s a number that they have been calling for 30 or 40 years.”
One of the tools that may serve you in being open with clients is what Heintz calls the “sneaky direct approach.”
“You just sit down with them, and you tell them the truth,” he says. “You let them know even if you can’t lay out for them chapter and verse what will happen, you lay down for them as best you can your belief about what will happen and what steps you are taking to control what can happen. I think people tend to react well to that.”
Another factor to control is the seriousness with which responsibilities are taken.
“Take that commitment of trust very, very seriously,” Heintz says. “One of your first thoughts should be how is this going to benefit your client ? not how much money can you make, not how quickly can you get this job done, not how much personal goodwill can you get from this.”
As a final matter, protect yourself as best as you can against the things you can’t control.
“Ignore a lot of the chatter for things that happen at the federal level ? the preoccupation with the recent Washington gridlock, for example ? as difficult as it is,” Heintz says.
How to reach: Brouse McDowell LPA, (330) 535-5711 or www.brouse.com
Availability is king
It’s been said that no matter recession or economic growth, your ability to succeed in business is only limited by your availability to your customers.
Jeff Heintz, managing partner of Brouse McDowell LPA, believes in that. In fact, he has his home phone number on his business card.
“If you make your clients know that you are available to them pretty much 24/7, they appreciate the commitment and are very conscientious how they use it,” he says.
Likewise, cascade that premise of availability throughout your staff, from top to bottom.
“If you are accessible, that’s a talisman of your commitment to your clients,” Heintz says.
“Don’t tell them, ‘You need to get a hold of me between 9 a.m. and 5 p.m. on Monday through Friday because I’m not going to look at my mail over the weekend, and I’m not going to answer my phone.’
“Not everything’s an emergency, and there are people out there that live their lives at general quarters ? and everything’s an emergency ?but there are emergencies out there, particularly as we increasingly get to a global economy where it may be 7 p.m. on Friday night in Akron, Ohio, but 9 a.m. elsewhere on the globe where people are at work when you are at play. But most people use their best judgment, and they have the ability to discern between what’s an emergency and what’s not.”
President Doug Kovatch knew the timing was right to lead the multimillion-dollar plant expansion for Kovatch Castings Inc. After the company secured a $1 million grant in 2010 from the State of Ohio’s American Recover and Reinvestment Act, he now had the capital to combine the company’s own $2 million to expand its Green, Ohio facilities by 16,000 square feet, add 45 new employees and invest in new equipment.
“It was a $3 million risk to do this expansion and reinvestment into the business, but at the same time, I was very confident that it was the right thing to do at the right time,” Kovatch says.
Financing aside, there were a lot of other aspects of growth to think about. Facing the logistical challenges with moving equipment, altering processes, and making sure production continued to move efficiently, he also had to keep customers satisfied and employees engaged throughout the transition. What made it all possible was the company’s culture of teamwork and enthusiasm, which has been a key part of its success so far.
“We really felt that we were able to overcome that just with really excellent communication and leadership and the support that I have for my people,” Kovatch says.
While the new facility will enable the company to go from its current $16 million in sales to more than $25 million next year, there is still much unforeseen with the current economy. By keeping a focus on collaboration, Kovatch prepares his team to meet any setbacks or challenges ahead with positivity and creativity.
“That helps them feel that they are part of what we are doing and engaged,” Kovatch says.
Including people in the decision-making process during a growth period also encourages employees to accept the new level of flexibility it takes to adapt in an ever changing business environment. It means operational and structural changes, but also handling the ups and downs that come with an ebb and flow of new business.
“Some business will be lost and that’s just sort of how that goes,” he says. “We all have to come to accept that. But it challenges us to grow in automation, to constantly be focused on cost reduction, servicing customers, shortening lead times, doing these things that maybe the low cost providers don’t do as well.”
One way the company encourages teamwork is fostering a work environment that is committed to serving others, not just its own bottom line.
“We try to be a light and set a good example to other businesses around us,” Kovatch says.
“I think that really inspires people to do their best.”
Kovatch says it’s important to remember that just because you are growing successfully as a business, you shouldn’t start thinking you don’t need the input, help or advice of others, or stop giving yours.
“We don’t want to ever get too large that we don’t forget the people who are most important,” he says.
“We understand the importance of giving back, of understanding that we as a group are much bigger and have a bigger impact on the world around us than any one person alone.”
The company gives a percentage of its quarterly profits to both local Akron organizations and others all around the world, such as Samaritan’s Purse, which runs a project that takes shoeboxes and fills them with gifts for the kids during Christmas time. This year, the company’s 195 employees aim to send out 1,000 shoeboxes with clothing, toys and school supplies.
“With our employees, we had to remain adaptable to a changing environment, which means lots of problem solving along the way and keeping people positive and focused on the goal,” Kovatch says.
“There’s real power in group dynamics and in working together as an organization to impact the world around us.”
