Laura Taxel

Thursday, 27 October 2005 20:00

Mann power

Alfred E. Mann is equally comfortable in a scientist’s lab coat and the executive’s requisite jacket and tie.

He is a researcher, an inventor, an investor, a philanthropist, a savvy and successful entrepreneur, and a consummate business leader. Equipped with a master’s degree in physics from University of California Los Angeles, Mann started his first business, Spectrolab, in 1956, which became an international supplier of photovoltaic solar cells, panels, searchlights, and solar simulators.

Since then, he has founded and led more than a dozen profitable companies, taken two of them public, and sold seven, and he shows no signs of slowing down. In a career that spans 50 years, he has patented numerous innovative products, from semi-conductors and electro-optical components for the aerospace industry to neurostimulation systems and drug delivery technologies.

But what he really wants to come up with is the 48-hour day.

“There just isn’t enough time to do everything I want to do,” says the energetic 80-year-old. “I consider myself fortunate in that many of my endeavors have extended life and improved its quality for people. This inspires and drives me to go on seeking ways to create benefit for others.

“Besides, what else would I do with myself? Play golf? I don’t have the patience for that.”

Even an abridged version of his current activities makes it clear why he needs to get two days out of every one. He is CEO and chairman of the board of MannKind Corp., a diversified biopharmaceutical company and chairman and co-CEO of Advanced Bionics Corp., a firm he founded in 1993 that is now a Boston Scientific company.

He serves as nonexecutive chairman for five other medical technology companies he launched between 1998 and 2004, as well as for a sixth he acquired during the same period. He is chairman of the board of trustees of the Alfred Mann Foundation and of the Alfred Mann Institute at the University of Southern California, and chairman of the Southern California Biomedical Council, a nonprofit group that fosters the growth of the biomedical industry in metropolitan Los Angeles.

By any measure, Mann, who generally puts in an 80 to 90 hour workweek, appears tireless in his pursuit of challenges, motivated by a deeply-held desire to do good and a relentlessly curious mind. After he and his team at Advanced Bionicscochlear created implants that allow the deaf to hear, he posed the question, “Now what can we do for the blind?”

So among Mann’s latest ventures is the development, manufacture and marketing of a visual prosthesis. But the company’s primary focus is on a pulmonary inhalation delivery system for insulin to treat those with Type 2 diabetes.

“This is a unique approach that could restore function to those suffering from a terrible disease,” he says. “It represents a totally new treatment paradigm. There is such great potential, and I feel that I must move this along before I leave this Earth.”

Mann also has a talent for seeing opportunity, turning ideas into business plans and motivating others to join him.

“I expected to spend my life in a laboratory, not a boardroom,” he says with a laugh, “but that’s not quite what happened. I guess I’ve always had an entrepreneurial spirit. I sold lemonade, Liberty magazines and newspapers when I was a kid. It requires a risk-taking psyche to start and build a business, and by nature, I’m a very daring guy.”

Taking risks has paid off. Mann was named one of the country’s 400 richest men in 2004 by Forbes, with a net worth of $1.4 billion. He has been honored by Arthur Andersen, NASA and the National Academy of Engineering. Ernst & Young dubbed him Master Entrepreneur Of The Year (1996), the Los Angeles Times listed him as “One of the 10 Most Influential People on the Tech Coast,”(1999) and a local business journal named him Business Person of the Year, (2003).

Other than a short stint at Harvard Business School’s Advanced Management Program, Mann’s prodigious expertise in running companies has been gathered on the job. And he is an encyclopedia of practical wisdom.

“Entrepreneurs think that if they’ve got a good idea, then they will surely take the world by storm, but a lot more is required to build a thriving business,” he says.

Mann defines the key elements required for success in terms of a 10-rung ladder, starting at the bottom.

  • Product
  • Manufacturing
  • Marketing
  • People
  • People
  • Management
  • Leadership
  • Capital
  • Capital
  • Capital

Capital is most important,” says Mann. “I can’t emphasize that enough. That’s why I list it three times. The failure of most promising businesses is usually due to inadequate funds for the start-up and early growth phase of the enterprise.

“Product is actually last on the list. It surprises most people when I say that, especially coming from me because of my technical background.”

In a speech he gives called “How to Succeed in Business by Really Trying,” Mann tells his audience, “The better mousetrap does not make itself and does not sell itself. Nor does it finance itself.”

He advises would-be entrepreneurs to find an under-served area where there are few competitors and one dominant player. Typically in this situation, he says, the technology of the dominant player is antiquated. Look for ways to improve it.

“First, see the problem. Then, provide a solution,” he says.

But, he adds, success will depend upon your ability to deliver enough product of high quality at sufficiently low cost. To do that, you must have manufacturing expertise, skilled managers and a team of committed, loyal, competent employees. To demonstrate the value he puts on people, Mann lists them as both the sixth and the seventh rung on his ladder.

“Good people never let you down, and they should always be treated with respect. Create programs to recognize, support and reward your employees at all levels. There is an art to finding and keeping the best.

“Look for those who share your vision and your core values and who are in it not just for the money but because they want to be a part of something. And remember that talent attracts talent.”

And it is visionary leadership that carries a company forward. According to Mann, effective leaders must project an image of integrity, commanding credibility, trust and respect from staff, customers and suppliers. When decisions must be made, leaders are decisive and responsive. They set an example, effectively delegate, establish clear objectives and expect quality performance, but are also patient and understanding.

A good leader, he says, is motivated not by his or her own self-interest but by the interests of the entity, its staff and its backers. He or she inspires others to share the vision and commit to building the venture over the long term, and conveys that all will share in the rewards as well as the struggles.

For all his ability, expertise, and accomplishment Mann is modest person, evidenced by his admiration for the women on the factory floor who assemble the cochlear implants.

“I don’t have the dexterity to do that,” he says. “They are absolutely integral to the company. It makes me angry when I hear business leaders take the credit for a company’s achievements. Success is a result of everyone’s contribution, at every level of an organization.

“If I’ve learned one essential lesson over all my years in business it is that the best leaders know their limitations. When I can’t do something, I get someone on the team who can.”

HOW TO REACH: MannKind Corp., 661-775-5300, www.MannKindcorp.com

 

Thursday, 27 April 2006 20:00

Growth expert

Richard G. Newman is sort of a gardener on a grand scale. You could even say he has a green thumb.

However, his special ability to make things thrive produces healthy profits rather than sweet fruits and beautiful flowers, because the 71-year-old Newman grows businesses, not plants. Companies have been flourishing under his care since the 1950s.

His formula? Cultivate core competencies, help clients solve their problems and maintain an employee-focused culture.

“I’m a firm believer in sticking with what you know, surrounding yourself with the best people, aligning their interests with those of the company and putting customer needs ahead of your own,” says Newman. “Do that, and the money follows.”

