Monson was supposed to start in January 2009 to help lead the company through an economy that had battered the worldwide sign and graphics franchise system. When she was finally able to make it into the office in February, sales were down and layoffs were inevitable. The challenge was how to rally the remaining employees while finding a way for the company to grow when the only signs a lot of customers were interested in read: “Going out of business sale.”
Compounding her difficulties was the fact that she was replacing the founder of the company.
“My concern was, is the outgoing founder and CEO going to truly step back and give me the reins? How will the franchisees and corporate employees respond, and then layer on the extra complication of a comparable store sales decline in a very tough economic climate and (there being) a lot of angst and concern on the part of the franchisees because of that,” Monson says. “Even if I was not a new CEO, that would have been a challenging time.”
Address the immediate concerns
From the start, Monson wasn’t the fan favorite because she had to eliminate positions.
She communicated to those individuals that their position had been eliminated, and immediately following those conversations, she had a company meeting that same afternoon.
“I talked about the changes, the reasons for the changes, that I could not promise that there would be no additional changes, but that I was going to be working very hard to get the business turned around,” she says.
She provided monthly updates after that, addressing what was happening with same-center sales, revenue, what the company was doing and how people could make a difference.
Whenever you’re facing tough times like this, she says you absolutely have to communicate with your employees about what’s going on internally.
“Given an information vacuum, people will always assume the worst,” she says. “If we don’t share what’s going on, our employees are listening to the news, they’re watching the headlines, they’re picking up a newspaper, they’re talking to their friends who have been, perhaps, laid off, and in the vacuum of honest information and direct information, they’ll just assume the worst.”
Despite her best efforts, the problem wouldn’t go away. Anytime her door was closed for prolonged periods of time, layoff rumors started to fly. She knew there was lost productivity because of worry, but she understood their concerns. Instead of focusing on the productivity loss, she tried to be positive but honest.
“People want leaders, need leaders, who are positive,” she says. “You can be positive realistic. Positive doesn’t mean Polyanna and not seeing the reality, but your people need to believe that you see a way to get to the end result, and you have to portray that in a positive way.”
In early summer, she had more bad news but again was honest with employees. In lieu of more layoffs, she decided to have a pay freeze and eliminate the 401(k) match, profit-sharing, and Christmas and executive bonuses. She explained what kind of savings those choices would bring to the company and why that made more sense than a further head count reduction.
“There will be tough times, but you can still be very open and honest, and you can talk about the realities, but do it in a way that it’s not negative — ‘We’re doing this for the betterment of the company. We’re doing this to support our franchisees. We’re doing this to get through these tough times. I believe in this company; I believe in this industry,’” Monson says.
In addition to addressing the concerns that employees had about layoffs and the benefits cuts, Monson also started working to build a strong rapport with her 100 corporate employees and the approximately 1,800 people across more than 450 franchise locations.
She set out on a 28-city town-hall tour where every Tuesday, Wednesday and Thursday she was at a different franchise location trying to get in front of as many of her franchisees as possible. During those tours, she did a seminar to show them how to increase sales and how to decrease expenses and improve cash flow.
Internally, she worked to educate employees about costs and the revenue structure. So instead of simply saying things like, “Take the paperclips off before you throw pages away,” or, “Turn the lights off when you leave instead of waiting until the cleaning crew comes in at 11 p.m. and does it,” she explained why.
“Unless you educate employees about the financial structure of your company, they assume that 98 percent of revenue flows down to the bottom and is profit,” Monson says. “It’s important to educate them about what are the cost of goods — what’s our overhead, what does it cost to turn on the lights here.”
She also met with both groups individually to ask them questions and to learn more and better understand the business and them as individuals.
“If it’s franchisees, I’m asking them, what are their biggest challenges in the business, what keeps them up at night, what can we do to assist them?” Monson says. “If it’s staff, it’s going to be, ‘Tell me about yourself, what are your dreams, what would you like to be doing five years from now, tell me about your family, how do you spend time on the weekends?’ In addition to that, it’s things like, ‘What do you like best about working here, what are the things that drive you crazy about working here, what are the two things that we could do that would give you the tools or the time or the ability to be more productive, and if you could change one or two things about the company, what would it be?’”
From there, she implemented things that could easily be changed to show she listened. For example, common complaints from staff members were that they didn’t like having to punch in a series of codes every time they wanted to use the copy machine or make a long-distance phone call. So she eliminated the codes so that people can walk up to the copier and just hit copy or pick up the phone and dial.
“Are some people making personal calls they shouldn’t? Maybe they are, but I’d rather take away those barriers to productivity,” she says. … “They might seem like little things, but to the employees, they were big things.”
In addition to listening and implementing easy changes, she also took notes on employees and franchises so she could relate to them on a personal level. So if, for example, Oren loved golf and Jason was a big hunter and Jimmy is a huge Cowboys fan, she made those notes. Then, as she interacted with those people, she had something aside from business to talk to them about. She also sent birthday cards and company anniversary cards home to the employees, complimenting them, thanking them and adding a personal reference from her interactions with them when possible.
“It’s important for the CEO to keep in touch with the personal side in addition to the business side,” she says. “It’s very easy as a leader to get very busy during the days and focused on business issues and challenges and perhaps not spend as much focus on the person side, so I try to make sure that I do that.”
Create a plan
Around the same time as her town-hall tour, Monson also rallied her corporate employees together to create Operation Fast Forward to focus on helping the franchisees increase their profitable sales, decrease their expenses and assist them with restructuring debts.
She invited anyone who wanted to help to come out and brainstorm ideas. They also did a SWOT analysis — strengths, weaknesses, opportunities and threats.
“We said, if business went the way we wanted it to, what would it look like at the end of 2010,” she says. “From there, fill out some key objectives. We said, ‘Who wants to work on what team to put the meat on the bones for each of these objectives?’”
She says that getting employee involvement is especially important to have a plan be successful.
“Whenever you involve the team in creating a business plan, it becomes their plan,” Monson says. “The worst thing that leaders can do is go create their business plan and create their goals without any input because then when you say to them, ‘OK, here’s where we’re going,’ they’re thinking, ‘What do you know? You’re up there in the ivory tower. You don’t live the challenges we live every single day.’
Now once they had these sessions and came up with ideas, she then had to move forward. That can be a difficult challenge, especially when your team generates many ideas. She says to evaluate each on its cost and benefit.
“You have to make sure that all of our stakeholders benefit from our operation,” she says. “It’s using some wisdom and judgment from where to put the resources based on what you think they’re going to give you as far as the payoff. Sometimes you have to guess because you don’t know directly.
“You do as much research as you can and then you make a decision. Part of leadership is being willing to make a decision without having all the answers because you never can have all the answers. If you have to wait until you have all the answers, you’re just going to have analysis paralysis. Part of it is taking educated risks.”
When you look at each idea from these perspectives, it will help you make those crucial decisions, but at the same time, it helps employees understand why certain things were selected versus others.
“They feel engaged and they feel the plan is their plan, and they understood that we didn’t have unlimited resources, so we couldn’t do everything,” Monson says. “We had to invest the resources where we felt they’d get the highest return.”
One of the major initiatives she implemented was moving the business consultants, who go out to the franchise locations and help them implement new programs that will help their businesses, to the regions they oversaw. In 2009, they averaged 33 consultant visits a month with franchisees, but last year, they were averaging about 113 a month. As a result, sales have increased since implementation.
As these sales have increased as a result of her plan, Monson made good on her promise to reinstate the benefits she had eliminated. In June, about a year after the pay freeze, she gave raises. She also laid out plans to add back some sort of bonus toward the end of the year and was hoping to reinstate the 401(k) match early this year.
Overall, Monson is pleased with the progress she’s seen at Fastsigns, and now she feels that she’s garnered the trust of her employees and franchisees.
She says, “I’d say we’ve gone from the franchise group that had some concern of, ‘Who’s this new person we don’t know coming in as CEO?’ to, ‘Wow, she really cares about us, and she’s smart and she understands the business,’ so that certainly has changed.”
How to reach: Fastsigns International Inc., (800) 827-7451 or www.fastsigns.com
Did you know that Euclid Avenue used to be called Buffalo Road, which was a shuttling ground for the Underground Railroad? Most Clevelanders tend not to know the interesting factoids behind the city’s history, but that’s something that Chris Ronayne is trying to change. He is the president of University Circle Inc., the development, service and advocacy organization that’s responsible for the growth of University Circle as a premier urban district and world-class center of innovation in health care, education, arts and culture.
Ronayne spoke at the Smart Business Live luncheon Oct. 19 about how UCI is driving economic development by educating people about the region and attracting them to the University Circle area, but he also spoke about the leadership that’s required to take Northeast Ohio to that new level of excellence.
“Start with a plan,” he says. “Do we have a plan for our city? What’s our coordinated economic plan for Cleveland and Northeast Ohio? Once we get that plan, work that plan.”
The plan for University Circle was initially outlined 150 years ago, and the groundwork for UCI was laid 50 years ago, so Ronayne is simply building on a strong history that already recognized health care, education and the arts as vital to the region.
“It’s about leveraging anchor organizations to develop a true new economy,” he says.
That requires bringing together local leaders to work collaboratively.
“You have to find public, private and nonprofit leaders willing to work together,” Ronayne says.
Then it’s about coming up with ideas. Ronayne says UCI tackles all of its new initiatives just as if they were campaigns, and he says you have to make sure you target the areas that have true potential.
