Lindsey Grant

Friday, 28 October 2005 07:50

Beyond banking

After more than 20 years in the banking industry, Jim Lynch recognized there was an opportunity to personalize banking for business owners and entrepreneurs.

Lynch, president and CEO of Leaders Bank, founded the company in 2000 as an alternative to large, impersonal banking institutions. He prides himself on forming close relationships with his clients, something he felt had become obsolete in the banking world due to the large number of mergers and acquisitions.

In the five years the bank has been in business, it has grown to about $300 million in assets, with high customer satisfaction rates and low employee turnover. Lynch believes this success is a result of his employees, people who are experienced in the banking industry and who share his belief that customers and employees should be treated as leaders.

Lynch’s management style is grounded in the philosophy contained in the book, “First, Break All the Rules,” by Marcus Buckingham and Curt Coffman. While the common business management philosophy, is that you should treat everyone the same and try to overcome people’s weaknesses, Lynch believes everyone is different and should be treated accordingly.

And rather than trying to improve on people’s weaknesses, he believes you should put people in positions where their strengths will be utilized and their weaknesses supported by others.

Smart Business spoke with Lynch about his vision for Leaders Bank and how his unconventional management style benefits employees, customers and shareholders.

What was your vision when you started Leaders Bank?
I have been in the banking business for 27 years and always as a lender to the lower end of the middle market, defined as privately-held businesses under $50 million in sales volume.

As I saw all of the mergers and acquisitions occur, I noticed that two things were happening — a whole layer of bank employees were being displaced and a whole layer of customers were being displaced. The customers, in particular, were often privately-held businesses and entrepreneurs.

My idea was to start a bank that focused on privately-held businesses, their families and other entrepreneurs. I knew there was an opportunity there. I wanted to focus on that niche and hire experienced bankers who could respond quickly to customer needs and provide an alternative to the depersonalization created by the banking consolidation.

How do you sell your vision?
When you say ‘selling the vision,’ there are really three groups you need to sell to — prospective employees, prospective customers and shareholders.

I’ll start with prospective employees. These are people with banking experience who have become frustrated with the obstacles often found at larger institutions. They want to make a positive difference in a growing organization over the long term.

We provide our employees with an environment that is both challenging and very supportive. All original 10 employees are still here. A critical part of my daily responsibilities is to make sure that this is always a good place to work.

As for prospective customers, they often learn about our vision from satisfied clients and come in to find out about how we can help them. We talk with them to determine what level of service they need, and then we provide it.

We call it our ‘ease-of-doing-business-with-us’ quotient. That doesn’t mean we’ll always say yes, but we will always clearly articulate the parameters and try to arrive at a mutual understanding.

When we approached our five-year anniversary, we thought we were doing pretty well on behalf of our customers, but we thought it was time to ask them. We used (Walt Denny Inc.) to do a customer survey, and the results were very gratifying. Well over 95 percent of the customers surveyed who classified us as their primary banking relationship rated us very high in terms of overall satisfaction.

With our shareholders, we describe how we compete in the marketplace and convey our long-term vision in straightforward terms. I communicate with our shareholders on a regular basis, which includes providing our quarterly financial statements to them.

How has your Cultural Health Program contributed to your success?
I have been managing people in this business for a long time. Traditional management practices say that you should treat everyone the same, and during the employee appraisal process, you should not only focus on what they did well but also focus on their weaknesses and what can be done to improve their weaknesses.

I have always thought it’s better to focus on strengths and support people in areas where they are weak and put them in positions where they are strong.

There’s a set of rules that we have to follow, but everyone is different and everyone deserves different treatment. When I find an employee who is great with customer service, we make sure that person gets to work with customers. If that person has too much paperwork, we try to give that person support for that aspect.

If an executive is great at bringing in new business but hates sales reports, we put that person with someone who helps with the reports. By empowering them to accomplish what they do best, employees feel they are valued and that the quality of the work they do does makes a difference.

To discover individual strengths of our employees, each person participates in the Gallup Organization’s StrengthsFinder Profile. That was put together by utilizing information from the Gallup Organization, which was developed through a poll taken of experienced managers from throughout the world.