He’s used that simple formula throughout his career.

Trained as civil engineer, Newman’s first success was to nurture a 16-person engineering firm into one with 260 employees and eight offices that was subsequently bought by architectural and engineering firm Genge. Newman became Genge’s president and made it into one of the largest companies of its kind in the United States.

He then moved to Daniel, Mann, Johnson & Mendenhall. During his tenure, first as deputy CEO and later as president following its purchase by Ashland Inc., the company tripled in size.

His most recent achievement was as CEO of AECOM, the parent entity for a global group of companies that works on infrastructure and facilities projects for governments and private clients.

He took the company from $300 million in revenue in 1990 to $2.5 billion in 2005.

AECOM, formerly known as Ashland Technology Corp., was launched in 1990 as an independent spin-off of Ashland Inc. Newman stepped down as AECOM’s CEO in 2005 and now serves as chairman of the board.

The unusual way AECOM began reflects Newman’s conviction that service businesses must attract and retain the best people, and the best people want more than a job and a paycheck. They’re eager for a role in building a business. That’s why he structured an employee buy-back proposal in 1989 when Ashland reversed directions and decided to sell various divisions it had acquired in its push to diversify.

“If you want to provide incentives, give employees a sense of ownership,” says Newman.

He risked more than $3 million of his personal assets to jumpstart the process of transforming employees into shareholders, and within eight years, AECOM was 100 percent employee-owned. These employee shareholders have earned an annualized 12 percent return on their investment during the past 15 years.

“There was a groundswell of excitement and support within the firm,” says Newman. “Everyone wanted to contribute. It was clear that people were hungry to be a part of this.”

Employees choose whether they want to be shareholders, and approximately one-half of those in the United States, where 401(k)s allow them to invest, do.

The obvious advantage is that by making employees equity holders, they create value for themselves.

“Our success is their success, so they invest in the future of the company, both in terms of money and their day-to-day effort,” says Newman. “The company benefits by getting a steady infusion of new capital, along with the energy and enthusiasm that is a byproduct of this arrangement.”

Mergers fuel growth
Strategic and carefully managed mergers are another key element in Newman’s vision of how to grow a business. Such mergers generate outstanding opportunities for professional development and advancement within the company.

Firms are selected because they expand AECOM’s capabilities, enhancing its geographic reach and skill set. But rather than swallowing each one up and diluting its identity, Newman’s megastructure concept folds it into AECOM’s family of companies. Often, a company continues to operate under its own name and retains its own management team and culture.

“We like to say companies are joining us rather than that we’re acquiring them,” Newman says. “It’s a kind of reverse merger. The model allows us to maintain our brand while bringing in new talent and significant expertise so that we can better serve our customers.

“We typically look for companies that are 5 to15 percent of our size that offer us a competitive edge strategically in terms of location or know-how. But we’re always asking ourselves, ‘Is this too big a deviation for us?’ We never go into mergers looking to save money. In fact, it may even cost us money. The goal is always to improve our problem-solving capacities.”

AECOM is organized into eight distinct operating entities, and groups are either geographically or technically aligned. Each has its own CEO, who reports to AECOM’s COO, who reported directly to Newman until he became chairman.

It is no accident that both the current COO, James Royer, and Newman’s replacement as CEO, John Dionisio, joined AECOM through mergers. Newman sees promotion from within as a significant benefit the company can offer. The operating group structure allows candidates to get acquainted with their future colleagues and demonstrate their capacity for leadership.

Groups and companies cross-sell, collaborate and interact. Know-how is a collective asset. Professional forums are held regularly to keep everyone informed of what resources are available within AECOM. Executives do a great deal of traveling to stay in touch with one another, share with other groups and have dinner with senior managers. The top CEOs gathered for a retreat at Newman’s desert home last year.

“We have a very formalized communications process, but a lot of valuable and meaningful exchange also happens informally,” Newman says.

One essential factor for managing expansion is to have good financial and administrative systems in place.

“Accountants, lawyers, human resources staff — these are the people who support the entrepreneurs who are growing the company and the technical professionals servicing our clients.

“It also requires a leadership team that understands the areas into which you are expanding. We’re a huge organization, so we move like a battleship, making little turns slowly and carefully.”

Attitude matters
Despite AECOM’s size, Newman has relied on some very basic principles to guide it. Mutual respect and trust, or MRT for short, is one of them.

It’s an acronym Newman uses to describe how every person in the organization is expected to interact with one another and with clients.

“It’s essential to listen to other people, even if you don’t agree with them and no matter who they are. You never know who has something you need or where a good idea will come from. I want us to be known as an MRT company.”

He’s also inspired by something he once read describing the three P’s of Japanese managers: persistence, patience and politeness.

“I have always tried to embody these three simple qualities in everything I do,” he says.

And lastly is his attitude toward problems, especially those of AECOM’s clients.

“I don’t believe in cookie-cutter answers,” says Newman. “Every solution should be individualized. Within every problem is the possibility of innovation.”

AECOM continues to grow, even though Newman is no longer the head “gardener,”and he thinks this is due in part to his implementation of a smooth transition.

“One of the most important jobs of a CEO is preparing for his departure,” says Newman. “I have been planning mine for three years. An organization is not a one-man show. It’s essential for everyone to understand that.”

But Newman is busier than ever as chairman, and he is taking his practical perspective about how to achieve stable growth to a variety of other businesses. He’s a director of Southwest Water Co., Sempra Energy Co. and 13 mutual funds under Capital Research and Management Co.

“I’d much rather be working than playing golf,” says Newman. “I love what I’m doing. I always have.”

How To reach: AECOM, (213) 593-8000 or www.aecom.com

Wednesday, 29 March 2006 11:15

Building family

You don’t just get a job with 84 Lumber, you join the family.

That’s not merely a figure of speech or a reference to the fact that leadership of this privately held company passed from father to daughter in 1992. It’s a philosophy that inspires Maggie Hardy Magerko and shapes the way she has run this business since she became its president.

“I know it sounds corny, but I really do try to create a family atmosphere throughout the company, in which we are all helping each other,” says the 40-year-old executive, wife, and mother of an 11-year old son. “We don’t believe in politics around here. I want people to be open. If there’s a problem, my attitude is, let’s come together, talk about it, figure out how to fix it and move on.”

Magerko says one way to maintain this mutually supportive culture is to advance employees up the company ladder.

“We promote more than 90 percent from within the company and consider every hire, other than our outside sales force, a manager trainee,” says Magerko. “Members of the sales force have a separate ladder they can climb.”

She says when employees have opportunities for career advancement, they are more likely to stay, and this creates a cohesive, consistent, and loyal work force familiar with the firm’s procedures and values.

