Kelly Tomkies

Monday, 29 August 2005 13:07

Turning the corner

While the practice of psychology is usually limited to people, sometimes psychiatric terms provide the best descriptions for intangible entities, as well.

A case in point is the state of Tutor Time Child Care/Learning Centers in March 2002, when Bill Davis took over as CEO. To say it was depressed is a bit of an understatement — the company was going through a bankruptcy, struggling with weak brand positioning and, as Davis says, “was basically a company with low self-esteem and low motivation.”

So Davis began to lead the company through a therapy of sorts. He assumed the role of CEO of Learning Care Group (the company created when Childtime Learning Centers acquired Tutor Time), and began reworking the company’s financials, rebuilding the management team and reconnecting with employees, who had a desperate need “to see and hear that there will be a better day,” says Davis.

That better day has arrived. Today, Learning Care Group has reached sustainable profitability, developed a strong company vision and mission, and set healthy goals for the future.

Smart Business spoke with Davis about reaching out to employees, turning the company around and leading it toward a bright future.

How did Tutor Time end up in such rough shape?

The company had had five CEOs in three years. When I joined, it was losing $1 million a month and had four months of cash available. The company experienced unparalleled growth in the late ‘90s, but its resources and infrastructure didn’t keep pace.

And there was a lack of passion for the company and its products. I don’t care whether you make cheese or provide a financial product, you have to have a great product. There was no focus on the product here, and no common look or feel to the brand. The facilities were in need of capital.

I was hired to restructure Tutor Time and take it through bankruptcy, and had actually bid to buy the company along with a financial partner. Childtime outbid my offer and acquired the company. The board asked me to head up the whole organization. We had to stabilize the company — and we had to be very careful. We did everything in the open with lots of communication. The board gave me a commitment that they would give me 18 months to integrate the two companies [Childtime and Tutor Time]. Thanks to the acquisition by Childtime, by July 22, 2002, Tutor Time was out of bankruptcy.

But the new company was bleeding badly and would run out of money by the end of the year. The first thing we needed to do was assess the situation and hire strong financial folks. I was able to develop a great team and two brands with a great management team.

There were basically no marketing, IT or human resource departments, so I developed those. The turnaround really increased our leadership group’s abilities. It took about a year and a half before we had our first profitable quarter. In 2004, we reported our first year of profitability.

How did you get employees motivated and excited about the turnaround?

When I started with the company, it was a turnaround situation. We had 500 schools, and I felt it was important to be visible to everyone. I visited two markets every week for a year, more than 25 states. We have 75 definable markets, and each market has 10 to 20 individual units.

In any company, whether it’s a manufacturer with multiple locations or a retail company with many stores, the CEO has to be very visible in a turnaround situation. You also see the situation in each location and can take that back to headquarters and develop action plans.

Headquarters’ employees tend to think they are the ones driving the success or there is a lack of support out in the field. So I changed the name from Headquarters to Support Central and set expectations on the turnaround time for these support employees to answer the phone, respond to e-mail, etc.

And I was very visible. It’s very important to do what you say you’re going to do as well — don’t overcommit or underestimate.

How did you establish a vision for the new company?

Three or four months [after I visited the markets], we developed our vision and mission statement. It was a six-month project that involved all of our stakeholders: the caregivers, center directors, board of directors and shareholders.

We were very inclusive. We developed a questionnaire that allowed these stakeholders to weigh in as we went through the process. The product is a statement that we framed and put on the wall, and it has meaning to everyone. We wanted to develop something that would cause people to say, ‘Yeah, I believe in that,’ and I feel we did.

If you really go through the process correctly, you use pieces of that statement in everything you do, from press releases to communication with customers and providing an environment for children. I have the mission statement on my desk. I live it and breathe it.

We have 8,000 employees, and I think it gives them comfort that they know where we’re going. It’s part of our initiatives for next year and included in all the things we’re doing.

How has your corporate leadership experience in other industries, such as food manufacturing, helped you in your current position?

There are similarities in the companies [that I’ve worked for] and the types of things I needed to do to fix or grow the company. You have to have a vision, mission statement and values, develop a top-notch team, develop a culture, [create a] long-range plan and shorter-term initiatives and goals. Most importantly, you have to hire very talented individuals and do everything you can to support them — give them capital, education, tools and training. And you have to make sure the organization doesn’t have any blockages that stop those individuals from succeeding.

How do you communicate your vision?

We knew we would be changing the name of the company, and the vision statement is what drove the new company. The name Learning Care Group came out of who we are, and all of our communication falls under that umbrella.

Tutor Time and Childtime are our brands. We developed good communications plans for all our stakeholders, and the plans started with the ceremonial meeting we held to reveal the new sign on our building. We made sure shareholders and everyone in the industry got the name change, and we framed it with our mission, vision and values.

What is your strategy for growth?

Initially, we were not looking for acquisitions but to grow with the assets we already had. We are now focusing on franchises, but that was not part of our original plan. We hired a customer service manager that came to us from Walt Disney to educate all of the company on service excellence.

We found that even a good product isn’t enough if it isn’t delivered with good customer service. We are heavily focused on franchising, and we are starting to add units and look at acquisitions. We had some major infrastructure to put in place — technology, software, financial [management] and center management — all in tandem with customer service, before we could consider this type of growth.

When it comes to acquisitions, we want to make sure we can add value to the company before acquiring it. If there is no net gain, we won’t consider it. We are interested in adding units in the markets where we already are. It doesn’t make sense for us to move into new markets.

How do you communicate with so many satellite centers and employees?

We developed an intranet and made a lot of information available for employees. We have weekly communications through e-mail. We’ve increased the number of regional, companywide meetings for management. We’ve developed a lot more staff training vehicles that we consistently put through the company.

The majority of the centers didn’t have high-speed Internet connections, so we put high-speed connections in all the centers. We also offered computer training for all areas and staff members. We feel innovation is value, and we are leapfrogging our competitors with technology and communication to parents and customers.