“Target your growth initiatives,” he says. “Target your projects, and target your precious resources to places that are working.”
And he says it’s important to look at what’s going to be successful and last in that urban area, and that requires going beyond the obvious. For example, bringing grocery retailers to the University Circle or downtown areas doesn’t mean going out and getting the big-box retailers. Instead, it means looking for local players, such as Constantino’s Market, which is already operating on West Ninth Street, to move into the University Circle area.
“Sustainability is not just an environmental word,” Ronayne says. “It’s a business word, a financial word.”
How to reach: University Circle Inc., (216) 791-3900 or www.universitycircle.org
“The hard drive business had been sold, and we had a number of businesses under a tremendous amount of pressure from the dynamics of technology,” he says. “That was the challenge — where were we going to take the company to make us be successful?”
He decided fairly quickly that the company had to transition from a device-focused OEM company to a storage systems company focused on backup recovery and archive segments of the storage industry.
“Part of your job as a leader, which is especially true in technology, is getting on the right side of gravity,” the chairman and CEO says. “There are certain things you do that just seem to work. Forces around you are helping you succeed, and the opposite is also true — when you’re pursuing something that’s just an uphill battle. Part of driving your strategy is making sure you get into a position where you’re not working against gravity — the gravity is working for you.”
That’s the biggest challenge he had to tackle as a result of Quantum’s position in product segments that were going against gravity.
“We can fight all day long to try and stop it, and no matter how good we were, that working against gravity was really a problem,” Belluzzo says. “We spent a lot of time getting ourselves in an opposite position where we’re in markets that are growing, we’re in technologies we know how to do, there are a number of things that are working for us, and we talk about that a lot. I often ask when we’re facing a business problem, ‘How much of this is gravity working for us or against us, versus we’re just not performing well?’
“No matter how good you are and how experienced you are, if you’re working in a situation that is against the laws of physics, as a leader, you’re responsible to not just fight that, but you’re also responsible to get your business and your team working so the gravity is working for you instead of against you.”
He led the company through a number of changes, and by 2006, Quantum was still under tremendous pressure. But that didn’t stop Belluzzo from borrowing $500 million to complete an acquisition.
“That really was the watershed moment in terms of getting us to where we are today,” he says. “We were struggling up to that point, and we had to do something big. This was it.”
Here’s how he used the acquisition to move Quantum forward.
Get your people in place
Acquisitions are always huge undertakings, and the key to Quantum coming out of this successfully was to integrate properly, which started with getting the people aspect in place.
“We took on a strategy that was harder to do — [take the] best of class in both companies to build a new company,” Belluzzo says. “Textbooks tell you that you acquire someone, you integrate deeply and go forward. We didn’t have all the right ingredients at Quantum to pursue our strategy, so we had to acquire and integrate in such a way that we had the best of both worlds.”
That meant that both the executive and the general employee base would be chosen from both companies.
“We took an unconventional approach to doing this,” he says. “That was essential for us to have the skill set and background that we needed to move in this new direction.”
But there are certain things you have to look at to make these decisions — it can’t just be a random selection or who you like best. Belluzzo looked at two things, the first being strength of capabilities in every area — manufacturing, sales, R&D and so on.
“I had to make the decision, ‘Which company was better at that?’” he says.
Then the second part was looking at which leader was better.
“Often, those are the same things, but other times, there was a bit of a mix,” Belluzzo says.
While he worked to pick the best from both companies, he also had to look outside both organizations at times and make hires in addition to the moves and the downsizing.
“We had to, pretty quickly, change the skill base that we had as a company,” he says. “A lot of companies that go through this fail, and I would argue that most of them fail, and part of it is because what they need to do to be successful going forward is very different than what they know how to do. That’s a very hard path to cross, and we had to be aggressive about that.”
Where he had gaps in skill sets, he looked to bring in people to fill those talent voids.
“You start by bringing on a few people who are the real experts in the field,” he says. “They help you define what else you need and how you want to get them. At Microsoft, this was a technique used often that if they were going to go into a new field, they would hire one or two key people and build around them, and we did a lot of that also.”
This comes down to a lot of personal recruiting on your behalf and talking them through your vision.
“There’s not a formula for how to do that,” Belluzzo says. “That’s what part of leadership is — to be connected with people and to recruit and to make sure you know what you want to build around.”
Ultimately, he was largely successful, but he says it’s important to recognize that you won’t get every move right.
“I feel like 80 percent of what we did initially we did right, and we had to adjust to the 20 percent that we may have done wrong in that process, because you never get it fully perfect,” he says.
That’s a key in integrating acquisitions — not getting bogged down in the decision-making process and instead forging ahead.
“We were decisive,” he says. “We were decisive, and we didn’t let things float, because we didn’t have time to let things develop. We had to be clear about what we were going to do and move forward with conviction.”
His decisions weren’t always popular though, and you have to be prepared to handle that.
“Frankly, a lot of people were dismayed at how I went through this process, because they thought I should pick people I was closest to,” he says. “I spent a lot of time with people one on one. I had a lot of input to make those decisions. I knew it was a matter of survival. I put my neck on the line to borrow this money and make this move, and I was not going to make decisions based on anything other than what would drive us to success.”
Whenever you’ve got so many major changes going on in an organization, it’s critical that you keep all the affected parties in the loop about what’s happening.
“You spend a lot of time developing a clear communication strategy, and make it clear and as direct as you can in what we are going to do,” Belluzzo says.
He spent a lot of his time visiting his teams all over the world during this process to make sure he was telling them what his plan was and what the decisions were.
“We used the traditional broad communication around employee meetings, but in addition to that, [there was] a lot of face time in front of groups. I know shortly after the launch, I flew around the world and visited almost every site to tell them what we were going to do, what the implications were, to stay very close with people through that process,” he says.
One of the challenges in communicating such a large-scale plan to such a large group of people is ensuring that what you say doesn’t get ignored.
“I don’t know if you know that immediately, but you keep following through and reinforcing the message and expect people to come on board,” Belluzzo says. “We try to make it clear that this is where we’re going, and we need you to be with us, and you can take some time to sort it out, but ultimately you have to get on board.”
You have to make the judgment call as to when people need to get on board.
“There’s no formula for that,” he says. “It depends on the person and the areas they’re in and how critical they are, but you can’t give it very much time.”
Some people self-selected out by saying that the new direction wasn’t what they wanted to do, and he was OK with that.
“You ask, ‘What are some of the success factors?’ and it’s to get a team that has the skills and believes in the future and can work together collectively to take on the challenges that are ahead,” he says.
Between what you’ve created and who’s stayed, you should be on the right path.
“You get it mostly right, but there’s subsequent changes that you inevitably need to make because it doesn’t quite work,” he says. “It is a challenge, because when you go through transformation like this, especially for us, we were de-emphasizing certain skills in the company, certain technical skills in the company, and we were embracing new things, and there are a lot of people who feel threatened by all of that. They used to do a particular thing well, and we just said, ‘We’re not going to do that anymore.’ That’s hard.”
Move ahead with your plan
As he moved forward after the acquisition, he needed to make sure that the new Quantum was on the right track, so he created a scorecard to ensure that happened.
“It would be based on a set of objectives of what we think the most important priority is,” he says. “Virtually at any point in time, I’ve got a very short list of the things I think we need to get done, and so I will communicate those. We will have metrics around them.”
Some of those are a year in duration and others will have more intermediate check-in points. He shares these across the company and they grade themselves on meeting them. Having check-ins helps ensure they’re on the right path.
“I like to lock things down and run hard for six months,” he says. “Then you kind of reflect on what’s gone well and what’s not working and what’s changed, and then you alter it and go put your heads down and run for another six months. That’s about the rhythm that we were on. We’ve not changed the goal, but we do change how we get there.”
In addition to the data, Belluzzo was also careful to pay attention to his instincts.
“There’s data and it’s intuitive,” he says. “You have to follow your intuition about it. For me, the way I know to make a change is if I’m going down a path, and I get really uncomfortable and I start challenging myself, I have a lot of internal turmoil over something, and I reach a point where I say, ‘OK, this turmoil has been here too long, and I need to find a different path.’ The faster you go through that process, the better off you are.”
When you combine your numbers and your intuition, you should know if you’re on the right side of gravity again.
“You can look at your scorecard and look at your results and say, ‘Are we improving in this area as fast as we need to?’” he says. “I would say that if my intuition feels right and the numbers and the progress look right, we keep going. The difference being you spend time looking at the future — you’re always trying to assess whether you’re moving in a direction that’s ultimately going to be successful.”
Now, more than four years after the acquisition, Quantum has reached $681.4 million in total revenue in fiscal 2010. The business has successfully transformed and is profitable.
“Borrowing money was a pretty controversial move,” Belluzzo says. “Yet that’s how we were able to put together enough of the strength that we needed to get to the point where we are today, which is a very profitable tape business and a growing disk and software business.”
How to reach: Quantum Corp., (408) 944-4000 or www.quantum.com
When John A. Eisenlau was a child, he used to love building tree forts in his backyard. He was constantly creating something. His love of creating led him to attend design school, and that love has never left him.
And while it’s something that he’s passionate about, Eisenlau will also argue that good design is everywhere you look and critically important to success these days.