It came up with a set of behaviors that the best managers utilized. Every employee participates and has a private interview with our consultant to discuss their strengths and how to develop them in the workplace.

Research shows the best managers don’t treat everyone the same. They focus on strengths and not weaknesses. We need to put our employees in a position where they can utilize their strengths and let’s recognize what the weaknesses are and not work so hard to change them but to make sure that they are supported.

This approach nurtures personal job satisfaction, which translates to low turnover and high levels of employee and client satisfaction.

How did you achieve such rapid growth without any mergers or acquisitions?
We’ve hired the right people who are experienced and have done a good job of bringing in relationships in the marketplace. That’s No.1.

No. 2, we have been successful in raising the necessary amount of equity to support that growth.

Three, we have a very active board of directors that has helped guide us and generate business.

And four, we have a very active shareholders group that hasn’t just invested money with us but does business with us and actively refers business to us.

How to reach: Leaders Bank, (630) 572-5323 or http://www.leadersbank.com

Thursday, 27 July 2006 20:00

Changing ways

 If there’s one thing that Kevin Gray can’t stress enough to his employees, it’s the importance of being adaptable to change.

As CEO of Lauren International, a $105 million holding company that consists of five polymer product businesses, Gray says the only way to stay competitive is to continually change.

“Change happens constantly, and one of the things that we spend a lot of time talking about is we believe as much as anything that our leadership needs ... to be creating a culture of change within the organization,” says Gray. “We need to make sure that once you start to create a culture that change is acceptable, we don’t ever want to go back and have to push through that barrier to make it start happening again.”

Gray was fortunate in that Dale Lauren Foland, founder and chairman of Lauren International, spent a lot of time during his tenure as CEO creating a culture of change, and it was ingrained in Gray during his 23 years with the company. When Foland retired as CEO in 2005, the responsibility rested on Gray to continue to reinforce that culture, which would, in turn, help Lauren International achieve its main goal — to continue to grow profitably.

Gaining momentum
For Lauren International to successful, all five of its business units — Lauren Manufacturing, Edgetech I.G., LMI Custom Mixing, Lauren AgriSystems and Lauren Elastomeric Coatings — must grow profitably.

Corporate management allows each business to run on its own, so it is up to the leaders of those businesses to ensure that they are constantly evolving to adapt to customers’ needs. Allowing business unit leaders and their employees to develop the strategies behind change leads to more buy-in on their part and a better chance of success.

“You get a tremendous amount of momentum out of each individual business, because there is ownership of that business,” says Gray. “They’re basically creating the strategy, so the buy-in is there. ... It’s not something being pushed down their throat as a corporate initiative. It’s all coming from within.

“It’s just like anything else — if you personally set your own goal, you get a much better chance of achieving that than if somebody else comes in with a goal that really doesn’t make sense and you can’t buy in to that. That’s a critical piece of it.”

And although Lauren International gives its businesses guidelines for profitability and growth, the businesses usually exceed those guidelines on their own.

“The business leaders have been chosen because we have a lot of faith in their abilities, and they bring something additional to the table,” says Gray. “We’ve given them the authority to not only grow their business but develop the strategies to move it forward.

“For day-to-day activities, there is almost no interaction with the Lauren International side. We do the reviews. We talk to people and go over their strategy, but by and far, that’s pretty much the business unit leader and their management team that’s setting the direction.”

In addition to setting the direction of their businesses, business unit leaders need to enforce the importance of change in their company culture. For example, an important part of adapting to customers’ needs is being innovative and coming out with new products before the competition does.

But if employees are scared of making mistakes, their creativity will be stifled. Employees need to know that failing is an important part of succeeding in innovation, and that’s an important part of the company’s culture that business unit leaders need to communicate to their teams.

“Every time we fail at doing something new, it’s a learning opportunity,” says Gray. “We’ve made our share of mistakes over the years — seven digit mistakes as far as dollars to the cost of business — and Mr. Foland has always been supportive of that and said, ‘Good try. We learned a lot from that. Don’t be afraid to go pick up and do the next one. Stay very active in your pursuit of innovation.’