We also have a monthly newsletter that we use to discuss changes in the product and why we do what we do. You can never communicate too well. We have focused on it and put the infrastructure in place. You have to communicate in as many formats as you can. Some people are fine with e-mails, others prefer print. You have to be duplicative for all.

How to reach: Learning Care Group Inc., (248) 697-9000 or http://www.learningcaregroup.com

Friday, 29 July 2005 10:12

Hitting the bull's-eye

ExactTarget is growing by leaps and bounds, and with no end in sight, Scott Dorsey is meeting the challenges of managing that rapid expansion.

In the four years since its founding, ExactTarget — which delivers e-mail marketing solutions — has landed more than 3,250 clients, including General Mills and Home Depot. And the 140-employee company plans to hire up to 10 more people a month for the next several months, says Dorsey, ExactTarget’s president.

“The biggest risk or challenge I see ahead for us is integrating so many new employees into the business,” he says. “We need to convey who we are and communicate our core values.”

Dorsey, who founded the company with Chris Baggot and Peter McCormick, attributes the company’s success to its adherence to its eight core values — Treat people well. Be easy to do business with. Stay true to permission. Make clients look like heroes. Empower marketers through software. Make decisions like an owner. Have an entrepreneurial spirit. Pursue company goals as a team.

To instill those values, ExactTarget requires each new employee to attend three days of training.

“What I am hoping to instill in them is that when they are making decisions, to hold them up against the core values,” Dorsey says. “If they do, they’ll make the right choices.”

Smart Business spoke with Dorsey about the company’s frenetic growth, its strategies for success and its core values.

What strategies led to the company’s growth?

We developed powerful and easy-to-use software designed to empower the marketer. Companies before us built their models around advertising agencies or companies that offer or perform professional services on behalf of a client. Our first big strategy was to put the tools and the power directly in the hands of the marketer at the companies themselves.

Secondly, we focused on tools that were interactive and appealing to Internet agencies. We have a strong reseller network that offers our tools through their own private labels and resell. They can then include e-mail marketing in other Internet or marketing services that they offer. That represents about one-fourth of our business.

Another strategy is that our sales and marketing employees are building face-to-face relationships with their clients. We are not leaning on the Web to sell the Web. We have local people in several markets, which is very different than other companies. We have reps in 30 cities. Some of these markets are untapped by other companies and have proven quite successful for us.

We have also partnered with some firms that have customer data and worked with them to develop smarter, more relevant software. We integrated our products and developed two applications.

We’re a client, as well. We help clients leverage customer data, like his buying history, city, state and ZIP code. We pull that information into an application so marketers can send more targeted e-mails. That’s the cornerstone of the business and what we’ve been doing from Day One.

We’ve been very focused on empowering the marketer. Leveraging the agency and partnership channels were opportunities that presented themselves,

and we took advantage of them.

What strategies were unsuccessful, and what did you do about them?

There are always strategies that don’t work as you intended. Early on, we focused on small businesses and franchise organizations to build content. We thought the franchises could localize the software to the marketplace and we’d have a good segment of the market.

We had a product category called Franchise Connect. It was not as successful as we thought it would be; there were bigger opportunities with companies that had large sales organizations or business units around the country and globe. Companies could do branding and content development at the field level and localize it.

We abandoned Franchise Connect and translated it into an enterprise platform with the same functionality, with great outcomes. It would not have been as successful under the franchise banner.

When did you know the company was going to be successful?

We’ve been insatiable. We rarely sat back or have been satisfied with where we were. The turning point was when we gained momentum. It started about two years into our evolution.

We were landing bigger clients and realized our products worked well for large organizations. We felt then that we were becoming a strong player, growing a lot and gaining a lot of momentum.

You added 250 clients in the last quarter. How are you accommodating that increase in business?

We just recently moved to our new corporate headquarters in the heart of the city on Monument Circle. We have 30,000 square feet of space now. We also made tremendous investments in hardware and personnel.

We have been very aggressively hiring. Our goal is to hire five to 10 new employees a month.

We’ve hired a recruiter who can devote 100 percent of his time to hiring. We are seeking high-energy people that have a passion for the business and have an entrepreneurial spirit, who think like an owner of the company. Those are intangibles. And we need people who thrive in a high-growth environment.

As the company reaches a more mature stage in its development, do you expect your rapid growth to continue?

We really don’t anticipate our growth to slow — we are moving at a pretty fast clip and feel that growth will continue. The strong reason is our on-demand software, which is a big base of our business.

Clients pay us each year or monthly for the software, and this model is working throughout the whole nation. The client leases the use of the software for one year and renews at a comparable rate or more.

We have a strong rate of reoccurring clients. We are doing a great job bringing new business on board plus adding more services to our current clients.

The majority of our competitors are privately held. We are highly regarded by analysts and are considered one of the top three companies in the country. We have more than 3,250 clients under contract. Most companies only cater to high-end clients, so they only have 200 or 250 clients.

How do you plan to retain and attract clients?

On the retention side, we’ve built a capable account management team that helps the clients use the applications correctly, building client relationships and offering great customer service. They make sure the

client is well cared for and successful.

On the new business side, we have a partnership strategy which has proven highly valuable in generating new leads. We also offer ongoing education in the form of seminars and Webinars that are very successful ways to attract new clients.

How have your core values played in your strategies and growth?

One of our core values really stands out to me that has impacted the business, and that is to stay true to permission. It became very clear to me that that philosophy was important.

Our clients have legitimate use of e-mail addresses but need to use them responsibly. We developed a one-year anti-spam agreement for our clients. We turned away a lot of business because of that agreement, because a lot of businesses don’t care about privacy or being responsible e-mail marketers. We stayed away from the temptation of sharing our databases.