“Good design sells,” he says. “I think there are good examples of design selling in the world right now. Look at iPods and things of that nature — Apple has their hands wrapped around it nicely. The car industry has been doing it for years. There’s no question that good design sells. People want good design. They want sustainable design. They want timeless design. So my vision begins with design.”
His vision for HOK, the $496 million international architectural design firm of which he co-leads the justice business unit and serves as management principal of the Atlanta office, tries to address how design is constantly evolving and how it can enrich not only his clients’ lives but also the lives of his employees.
“They need to be motivated and captivated,” Eisenlau says. “They need to be challenged on a daily basis, so we spend a lot of time talking about design and where the design world is going. Americans have a greater appreciation for it, whether it’s fashion or automobiles or your home or the world of electronics. There are certainly great examples of where design sells. Our vision begins with that — being good designers and being good thought leaders.”
In order to effectively do that, Eisenlau has to make sure he creates the best environment possible for employees, and he does that by offering training, building trust with them and providing a nice physical environment.
Eisenlau is well experienced in the industry and isn’t interested in participating in long hours of additional training, but just because it’s not something he’s passionate about for himself doesn’t mean he doesn’t see excitement in others about it — particularly the younger generation of his work force.
“They’re much more motivated to learn more, to expand their skills and to reach out to any new opportunities,” he says. “It’s very interesting.”
And that’s consistent across all of the HOK offices globally. Staff members are asked to complete 40 hours of additional training in a calendar year, and those young people are eating it up.
“You have a lot of people motivated by something different than I am, and they’re not necessarily motivated by money — they’re motivated by thought, by creativity, by new challenges every day and by not being told when to come and go,” he says. “It’s a very unique mindset to manage and to stimulate.”
The additional training opportunities through HOK University offers a way to stimulate them. For example, someone may be interested in the design of one particular type of facility, such as hospitals or airports, and if that’s what the person is interested in but not necessarily working on, it gives the employee a chance to learn about that area where his or her interest lies.
“The sort of bandwidth of your employees is much broader, and the fact that it’s wrapped into a normal work year — this is not something we expect somebody to go out on a Saturday and sit around and study this information,” he says. “We expect it to be done within the normal course of the business year.”
Employees are compensated for the time they spend in training, as well.
“So you don’t have people saying, ‘I don’t have time after hours to visit my kids or my significant other or I don’t want to burn up my Saturday doing this,” he says.
If you’re not sure where to start with putting together a training program, Eisenlau suggests beginning with the basics. First, define what the skills for each position are.
“Once you define very clearly what everybody’s roles and responsibilities are, then you can offer them the proper guidance and then you can offer them the proper training modules within your organization,” he says.
Then look at what are the basic skills needed to execute on those responsibilities.
“I would probably start with getting a firm understanding of what the proper skills are to sort of execute the product that that particular business leader was producing and make sure that the skill sets were properly addressed,” he says.
For example, for him, that could be basic things, such as defining what the roles of certain positions are or going over basic safety-code issues. Then from there, you can take it up a notch.
“Develop a varied training model that addresses everything from immediate skill sets to the creative side of your business, as well, and develop those training modules,” Eisenlau says.
Once you develop training programs, then you can gauge whether or not they’re effective by how employees apply what they learn to their work.
“A simple example to illustrate would be, let’s say someone takes an HOK-U learning module on handicapped accessibility within the building, and they learn a number of features in a learning module,” he says. “Well, when the actual project that they’re working on would have a code evaluation, there would be clues as to whether or not the training module was effective for that particular individual.”
Build trust in a team
You can probably think back to a time in your career when somebody questioned the quality of work you produced or some other aspect of how you performed your job, and while it may have been frustrating to experience that, how your boss responded probably made it better or made you feel worse about the situation.
As a leader, it’s important to make sure you’re supporting your team members, which is one way to build trust with them and build a good place to work.
“I go to bat for my team first of all,” Eisenlau says. “If their performance is challenged or the profitability is challenged or somebody wants to pull somebody off of one of our projects and move them on to one of our [other] projects, you need to look after your people.”
It’s important to seek out truth in those situations and back your people. It also helps to get to know your people.
“As a leader of your team, you have to stay very close to your people,” he says. “You have to sit with them, you have to be with them, you have to laugh with them, you have to go out and have a drink every once in a while. It’s very important to get to know them.”
Eisenlau is baffled by people who work remotely, because it’s too hard to do this very thing.
“Being with your team and being connected to your team yields the best success,” he says.
If you’re not sure how to start building relationships with people, start with a basic question.
“I’ll often start with what they’re working on,” he says. “Are you comfortable doing what you’re doing? Are you heading in a direction with your career that you want to go in?”
These kinds of career questions can lead to learning if they’re satisfied or not in their current role, but they also open the door for more personal questions as you build that trust.
“I don’t think you should, as leaders, ever underestimate the importance of the environment that you work in,” he says. “Recognize people. Be kind to people and recognize them and talk to them. Make them feel like they’re part of the whole. People get disenfranchised really easily when they just don’t feel like they’re part of the team.”
Beyond that, the last part of building trust is to make sure you’re sharing information with your employees.
“You need to reveal information — that’s one thing I’m learning as a leader,” he says. “Transparency of thoughts and ideas is very important. People want to know. People want information. This is an information-based world. You will not get people to trust you if you are hoarding information and not being honest about the information. I don’t care if it’s good news or bad news — put it out there.”
It’s also important to put it out there in a timely manner and not after the rumor mills have already begun to spin.
“Put it out there quickly and make sure you have your facts straight,” Eisenlau says. “People admire you for that, and they trust you for that as long as you’re clear and honest. It’s the people who hold information at bay and don’t disclose it — that’s where the trust, certainly in a creative environment, really starts to break down.”
This is particularly important if your work force is composed of younger people, as the new generation of workers wants to know information.
“People want information, and they want to know what’s going on,” he says. “They want it accurate, and they want it quickly, so if you’re running around hoarding information or you don’t have all your facts straight or you’re too fearful to put that information out there, that’s not a good success story.”
Create good physical spaces
Eisenlau is the kind of guy whose friends have stopped inviting him over for get-togethers and parties.
“It always intrigues me how people live or how they want to live or they aspire to live,” he says. “Friends don’t invite me over anymore, because I’m a little outspoken usually about their homes. I’m the kind of guy that takes my physical environment pretty seriously and my work environment and so forth, but I think it really shapes you.”
He says it’s important as a leader to provide a good physical work space for your employees.
“The place is important and needs to be aligned with the goals of the company,” he says.
For example, as a design firm, employees should be connected to the community, and his employees don’t want to work in the suburbs, so it makes sense for their office to be in an urban location instead of on the outskirts.
You also need to look at the way your office is set up and arranged.
“Your conference rooms, your lobby, your work spaces, it needs to be fun, and it needs to be light-filled — there’s no question about it,” Eisenlau says. “People just respond better.”
Look carefully at your break area. Does it promote socialization or does it discourage such activity?
“I’m not talking about the old, dank coffee area,” he says. “It needs to be glass, with a nice view, possibly with a nice library with a lot of current periodicals nearby. Make it a stimulating space. And your lobby needs to be a reflection of what you do, too.”
HOK’s is slick, modern and has a very contemporary feel — all of which reflects the company’s vision of being on the forefront of design.
“When people come to the office, it leaves them with an impression, and it should be a reflection of your office — kind of like someone walking into your living room at home,” he says.
What you don’t want is disparity between who your company is and how you present yourself to others. For example, perhaps someone you work with is extremely traditional in their actions, their work approach and even in how they dress, but then you go to their home and it’s very modern and sleek — there’s a clear disconnect between who you thought they were and how they live.
“It just amazes me when you see someone’s physical environment that may be spot on to the way they behave or it could be completely different from what you would have expected,” Eisenlau says.
Don’t let anyone coming to your office be blown away by how you present yourself versus how you actually conduct yourself.
“Your physical environment is very important,” he says. “It says a lot about your company. It will contribute or it will negatively affect the productivity and the creativity of your team.”
How to reach: HOK Atlanta, (404) 439-9000 or www.hok.com
When Juvenal Chavez Sr. and his wife went grocery shopping in the United States after emigrating from Mexico, they soon realized how different the process was here than it was in their home country.
There, it had been more personal and people seemed to care about you, but here, they felt lost in the masses.
“Businesses feed you as a statistic,” he says. “They feed you as one more number. They see you as the economic value that you represent to them.”
He also recognized that many stores tried to understand the Hispanic population and spent good money trying to do so.
“They hire consultants, and they hire people with the knowledge in the area in order to understand the most about these customers,” Chavez says. “I realized that, and I understood that that would be my competitive advantage against them in that area by knowing my customer, by knowing the wishes and desires and tastes for food, the different ingredients. I know the traditions and the language and culture. I can relate not only in the basic needs while in the store but also I relate to them in its totality as a whole experience.”
So Chavez, who had been a high school teacher in Mexico, decided to go into the retail industry. He started with just one small butcher shop about 20 years ago, and from there, he’s grown it into Mi Pueblo Foods, a $300 million grocery retail chain with 17 locations and plans to add three more by next year. The founder and CEO says that focusing on “el cariño y el respecto” care and respect when it comes to both employees and customers has been the key to his success and growth.
He says, “I’m in the people business not the grocery business.”Focus on your customers
Chavez asks his employees to make eye contact each time they interact with a customer, so they don’t miss his or her face.