“It’s just a culture that it’s OK to try something new and fall flat on our face. We’ll risk a lot of dollar bills to be creative and do new things. And nobody that is involved in that is looked at in a negative way. In fact, they are commended for that.”

The key to change is being consistent and constant. If you constantly tell your employees the importance of change and why it keeps the company competitive, they will get excited about change and what it means for the company.

“Once people start to recognize that the change is good, the change is making us more competitive, the change is giving us more opportunity, and in many cases, the change is improving the overall operation, then you start to build that momentum,” says Gray. “Our point is we can never allow that to go back to what it was when you had to bring a bulldozer in to get it started. Right now, we live in a world where every day we are changing, so people are used to it. That, to me, is one of the most important things that our leadership team can continue to impress on all of our employees.”

Endless opportunities
Change occurs at Lauren International in a variety of ways. Sometimes it’s exploring a new niche and possibly opening a new business.

Other times, it’s developing new products. And sometimes, change just means becoming more efficient and eliminating wastes.

For the past several years, Gray has made it a point to examine all facets of Lauren and look for processes or steps in a process that don’t add value to the customer. He looks at where the business is now and where he would like it to be, and then creates a plan that will get the process there.

“We basically do a quick overview of any of the business practices,” says Gray. “It could be something as simple as, on the office side, accounts receivable. We pull together a group and look at the process and start identifying many of the wastes in the process and how much time it takes to perform that process. Then we start finding and picking out where the wastes are and putting a plan together to eliminate those wastes.”

Change also occurs because management is open to new opportunities, which could mean new products or a whole new business.

“We want to make sure that we are finding niche opportunities where we can add value to our customer base,” says Gray. “We want to do that in a manner that we not only grow top-line revenue, but we continue to remain a profitable organization. To do that we believe we need to be able to build closer and deeper relationships with our customer base and continue to provide things that are different than every other company out there.”

Building customer relationships involves spending time at customers’ facilities and encouraging visitors to come to Lauren facilities. Management tries to reach out to customers using the Internet as a tool to help them manage their inventories and access their needs.

But Gray realizes that it is still old-fashioned face-to-face discussions that bring new opportunities to Lauren. And when customers visit a Lauren facility, they don’t just meet with management, they meet with the employees involved in running the business, so the next the time they call with a question or concern, they know who they’re talking to and how that person operates.

Building those relationships helps customers feel more confident doing business with Lauren and helps Lauren learn about customers’ needs, which could lead to new products.

“When we find out there is a need for a product there, then we go back and start thinking through how we might be able to meet that need,” says Gray. “From that point, we would do the analysis and say, ‘If we could make those things happen, are we going to be able to do that and be a profitable organization? And how big is the opportunity? And where else could we take it? Is it something that we could be spinning off and starting an entire organization around?’”

Sometimes that opportunity turns into a new product, and sometimes it is enough to base a new business around. But regardless of how big the opportunity is, Gray doesn’t strive to reach a certain number of new products a year. If an opportunity arises and appears worth pursuing, then Lauren will pursue it.

“To us, it’s not about quantity, it’s about quality of the opportunity,” says Gray. “It could be one for the year, or it could be 15. It just depends on how things present themselves.”

And sometimes opportunities present themselves as a challenge. All companies face challenges, and rather than be discouraged by them, Gray is motivated by them.

“We really look at challenges as opportunities,” he says. “We try to spend a lot of time recognizing those early and putting action plans in place to deal with them. We don’t sit around crying in our milk over a challenge we face. We take that challenge and realize that if we can persevere and work through this, then we’re going to be a better organization because of it.”

One challenge that the company faced in the last few years was that it wasn’t selling any weather stripping in the United States. But rather than give up on that product, management decided to do something to become more competitive in that market. It required completely changing the way the product was produced, which meant that Lauren had to stop mass producing products and change to single-piece flow.

“Today we are selling a large percentage of those products, because we saw an opportunity,” says Gray. “The way we were doing business, we were never ever going to be competitive and provide the quality product that the market required. We took that challenge and completely changed the way we were making the product and turned a challenge into an opportunity. That’s a small example, but it happens every day.”