Our core values remain very strong, and our other values focus on privacy and deliverability. Because of our core values, we have very good relationships with providers like AOL which have very strict standards. A second core value that is important to us is for us to be easy to do business with.

It’s easy for a nontechnical person to understand the software and our price structure. And we have a strong customer service orientation. It’s easy to get ahold of us, and we put our service up against that core value filter.

Are there any plans to take the company public?

Our core focus is to build a great business and grow in size and presence. While taking the company public is an option for us, we don’t have plans at this time. Last year we felt that we became a high-profile, on-demand software company.

Our business is fundamentally run like a public company; we use metrics similar to a public company, so that could be an alternative for us in 2006 or 2007.

HOW TO REACH: ExactTarget, (317) 423-3928 or www.exacttarget.com

Wednesday, 29 June 2005 12:41

The Hunter file

Born: Oct. 14, 1951

First job: Shining shoes and sweeping up hair in a barber shop at age 12

Career moves: Named Ernst & Young Entrepreneur Of The Year in the financial services category in the Indianapolis region in 2004; transitioned his company from financial services into the pharmaceutical distribution industry in the last two years; built a new international headquarters five year ago; began the process of buying company in Europe to internationalize the Standard Management

Boards: Chairman, DARE Indiana; president, Indiana Association of Insurance Cos.

What was your greatest challenge in business and how did you overcome it?

My biggest challenge was, and still is, getting the financial markets to recognize small- and mid-sized companies for what we provide to economies. We have a large local and regional impact.

Past or present, whom do you admire most in business and why?

I'm going to break ranks and give you a different answer. I admire Ronald Reagan because the most difficult CEO position in the country is president. It is the most underpaid and underrecognized job, and you are subjected to unusual pressure.

I admire Reagan for his values and his abilities. He never compromised his principles. He really cared for people deeply but was still strong.

What is the greatest lesson you've learned in business?

The greatest lesson I've learned is to have patience. Your agenda is not always everyone else's. To have patience and stick to your resolve is one of the ways you'll end up in a win/win system.

Wednesday, 29 June 2005 11:23

The Rayden file

Born: Oct. 31, 1948

Education: Bachelor of science degree, marketing, Penn State University

First job: Stock boy at Gimbel's; in Philadelphia, carried out Trim A Home Christmas trees

Career moves: President of Eddie Bauer, 1984; named president and CEO, Stride Rite, 1987; president and CEO, Pacific Sun Wear, 1990-1996; joined Limited Too in 1996

Boards: Boards of directors, Too Inc. and Strottman International Marketing Promotion Co.

What was your greatest challenge in business, and how did you overcome it?

I think basically my career has centered on turnaround situations. When I joined all of the companies as president, they were struggling and I had to turn them around.

Each was a huge challenge, and I learned to make all decisions on personnel at a rapid speed. In all four situations, I applied the fundamentals with the personnel that existed instead of bringing in new crews. We got down to business and turned around the companies with existing people, and I am proud of that.

Whom do you admire most in business and why?

Clearly I admire Les Wexner, having worked and watched him. I have admiration for his immense talent, creativity and determination. I also admire him for what he's given to the community.

The reason I left Pacific Sun Wear was to work for Les. And when he saw the opportunity for me to be on my own, he gave me that opportunity.

What is the greatest lesson you've learned in business?

To take things slowly. Retailers are very fast-paced and are historically reactive. Often, if a strategy doesn't work, it will be changed instantly.

I've learned to give things more time to play out. You need to have patience and let a plan evolve -- take things a little more slowly and thoughtfully.

Wednesday, 29 June 2005 10:53

Rising to the top

Before any decision is made at Breads of the World, management first considers the impact it will have on quality.

Jeff Rains is president of the company that owns 49 Panera Bread franchises in Columbus, Cincinnati, Dayton and Denver. He started Breads of the World with Doron Berger and Ken Rosenthal, who founded St. Louis Bread Co. (now Panera Bread) before selling it to Au Bon Pain Bread Co. to become a franchisor. Rains says quality is the company's foundation, and everything it does revolves around that.

"We wanted to be a fresh bakery as well as have everything else fresh -- soups, sandwiches, everything," says Rains.

While that requires the company to invest in more equipment than some other restaurants do, the investment doesn't stop with durable goods. Breads of the World also devotes a great deal of time and attention to its more than 600 employees.

"If we can get the right general managers, they can get the right people into the stores," Rains says.

And when it comes to choosing those general managers, Rains says the No. 1 characteristic the company looks for is a desire to serve customers.

"We can teach them about bread, but we can't teach them how to be great people and care about the customer," Rains says.

He says it's easy to rise above the competition with the right people in place.

"Competition isn't a challenge -- it doesn't drive our actions," Rains says. "We are driven internally to do better. Once you get the people part down, the rest goes easier."

Smart Business spoke with Rains about the challenges of competition, marketing and managing 49 locations.

There are a growing number of restaurants similar in concept to Panera. What are your strategies for competing for the same customers?

What attracted me as a customer was also what attracted me to get into the business, and that is the quality of the company. I worked with Ken [Rosenthal] when he started the company. He didn't make decisions based on money but based on quality.

It was an interesting, refreshing approach. He knew that customers cared about quality, and he made that part of the business model, which has helped make Panera different, and why we do what we do.

All of the menu items revolve around the bread experience, and we do things from scratch. This model allows Panera to be the star when it comes to quality. The chairman of Panera never says, 'Boy, we have this all figured out, let's not change a thing.' We have one of the best concepts in the country.

We work hard on product development and atmosphere. No one is sitting back and taking it easy. We work to make sure we have the best concept out there.

We have a lot of input from people at Panera LLC but not all great ideas originate at the corporate office. We listen a lot to our franchisees. They give us a lot of input on product development and quality. We've changed some of our products based on that input, like four or five years ago we changed the coffee.

What are your biggest marketing challenges?