How to reach: Kovatch Castings Inc., (330) 896-9944 or www.kovatchcastings.com
As Kovatch Castings Inc. celebrates its 35th year doing business in Akron, President Doug Kovatch continues to be an advocate for the region’s manufacturing industry.
“Akron is a great location for manufacturing,” he says. “We have a terrific labor market here. We have materials. We have a supplier base. We have a reasonable cost structure. It’s been a very good place for us to do business.”
For Kovatch, Akron is also an attractive location because its low labor costs allow the company to do finishing operations such as machining and plating much more cost effectively than somewhere on the east or west coast, where labor rates are much higher. While the company has secured a significant amount of new business this year, it’s not just from promoting its own offerings.
“What we do is utilize trade shows and marketing promotions to promote this area,” Kovatch says. “We’re growing because we are actively pursuing new business all the time.”
He also participates in the local Akron Chamber group that brings together leadership from different industries to support a dialogue on regional growth. This organization is extremely valuable he says, because of the resulting wisdom that comes from many joining together to help on another.
“Those kinds of dialogues where CEOs can come together and help and support and feed off of each other’s ideas are very positive and very beneficial,” he says. “I’ve grown and I think improved as a result of hearing others perspectives.”
In the report “Pipeline’s Broken Promise,” Brenda C. Barnes, then the chairman and CEO of Sara Lee Corp. says: “As hard as companies work to obtain top talent, they should work equally as hard to retain top talent. As corporate leaders, we must listen to the growing needs of our greatest assets, our employees. This means creating a nurturing environment that continuously develops diverse talent at all levels of the organization.”
Barnes’ comments were made in light of a recent Catalyst report on how the corporate pipeline has failed women. I believe her comments hold true not only for women but for minorities and organizations as a whole.
Not long ago, it was commonplace to proudly work for one company for a lifetime. But unlike our parents’ generation, employees now expect more than a paycheck in order to stay in their jobs. They want to know that their contributions are valued. They want work environments that accommodate their lives and give them opportunities to learn and advance. If you don’t offer these things, they’ll find an employer who will. We’re on the verge of a talent war, and complacency will be the hallmark of those companies on the losing side. In other words, recruiting top talent isn’t enough. You need to give them reasons to stay.
Yet retaining diverse, qualified employees and promoting them up the company ranks doesn’t happen overnight. Here are some tips to get you started.
Take a long, hard look in the mirror
Begin by asking yourself whether you’re contributing to the problem. How are decisions being made about promotions or new assignments in your organization? Chances are there are organizational barriers and roadblocks in place that are inhibiting diversity in senior management positions. Though they may not be openly stated, these barriers often come from leadership in the form of beliefs about family roles, child care, capability perceptions, other gender or race biases and negative attitudes based on past experiences. If you’ve ever had a thought such as, “That job would involve too much travel for a working mother,” then this applies to you.
Reward those who sponsor strong leaders
Not to be confused with mentoring, sponsoring means actively helping talented staff rise through the ranks — going to bat for them when needed, shepherding them, lobbying on their behalf to ensure that they receive deserved opportunities. Sponsorship is a key factor in ensuring that bright leaders ascend the ranks. Send the message that you’re serious about sponsorship by rewarding senior leaders who effectively act as sponsors.
Stay ahead of the talent curve
Don’t rely on employees to nominate themselves for leadership opportunities. While some employees will more than gladly engage in self-promotion, they won’t necessarily be the ones who are most qualified. Women and minorities may be less inclined to put themselves forward, not because they don’t want the opportunities but because they haven’t developed mentors or sponsors at the executive level. To ensure that you’re cultivating the most talented group of leaders, develop a system to identify the key competencies required of executive-level positions and fairly evaluate staff.
Winning athletes do it, and you should, too. Build your strengths across the spectrum. Make sure that talented staff rotates through the organization, developing an understanding of key functions. It’s particularly crucial to ensure that women have profit and loss responsibilities if they’re to advance to executive positions.
We’ve witnessed these past few years an increasingly overburdened work force, with people routinely assuming the responsibilities of multiple positions and technology enabling (and demanding) that people work at any hour from anywhere. The risk of burnout is higher than ever. Environments that promote a work-life balance are essential to keeping employees engaged. Flexible environments that allow employees to determine how and where they best perform are going to outpace more rigid workplaces.
Increasingly, competitive, prospering organizations will be marked by their diversity, their flexibility and the awareness that thriving employees lead to greater innovation and achievement. If you think you can’t afford to invest the time in creating a diverse working environment, think again. You can’t afford not to.
Donna Rae Smith is the founder and CEO of Bright Side Inc., a behavioral strategy company that teaches leaders to be masters of change. For more than two decades, she and the Bright Side team have been recognized as innovators in organizational and leadership development and the key partner to more than 250 of the world’s most influential companies. Donna Rae is a guest leadership blogger for Smart Business and the author of two leadership books, Building Your Bright Side and The Power of Building your Bright Side. For more information, please visit www.bright-side.com or contact Donna Rae at firstname.lastname@example.org.