“I encourage my people to do that honestly, sincerely and naturally,” he says. “It’s been working since day one, and it’s working today.”
It’s a small request, but it’s huge in that it gets employees out of their own world and forces them to focus on the customer, which is one of the keys to Mi Pueblo’s growth over the years.
Chavez says that the first step to focusing on your customers begins with recognizing the extent of your knowledge. While he understood his customers’ needs better than the competition, he still needed to get to know them as individuals to make sure he really understood them on a deeper level.
“I began with the premise that I don’t know the information that I need to know in order to go out there and do business,” he says.
You have to realize you don’t know everything about your customers, and the only way to learn is to ask.
“How are you going to do that by listening and observing and asking them a lot of questions and telling them, ‘I’m here to fulfill a need for you. I’m here to serve you. How can I serve you better? Everyone began with the same piece of meat. How can I put this piece of meat in your hand, onto your table in such a way that represents more value to you?’”
He also makes sure that when he goes to his office or leaves the stores that he walks through the main sales floor so he can see what’s going on and talk to customers.
“The best place to be is where the action is taking place on the sales floor,” he says. “The worst place to be is sitting in the chair, behind the desk.”
He’s gotten great feedback by doing this. One woman pulled him aside and explained that the employees at the meat counter were throwing the meat to each other and flopping it on the counter for her, and it was disrespectful. She went on to tell him that this is the meat she will be preparing for her table at home, and she would like it handled with more respect. Chavez agreed.
“I tell my employees, ‘Imagine that this meat is a gift, and the only thing that is missing is the [tag] that says this gift is coming from me to yourself,’” he says.
It may just be one complaint from one woman, but you never know how many customers have felt the same way and not spoken up. And it’s a simple change.
“You have to use your judgment; you have to use your common sense,” Chavez says. … “You don’t have to invent anything. Everything’s already created. You don’t have to invent the wheel. There are so many processes and behaviors out there in use today by others and used in the past by others. You have to grab them and put them in practice.”
And you have to communicate to your customers about the things that you change on their behalf.
“Bring them and make them part of the change,” he says “You have to create trust and respect and you have to tell them that everything you’re doing here is with the intention to provide that environment to them. In that process, they will tell you what they want, what they don’t like or could be offensive to them.”
And even when customers don’t have complaints and instead offer compliments, he still remembers to focus on them.
“Usually, the biggest compliment you hear is when customers tell you, ‘Thank you thank you for what you’re doing for me,’” he says. “And I will tell them, ‘On the contrary, you’re the one who’s making this business successful and the reason for our existence is you, and you’re the one that keeps Mi Pueblo growing it’s not me.
“Seeing it that way and approaching it that way, and then being accessible to your customers, that’s where the customer continues to see you as the same human being you want to be seen as. No difference.”Focus on your employees
When a new store is opening, Chavez spends an entire week of his time working with the new employees. He talks to them about the vision of Mi Pueblo and about personal development, leadership, how they, too, can become leaders and how he wants to help them in life.
“The first reaction that these people express is how come this guy the founder of Mi Pueblo who doesn’t have the need to do this, is making this personal investment in us,” he says. “I can see people crying, and I can see people asking me very, very personal questions. I can see people totally committed by the second day.”
He gets that commitment from people because he takes the time to come down to their level.
“If you allow your own position to trap you, you can lose the sense of yourself,” he says. “You can lose the essence of what brought you to where you are today. … You have to realize that you are not perfect and that you are vulnerable and that you need others for you to succeed. Tell them that.”
He also takes this approach because he sees himself as more than just a CEO he’s trying to build character into each employee and improve their lives.
“The basic values and the basic vision and philosophy of the company is not changing,” he says. “It’s what’s making us successful in the past, and it’s what’s making us successful today, and the same values will make us successful in the future, so we have to make sure we are teaching most of the people.”
The key is to take the servant leadership approach.
“We’re here to serve others,” he says. “We’re not here to direct. We’re not here with a position of power or a title. We’re here with a position of responsibility of leadership to help others achieve great things in life.”
Because of this respect and care for employees, word spreads fast, and jobs are in high demand when the next store opens.
“We go through anywhere from 3,500 to 5,000 applicants to hire a couple hundred employees,” he says. “Really, in that process, you are hand-picking your people.”
It’s nice to have that many people wanting to work for you, and it allows him to pick people who will buy in to Mi Pueblo’s values and be receptive to his message and leadership approach.
Employees walk through three or four screenings so he and his team can identify if there’s a values match, and Chavez himself asks many questions of potential employees.
“‘Tell me about you. I want to know you. My intention here is to know about you,’” he says. “That’s one of the questions I ask.”
But then he goes deeper. He asks the person, “If I were to talk to your mother, husband, wife or other close relation, how would they describe you? What three or four attributes would they say embody who you are?” Then he asks the converse “What one or two things about you would that same person want to see changed in you?”
He also strives to understand what makes them tick.
“What gives you the passion, the hope, the joy?” he says. “You lose your mood, you lose your temperament, you lose your posture what do you do in order to recover yourself?”
He also asks how they got to where they are now in life and what makes them a successful person today.
“What values?” he says. “What practices? What disciplines? What education? Also, I ask them, ‘Why should I hire you? If you were me, interviewing you, why should I hire you? Tell me about it.’
“Those are most certainly simplistic questions, but they are very tough questions, and I always allow room for them to ask me any questions. I usually tell them, ‘I’ve been asking a lot of questions, and my intention was to get to know you do you have any question for me?’ I always leave room for that.”
And if they ever doubt their worth, Chavez is quick to reassure them as part of his corporate family.
“I tell them, ‘Do you have any doubts about why you’re here? Forget them. We hand-picked you. You’re here because you’re a successful person. You are here because you are part of something big in here. You may not have the skills in your hands today, and you may not have all the solutions to the situations you are dealing with today, but in a few weeks, you will have confidence and the skills in your hand, and you are the one producing the results we look to you to produce, but the values are more important to us.’”
As employees start in their actual day-to-day jobs, he continues encouraging them to stretch beyond what they see on the surface. For example, if a customer asks them something and if Chavez asks why they responded the way they did or why they weren’t able to help them, they often tell him it’s because they’re new.
“I tell them, ‘Think for a moment. No one asks if you’re new, and nobody knows you’re new. Smile. Be yourself. Be present. Be in here ready to open. Don’t let the customer know you’re new in that way. Try to impress the customer in a different positive way so you can give that positive impression,’” he says.
Those encouraging words can go a long way.
“It’s about giving counsel, trust and providing an environment to get ordinary people to be themselves,” Chavez says. “Once you give them the space and once you provide the environment and believe in them, they grow miles trying to fulfill and even, perhaps, exceed your own expectations.”
How to reach: Mi Pueblo Foods, (888) 997-7717 or www.mipueblofoods.com
“We really have to, when we develop products, develop products that we know are going to resonate very strongly with consumers,” he says.
As co-CEO and chief science officer of Mannatech Inc., he’s charged with creating new products for the $289 million global wellness solutions provider. From nutritional supplements to skin care products, he has to develop what’s going to be most effective and well received by customers.
“The biggest leadership challenge is really finding products and marketing angles that resonate very strongly and emotionally with consumers, because they need that ammunition when they go out and talk about our products and basically introduce other people to Mannatech,” Sinnott says.
He’s also doing it in an industry that typically isn’t known for creativity.
“The industry as a whole isn’t really known for tremendous innovation, but what I’ve done in my tenure as CSO here is I’ve brought in some of the innovative pathways that have been used in more innovative industries, like software and computer hardware, where it moves a lot faster and it’s a lot more competitive and taken those practices and applied them to the dietary industry,” Sinnott says. “Not to brag on it, but that’s why our product development process and products runs way ahead of our competition.”
By creating a solid idea-generation process, evaluating the best ones, and then developing a product road map, Sinnott has worked to make sure that Mannatech puts out the most relative products for its customers.
Create an idea-generation process
Sinnott was taking a class in product development at The Wharton School of Business when inspiration struck.
The class was using software that the school had developed to run academic tournaments, but Sinnott saw that it was just what he had been looking for in his business.
“People always bring me new product ideas — slips of paper or articles from a magazine — and I end up with these huge binders of information of stuff that’s not aggregated or organized, and it’s almost too much information to go through, so I’m always looking for a way to sift through these ideas efficiently,” he says.
He recognized that this software could help him do that better by pitting products against each other for evaluation much like the academic tournaments in the class.
He approached the school and got exclusive licensure to use the software, and his new product development plan began.
All of his independent distributors — about 500,000 of them around the world — have the opportunity to participate in the product development process. Each creates a unique user ID and can submit ideas into the system, but it’s limited to one idea per session so the system doesn’t get overwhelmed.
“Generally, the research shows that people tend to have one good idea at a time — and they can come on every single day if they wanted to and put a different idea in if they’re so inclined, but we didn’t want the ability for people to come in and flood the system with 100 of the same idea and cause chaos to the system,” he says.
Once someone submits their idea, then other users begin reviewing it. Simultaneously, the person is asked to review as many as 10 to 12 other ideas. Users rank them on a scale of 1 to 10 — 10 being they like the idea and it has economic potential.
“This software will actually normalize all the ratings,” he says. “Some people don’t like anything, so they rate everything a 2, and some people like everything, and they’ll rate everything an 8, and some people are more in the middle, but this software is smart, and it will understand where these people are coming from, and it normalizes the ratings.”