One of the biggest challenges for us is to reach a bigger audience without dropping into the fray -- the great gray of mass marketing. You can throw so much money into mass marketing, but so much of it is tainted with claims that customers don't believe.

We have to be careful. We are researching how to reach big audiences without doing television ads.

The market in Denver is different than Columbus. In Columbus, we have 18 locations. Not everyone knows us but we have good name recognition. Our 11 Denver locations are large, and we are just beginning to get our name out. We hand out a lot of samples.

We are large enough in Columbus that we are a bigger player in community events. We are a donation partner with the Children's Hunger Alliance. We have donation cups at the stores and were able to give them a check for $32,000. Having that scale helps you do some of those things. We have an internal commitment that whatever the customer donates, we match in product donations.

How important is it to form a relationship with the customer?

People like their own Panera, the people there, the personalities. We want to stay grounded in the neighborhood -- that's what works, is the connection with the customers. The customers become emotionally attached.

It is rewarding to work here. I've been in the restaurant business for a long time, and this is a great place to work because of the environment and what you get from customers. It's dangerous to try and figure out how to squeeze every last dime out of a customer.

We want to be on the customer's side. It's not adversarial, so we don't have to start out convincing the customer that we're not a bad guy.

We don't shove products down a customer's throat. Customers want value. Cost isn't important -- value is.

What role does your partner, Ken Rosenthal, play at the company?

I'm biased when it comes to Ken. He is what you want in a partner. He is very honorable; I've never had to think about that part of it. I'm proud to say that Ken has a great ability to think like a customer. That's hard, especially day-to-day -- you can get so caught up in managing the business. But Ken has an intuitive sense of what customers will like and not like. And he is very knowledgeable about baking. That helps us a lot.

How important is it to hire the right people?

One of the things about this business is that it is low tech overall. The bulk of the business is labor-intensive and low-tech. Finding the right people, good people, is the challenge. It's not necessarily experience that is important but the desire to take care of the customer.

We have a person here that is responsible to hire general managers. But we are talking with The Ohio State University, for them to conduct a study for us to make sure we are satisfying our internal customers, too. Part of it may seem obvious -- it's little things like saying, 'Thank you.' Some are more striking.

I know the value our general managers bring the company. We are finding ways to make them never want to leave. People are not interchangeable. We work very hard, thinking about what people want.

We don't have really big egos here, either. No one says, 'We have to do it that way.' We have rules we don't break when it comes to quality, but on the other side, we go through a lot of ideas. We're not afraid to try new ideas. We really take a run at them, and don't punish people for trying.

How to reach: Breads of the World, (614) 457-8500 or www.paneraohio.com

Tuesday, 24 May 2005 07:32

A new arrangement

Forget those images of symphony orchestra patrons dressed to the nines and listening to an evening of the classics.

While the classics will always be around, Simon Crookall, recently appointed president and CEO of the Indianapolis Symphony Orchestra, has a different vision for how he wants the public to view his organization.

"We are still using a 19th century model," he says, adding that as part of his aggressive growth plan --which includes increasing the symphony's annual budget from $25 million to $40 million over the next five years -- he's set his sights on bringing the symphony into the 21st century by reaching out to a wider audience.

To do that, he recognizes that he must make people comfortable with the idea of attending concerts.

Thinking big is nothing new for Crookall, who comes to the job from an eight-year stint as chief executive of the Royal Scottish National Orchestra. Since he took over the Indianapolis Symphony early this year, he's been shaking things up and getting the symphony's 150 employees to look differently at their jobs and the organization as a whole.

"I like to ask the 'daft laddie' questions," he says, asking employees why they do things a certain way. And the answers often get people to look at their jobs -- and operations -- differently.

Another component to the plan includes reaching out to the schools to generate interest in the symphony among young people, ensuring future audiences.

"It would be helpful if there were a model to follow, but there isn't," he says.

Smart Business spoke with Crookall about why he came to Indianapolis and how he plans to increase funding and attract more interest in the Indianapolis Symphony Orchestra.

Why did you leave Scotland?

I had been chief executive of the Royal Orchestra for eight years and worked 20 years in the arts industry in the United Kingdom. There [were] limited career opportunities for someone in my position. It was not beneficial or suitable careerwise to continue because there were no opportunities to advance or move up.

There are a lot more opportunities and it is a different environment in the United States. There are more exciting challenges. It is a much bigger company. The number of musicians is the same, and it has the same work plan, the musicians are full time.

But here, instead of managing a 5 million pound ($9.5 million) company, I am managing a $25 million company. There are more employees on staff, and we also own the performance venue. I used to run a concert hall, so I had that experience as well. I am really moving from one kind of environment to another.

How did you decide on Indianapolis?

There are only 18 full-time orchestras in the country. I didn't want to go to anything smaller in scope. And it is an interesting stretch of my skills and talents.

The complexity of the organizational model made it a good entry point to the U.S. market.

What are the Indianapolis Symphony's greatest strengths?

Obviously, you look at the artistic profile, which is high quality. The orchestra is very well directed. I was familiar with the previous conductor -- he is British -- and I knew the current director from his work in Scotland. The organization has been extremely well managed.

It is in good financial shape and has a bigger endowment than I expected. It has a good, strong staff. It also has a diversity of performance. The symphony plays classical and pop. The Yuletide Christmas Show and the Symphony on the Prairie and children's activities are diverse products and very important.

What are your goals for the orchestra, and how do you plan to achieve them?

Orchestras, in general, need to think about modernizing their approach and look forward. We need to make it relevant to audiences through our outlook and image. We need to be reaching out in new ways to attract new audiences.

We need to constantly refresh ourselves to attract Generation Xers who are in their 20s and 30s. We need to work especially hard in the areas of education and outreach, introducing the symphony to schools and the community.

We have a very strong fund-raising goal -- to increase our budget to $40 million over the next five years. That will provide us with future stability. We are tying that with our vision of where we want to take the organization; we are still working on that.