This idea, like just about every other one she’s put into place, has had a positive impact. The company posted $3.92 billion in sales for 2005, a 13.5 percent increase over 2004. The new numbers mark the 14th consecutive year that 84 Lumber has broken its own sales records while expanding at a rapid rate.

The building materials supplier added 33 stores last year and now numbers more than 500 locations in 40 states, including 19 plants for the manufacture of trusses, floor components, and wall panels. The company expects to open 50 additional stores in each of the next three years, with a concentration on the Southeastern and Western United States, where housing markets are strong, and in the hard-hit Gulf Coast region to meet the area’s most pressing and long-term needs.

This year marks the company’s 50th anniversary, and with Magerko at the helm, it’s become a very different operation than it was when her dad and 84 founder Joe Hardy ran things.

He started a cash-and-carry lumberyard in the rural town of Eighty Four, Pa., in 1956, and the company is still headquartered there. Within five years, Hardy’s low-overhead, no-frills approach had taken off, and he embarked on an expansion program.

Over time, the focus shifted, and the original customer base of homebuilders was replaced with do-it-yourselfers. But by the early ’90s, 84 Lumber was losing its market share to Home Depot and Lowe’s.

Realizing that their company couldn’t win in a battle with these big-box retail giants, father and daughter decided to change directions. At the same time, Hardy ceded day-to-day control to Magerko.

“When I took over, we immediately started targeting professionals again and implemented credit services,” says Magerko. “Now, 95 percent of our sales are to contractors. Instead of just sitting behind the counter waiting for shoppers to come in, we go out and get the business aggressively. And then we provide the pros with incredible service, every step of the way.”

More than 10,000 employees nationwide are responsible for delivering that service, and hiring the right people is critical to the company’s continuing success. Magerko wants individuals with passion, energy and “a twinkle in the eye.” And she says she can always pick out the 84 type in a crowd.

“They’re the ones that look at you, not down at their shoes,” she says.

In interviews, potential members of the 84 family must show that they are career-minded rather than job-oriented, and demonstrate an entrepreneurial spirit.

“Our managers have a lot of autonomy because I’m convinced a store only does as well as its manager,” says Magerko. “These are the people who really make the difference. So I want them to feel like they own the place.”

To attract these kinds of people, hard work and loyalty are rewarded. 84 Lumber offers young people great earnings potential, training that includes a home study course and a profit-sharing plan — available to all full-time associates with one year of service — that’s fully vested after seven years. When a store meets its monthly quotas, every staff member gets a bonus.

Magerko is a very hands-on executive. She doesn’t believe in leading from an ivory tower or a corner office.

“You can sit at your desk and read reports, analyze the numbers,” Magerko says. “But you don’t know what’s really happening unless you’re talking with the people who create those statistics.”

Six regional vice presidents report directly to her, and each is responsible for 60 to 90 stores. Area managers, who report to the VPs, deal with six to 18 stores each. And to keep the communication open, she regularly holds what she calls regional Town Meetings.

“Everyone gets a chance to offer their ideas about how we can improve the company and bring issues to my attention,” she says.

84 Lumber is the opposite of a top-down enterprise. Because of Magerko’s conviction that the company’s success is determined at the store level, the mix of products and services at each location is customized to meet local needs.

In a sense, every site represents a niche market, with inventory and even layout tailored to the specific demands of area homebuilders. Insight about each community comes from the people who know it best.

“Everyone works for the store managers, even me,” Magerko says. “Listening to them is the No. 1 thing we do that helps us grow and grow healthy. I learn from them every day.”

If margins go down even slightly, Magerko hits the road.

“I make it my focus,” she says. “I meet with area and store managers. We go over financials together. I find out who needs help. With this approach, we’ve gotten ourselves back on track in as little as two weeks.”

These visits also give her a chance to deliver her own special brand of inspirational encouragement.

“My strength is motivating people to believe in themselves,” says Magerko. “Mental attitude is everything. Each person can become exceptional, and I let them know we’ve got their backs and we’re here to help.”

Her style is the opposite of her father’s. She ruefully admits he was an old-style manager who ruled by fear.

“When he got angry, you knew it,” she says. “He could make the walls shake, and he did just that on many occasions. I don’t believe in doing things that way. I’d rather energize people to sign on to our program and our goals. Nothing makes me happier than to see average-performing people become extraordinary and extraordinarily successful.”

One of the primary responsibilities of area managers is to hire smart. The company runs lean, and vacancies can really hurt. By identifying capable individuals who fit the profile and are in it for the long haul, and then giving them on-the-job experience in every aspect of store operation, from cold calling to order fulfillment, 84 Lumber creates its own pool of applicants for every position.

And managers can easily find out who is willing to relocate. A recent investment in a computerized database containing bios of all of its employees is paying off.

“We can match an opening in California with an associate in Florida who has family on the West Coast,” Magerko says. “That tells us they might be happy to consider a move out there. So we can now find a promotable person within our organization very quickly.”

84 Lumber has the resources to continuously open new stores. In fact, Joe Hardy, who turns 84 next year, is constantly scouting potential locations. But the critical factor is whether the company has managers capable of staffing those locations.

The plain-speaking, straight-talking Magerko doesn’t even have to stop and think when asked what makes a good manager.

“You’re willing to bust your butt to get the job done,” Magerko says. “You fulfill your promises. You lead by example. You’re the first one in and the last one out. You know that service means going beyond the ordinary. And most important of all, you genuinely care about your people.”

How to Reach: 84 Lumber, http://www.84lumber.com or (800) 664-1984

Tuesday, 27 September 2005 12:13

The Antin file

Born: 1950, New York City

Education: Bachelor of arts degree, State University of New York at Cortland; MBA, Cornell University

First jobs: Delivering dry cleaning and driving a taxi

Career moves: Various positions within American Medical International, including a stint at the helm of a subsidiary, AMI Ambulatory Centers; president, CEO, director and co-founder, AlternaCare Corp.

What is the greatest business lesson you’ve learned?

The best leaders and managers appreciate their own good fortune and help others develop their potential.

What is the most difficult challenge you’ve faced?

In 1996, we missed our earnings goals. We were still a young company, we had high expectations, and we’d grown too fast. It forced us to reassess our plan and look for ways to overcome our problems. Three months later, we were back on track

Whom do you admire most in business and why?

I can’t answer that question because I don’t think in those terms. But I can tell you about a man who had a big impact on me. His name is Royce Diener. He was the president, CEO and chairman of American Medical International, which operated the first investor-owned hospital in the country. I worked for him. Essentially I was his go-fer, even though I already had my MBA. He pushed me to make decisions and try new things by continuously reminding me that nothing I could do was so important that it would harm the company. It was an unusual way to build up someone’s confidence, but it was effective.

Friday, 29 July 2005 09:59

Accounting for success

What does an accountant say when you ask him the time?