And that is why Lauren employees must be willing to embrace change. Although many look at change as a bad thing, change has only brought good to the organization. And that is something that Gray and the rest of the leaders of Lauren International and its subsidiaries will continue to communicate to their employees.

“Be prepared for it, because it is going to happen,” says Gray. “We really stressed that point with our leadership — that it is our responsibility to make sure that our culture never ever slips away from that concept that we are always going to be changing. And none of us need to get comfortable in what we are doing today, because if we are doing the same thing 90 days to 180 days from now, then there’s something wrong, because we are not addressing the needs of our customer base.”

HOW TO REACH: Lauren Internationalwww.laureninternational.com

Friday, 30 June 2006 05:50

Donald R. Simon

When Donald R. Simon founded Contractors Steel Co. in 1960, his goal was to provide fast service. To accomplish that goal, Simon invested $25,000 and hired just three employees. His first year in business, the steel service center had sales of $300,000. Forty-six years later, Simon’s goal remains the same, but Contractors Steel employs more than 300 people and posted more than $200 million in 2005 revenue. Smart Business spoke with Simon about Contractors Steel’s start-up and how he is continuing to grow the company.

Start small.
When we started the company, we didn’t have anything. I invested $25,000 into the business. I bought 25 tons of steel, a used truck and a crane. That’s how we started.

The challenge at that point was just surviving and seeing if we could make it through the first three months of a business based on the fact that we started so small.

Spread the word.
We’ve been in business since 1960 here in the same location. We’re pretty well-known here, but at the beginning, we had to use all kinds of advertising. I was the salesperson, and I went out and called on hundreds of thousands of people.

Once we got going and once people understood exactly what we were and what we could do, it got around that we were a good company, and we could handle people. Your name just gets around through referrals.

Expand into new areas.
We’ve already attempted to expand a number of times. We had ads running in steel magazines that [said] we were interested in expansion if anyone was looking to sell.

It’s a small type of expansion —we’re not buying any $20 million or $50 million companies. We look to expand into two different states on a small basis and then build from there.

We can’t just let all of our eggs lie in Detroit. We don’t know where Michigan is going to be going. We want to diversify.

Make cautious acquisitions.
We look at everything. We look at their finances.

We look at what they are selling. We talk to their people.

We do our due diligence to make sure that this is what we can support and work with. We look at the management end of it to make sure that those people are cooperative and looking for the same things we are.

Look out for your employees.
The key to a successful expansion by purchasing another company is personnel. Bricks and mortar are something that anyone can get or buy.

Personnel is what you need. We are looking at their employees to run this business and give them an open hand to do what they feel they can do the best.

We would oversee and we would add financially and support them any way we could in order to make them a better company. And then we would build on that. Someday we would add to what they already have to make ourselves more of a factor in their market.

Right now, we want to buy them and leave them alone. Let them do what they can do.

If they need support, then we will be there, but in the beginning, we like to think that they know better than we do how they run their business and how they have to handle themselves with their customers.

Provide exceptional service.
Without good service from the beginning to the end, you can forget success. We have been using just-in-time service since 1960. If you want to grow, you had better have good service, or you’d better look for a new job.

We, as a company, will ship steel any time a customer wants it. If they want it delivered at 12 at night, we’ll do it. If they want it on Saturday, we’ll do it. We do what the customer wants.

Service is something you got to give your customers. Everybody has the same product.

The only thing that distinguishes you from someone else is how fast you do it or the services that you provide that they need. We try to get every order that we have out the next day. You have to be just-in-time all the time.

When a customer says, ‘Hey, I need to have this at this time,’ you have to get it there. Without being service-oriented, you might as well cash your chips in and go somewhere else.

Plan for the company’s future.
I have very good people working for me and have had them for years. A good percentage of our employees have been with us over 20 years. I’ve had [employees stay for] over 30 years.

I’ve got people here who are chief operating people, chief financial people, managers and superintendents who have the responsibility of running this business. My role right now is I just oversee it.