But we need to demonstrate very clearly that we have got the future in mind. No company should ever stay static.

We can be creative, we have a lot of creative people, but they can be wary if you change the status quo. The fear is destabilization. We need to be confident in taking risks and trying new things. We are in our 75th year, which is wonderful, but we need to make it relevant. We need to take where we are now and constantly refresh and look at ways to improve.

Within the organization, I think there is an awareness of this. It was a good signal that I was appointed in the first place. But I don't have very long to get a new perspective because it won't be long until I get very involved in running the organization. There are advantages to coming in with fresh eyes.

How do you get people to innovate?

I ask a lot of questions, do a lot of challenging and lighting fires. I am asking why things are done a certain way. Some are [providing] very good reasons, others are beginning to question or ask, 'Maybe there is a better way of doing this.'

We are learning from each other by challenging and questioning and seeking out new ideas through debate.

What are the differences in the music industry between America and Scotland?

The biggest difference is the funding mechanism. In Scotland, 60 percent of our financing came from the government directly. Here, our government portion is almost too small to count. In Scotland, there was more of a political structure to the job and I spent a lot of time sitting in with government officials.

Here, although the political part is important, it does not have as much direct relevance. We keep the government more at arm's length and it can't influence what we're doing. Here, we are more involved with donors and the audience, and I welcome that.

It is more of a shareholder relationship, and our task is to deliver what the donors are paying for, which is the best possible outcomes. We try to build our relationships with the audience and our stakeholders. And we are more conscious of how to include people who are less fortunate so we are not perpetuating a product for the rich. We are seeking to cross social boundaries and work with schools.

What is the greatest challenge in your job?

Building that endowment will be one of my top challenges. And being able to adapt and modernize the symphony. The generic view of the industry is slightly old-fashioned. You think of people dressing up, and older people (rather) than younger.

We want to turn all those thoughts on their heads. We are here for you walking down the street. We want to be approachable; we want everyone to feel comfortable attending concerts.

We're already looking at our programs and the venue, and there is a lot of work to be done on our global strategic initiatives. It's all experimentation. We will go out and try to see what happens. It's exciting but challenging, too.

What is your biggest personal challenge?

Besides the language barrier? I am coming into a company that is very well run and organized and seeking to put my stamp on it. It is an interesting challenge. We have 87 members of our music staff, board members and audience, and my task is bringing them together and exciting them to accomplish new levels of creativity. It is a big challenge. But it's also what makes the job very exciting.

Obviously, the context of arts companies is that we are a business and we act as a business. We are seen as not-for-profit playing at running a business. We employ more than 150 people full time, so we have to treat it like a business. We have goals, plans and the same strategies tha t we apply. I have a degree in economics, not music.

That's another aspect -- we interact with a lot of other businesses to help further our aim and help the businesses publicize themselves. Some people think that the leader running the symphony is a failed musician. On the contrary; it is a complex model that takes considerable acumen to move forward and get the respect of the community.

How to reach: Indianapolis Symphony Orchestra, (317) 262-1100 or www.indianapolissymphony.org

Tuesday, 24 May 2005 07:05

All in the family

What does one do with a doctorate in physics? You might work for NASA, or develop new medical devices, or even teach young astronomers.

But if you're Kent Johnson, your degree takes you in a slightly different direction. This Harvard-educated physicist uses his advanced scientific knowledge to ... publish a children's magazine.

Two years ago, Johnson was well along the road to success, managing operations of a biotechnology company. Then, Garry Myers III, then CEO of Highlights for Children and the grandson of founders Garry and Caroline Clark Myers, called on Johnson -- a great-grandson of the founders -- to join the family business as a member of the Highlights board. Myers III wanted to name Johnson his successor.

"I was impressed with what I saw," says Johnson.

In fact, he was so impressed with the company's children-first philosophy and management style that he joined Highlights full time as vice president of strategic management. Myers III was equally impressed with Johnson.

"He accelerated his thinking, making more near-term plans," says Johnson. "I think he was feeling very comfortable that I was a good choice for the position."

Shortly after this decision, in January 2005, Myers III died unexpectedly of a heart attack, a loss that was felt companywide.

"Personally, it is a great loss," says Johnson. "He was the leader of our family as well as the company."

So while the company mourned Myers III, Johnson honored the succession plan and moved to the top spot.

For Highlights, Johnson's story is a bit of déjÀ vu. In 1949, three years after the first issue printed, Johnson's great-uncle, Garry Myers II, left his job as an aeronautical engineer to close down Highlights for his parents, the founders.

At that time, magazines were still sold door-to-door, and getting out the work about a magazine required a lot of time and money. And while the founders were well-equipped to produce the editorial side of the magazine, the day-to-day running of the business side was not their expertise.

But when Myers II arrived to begin closing down the business, he saw potential in the struggling company and decided to make it work.

Highlights flourished under his leadership, as well as the leadership of his son, Garry Myers III, leaving Johnson -- a member of the fourth generation of the family -- some very deep footsteps to follow.

But Johnson is ready for the task.

"So far so good," he says. "One of the things that went well is that Garry [Myers III] involved as many board members, senior executives and shareholders as he could with the succession plan. It created a smooth transition."

Johnson says the company's dedicated staff also contributed to the ease of the transitional.

"There are a lot of talented people committed to making Highlights successful," he says. "That makes it easier. I've gotten a lot of support."

And it is not just the children's magazine that Johnson heads. Under Myers III's leadership, Highlights expanded to include a family of eight related companies, with a common denominator of high-quality products for children and educators. These companies include a publisher of children's books, a publisher of educational classroom materials and a company that sells books and toys through in-home parties.

Johnson says Highlights' philosophy in choosing these new revenue streams was always children first and profit second. And that philosophy is still rules today.