As people go through these idea round-robins, Sinnott gets the feedback he needs to know how to move forward. Products are typically reviewed a few thousand times before they start to stand out.
“Statistically, the best ideas will rise to the top, and we’ll just skim them up off the system and develop them into new products,” he says.
Initially, he rolled this system out at a major company event to maximize exposure to it, and it took about six months to build up the kind of data to know whether an idea was good, but now it takes only about two months.
“It’s just something that gradually developed,” he says. “Statistically you need thousands to really power this. We’re in that range now where it’s operating really well.”
The system helps ensure Mannatech is getting what would be best for customers because the direct sales associates are out on the front lines every day — much more so than Sinnott and his 400 full-time employees.
“This whole concept is based on open innovation, where regardless of how many brilliant people you have inside your building, you have a lot more brilliant people outside your building. What we’re trying to tap in to is not so much what the employees think because we know what they think — we ask them all the time — but to really find out what the consumer, the people that are buying our products on a regular basis, what are they wanting, what are they asking for?” he says.
“That’s one way to stack the deck in your favor and pick winners as opposed to just randomly going out and sorting through technologies that are out there and hoping you have a winner.”
Evaluate your best ideas
Once the best ideas are identified, then Sinnott has to figure out which ones he’s actually going to implement.
“The best thing is to have a really good process laid out,” he says. “Have a formula that works, and it has to be adapted to your particular culture because every company is different.”
He starts by meeting with his technical and marketing folks to figure out which ideas are most feasible and then prioritizing each on the company’s to-do list.
They first look at technical feasibility. The technical team is consistently surveying what kind of technology is available in the marketplace by attending trade shows, scientific conferences and academic meetings, so they see what’s hot, what’s coming out in the nutritional technology realm, and they keep a file on that information.
“We (get) out and we find out what’s available — what’s potentially doable technology-wise — and then this ideation process matches up, ‘OK, now we know what’s doable, now which of this set of doable actually matches up with what the consumer wants?’” Sinnott says. “What we’ll do is we’ll figure out what the consumer is asking for in general concepts.”
For example, consumers may want some sort of anti-aging product, but they don’t know anything about ingredients and scientific technology, so they’re not sure what to specifically ask for. Sinnott’s team may see something that’s rated high in the system and see a new technology that can be used to create it, so they’ll match those up and go out to model it and see what consumers think.
“The iPhone is a perfect example,” he says. “The consumer could never have told you in advance or described to you what the iPhone was. They imagined a phone that was easy to use, intuitive, very easy software, that kind of thing. But it took somebody like Steve Jobs to match up the technology plus what the consumer is asking for, but when you handed the consumer the iPhone, the immediate reaction is, ‘This is exactly what I was looking for.’”
He also looks at financials.
“When you sit down and put pencil to paper, you can cut through a lot of ambiguity really fast, and certainly your financial models are right,” he says.
“You’ve got to find something that fits your culture, and there’s so many ways of doing financial modeling. The whole financial modeling, particularly of a launch of an innovative product, is terribly difficult because you have no history to draw upon, but we’ve found ways of drawing analogies between not only similar products we’ve launched in the past but also perhaps disruptive technologies that have been launched in other industries.”
He also considers regulatory issues surrounding the product. For example, in the U.S., his products are regulated as dietary supplements, but in other countries, they’re regulated as medicines or drugs, so that affects a rollout timeline and how quickly a product will be profitable or can be rolled out in multiple locations.
“What kind of regulatory issues do you have to face and knock down to get these products into other countries?” Sinnott says. “That’s one way we prioritize — which countries will be first on the list will be the ones that have the simplest regulatory framework, and then the ones that have very complicated framework, like Canada, that tends to be later in our global rollouts because it’s so complicated.”
Create a rollout plan
Once he knows which ideas he’s going to implement, then Sinnott works with his teams to create a product road map. All of the information gathered in the idea evaluation process helps with that task.
“When you lay all these criteria out, the road map almost builds itself,” Sinnott says.
His road map looks out three years and shows what Mannatech will launch, at what times and in what countries.
“You need to know what you’re shooting for years in advance,” Sinnott says.
Typically, Sinnott and his team launch 65 to 70 products a year; however, they serve 16 countries, so divide that across all of those locations, and it typically works out to just a few launches per year in each country.
“You want to space them out so you have good development time and you’ve also got not too many products coming out at once,” he says. “It takes a lot of analysis, so behind that simple piece of paper is actually thousands of pages of documents where we’re analyzing and figuring out the right time to launch these, and we’re allocating resources and budgets.”
When he’s launching a blockbuster product, he does so at a major event, such as a national convention. Minor products get less fanfare.
“You have to always keep it fresh, and then at the same time, remember that the consumer can only digest so much at one time, so really, if you dumped out too many products at one particular time, you diminish the impact,” Sinnott says. “It’s better to deliver fewer than a lot.”
While you have to keep people excited by rolling out new products, you can’t move too fast. Sinnott typically spends about 18 months developing any given product before it’s launched.
“That’s the balancing act,” he says. “You can’t take forever because people’s preferences change pretty rapidly, but also, you can’t take shortcuts or else you’ll end up with a defective product, as Toyota found out.”
Don’t be afraid to adjust your product development process. Mannatech is currently on its fourth version.
“They call this the product development pipeline because ideas go in one end and they get processed, and products come out the other end. It’s just building it just like if you’re building an oil pipeline,” he says. “What you do is you design the segments, and you kind of weld them together, and then you pressure test it. What you do is you run a few products through and you find out where the leaks are. Where did you run into development issues? Where was the actual timeline not matching theory? And then you fix the spots where it’s broken, and the more you run it, the next time it leaks less, and then the next time you run it, it doesn’t leak at all, and then the next time you run it, you realize, ‘Hey, you know what? We need a bigger pipe, so you expand it.”
It all comes down to taking the time to create the process.
“My grandmother gave me a lot of advice, but one piece that really stuck in my head that I’ve followed ever since is it takes less time to do something right than to explain why you didn’t,” he says.
Taking this approach has helped Mannatech launch products more efficiently and successfully and has positioned the company for future success.
“If you’re in touch with your consumers and you truly know them and you’re communicating with them and you know what it is they want, then it’s simple,” Sinnott says. “You just need to find out what they want and make a good quality product, and then you can’t fail. When we do that, when we apply that simple two-step formula of finding out what they want and building it with the highest quality, those products have been a success.”
HOW TO REACH: Mannatech Inc., (972) 471-7400 or www.mannatech.com
“Anytime the FAA goes out and looks at the scene of a plane wreck, they’re trying to learn something about what happened,” he says. “Was it wind shear? Was it equipment failure? Was it a personnel failure? And usually it’s categorized around those two or three or four things, and then all those pilots go to this case and learn what happened — don’t let it happen to you, learn something.”
If you stick around in business long enough, inevitably you’re going to fail, and Ginsburg has seen those times during his career, but he’s also learned from failures — both his and those of others. He’s had a successful nearly two-decade career in radio broadcasting, forming several successful radio groups during that time. Now he’s leading 1,500 employees as the owner of Boardwalk Auto Group, a chain of automobile dealerships, and chairman and CEO of DG Fast Channel Inc. (Nasdaq: DGIT), a provider of digital media services to the advertising industry.
“(Failure) didn’t happen every time, but the failures taught us a lot about how to succeed,” he says. “We had failures with specific stations or specific managers or specific markets, and those failures created a huge MBA program for everybody because you spend wildly on failures — millions of dollars — but you learn from those failures, and that’s the beauty of business.
“Every day you can change what you do. You can take an incorrect, ill-advised policy and change that to one that’s forward-thinking and plausible.”
Throughout the successes and failures, Ginsburg has learned a few universal truths to successfully running a business: take responsibility for your business, address needed changes and build customer relationships.
President Harry Truman had a sign on his desk that read, “The buck stops here,” and Ginsburg says that leaders have to take on that ultimate responsibility in order to be successful.
“People expect leaders to lead and to take responsibility when things are looking good as well as when they’re looking bad,” he says. “When we started the year in 2009, we saw a scenario, some of which was bad and others of which were very bad. It was a challenge to get everybody on the same page, to agree to the financial discipline to hold expenses in check and to maximize every opportunity for revenue, and they expected me to lead those efforts.”
You have to know what it takes for your business to be successful.
“In order to take responsibility, you have to have your arms around your business, and you have to thoroughly understand each aspect of it,” Ginsburg says.
You might have gotten to your position because you were particularly good at finance or sales or administration, but it takes expertise in more than one area to be a successful overall leader.
“In order to be a leader of consequence, you have to be able to really cross all those disciplines and not say, ‘Well, I don’t know anything about that,’ or, ‘I don’t want to get involved with that,’” he says. “While it’s the comfort zone of most people in one area or another, to be an excellent leader, you have to go outside your comfort zone and learn things you didn’t want to know. You have to learn lessons and go back and learn things that aren’t intuitive for you, that will create the opportunity to help your managers deal with problems that when you bring them in your office, you don’t just okey-doke them.”
This aspect of leadership was particularly important for Ginsburg as he took companies public in his career.
“I’m not an accountant, but if you’re the CEO of a public company, you’re expected to sign all sorts of documents,” he says. “You’re expected to understand how any given decision will flow through a financial statement.”