It’s 9.18 am and 12 seconds; no, wait — 13 seconds, no, wait — 14 seconds, no, wait ...

Let’s face it — accountants have something of a reputation as obsessive bean counters, people who live and die by the numbers. To these types, mistakes are a nightmare.

Alan F. Schultz is trained as a CPA but he certainly doesn’t conform to the stereotype. As chairman, president and CEO of Valassis Communications Inc., a provider of integrated direct-to-consumer marketing and promotion services to clients in the United States, Canada, Europe and Mexico, he’s a big-picture thinker, a man who sees the future, plans for the long haul and has a high tolerance for error.

“Being risk-averse stifles growth,” says Schultz, who joined Valassis in 1984 and has served as its leader for the past seven years. “I encourage people to be forward-thinking, to move outside their comfort zones in pursuit of innovation.”

Consumers have an ever-increasing array of tools that let them opt out of receiving marketing messages. For a company such as Valassis, the key is to stay ahead of the technology and create imaginative and productive solutions for its customers.

Valassis serves manufacturers of consumer packaged goods, retailers and tech companies, offering a portfolio of newspaper-based, direct mail, direct-to-door and Internet promotion products. It can reach as many as 69 million households in a single day with messages from its clients, which include 80 of the top 100 advertisers in the country.

To do that effectively, new ideas are essential. Some will work, others will flop. A willingness to try things that have not been done before allows a large, established company such as Valassis, which posted rev enue of more than $1 billion in 2004, to retain the energy and flexibility of a smaller, more entrepreneurial one.

And this ability has helped it become and remain an acknowledged leader in its field.

“Our industry is constantly changing,” Schultz says, “and we have to change with it. In 1998, we had 1,500 employees. Today, we have 4,000, and more than half of them are involved with products and services we didn’t even offer back then, including database marketing and performance analysis.”

As a result of the expanded products and service, revenue is up.

“Our fourth quarter earnings reflected 27 percent revenue growth,” Schultz says. “That’s the largest increase in our 13-year history as a publicly held company. I believe it’s a result of our willingness to take risks. You can’t create anything exceptional without it.

“From that perspective, wrong decisions become learning experiences. That was a lesson life taught me when I was 9.”

Laughing at the memory, the 46-year-old Schultz recounts a visit to a carnival. His mother gave him $10 to spend, and he got suckered into blowing it all on a game of chance. Every time he failed to knock over some metal milk cans and win a stuffed animal, the carney convinced him to keeping trying.

“I thought she’d be mad when I told her what happened. Instead my mom gave me another $10, and a piece of advice — don’t make the same mistake again. You can be sure I made that money last all day.”

That experience informs his business model. Schultz, who says he’s been reading stock reports and preparing to run a company since he was 14, strives to create a safe space for experimentation and the failures that come with it. Shared, one person’s mistake becomes useful information for somebody else.

People who work for him soon discover that they’re not putting their positions or careers in jeopardy by thinking outside the box — or in the case of Valssis, thinking off the page and outside the coupon book and sample bag.

This spirit contributes to a culture of growth, says Schultz, that, in turn, generates opportunities for professional advancement and personal development. And that helps the company draw and retain a talented, energetic and loyal work force.

“Once you have a base of great employees like we do, it becomes easier to attract more of them,” Schultz says.

The company’s culture has also contributed to its eight-year run on Fortune magazine’s list of the “100 Best Companies to Work For.” It’s one of only 22 companies, and the only one based in Michigan, that has been on the list every year since the magazine began publishing these ratings.

“Fortune randomly surveys employees,” says Schultz. “Two-thirds of our score comes directly from their responses. Our staff are responsible, in large part, for putting us on that list and keeping us there.”

He’s convinced that good communication and frequent celebrations fuel their positive attitudes. Management actively solicits input and feedback from staff at every level, and intradivision exchange is encouraged. Diversity councils are in place at facilities in Michigan; Durham, N.C.; and Wichita, Kansas. Pats-on-the-back and praise are standard operating procedures.

It begins, Schultz says, with a clearly articulated vision for the company.

“When everyone is moving together toward the same end, it naturally eliminates a lot of competition,” he says. “The result is a better, healthier, happier work environment for all.”

He outlines a seven-step action plan for implementing a culture that allows the company — and its employees — to thrive.

  • Involve a large cross-section of people, at a variety of levels, in the creation of a mission statement.

  • Make sure every employee understands it. Define each word.

  • Link job descriptions to specific elements/aspects of the vision.

  • Go back and sell it to your staff so that every member buys into it and sees how he or she can contribute.

  • Empower employees to pursue it.

  • Regularly assess performance in pursuit of the mission goals, update strategies and keep people informed.

  • Highlight successes and recognize achievements.

The company measures performance against specific criteria at quarterly intervals, holds a more comprehensive annual review and provides every employee with a scorecard of outcomes. Vision awards acknowledge individuals who have made significant contributions, and rewards include everything from announcements and trophies at after-work gatherings to an around-the-world cruise, a prize for the company’s best “global thinker.”

“Success breeds success,” says Schultz. “People are motivated by their own and the company’s progress, so we invest time and money in getting the word out. There’s nothing like winning to create enthusiasm.

“And all of our employees have stock options, which means they are aligned with shareholders and have a personal interest in creating value for the company.”

For Schultz, there are two ways to approach running a company and managing its employees. One is to identify weaknesses and strive for improvement. The other is to see where your strengths are and capitalize on them. He ascribes to the second, positivist attitude, and recalls that he learned its value as a high school athlete.

“I had a coach that led our basketball team to the state championships without a single player over six foot,” he says. “He worked with what he had, knew how to bring out the best in each person and made every player as good as he could be.”

Like a truly great coach, Schultz credits the team for his winning track record at Valassis. He’s not the kind of CEO who grabs the limelight, and he’s more comfortable talking about what others do right than what he knows. As a member of an executive committee that forms the ultimate decision-making body, Schultz has one vote, just like the other five members. And he likes it that way.

“I am only one of many,” he says. “I have a role to play in the company, but so does everyone else. My goal is to create an organization that can function exceptionally well without me, and my job is to empower and motivate our employees to do their jobs. I see myself as a facilitator.”

He admits he’s amused — and a little confused — by what’s best described as the power portraits that often grace the pages of business magazines, and, it should be noted, resisted the idea of being photographed alone for this article.

“CEOs are typically pictured standing alone, arms folded across their chests, as if to say that they are personally responsible for selling every order and loading every truck,” he says. “That’s not the reality, and the danger, when you are a leader, is to make yourself the focal point for an organization.”

The truth, he says, is that the head of a big company has very little to do with the day-to-day operations that drive the organization. Schultz has what he describes as “a strong, talented team in place,” assembled by putting people in positions where they can excel and then giving them room to build on their strengths.