"When we take a proposal to the board, the first thing they ask is, 'What good does it do for children?'" says Johnson, "[That's] before we even explore the idea of its profitability. But we are always looking for ways to add revenue."

Widening the scope

When Garry and Caroline Myers founded the company in 1946, their goal was to provide an advertisement-free venue for children. The Myers' worked for a similar children's publication for 12 years before starting Highlights and felt strongly that their editorial content should remain untouched by influential marketing.

"Philosophically, we are not against advertising," Johnson says. "We have a magazine for teachers that does contain advertising. We don't advertise to children. We do not want children to be the target of marketing messages."

But without advertising, the company needed to explore additional revenue-making opportunities.

"It is a challenge in a hard business to compete with publications that advertise," he says. "Not having that source of revenue makes it harder."

To keep Highlights a profitable competitor, Myers III instituted new marketing techniques for the publication and acquired other child-focused companies.

"The magazine had to change with the times to be relevant for kids today," Johnson says. "And we find ways to have parents, teachers and grandparents connect with the publication. As we grew more successful, the company systematically expanded into other areas."

And those other areas are proving successful additions.

"Zaner Blosser publishes textbooks for the language arts, writing, reading and handwriting," Johnson says. "When you look at the penetration we have in classrooms, we're having a significant impact on children. And children are the world's most important people. That's the original philosophy that unifies all of our products."

Johnson is confident that with continued thoughtful strategic planning Myers III employed, Highlights will continue to succeed.

"He saw strategic planning as an ongoing process," Johnson says. "We involved a larger number of people and refined the plan. It has to be a collaborative process, so you can get the necessary buy-in throughout the organization."

Myers III's three strategies -- related acquisitions, solid marketing and collaborative strategic planning --have made Highlights a force to be reckoned with. With more than 2 million subscribers, Highlights is the largest paid subscription-based general interest publication for children in the world.

A family affair

Johnson isn't the only member of the Myers clan to work for the company -- Kent Brown, grandson of the Highlights founders, is editor-in-chief of the magazine and publisher of Boyds Mills Press, which publishes children's books. Pat Mikelson, granddaughter of the founders, is president and CEO of Highlights Jigsaw Toy Factory Ltd., the in-home toy-selling company.

And the family is also present the Myers Family Council, founded in 1993 to keep family members informed about the business. The council holds meetings every three years, and publishes a newsletter and offers rotating seats on the board and a fourth-generation internship program.

"This is a family-owned company, and there is a very strong connection between the owners [the family] and the company," Johnson explains. "We take great pride in what our great-grandparents started and the impact it has had on us all over the years."

Johnson says being family-owned offers Highlights some competitive advantages.

"We have a very patient focus on the long term and we don't focus so much on quarterly reports," he says. "There is a long-term sense of stewardship and a legacy of contributing to Highlights."

While the Council doesn't play a role in the day-to-day operations of the company, Johnson says its presence is definitely felt.

"It's a way of fostering unity and consensus among the owners so they can speak with one voice," Johnson says. "The council provides the company with a shared feeling of the owners' desires."

Still, like Great-Uncle Myers II, Johnson is finding his own way and determining his legacy.

"Figuring out what to do will be my greatest challenge in the next few years," he says. "There is always change. Garry [Myers III] and I talked about how the world is changing around us. And we want to change and adapt with it -- but prudently."

Johnson says continuing to adapt the publication and company to meet the needs of children is -- and always will be -- the goal of the company.

"We are not known as cutting-edge, but we do want to change and adapt wisely, without losing sight of our mission," says Johnson. "Like our strategic planning, how to plan for the changes in the world is an ongoing process. And it's been ongoing since 1946 -- since the second issue."

How to reach: Highlights for Children, (614) 486-0631 or www.highlights.com

Monday, 25 April 2005 09:42

Speaking up

William Corley knows the importance of speaking his mind. It's a lesson he's learned during his 20-plus year tenure at the helm of Community Health Network, an organization comprised of five hospitals, six immediate care centers, three nursing homes and several other health care facilities across central Indiana.

Corley, president and CEO of Community Health Network, has applied this lesson to all of his organization's 8,500 employees. In fact, he's made it mandatory that all employees regularly give their managers input.

"You could be terminated if you don't express your opinion," Corley says.

Corley's vehemence when it comes to freedom of expression stems from the time he found himself on the opposite side of a position taken by Community Health Network's board chairman.

After debating the issue, Corley was convinced his opinion was the right one. So rather than acquiesce, he stood and fought.

"CEOs do not like being on the other side of the table from the chairman," Corley says. "And our chairman is different than a corporation's. Our chairman is always a volunteer."

Corley says this was the most difficult situation he faced during his business career.

"I knew if the rest of the board didn't support me, I was gone," he says.

Fortunately for Corley, the board did support him and the chairman resigned. But the experience was life-changing, and since then, Corley has worked hard to prevent a repetition. Accordingly, he stays in close contact with the current chairman to keep him informed and gauge his views.

"I've worked hard to ensure that everyone is on the same page," he says.

That philosophy translates to every member of Corley's work force, and he strives to ensure they voice their individual and collective opinions to managers and supervisors -- especially when they have complaints.

"Frustration causes burnout," Corley says. "Not overwork."

Research, Corley says, shows that people who are frustrated on the job are more apt to leave a company when a good offer comes along.

"Most people leave because they can't get along with a boss or co-worker and to get more money," Corley says. "But the major reason is the relationship issue. We want people to speak up. You use other people's ideas and give them credit. If you do, they will stay with the organization for a long time."

Considering the shortage of health care workers, it is not surprising that Corley recognizes that retaining his employee base is critical to Community Health Network's future. And, he says, those people must be able to express their opinions without fear of the consequences.

"I really want people to talk back to their managers," he says.

Priorities, priorities

Ask Corley about his top five priorities for Community Health Network's future success and it's not surprising that the first three are people-oriented.