Address needed change
In the past, if numbers or prices changed as little as 3 percent, it wasn’t a big deal, but that’s changed in the current environment.
“In many of our businesses, what we did was we said, ‘Well, OK, if that goes up 3 percent a year, no big deal, because we were living in an inflationary environment where it was always easy to say yes to a little bit more. We’re not in that anymore.”
Instead of saying yes, you have probably had to cut back more. Perhaps it was cutting your 401(k) match or reducing health benefits or having furloughs. Whatever the situation was, there was one common necessity: Change was needed, and you had to be able to recognize that fact. You do so by looking at the numbers, which don’t lie.
“In all my businesses and all my divisions, we build [data] matrices so that there’s an objective truth, an ability to have a view,” Ginsburg says. “Then, after you’ve gone through it with your managers, you have the ability to articulate what you want because you want to change the matrix — you want to change your sales, you want to change your expenses, you want to change your outcome.”
When the numbers tell you change is coming, you have to start with honest communication.
“Be candid with people,” Ginsburg says. “Tell them the truth. Don’t tell them what they want to hear — tell them what they have to hear. If you tell them the truth, people can have a tremendous capacity to deal with the truth and no capacity to deal with fiction. A salesperson knows if they’ve sold a sufficient number of units, cars, widgets or whatever it is to know that they’re doing well or they’re not doing well, so you can’t tell them things are bad when things are good, and you can’t tell them things are good when they know full well that their commission checks aren’t doing what they have to do to support their own families.”
You also need to be consistent across the organization.
“What’s particularly important in communication is being consistent about that communication so we don’t say one thing to one group or another to another group and then finally another to a third group,” he says. “What we have to be able to do is come up with a consistency and internal logic, and in order to do that, you have to think about your business 24 by seven by 365. Some people like to run a business over an eight-hour day, over a four-day week because on the fifth day, they’re playing golf.”
Beyond consistency, you also have to communicate things early, which goes back to having your arms wrapped around the business.
“If you are so late in the cycle of understanding the dynamics of your business and what’s happening around you, it’s difficult to communicate to your employees early,” Ginsburg says. “If you can get your arms around some of these issues about where you are with lenders, what’s your leverage, if you have a lack of demand and have too many employees to explain that, so not all of a sudden, you’re six months into the dilemma and the next thing you’re doing is you’re reacting. In order to be a good communicator, you always have to be proactive.”
Whenever changes are necessary, you’ll als
o have to address your managers’ attitudes.
“Denial is what you have to deal with with your managers,” he says. “‘The matrix says that over the last four months, your production is down. Why is that?’ The very first thing a lot of managers will say back to you is, ‘Oh, no, it isn’t.’ Now we have to deal with the belief system. ‘OK — what is it about this matrix that you don’t believe?’ You have to get people to confront what is happening in front of them and what the numbers say.”
Build customer relationships
Another lesson that Ginsburg has learned throughout his career is to build strong customer relationships.
“That comes down to having your sales organization not being afraid of asking the questions: How am I doing, what can I do differently for you, what are your needs, how do you see your future, and how can we help you make your business better?” he says.
You want to build that relationship so customers know you care about more than money.
“That is the key to most customer relationships: Are you a real partner or are you a transactional company that’s looking for the quick hit and then go find the next customer?”
That starts with thinking of your customer’s needs before your own.
“The basic advice is you’re not going to win every time,” Ginsburg says. “Be prepared to compromise and be prepared to, at times, sacrifice your own revenue stream because of the needs of any given set of customers. We all like to get up and pound our chest and say, ‘Boy, we can drive revenue through any kind of environment.’
While that’s a good thing to say, the reality is that in this environment it doesn’t happen as frequently, so that’s when you have to try to cooperate with your customers.
“What can be better than if someone, if a company in the customer relationship, takes a step back, understands what the need is, so that when you begin to move forward again as we are in 2010, … then next time around and the next opportunity, they’re wed to you in a way they wouldn’t otherwise be because they know you cared, you listened, you stepped back and you have an opportunity to move forward,” he says.
Also know what you can and can’t do to build the customer relationship.
“You cannot solve every problem for every one of your customers, but in your relationship with them, you certainly have to have enough listening posts and have enough data as we said to put in the matrix that there’s usually a similar story if you listen hard enough,” he says. “You can’t forgive everybody’s account receivable — if you did that, you’d be out of business, but you can hear if someone needs some extra time to pay or someone needs to work on a specific problem they’re having with another one of their customers, so you can become part of the solution.”
You also want to have multiple people in your organization listening to the customer instead of just one person.
“Have your managers and a number of diverse people in the room listening, and then get altogether inside the company and have the opportunity to have an open dialogue and have the participation of a group of people and not try to funnel it all through one person,” Ginsburg says. “Over the years, the times that I have made my largest errors is not reaching out to enough diverse opinion and listening and not having the right people in the room at the time the decision is made.
“This is just a little different that people saying you have to listen to everybody in the organization. That’s a little unattainable depending on the size of your organization, but if you have an organization of 50 to 100 salespeople, and you’re only listening to two sales managers, chances are you’re not getting deep enough, and it’s being channeled in a way that, as the general manager of the business, the CEO of the company, you’re not really listening hard enough.”
By applying these truths to his current businesses, he’s seen DG FastChannel reach $190 million in revenue last year, and Boardwalk Auto’s revenue was slightly greater than $250 million.
“It’s taking leadership responsibility, being candid with people and then communicate as best you can through managers and through your organization,” Ginsburg says. “… You should be able to make it through any period of time, and that’s what we’ve seen over the last 16, 17 months. Those who were ready, it wasn’t such a bad time, but those who weren’t ready, it was a terrible time.”
Somebody, somewhere higher in the PricewaterhouseCoopers LLP structure thought Gary Price was a smart guy.
Somebody thought that Price was worthy of being the Greater Atlanta market managing partner of the accounting and professional services firm. And because somebody thought Price was a pretty knowledgeable guy and could handle that responsibility, the firm gave him the position overseeing 1,300 people across three states.
But just because somebody thought he was a smart guy, doesn’t mean that those 1,300 people think he’s a smart guy, too.
“Just because someone anoints you king for the day, … just because you think you’re doing all these great things and modeling all these great behaviors, it doesn’t necessarily generate the trust and enthusiasm and change you’re looking to get until you make the connection,” Price says.
And it doesn’t mean that his clients think he’s a smart guy either.
“We have to sell ourselves every day, and you can’t sell yourself if your client doesn’t trust you,” he says. “The client isn’t going to trust you because you’re smart. It’s the same analogy about when I stepped into this role. Maybe some people think I’m a smart person, but my partners aren’t going to trust me because someone said I was smart. I have to have a relationship, and the way you have a relationship is you have to invest time.”Build relationships with customers
PwC used to run a television commercial that said, “Your clients don’t care how much you know until they know how much you care,” and that tagline has stuck with Gary Price.
“There’s no specific formula for doing this it’s an art as much as science,” he says. “It starts with relationships. If I walked into company X’s offices tomorrow and I didn’t have a good, trusting relationship with whoever’s office I was in, I wouldn’t get very far asking questions. The starting point is it’s all about relationships, and you’ve heard that before, and it’s true, and it’s exceptionally true in our business because our product is ourselves.”
But how do you show your customers you care? How do you make them the center of an organization that has not just 1,300 people in one region across three states, but 30,000 people and revenue just below the $8 billion mark across the whole country?
“If you really, really want to, you can turn that into a complicated story, but if you think about what we do at the core, it’s very simple,” Price says. “We help our clients solve difficult issues. It’s that simple. It’s no more. It’s not that complicated. When you’re able to distill it down, it really takes away the complication.”
It’s a simple mission, but even the simplest of tasks can get muddied, so start with how you initially communicate with your customers.
“I always start with, ‘What are you trying to achieve,’” he says. “Whether that’s financial goals, strategic goals in the market, growing the business, product expansions, mergers and acquisitions, and divestitures, tax planning, improving processes in the business, there’s a lot of ways companies like to make themselves better. I always ask, ‘What are you trying to achieve? What are your goals? I want to make sure I understand clearly what your goals are.’”
Show them you truly care about those goals so ask them to not just tell you about them but to show you, as well.
“Most people in most businesses have personal plans where they put on a piece of paper somewhere their goals, and somebody in their organization reviews it and holds people accountable to those goals,” Price says. “We encourage people to actually ask people to review their plans with them. Usually, not always, our clients share those with us, and when they do, it provides a great road map to how you can help them be successful.
“When I have a clear picture of their goals and have that trust with them, then I have the opportunity to step in their shoes and start to break down what’s keeping them from achieving those goals.”
For example, if a client says they want to reduce their tax burden and do some tax planning, he can begin to ask questions.
“Questions you begin to ask are let’s talk about your structure you start drilling down into the details and let’s talk about where your tax burden is here or overseas,” he says. “Where is your tax burden most problematic? If you say, ‘What are you trying to achieve?’ and they say, ‘We close our books in 20 days, but we want to close them in five; how do we get there?’ So you have to understand what they’re trying to achieve.”
As he builds these relationships and asks these questions, he’s able to see patterns across industries that allow him to pinpoint the real issues for which his employees should be focusing on finding solutions.