That leaves him free to concentrate on connecting the multiple constituencies he serves, representing the interests of investors, employees, suppliers and customers. His secret to doing that well is no secret at all.

“Things are only as complicated as you make them,” he says. “Despite what some MBA programs may suggest, being a good CEO is not that difficult. It comes down to basics. Listen. Build relationships. Treat people well. Never forget that it’s the little things that count.”

HOW TO REACH: Valassis Communications Inc., http://www.valassis.com

Wednesday, 27 July 2005 20:00

People, planet, profit

With his signature ponytail, beard and characteristic tie-free attire, John Paul DeJoria doesn’t look like a typical CEO. And he’s not.

John Paul Mitchell Systems, the professional salon product manufacturing company he co-founded 25 years ago, is an industry leader with annual retail sales of approximately $700 million. But JP, as his friends and colleagues call him, plays by his own rules.

“I believe in having fewer moving parts in an organization and doing more with less,” says the 61-year-old chairman and CEO. “Growth and expansion usually come with increasing layers of management, but not at John Paul Mitchell Systems. I keep things lean intentionally. It helps maintain the sense of family and team spirit that’s part of our corporate culture.

“My 130 employees do the work of 300. And in 25 years, we’ve had very little turnover, replacing only 15 people in all that time.”

How does he attract and retain these dedicated super-achievers?

“Hire the best and treat them well,” he says. “I expect more, give employees more responsibility than their peers in other companies and I pay them more. When I was building this business, I did everything from selling to keeping the books, and now I look for that same versatility in others. I choose people who want a career, not a job, people who want to be part of something.”

He also offers some unusual benefits. Because of his commitment to environmental activism, employees who carpool are reimbursed for their gas expenses. He also provides a meal on the house to those who work at corporate headquarters in Beverly Hills.

“Ever heard the expression, there’s no free lunch?” he asks. “Well, at my company, there is.”

Doing things differently is a DeJoria trademark. He and partner Paul Mitchell, who died in 1989 of pancreatic cancer, started the company in 1980 with a radically innovative hair care product, styling method and marketing concept. Their hair sculpting lotion was sold only to salon owners and stylists.

The partners took it door-to-door, providing free training demos. And they promised that unsold products could be returned for a full refund.

It was an idea, not a business plan. To say that the venture was seriously undercapitalized — think a borrowed $750 — is an understatement. Their first year, says DeJoria, was all about avoiding bankruptcy and staying afloat.

“We should have gone under. It’s amazing we didn’t,” he says. “Our short-term objective was just to be able to pay our bills and take home a little money for ourselves. Our big dream was to one day have $5 million in sales.”

The man and the business have clearly exceeded those aspirations. DeJoria, who was raised by a single mother, with no silver spoon in his mouth or a college education to give him a leg up, is a self-made multimillionaire and philanthropist. He runs a global beauty empire that is one of the fastest-growing privately held companies in the country — not bad for a kid who was voted least likely to succeed in high school.

“I’ve sold everything from encyclopedias to life insurance,” DeJoria says. “The most important thing I discovered is that the difference between successful people and unsuccessful people is that the successful ones do the tough stuff that others don’t want to. That means after getting a door slammed in your face 10 times, you still go to door No. 11 with just as much enthusiasm and a smile on your face.”

John Paul Mitchell Systems works with distributors in 46 countries who supply approximately 90,000 salons in the United States and another 15,000 worldwide. The company has maintained its commitment to hair care professionals, selling its 90-plus products only to salons. Because John Paul Mitchell System’s financial health is directly linked to the profitability of those who buy from it, it also provides these small businesses with the tools they need to thrive.

“Part of our mission is to educate,” DeJoria says. “We teach everything from how to use our products and display them to how to keep their clients coming back. We offer free in-salon courses and inexpensive advanced classes at seminars and our affiliated schools. We see ourselves as a resource for our customers.”

DeJoria takes a hands-on approach to running the company, visiting the hair care salons that stock his products just as he did in the early years. In fact, he spends only one or two days a week in the home office. The rest of time he’s on the road, or more precisely, in the air, traveling from city to city to meet with regional managers, distributors, sales reps, salon owners and stylists. That’s why he calls his private plane his most important communication tool.

“I’m not a big fan of cell phones, and I don’t do e-mail,” he says. “I prefer face-to-face contact whenever possible.”

DeJoria didn’t get his know-how from an MBA; instead, it comes from his many years at the helm. Here are a few of his fundamentals for how to get the best from the people who work with and for you.

  • Reprimand behind closed doors, one on one. Don’t ever talk about what’s wrong without also talking about what’s right
     
  • Praise loudly, publicly and often.
     
  • Don’t act like a boss, imposing your authority and telling others what to do. Include employees as partners, draw them in, get them to see what you see and want what you want.
     
  • Bring your people with you. Never sacrifice others for your own advancement or ego.
     
  • Set the tone. Then give everyone in the organization space to contribute.
     
  • Be accessible. Encourage staff at every level to share ideas and talk about issues with you and other members of management
     
  • Be honest, be direct and be sensitive to the feelings, needs and motivations of others.
     
  • It sounds like a cliche, but always go by the Golden Rule. 

DeJoria lives — and leads — by the motto “Success unshared is failure.”

As a man who has experienced both hunger and homelessness, he is profoundly appreciative of his good fortune and determined to extend it to others. He makes a great many contributions to a wide variety of health care, social service and environmental groups and institutions. And one of his oft-repeated mantras is, “Individuals and corporations have a responsibility to make the world a better place.”

Another is, “Making the world a safer place to live is part of our ‘rent’ for being alive.”

He believes CEOs have an obligation not only to manage but to lead.

“As a company,” he says, “we pursue both financial and ethical goals. In fact, I don’t see them as separate.”

Sometimes referred to as the triple bottom line, this approach places equal value on economic growth, social responsibility and environmental impact. It’s a vision that shapes John Paul Mitchell Systems’ day-to-day operations and long-term strategic planning.

For example, the company does not test its products on animals, packages in 100 percent recyclable containers and voluntarily meets the most stringent VOC (volatile organic compounds) standards for aerosols. It also harvests botanicals in an environmentally responsible manner and uses many organic ingredients.

To offset the impact of carbon emissions associated with the manufacture and distribution of its Tea Tree brand, JPM Systems contributes heavily to reforestation efforts through the nonprofit American Forests and its Global ReLeaf program.

DeJoria believes doing these things adds value to the company’s products and sets a positive example for other corporations.

In 2000, DeJoria was a keynote speaker at a meeting of the Pacific Basin Economic Council. The theme was corporate responsibility, and he advised the audience to remember that giving — both time and money — should be part of business as usual.

It’s also smart business.

Having meaning within the workplace, he says, is a key to employee satisfaction and thus, customer satisfaction. And, DeJoria says, it’s important for CEOs to be an active and visible philanthropic presence.