First, he's working to develop exceptional patient and family experiences. Second, the organization is developing what Corley calls an even better experience for its employees. And third, Community Health Network aims to develop exceptional experiences and partnerships with its physicians.

"We believe they, as well as the employees, are crucial to our success with patients and families," Corley says.

The fourth priority is to determine Community Health Network's growth direction -- what facilities, new programs and services will be needed at the various locations. And the final priority is financial performance and growth.

"We put them in that order," Corley says. "Our employees and physicians provide the exceptional services, which will lead to our strong financial performance and growth. So our focus is primarily on the first three."

To best accomplish these goals, Corley relies on input from several sources.

"We have what we call a summit and bring in people from outside to talk with us, stimulate our thinking," he says.

Then a cross-section of employees, first-line managers, department leaders and top managers gather to develop the operating plan. This cross-section ensures that everyone at every level is represented.

"We believe that good ideas come from all levels," Corley says. "Often, the best ideas do not come from managers and senior leaders."

Included in the operating plan are timelines for action items and names of responsible parties.

Even with all this organization, Corley says the plan isn't set in stone.

"We review [it] quarterly," he says. "We want to be proactive, not reactive. We can't be proactive and just look at the plan once a year or every six months."

Counting on change

In Corley's world, change is good. In fact, he expects a great deal of change over the coming years. And, he wants Community Health Network not just to keep pace with those changes but to be at the forefront of them.

Part of that encompasses the impact of technology on the health care industry, an area where Corley says his organization recognizes the signs of things to come.

"New technology is coming out so fast, our ability to handle it is like drinking water from a fire hydrant," he says. "People want that technology. They hear about it very quickly."

Among the innovations are new and replacement medical devices, equipment, procedures and information technology. But Corley says it will be IT that has the greatest impact on health care providers.

"In the next five to 10 years, all of the information that is on paper charts will be on computer," Corley says. "It will improve the safety, reliability and speed of treatment. Information will move much faster, and people will take action earlier."

All of this, he says, is part of a gradual shift in the industry, from reactive treatment to a preventive medicine model.

"You'll still have injuries and accidents," he says. "But with so many more diagnostic tools available, early health prevention techniques will prevent heart attacks, strokes and diseases like diabetes from occurring."

Even the reimbursement system will change, he says.

"An open heart surgeon is paid a significant amount, while a primary care physician that prevents disease only gets paid for an office visit," says Corley. "That will change. We're changing from an illness society to an early health, wellness and prevention one. Health care will not be as expensive as it is now."

That's a bold prediction at a time of escalating health care costs with no end in sight. But Corley, as he's proven in the past, is willing to stick his neck out for something he believes in.

That's why he's preparing Community Health Network today for what he sees peering over the horizon. With input from his staff and employees helping to guide his decisions, Corley says he wants to act now and not wait for everyone else to jump onto the technology bandwagon.

"We try to be proactive rather than reactive," he says. "In some cases, it takes a leap of faith to be ahead of the curve. But we'd rather be there than waiting for the curve to happen."

That's one reason Corley recently formed a partnership with GE to serve as a testing site for all relevant new technology.

"As new IT comes out, we are an alpha site for those new things," he says. "We did our research and believe this is the way to go."

And when Corley says "we," he means it. Most decisions are reached through that all-important employee input, he says.

"Our top management team knows we must reach a consensus as a team and live with it," he says. "We work until we find a decision that everyone can live with and support. We know that not everyone has the same talents and skills, so no one person is making all the decisions. All of us are smarter than any one of us."

And Corley makes sure this environment permeates Community Health Network because, he says, that's where the real secret to an organization's success lies, within its employees.

"We use a lot of people's ideas," he says. "That is the power of any organization, being able to unleash the good ideas from your entire work force, not just management, because t he employees closest to your customer know their needs better than we do. That's why we foster their involvement and engagement."

How to reach: Community Health Network, (317) 355-1411or www.ecommunity.com

Monday, 25 April 2005 09:20

Barnum file

Born: May 9, 1942

Education: Bachelor's degree in business, Michigan State University

First job: Buyer and department manager, F&R Lazarus

Career moves: Partnered with restaurant developer in 1970; co-founded Max & Erma's in 1972, appointed president in 1977, assumed CEO and chairman roles in 1986

Boards: Boards of directors of Grange Bank, The Ohio State University Medical Center and Experience Columbus

What was your greatest challenge in business, and how did you overcome it?

Trying to maintain a small company culture as our company has continued to grow and spread out around the country. I have tried to do this by spending a great deal of time in the field and resisting layers of structure whenever possible.

What is the greatest lesson you've learned in business?

I am not that smart. How I have been successful is by building an organization of really bright people, getting out of their way, giving them credit for their success and keeping them focused. It's a formula that works over and over.

Whom do you admire most in business and why?

That list is long and continues to get longer. There is no one individual for me.

Wednesday, 23 March 2005 09:20

First things first

When Kathy Reehling started CREW Technical Services, her daughter was 1 year old and her son was 4.

Family and friends cautioned her that it might not be the best time to start a business, but Reehling was determined to make it work. The result is her family-first company, where employees can work a flexible schedule at home or in the office. And employees with sick children are encouraged to stay home.

"I didn't want to be in the office five days a week, eight hours a day, and I didn't want to ask anyone else to," Reehling says.

The system works for employees who value that flexible, family-friendly environment, but Reehling has learned that not everyone is disciplined enough to thrive. During a growth spurt, she hired employees who were skilled but not excited about the policy, and she had to let them go. Reehling says that now she doesn't hire anyone unless that person is enthusiastic about the company's policies and core values.

"We learned that that is a good indicator," she says.

Reehling is so committed to the family-friendly policy that it has become part of the company's core values, or 14 Commandments, which are posted on its Web site. "Family first" appears on the list, along with more common values such as honesty, integrity and quality. Reehling also encourages employees to have fun.