“You start talking to multiple companies, and you start coming back and saying, ‘You know what, what we heard from Company X is the same thing we hear from Company Y,’” Price says. “You begin to build a knowledge base, and in a firm like ours, it replicates itself in many ways, and it allows us to be very focused. … We get very focused around the most important issues our clients have. We don’t go into our clients and say we can solve all your problems. One, it’s not true, and even if it were true, we don’t have the capacity to achieve that. But where we do go, we say, ‘Tell us what your problems are; we think we can help you with some of the biggest problems.’”
Through all of this, you have to keep the customer at the center of your focus instead of money.
“You might hear, with professional services firms, the old saying, the billable hour how important that is,” Price says. “In our mind, equally important is that nonbillable hour where you’re investing that time to build trust with your clients. That’s the baseline. Once you have that trust, how do you get at those things?”
And lastly, you have to be yourself. It’s the best advice that he ever received and it’s true in any situation with customers.
“Some people are always trying to work on things that are viewed as negative and trying to create an image externally with other people that is not consistent with their personality and who they are. I had a mentor and he said, ‘Take that solid foundation and those values and build on it and be a positive person and be who you are. Don’t take on someone else’s personality just because it’s expedient or you think it will get you somewhere.’
“It’s hard to go into a client’s office and we work with really smart people and clients and fool them. They see through that really quickly. And then once that happens, you no longer have trust and credibility with them. You walk in, you are who you are, you help them, and by the way, if they ask you a question and you don’t know the answer to it, ‘I don’t know,’ is a great answer. ‘But I’ll be sure glad to find out and get back to you.’”
Taking this approach to building customer relationships will help your customers trust your leadership and what your organization does.
“I used to think that commercial was so hokey, but that tagline is so good,” Price says. “It’s true. … It’s very difficult to outsmart the competition, but if you can build better and deeper relationships, you can outhustle them.”Build relationships with employees
Earlier in his career, if someone walked into Price’s office or he walked into his or hers, he didn’t waste time with small talk.
“If someone walked into my office, boom we’re talking business,” he says. “But what I learned is we’re all humans with the same issues and frailties that we’re working through. And it’s amazing the connection you make with people when you open up and share.”
Since that realization, Price strives to build relationships with his employees and to really know them.
“That’s a challenge, no doubt about it,” he says. “And it’s an ongoing challenge you don’t do it once and check the box and you’re done.”
While it’s difficult to know 1,300 people, he focuses primarily on the partners.
“First and foremost, starting with those other 99 partners, was really spending quality time with each of them and reaching out to them,” he says. “It was me reaching out to them and not saying, ‘Come to my office and let’s have a meeting.’ Meeting them on their turf and their terms and really doing it without an agenda.”
Getting some quality time with 99 people can be tough, so he uses a combination of informal and formal methods. First, map out an informal plan for making connections.
“The informal ways are you try to find opportunities where there are intersections between work and personal and social, whether it’s having dinner with a partner or inviting a small group of partners into your home for dinner on the weekend or playing golf with a partner or going to a play or something. Or you bring a small group of partners together with a small group of clients and you have social time,” Price says. “There’s a lot of ways informally to do it.”
He also drops in their offices and asks open-ended questions to just get to know them better.
“It’s just simple questions ‘What’s going on, how’s the family, how’s the golf game, how was your vacation?’” he says. “You get to know what makes your partners tick.”
Beyond the informal, you have to also find the formal ways to connect with them and get to know them better. Price works with his assistant to rotate through those 99 people throughout the year.
“You start at the top of the list and work your way down, and it doesn’t always work that way if there are certain partners you want to get to immediately, but hypothetically, you start at the top and work your way down, and you say, ‘In the next two months, let’s make sure I get some good quality interaction with these eight or 10 partners,” he says. “Then the next month, pick the next eight or 10, and work through formally.”
While he may be focusing on spending quality time with eight to 10 people each month, he has other ways to make sure he doesn’t lose contact with everyone else when it’s not their “turn.” Monthly he has an all-partners meeting over a lunch hour, and the agenda is to build relationships and trust with one another so they can turn to each other when business opportunities come up.
He also has a small group of six people that he meets with for two hours every two weeks. It’s typically the leaders of each line of business and three key enablers his human capital leader, marketing and sales leader, and administrative leader.
Combining these efforts, it gives him far more insight into his partners than he would get staying in his office.
“It’s really understanding their personal agendas and really understanding what makes them tick,” he says. “If you think about it, it’s about making them successful … because if you can enable success in the team around you, there’s a lot more leverage and a lot greater chance you’ll personally be successful in that approach and model than going and doing it yourself.”
By taking these steps, it helps people buy in to what that high-up, powers-that-be person originally thought that Price is a smart guy.
“What that did was start to break down some of the, ‘Who’s this person; what are his motives?’ and enabled us to connect on a more human level,” he says.
And it’s the same approach as the commercial.
“It really gets back to that simple message from the commercial you have to demonstrate a real genuine care for the person, the whole person, and that’s both professional and personal,” Price says. “When you do that, that engenders trust and loyalty. Strategy is 10 percent of the battle, and everyone has a great strategy, and everyone has smart people. Whatever your strategy is, if they trust you, they will follow it and execute against it, and they will perform well and be successful. That same person could be a very bright person, but without that trust and without that loyalty, that person won’t be as successful, and you won’t get the same productivity out of that person as you otherwise would.”
How to reach: PricewaterhouseCoopers LLP, (678) 419-1000 or www.pwc.com
When Linda Galipeau took over Randstad US nearly two years ago, the recruitment company lacked key performance indicators, or KPIs for short.
“Before I came in, there were two big ones but oddly enough, they didn’t correlate with success,” the president says. “I know that’s very strange. One was very ‘amount of activity,’ and one was sort of ‘units sold,’ if you will.”
Both assumed that all activity was good activity and that everything else was done well.
“Since they had narrowed it down so much and said, ‘We’re going to assume that all of those have taken place, and we’re just going to push these two,’ you saw falling away of other KPIs, and since there were too few, you couldn’t measure the fallout of the chosen focus,” she says.
She suspects the thought process was to not give people too much information because then they’ll get lost in the details, so by focusing on just two areas, they’ll gain more traction in those areas.
“But what actually happened was kind of quite the opposite,” she says. “First of all, there wasn’t a lot of buy-in — people are pretty smart, and there wasn’t a lot of solid buy-in and adoption of the value of these KPIs. And there was constant change — if this didn’t work, then we’ll try this, so there was a constant changing of KPIs, and there wasn’t a fundamental buy-in. People weren’t engaged.”
To get things back on course and move the 1,600-person business forward, Galipeau decided that she had to set new KPIs and then get employees engaged in the business.
Set performance indicators
Galipeau had to first find the behaviors and actions that would move the business forward.
“In all businesses, at the end of the day, there’s how the market does,” she says. “You see that after the fact, but even that is very descriptive, but it’s not terribly prescriptive — if you want to be prescriptive about your performance, you have to say, ‘All right, this and this and this gives me that and that and that, and therefore, I’m going to measure how we’re doing on those three areas.’”
She says they should be easy to measure, easy to drive, transparent, visible and timely. One way to identify those is to look at differences in your performers.
“You look at the difference between the highly successful and highly unsuccessful,” she says. “… You can’t just look at the operational input of the very successful and say, ‘They’re successful because of these.’ You have to actually look at what operational inputs differentiate the highly successful from those that are less successful.”
Galipeau divided employees into quartiles based on performance.
“It’s really capturing what were the differentiators between the top group and the bottom group, because that’s where you see the differentiators,” she says.
In doing this, they identified three success indicators and three outputs that separated the top 25 percent from the bottom 25 percent.
“You have to take a fairly long look at the data and make sure you’re really contracting the extreme in performance before you come to that conclusion,” Galipeau says. “If you’re looking at the top group, the middle group, the submiddle group and the bottom group, you’re just not going to come to that conclusion. … You can’t dissect the struggles and hope to find the recipe for success. I think you can only compare and contrast and find the things that differentiate.”
At the same time, you have to be careful not to lump all successes as leading indicators.
“Just make sure you’re in facts, and make sure you’re always comparing and not only describing a group that succeeds,” she says. “Very often we get caught up in, ‘Gee, this person is doing very well, and they’re doing this, therefore, they’re doing well because they’re doing this.’ That leads to anecdotal leadership, which I think is very dangerous and probably is not doing justice, and sometimes you end up with a series of behaviors that happened to work for an individual but aren’t necessarily organizational success factors.”
For example, you can’t just say that a salesperson does a good job because he or she has X appointments in a week. Instead, you have to look at a ratio of how many appointments did it take to close a certain amount of deals. If one successful person had five appointments and another successful person had three, but then an unsuccessful person had one, that tells you something.
“It took a certain number, there was no question about that, so the people who did more didn’t necessarily do well, but you didn’t do well if you didn’t do at least this number,” she says.
Therefore, you may conclude that three is the magic number to set as a performance indicator.
“If the goal is to achieve sustainable results, you have to measure outputs and inputs and making sure that the ‘more is better’ is not the message, and enough is enough, and now we’re going to look at the content of those activities,” she says.
If you drive the more-is-better mentality, you’ll be hurting your organization.
“If you only look at that, the message that you’re driving has nothing to do with effectiveness,” Galipeau says. “You’re encouraging just activity and not results. Many organizations have done that because it’s easy to measure.”
Once you have clear performance indicators, you can also measure employees.
“You have to have metrics,” she says. “I want to take your blood pressure before you have your first heart attack, so I think we have to make sure that we’re engaging in wellness and not fixing the sick. I think you have to pick metrics you can measure in a timely way.”