“My participation means far more to my employees and to my customers than simply sending someone on my behalf to present a check,” he says.

Which brings us back to that ponytail.

In a typically generous gesture, DeJoria gave up his persona-defining renegade look for a worthy cause. Last January, to raise money for The Red Cross Tsunami Relief Effort, he offered to let Los Angeles radio host Leeza Gibbons cut off his legendary locks, which he’s sported for his entire career, in exchange for a donation of $50,000.

Responding to the call, the 8,000 students of Paul Mitchell The School from all around the country banded together and met that goal, and he got what’s been dubbed the most expensive haircut in the world. But it’s one that makes everybody in his company and the industry look — and feel — good, while giving them an opportunity to do good by helping others in need.

And that is standard operating procedure for John Paul DeJoria.

HOW TO REACH: John Paul Mitchell Systems, (310) 248-3888 or http://www.paulmitchell.com

 

Tuesday, 24 May 2005 07:19

The McIntyre file

Born: 1935, Monroe

Education: University of Detroit, University of Notre Dame and the Advanced Management Program at Harvard University

First Job: Loading a beer truck at age 12

Career Moves: 1960, first employee of the newly formed International Division of the Monroe Auto Equipment Co.; 1964, executive vice president, International Operations; left in 1981 to become a self-employed consultant, president of a venture capital firm owner of a small import company; 1987, American Speedy Printing Centers franchisor; returned to the corporate world in 1990 as vice president of field support for American Speedy Printing Centers; 1991, promoted to president and CEO; 2004, Allegra Network chairman and CEO

Awards: Governor's Minuteman Award for civic service and charitable work; Saint Mary Catholic Central High School Alumnus of the Year

Memberships: Detroit's Presidents' Organization; Chief Executive Organization; Legatus, a membership organization for Catholic business leaders; Society of Automotive Engineers

Allegra Brands: Allegra Print & Imaging; American Speedy Printing; Instant Copy; Insty Prints; Signs Now; Speedy Printing Centers; Zippy Print

What is the greatest business lesson you've learned?

The most important work of a manager is to continually communicate a company's values and goals. You can't do this too much or too often. Preaching the message over and over is what builds team spirit.

What is the most difficult challenge you've faced?

Convincing everyone in our organization that changing our corporate name from American Speedy Printers to Allegra Network made sense. It was controversial and a tough sell. People get used to doing things one way. They have their fiefdoms.

Change can be threatening. But we were moving away from the old retail model of providing fast service to the consumer to a new, more sophisticated business-to-business identity. The name change was part of that identity.

It proved to be a very good move but I had to spend a lot of time explaining why we were doing it.

Whom do you admire most in business and why?

Tom Monaghan, Domino's Pizza founder and former CEO. He started with nothing. He achieved great success professionally and personally, and he did it all while adhering to his spiritual, social, mental, physical and financial priorities.

Thursday, 24 February 2005 19:00

Team spirit

Pat Croce has been described as the Dale Carnegie of the 21st century by Inc magazine, but that title doesn't go far enough

This celebrity entrepreneur could also be called the Guru of Get-Up-and-Go, Doctor Dynamism or Mr. Management. Think of him as Coach Croce, the man who can help you and your business get to the winner's circle. To put him in your corner, all you have to do is listen.

He wants to tell you everything he knows. And he knows a lot.

"I'm a very successful entrepreneur," says Croce, "who does business in a uniquely customer- and employee-friendly way. Some of it is 'Sesame Street' simple, stuff your parents taught you, like saying please and thank you. It's part of building relationships. Everything depends on relationships.

"My approach combines common sense, street smarts and book sense. My son-in-law has an MBA, and I value what he has to say. But application is something else. What you learn in school has to be put to use before it's useful.

"I tell people, 'Think of life as a three ring binder.' You decide if you want to add some of what I have to offer to the pages in your notebook."

Croce's got tips to take you from "What if ... " to a business plan, a 10-step rule book for outstanding customer service and fool-proof team-building techniques. He's formulated a crash course in effective communication and knows exactly what it takes to be the kind of leader who motivates others.

A tone of optimism and positive reinforcement runs through everything he says. But his leadership and management techniques are more than a set of upbeat maxims. He's distilled a career's worth of learning into a simple, straightforward, can-do approach that, he says, anyone can implement.

"If you have a passion," he insists in a style that mixes preaching with teaching, "you can lead. Each of us can be a leader in business, in the community, in whatever group we're a part of. But most people don't know how. It's true that some have an innate talent for leadership. But the skills required can be learned. And with practice, they'll carry you forward."

The 50-year-old from Philadelphia has worked hard to earn this expertise, and his credentials have been conferred on him by the school of real life.

In the Cliff's Notes version of the Croce rags to riches saga, he goes from being a physical therapist and athletic trainer to owner of Sports Physical Therapists, an 11-state chain of 40 fitness and sports medicine centers. In the process, he invents the concept of pairing athletic training with preventive and rehabilitative health care and creates a market for it.

In 1993, 10 years after opening the first center, he sells the business for about $40 million. Three years later, after going on what he's dubbed "The Vision Quest" to figure out what new adventure he wants to embark upon, Croce buys the Philadelphia 76ers, an especially amazing feat because the basketball franchise wasn't even for sale.

When he became president, the team had the worst record in the NBA. Under his guidance, it made it to the playoffs, energizing fans and filling seats along the way. Although he still serves as a consultant and owns a minority share, Croce resigned as president in 2001. During his five year tenure, attendance increased by 60 percent, and franchise records had been broken for merchandise sales and overall revenue.

His latest project is The Pirate Soul Museum in Key West, Fla., which opened in January. Built from the ground up, the $10 million, 4,000-square-foot facility containing almost 500 artifacts is a tangible expression of his long-standing interest in buccaneer history and culture and of his equally enduring enthusiasm for taking on new challenges. His daughter, Kelly Croce Sorg, is CEO, and his son-in law, Jeffrey, is COO. Pat's title is "visionary."

Along the way, he's become a radio and TV personality, a best-selling author, a columnist for Fortune Small Business and a highly sought-after -- and highly paid -- motivational speaker. His stories and strategies about how to succeed in business and in life have become a brand that is the core product of Pat Croce & Co., a multimedia enterprise based in Haverford, Pa.

"An effective leader needs to know how to delegate. I had a hard time with that about two lifetimes ago when I went from having one to two sports medicine centers. But not anymore. Following my own advice about putting trust in others and giving them responsibility, I recently hired Marc Cerceo as Croce & Co.'s first COO."

Delivering the message
This uber-achieving yet astonishingly accessible guy doesn't just have a message -- he IS the message. There's no difference among what he believes, who he is and what he's accomplished. His mission is to tell you how he did it and convince you that, like him, you can realize your potential. And he wants you to start today.