This atmosphere is not just working well for the company but is proving to be a wise business decision. CREW's family-friendly environment attracts higher-quality employees who are willing to take a smaller salary in order to have a flexible schedule and the ability to work from home or bring children to work, as needed.

"And these employees are happy, very loyal, and stay with us for a long time," Reehling says.

Smart Business spoke with Reehling about the benefits of running a family-friendly company.

Why do you post your 14 Commandments on the company's Web site?

The 14 Commandments are integral to who we are and the culture we've built. They are something we want everyone to know about. If a potential employee can't agree with them, then that person won't be a good employee for us.

If a client doesn't appreciate them, then the client won't appreciate CREW Services. It's an important way to get people to know who we are and what we're about. We are, however, consolidating the commandments because we feel that 14 are too many to expect people to remember. So we are paring them down to five core values.

We just recently moved to a new headquarters and are going to have them framed and hung on the wall. We've gotten a lot of feedback about them, and the one we get the most feedback on is 'Viva la difference.' It's also the easiest to remember. And it is an extremely important value: diversity.

The commandments also reminds us to be compassionate. We are keeping family first, and we strive for honesty, integrity and quality in all that we do. The five core values will encapsulate the 14, emphasize those that I mentioned and are easier to remember.

How do the commandments impact the way you run CREW and your strategic business planning?

We take strategic planning seriously. We don't do it and then put it away. We execute our plan and discuss it at team meetings twice a month. We have people that become champions of specific strategic initiatives. They report on the progress of the initiatives during the team meetings. The core values are a starting point.

As an example, at other companies, so much attention is on sales and profit. While we track that closely, one of our strategic initiatives is to maintain our corporate culture, and we devised goals for it. It's harder to measure and know we've accomplished the goals.

We also want the goals to be realistic. One way we're measuring this corporate culture goal is we are tracking every time someone on the management team has a connection with an employee. Since some employees work at home and some work on the customer's site, contact is very important.

We keep track of what kind of contact it was, who initiated it, whether it was face-to-face or e-mail. We also do surveys of both our clients and employees. Customer satisfaction can also be hard to measure. We do surveys and keep track of how many times we've interacted with the customer.

The surveys give the customer an opportunity to let us know whether they are happy or unhappy, and we act appropriately and make decisions based on that feedback.

Was there ever a point where you hit the wall with your business?

Yes. We actually had a banker tell us that we were insolvent at one point. But we knew we had some business developing in the pipeline, so we did what we could to get through. It is true that if you can learn from your mistakes, it makes you stronger.

We looked at how we could stretch what resources we had. And we really learned from that experience, especially because it forced us to do the hard things we hadn't wanted to do up to that point, like laying off staff that were adding to our overhead expenses. We didn't want to do it, but not doing it was killing our cash flow.

We did save the business, and were able to grow and employ more people. Laying people off is always an option of last resort, but what we have learned from that experience is not to wait so long to do it.

We saw it coming a second time in advance and did some juggling, assigning some of the staff to billable projects, and we didn't have to let anyone go. We learned our lesson.

What was the turning point in your company's growth?

One of the big turning points was when we were named a preferred vendor for a major client. Our work just doubled overnight, and we knew we had arrived.

Also, companies began knocking on our door wanting to be a subvendor to us. That's another point when we knew we had arrived.

What was the hardest business decision you had to make during that growth period?

When we were growing very fast, we hired people we shouldn't have hired. We lost sight of our employees. We had this vision that we wanted to be a great place for people to work. It takes a lot of self-discipline to work here because you can work from home.

Some people think it is easy, but it isn't. People are paid for what they produce, and it takes a tremendous amount of self-discipline. There are many people who can't do well in our environment.

We hired people that had the skills we needed, but I got a sense that they probably wouldn't work in that environment, then we had to let them go. Our policy is that you are only paid for every hour you work. You don't get vacation days. We do give a vacation bonus twice a year, so people can afford to go on vacation, but not everyone can manage their money.

We explain that during the interview process. If the person is not excited about the system, then he or she is not a good fit for the company.

We tend to hire women who are re-entering the work force, and they like the flexibility the job offers. They can take time off at spring break to spend with the family, for example. It can be hard for some people, ideal for others.

What a lot of our employees like is that if the kids are sick, we tell them to stay home with the kids. If the employee is uncomfortable with the system, then it is probably not going to be a good fit.

What challenges have you faced as a woman business owner that your male counterparts may not have?

I don't play golf, so I don't do golf course deals. I can't take the head of the Indiana Airport Commission out for drinks; it wouldn't be politically correct. But if I were a man, he wouldn't think twice about it.

I belong to the Young Presidents Organization, so everyone knows me from that. But when I go to regional or national meetings, everyone assumes that my husband is the member.

There are some advantages to being a woman business owner. I think it is easier for employees to knock on my door and talk to me about anything. I think I'm seen as more nurturing, I am more nurturing.

I went to a meetin g at a big pharmaceutical company once and there were representatives from each vendor there. There were 300 men in dark suits and me in a red suit. They remember me.

How did you build the family-friendly culture, and what do you do to nurture its growth?

The policy started because when I started the company, my daughter was 1 and my son was 4. Our friends and family members said 'You'll hate yourself if you start the company now. You need to eat, sleep and breathe a start-up company.' I didn't see why I couldn't start the company and bring others in so I didn't have to live the company 24 hours a day.

I job-shared from the start so I could work at home one day a week. And at that time, most of the people I knew were mothers of young children, some of whom were interested in working part time. So we built a system that worked for us. It not only works, but it's good business. We are attracting fabulous employees that are willing to work for less because of the flexibility we offer.

Not everyone fits, but we get rid of the occasional bad apple and move on, working to keep the good, loyal employees.

How to reach: CREW Technical Services, (317) 713-7777 or www.crewtech.com

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