Galipeau measures employees weekly, and then stack-ranks them against each other and the overall standard on a monthly basis. Once she found these KPIs and started measuring people, she noticed a difference in the organization.
“The top half did much, much better, and the bottom half didn’t move, which is not surprising,” she says. “The people in that third quartile, you did see some movement up into the second quartile. The people at the very bottom either quickly got themselves out of the situation or realized, ‘I’m not a bad person, but this isn’t the role for me.’”
With performance indicators and top employees established, Galipeau then had to attack the other part of her initial problem — engaging employees in the business.
“Once you have clearly stated to everyone where they stand, then you quickly become paranoid about that top group because they then understand that they’re the top group,” she says. “If you don’t do a very good job of driving, understanding and engaging them, you’ve done yourself a great disservice. They then realize, ‘Gee, I am very good, and I am very valuable, and I’m one of the top people. Do I feel that way? Am I rewarded that way? Am I treated that way? Do I want to be that way here?’
>“The second piece that came to us very quickly was, ‘How do we continue to develop them? How could we keep them? How could we make sure they were engaged? Beware advice from fools, but you certainly want the advice from the top group.”
Galipeau’s primary tool for finding out whether employees are engaged or not is through a staff survey. But even that requires some level of buy-in before it can be an effective tool.
“It’s not just good if the very top leadership accepts it or even, heaven forbid, the human resources department accepts it,” she says. “It has to be owned by everybody who needs to receive the feedback and act on it. A very credible, outside firm that specializes in that will be most well-received, and an employee-satisfaction survey produced and executed internally may not have the same impact.”
Doing it externally helps employees feel more comfortable being honest.
“Employees are worried about anonymity, and you want to make sure that’s protected, and the use of an external party will help you achieve that so you’re going to get credible, objective results that are measuring the right things and people will listen to,” she says.
If it’s your first one or you’ve done them in the past but never changed anything afterward, you also have to convince employees that you will take action based on their feedback.
“You have to explain to them why you’re doing it and what you’re hoping to learn,” she says. “You have to ask them to participate. Typically companies with low engagement scores have low participation — they have to see what’s in it for them to do it. If they’re disengaged, they may be so far gone that they don’t perceive there to be any possible benefit to them, and that’s not going to help you too much, so you tell them why you’re doing it, you tell them what you’re looking to learn, you ask for their participation, and you promise to share the results. I think that if you do that and they see the purpose and they know that there’s no risk to them and they see what’s in it for them, people will participate.”
Once you do the survey and get the results back, you have to then communicate with them what they said needs to be changed, which may be a blow to your ego.
“It can be quite reassuring to them to hear that you now see [the problems] and that you’re going to take steps,” Galipeau says. “Very often, leadership development is an outcome of that. That’s why people are a little hesitant to do it because it’s not so much that your dental plan gets criticized — everybody would always like better benefits, I agree with that — but there’s a lot of feedback on the leadership, so leadership development is often a key priority.”
But just doing the survey isn’t enough.
“Once you get that feedback, you have a mistaken impression that you’ve already began to improve,” she says. “Once you recognize you do something wrong, you think that that great epiphany will take care of some of the problems. That, of course, is not the case.”
Instead, have a process to go through the feedback and create a plan.
“One of the first things that we did was we sat down and said, ‘All right, which of these are consequences, and which of these things are things we initiate — which of these are outcomes and inputs, kind of the way we look at our business, and what are the key elements?’” Galipeau says. “You have to look at the key strengths — these we’re particularly good at because those are easy to get better at, and you don’t want to turn away from that, and organizations typically do that. Then there are the things that are the laggers — the things that are pulling you down. Again it’s the top and bottom approach. You have those things in the middle, but if you look at the top and bottom, there aren’t many things that you can’t impact.”
Start by choosing three major priorities and developing new strategies and programs on a 12-month time frame. This allows ample time to actually work on what you need to, but it will also give enough time for employees to become more engaged.
“Even at that time frame, you have to start to understand that once you start shining lights on this, people will expect more of you, and you have to make sure that you’re going with that,” she says. “Once you say you’re going to work on something, there’s certainly the tendency to say, ‘Well, let’s see.’ So engagement leads should only be undertaken by companies that really plan on changing anything. The status quo will only result in increasingly negative outcomes and lower participation. It will have precisely the opposite effect.
“A very tectonic shift in short time frames is unlikely, but a culture of engagement has to be done by biting these things off, having a plan of attack, and then measure, measure, measure. You have to measure because working on things gives you such a placebo effect of, ‘I’m moving these things forward.’”
After doing all of these things, Galipeau is already seeing a difference in Randstad.
“The organization is clearly performing better,” she says. “There’s no question we have very clear metrics on the results, and the results have improved fairly drastically, so I’d say we’ve seen certainly an improvement in performance and the distribution of performance. The success is much more evenly distributed than it has been in the past — that’s very healthy.”
How to reach: Randstad US, (770) 937-7000 or www.us.randstad.com
When Eric Thomas gets up in the morning, he’s not listening to the radio or watching the news. Instead, he’s listening to “Good to Great” and other business books on CD.
It’s not something that he’s always done, but after hearing a speaker talk about the benefit, he thought it would help him in leading his 46 employees as CEO of FreedomVoice, a provider of toll-free number service solutions.
“He was talking about this idea that you listen to music, and how many words for songs do you know, and the reason you know them is because when you’re in downtime mode, when you’re getting ready in the morning or whenever, you’re listening to that,” Thomas says. “What if you took that time that ingrains and puts all this information in your head and used it to put information in your head that would help you or your company?”
Smart Business spoke with Thomas about the things he does to be a more effective leader.
Look for opportunities. Looking for opportunities is a lot of common sense it’s understanding the industry, understanding what things are needed, what pains exist for the customers, what problems need to be solved. Then look at those to see if there’s some sort of way to make a business opportunity out of it.
It really just has to do with putting yourself in the position of a customer in whatever particular marketplace and/or product idea that you’ve got. Think of it from the customer’s perspective and try to understand what would make a difference, what would they get emotional about, those sorts of things.
Ask good questions when hiring. You’re looking for people who are the 20 percenters the 20 percent of the people that do 80 percent of the work, that are creative, driven, self-started. Ask all the questions that might find you those people.
Things that I ask are, ‘What do you do when you’re not at work?’ If you’re hiring a programmer and they say, ‘Well, I play video games.’ That would be less compelling than somebody who says, ‘Well, I like to do research on new programming languages, and I like to read trade journals,’ things that tell me that they’re passionate about their particular talents and how they’re going to contribute to the company.
‘What are you reading?’ That’s usually an indicator. I like people who read and are trying to always develop themselves.
Give them examples of situations, and try to do it in an open-ended way … to see if they answer on the way of doing the right thing as opposed to what most people think an employer wants to hear. Sometimes people will answer in a way that’s like, ‘Wow, I wouldn’t give them the refund because the company should keep the money,’ versus, ‘Well, the right thing to do is to give them the refund, so I would give them the refund.’ I’m looking for the guy who’s going to look after the customer and do the right thing. A lot of times people think the company is always about the money. Money is on the list, but it’s pretty far down.
Reinforce your values. Talk about the core values of the company. One of our core values is to contribute to the success of our customers through technology and service. Maybe I’m talking to somebody in client services about something that happened and it didn’t go the way I felt it should go. I would bring up the core value as the way to evaluate what the right behavior should be, so that they would automatically learn, ‘OK, to know what the right decision is, start thinking about core values and then weigh it against that. OK, that makes it easy. I don’t have to know the rule that in this situation, do this I just have to know that I’m trying to help this customer through service; therefore, that feels like the right thing to do, so I’ll do that.’ It’s talking about it, reinforcing it, keeping it top of mind for people.
Have a plan. Each year, we do a road map of what we’re going to do in R&D, in sales, in marketing, in client services, etc., and have an overall road map in the company. That helps because it’s not about activity it’s about productivity. It’s easy for people to get off on tangents that are interesting but not necessarily on the critical path.
It deals with an honest assessment. You have to understand where you are now, what you might be able to accomplish, and then you start prioritizing and organizing in terms of what things are dependencies sometimes you need to get this done to be able to do that. It involves meeting and talking about it ‘No, I don’t think we can do that because this will take us off of that,’ or, ‘That’s more important because it will help our customers this way.’ Meet between the different departments because something that happens for R&D will affect what’s on the road map for marketing. … All of these things have to line up.
Be honest. Doing well has to deal with telling the truth, and this seems like a Sunday school thing, but it’s really critical. … If you are truthful with yourself, you can properly evaluate where you are and make changes. If you lie to yourself about ‘I’m this,’ or ‘I’m that’ and you’re not, you’re going to run into roadblocks. You’re depending on your abilities that aren’t there.
You have to have honest self-evaluation as a company, and you have to promote, ‘I don’t want you to fluff this. I want you to just tell me what you think. I don’t care if you use any flowers around the words. I just want you to say what it is, and then we’ll deal with it.’
If you don’t do that, then things that are wrong build because they never get taken care of. If you are building a culture of telling and facing the truth, then you find the errors. Maybe it hurts you to know that they’re there, but at the end of the day, you actually deal with it, you fix it and you move on.
How to reach: FreedomVoice, (800) 477-1477 or www.freedomvoice.com