If you're not going to be in the audience any time soon when he bounds onto the stage to deliver his trademark dream and make-it-happen talk, you can read his books. The newest is "Lead or Get Off the Pot: Seven Secrets of a Self-Made Leader." It's chock full of practical advice, actionable ideas and tools to use to make yourself into a person of initiative and influence -- the kind of person capable of achieving your best and inspiring others to achieve theirs.

Croce, just back from Los Angeles, where he was filming multiple segments of his nationally syndicated self-help reality show "Pat Croce: Moving In," slowed down long enough to talk about why he wrote the book and what it has to offer.

"I want to change that tape of self-doubt that plays in people's heads into a positive voice by using myself as an example. If I can do it, so can you."

Leadership, according to Croce, isn't a role that somebody else confers on you. You become a leader by thinking and acting like one.

"A great leader is not measured by a profit and loss statement. All CEOs are not leaders. They may have the title but if they're not helping others reach their goals, they are not real leaders."

That's what he said when he spoke at Ernst & Young's Entrepreneur Of The Year awards ceremony in Palm Springs, Calif., in 2002, and the crowd gave him a standing ovation.

"Everyone in the room was already a winner. But I told them not to rest on their laurels, and urged them to use their influence to make those around them better. Doing well has everything to do with doing good."

The return on that investment, he says, comes in many forms, both personal and professional.

"The rewards are emotional and financial. You will grow and so will your business," he says.

"Everyone has the power to add to or subtract from the situations around them. Be aware of that power. Look for it. See the times and the places you exert influence. Build on that. This requires presence. You have to be there, moment to moment. It's the hardest thing, but it's important."

Presence, in Croce-speak, includes paying attention, asking questions and focusing on the person in front of you. It's part of "listening with a leader's eye," an essential ability for a successful manager and the title of chapter five in his most recent book.

Croce on Croce
Croce tends to quote himself and his writing often in conversation. And why shouldn't he? The man has a knack for simplifying complex concepts and turning big theories into memorable catch phrases. Number 12, for example, on his dirty dozen checklist for fostering a dedicated, cohesive and enthusiastic team, is C.A.R.E.: Compromise, Apologize, Recognize, Empathize.

Here are some others.

"The leader must be fully aware of the goals, roles and tolls that affect each member of the staff. Knowing these things will lead to proper action and effective interaction."

He ticks off another.

"Integrity has no on/off switch."

And another.

"There are Six C's in Communication: Clear, Concise, Consistent, Credible, Courteous, Current."

And when it comes to articulating an organization's goals, Croce, whose skill in crafting easy-to-understand precepts has served him well both as an executive and as a public figure, has even more advice.

"Don't speak over people's heads, use simple language and give them something to take home," he says. "I'm a big believer in breaking complicated ideas down to points on a to-do list. Everybody wants a cookbook."

Croce's recipe for getting things done is broken down into four simple steps -- paint your vision, develop tasks, prioritize action steps and do it now.

This real-life swashbuckler has a soft spot for pirate metaphors. He describes a high-performing team as a band of rogues, people who think for themselves and take initiative. But they need a captain they can trust to keep them from running amuck with an every-man-for-himself attitude.

"On a pirate ship, the crew voted the captain into power," he says. "He had to earn his authority, then let them know who was boss, make the rules and keep them working together and focused on their common objective -- the attack. It's not so different in a business. The leader of a group has to communicate the mission, get everyone to buy into it and make sure they follow through and do what they've agreed to do."

Croce describes himself as an MBWA, someone who ascribes to the Management By Walking Around philosophy. The term refers to his conviction that good leaders are observant and receptive because they know that valuable ideas and useful information can come from unlikely sources at unexpected moments.

"I'm a daily caller, e-mailer, note-writer," says Croce. "I share what's on my mind. And I want my people to do the same. You must be in touch with your staff often and all the time. That's why doing the 'Five-Fifteens' is like a religion with me."

The Five-Fifteens are progress and activity reports written by every employee and submitted to supervisors every Friday. They should take just 15 minutes to write and five to read. These keep Croce in the loop, and he's instituted this bottom-up line of communication in every organization he's run.

"The Five-Fifteens," he writes, "serve two main purposes: they keep practical information flowing and they get the celebrations going."

Croce is determined to enjoy every step on the road to success, and all his endeavors must meet the QPF standard. The acronym stands for his aim of delivering the highest Quality product or service, while making a Profit and having Fun.

Each element is equally important.

When I confess that interviewing him has been way too much fun to be called work, he is delighted.

"That's the perfect ending to your story about me," he says with a laugh. "You should always have a great time while pursuing your goals. Life's just too short for anything less."

HOW TO REACH: Pat Croce & Co., www.patcroce.com

 

Wednesday, 22 December 2004 05:31

Fostering creativity

Joanne Harmelin got her business education in a convent. Today, she's the founder and CEO of Harmelin Media, the largest independent media firm in Pennsylvania and the sixth largest in the nation.

But before the 59-year-old became an entrepreneur, she was a nun.

Harmelin sees no contradiction between the two vocations. In fact, she says, the fundamental precepts that govern cloistered life are the same ones that have guided her as a businesswoman.

In a religious community, there is no place for egotism or self-importance. Putting others before oneself is standard operating procedure, and service is the highest achievement. As a philosophy for running a company, this has proven remarkably effective for Harmelin.

In 1982, when she started her business, Harmelin had one client and she worked alone from her home. Now the company, with billings of $192 million in 2003, provides strategic media planning, negotiating and buying services for more than 175 clients.

Based outside Philadelphia in Bala Cynwyd, her 97-person staff creates media strategies, makes media buys and provides ongoing stewardship and analysis of media campaigns for large national corporations, banks, hospitals and health care groups, educational and cultural institutions, and public service organizations.

For her efforts, Harmelin has been honored as Pennsylvania's Small Business Person of the Year (1996) and Philadelphia Woman Business Owner of the Year (1997). In 2001, Harmelin Media was ranked among the top 500 women-owned businesses in the United States by Working Woman Magazine.

Smart Business spoke with Harmelin about the secret of her success and her tips for running a thriving media firm.

What's the most important thing you've learned about being a leader?

The lesson of my experience in the convent was to be other-directed, to think not about myself first but about other people. I have brought that idea to the running of this company.

I focus on my clients, who I define as my external customers, and on my employees, who are my internal customers. I want to treat both groups well and with respect.

Over the years, as this company has grown, my job description has changed. But time has only confirmed my belief that being egocentric is exactly the wrong way to go about leading. If I have one piece of advice to give CEOs, I'd say, 'It's not about you.'

In my eyes, the receptionist at the front desk, my president and the president of our biggest corporate client are all equals. Their needs are what should concern me. I started out with that as my mantra, and it continues to be the basis for how I do things today.

As CEO, I set the tone for the company. Others follow my lead, so this attitude trickles down through the hierarchy at Harmelin.

How do you get employees to buy into your vision?

It may be my company, with my name on the door, but Harmelin Media's success depends on its employees. I'm not going anywhere without them, and I make sure they know that.

Whenever we win an award, and we've won many, I accept on behalf of the company and all our employees. I emphasize their accomplishments, not mine.

I also believe that helping people realize their potential is the key to building a great company. We pay, for example, for our employees to take a Dale Carnegie class. It's an investment we make in our future and theirs.

After all, we're in the communication business, (and) being able to interact effectively is essential. By giving them tools to help shape their own destiny, we get a staff of skilled and committed communicators.

What qualities do you look for in a good manager?

A good manager understands that all benefit when any one of us excels. I give my VPs a book to read called "The Nibble Theory and the Kernel of Power" (by Kaleel Jamison). It's small, lighthearted and deceptively simple.

It's about how we behave in relation to others. The author compares people to circles. The basic idea is that permitting someone else's circle to get bigger doesn't diminish your own. Real leaders bring co-workers up rather than see them as competition, inspiring them to also become leaders and managers. When everyone within an organization is trying to help one another, it sets up a reciprocal network.

Our policy is to promote from within, so even when I'm interviewing for a start-up position, I consider a person's potential to be a capable manager. That means he or she has to be a good listener and a patient teacher, willing to make time to explain things. Managers need to be the type that take the initiative and encourage other people to do the same.

What else do you look for in the people you hire?

I want people who show a real interest and enthusiasm for this field. They have to understand the importance of customer service. In terms of personal qualities, I'm looking for individuals with pleasant personalities -- clients obviously prefer to deal with those kinds of people, and it certainly contributes to the atmosphere of the workplace.

The men and women I hire need to be listeners and learners. I believe that the better the people you employ, the better the company. So I want the best --people that are better than me.

I've also hired three mentally challenged individuals. They perform real and important jobs for us, like handling the mail, which has freed others up to do different work. Our employees have learned to feel comfortable with these differently abled people.

It's an opportunity for us to make a contribution to our community and model good corporate citizenship to our clients and vendors. I think of it as one of our biggest hiring success stories.

You've said that staying power in business demands consistency, and that your employees are vital to achieving it. How do you build loyalty in your organization?

When you start out with the idea of respect for everyone in your organization, value their contributions and make a commitment to express that, it creates a very positive kind of environment, a place where people want to work. The way we treat people here is often a revelation for those who've come to us from other companies.

Here's how we do it. When a female employee returns from maternity leave, she gets a dozen red roses. It's a welcoming gesture that tells her that even though we're busy, we're not too busy to remember what a big day it is for her. My three children are grown now, but I was a working mother.

I remember how hard it was to leave them and go back to work after each was born. The flowers are a way of saying we're glad she's here.

Everyone likes to be recognized for their efforts. At Harmelin, the whole company participates in that, and we do it in many different ways. Some might call this a nurturing approach, and one that's often associated with women. That may be true, but I'd also say it's a very healthy philosophy, and I see more companies operating as we do here because it works. Twenty years ago, the business world was mostly male, and companies were organized in a somewhat military manner.

The rule was, 'Just do what you're told.' Things have changed. Ideas about how to run a business have evolved. A new generation sees a value in paying attention to others and being sensitive to their needs.

You promise your clients a high level of start-to-finish service. How do you ensure that everyone who works for you delivers on that promise?

We work in teams here, and teams help each other. I cross-pollinate regularly, moving people from one team to another. Not only does this create continuity, especially if someone is out temporarily or leaves, but it fosters camaraderie and discourages the kind of back-stabbing inter-office politics that are common elsewhere.

When I hear from a client that a staff member has done an excellent job, instead of just complimenting that person, I write a memo that's e-mailed to every employee, and suggest they thank their co-worker because his or her good job makes us all look good.

I also g ive that person $25. It's not a lot of money, but it's another way of showing appreciation. I was once a secretary. I know how meaningful recognition can be.

It was brought to my attention that people on our staff who didn't interact directly with clients did not have the same opportunity to earn praise for outstanding customer service. So now, when employees are especially helpful in serving other employees, they, too, get a check and the same kind of e-mail memo circulates about them.

The result is that we're all doing the same job, which is working together to do the best we can for all our customers.

How has your company adapted to an increasingly complex media world?

It's a very exciting time to be in the media business. The possibilities are unlimited. But one result is that it's getting harder and harder to reach audiences, especially younger ones. We have to use guerrilla tactics and go outside traditional methods to deliver our clients' messages.

My people need be constantly looking for new ways to reach target markets. I encourage them to read extensively -- about our business, as well as the trade journals that represent our clients' businesses, and to learn all they can about what's happening in culture and media.

How do you foster creativity within the firm and nurture an atmosphere that breeds new ideas?

We don't have a fixed creative staff, per se. Instead, we do what we call creative think tanks, and the participants are always changing. We gather eight to 10 people from different departments to address specific clients' needs and issues.

It's amazing how many great ideas are generated when you bring people together to brainstorm. The atmosphere is one in which everyone has a chance to be heard and feels they can speak freely.

I view everyone on my staff as idea people. I'm convinced that it makes each of them more creative because I truly believe that we become what we think we are.

How to reach: Harmelin Media, (610) 668-7900, www.harmelin.com.

Tuesday, 29 November 2005 10:03

The Klein File

Born: 1957, New York

Education: Bachelor of arts degree, accounting, Syracuse University

First job: Brand management, Procter & Gamble

What is the greatest business challenge you’ve faced?
When I went to work for my father-in-law’s building products distribution company, it was immediately assumed that I was the idiot son-in-law. I may have had a four-window office at PepsiCo, but I had to establish my credibility with these people.

I did it by sitting in every chair, learning everyone’s jobs. I unloaded trucks, drove a forklift, worked in the warehouse, spent time in accounting, payroll and sales. The first six months were tough.

I spent a year showing my willingness to roll up my sleeves and get my hands dirty. Then I became COO. During my time there, I helped take it from a $12 million company to a $1 billion one.

What’s the most important business lesson you’ve learned?
It’s not about me. The people I work with are the ones who should be honored and recognized for all they do. I’m lucky. As CEO of IRI, I get to go out and deliver the company’s message, tell our story and talk about our accomplishments. But it’s the employees that create that story every day.

Whom do you admire most in business and why?
The chairman of our company, Romesh Wadhwani. He hired me and he’s the reason I decided to come to IRI because I realized that I could learn a great deal from him.

He’s a very successful businessman and a supportive, caring and strategic-thinking leader. I admire his creativity, his passion and his drive. I work hard and put in long hours, but this guy must never sleep.

Page 1 of 2