If you don’t have good people by the time you’ve been in business 47 years and you don’t have people who can take over when you retire, you better look for something else. The people that work for me are active, upfront people, and they basically run the company with my direction.

HOW TO REACH: Contractors Steel Co., (800) 521-3946 or www.contractorssteel.com

Tuesday, 27 June 2006 12:55

Douglas Ramsdale

Two years ago, Douglas Ramsdale was just an investor in Home Products International Inc. Today, he is CEO of the $230 million company. The change came about in late 2004, when HPI’s former CEO, James Tennant, planned to purchase the company. But he was outbid by a group of investors that included Ramsdale, who was ultimately chosen to replace Tennant. Smart Business spoke with Ramsdale about how he is rebuilding HPI and conveying his vision for the company to employees.

Create a strategy. HPI had been a company, prior to our arrival, without a strategy. Most of the late ’90s at HPI were characterized by a series of acquisitions and dispositions. There was not a very good job done of integrating those businesses.

Because that was the main thrust of the strategy, a number of things that are absolutely crucial to success and survival in the consumer products industry — new product development, brand development, people development — had been secondary concerns. We found ourselves in possession of a company that had really been trying to sell itself for most of the time since 2000 and had been sustaining itself by not investing in the business.

Execute the strategy. We put together a management team that is really pretty good at operating a business. By operating a business, I mean focusing on what is really important — customer relationships, managing the manufacturing, managing the supply chain, keeping an accurate track of costs and expenses and working capital, and just good at the basics.

The second thing we did is we strengthened the area as it relates to how we interact with customers. We built multilevel relationships with our customers. It was no longer just the salespeople, but all members of our organization got involved in the selling process, so that we had not just the ability to tell a better story and tell it more clearly, but we were also more accessible and able to listen to what our customers were saying.

We invested in resources to develop new products and enhance existing ones. We took a very long and hard look at the whole image of our company and, in particular, our brand, and embarked on a process to enhance the relevance and attractiveness of our brand.

Build a brand. The image of our company, until the middle part of last year, was one that was anchored very much in the low-end of the markets in which we operated and did not bring much creativity. We were kind of boring.

We brought good service, reliability, our quality was OK. One of the first things we did was we decided in the areas in which we operate, we have to be the subject matter experts.

We have to transform that knowledge into enhancements to the product and enhancements to the presentation that made sense to the retailers so that they looked at us not just as people who deliver boxes of stuff, but who actually could tell them how to sell consumer problems.

Lead the way. I see myself as the person who makes it possible for everybody else to succeed.

That’s my mission. I’m somebody who basically makes sure that we have the human resources and the other resources so that we can all do our jobs well.

If there are issues, I work with other members of the team to address them quickly so that they don’t slow things down or get in the way. I also try to be the spokesman for what it is that we are trying to do and what is it that we believe in and help people understand that and stick with it.

Walk around. I try and maintain one-on-one personal contact wherever I can, which just means walking around. I don’t believe that you learn much or achieve much by sitting in front of a computer screen. I’m often not comfortable with how little time I do spend out there.

I’ve gotten into the habit of sending people e-mails and just letting them know, ‘By the way, this has happened, and this is great,’ and, ‘By the way, this is not happening, and I’m concerned, and this is what we should do about it.’

Be accountable. About twice a year, I get up in front of every one of our employees in all of the different locations and I just make myself accountable to them for how the business is doing and give them the opportunity to ask questions and share with them what our expectations are of them.

It’s just taking opportunities formally and informally to have dialogue. And dialogue in my book is basically listening.

Know what you want to accomplish. Every challenge is different. Every CEO has to know very clearly what it is he or she wants to accomplish and be able to enunciate that clearly so that other people understand. When you have all of the people on your team on the same page, then you have an effective organization.

Watch for results. (The job) was an opportunity that came out of the blue. It’s not an easy one, but it’s a lot of fun. It’s really started to become exciting, because we’ve been here long enough now to know that some of the things I talked about are beginning to show results, beginning to get traction.

The things that we’ve put in place have really laid the groundwork for a future that for most of the 1,000 people who were here before we came wasn’t anywhere near as rosy as it now looks like it could be.

HOW TO REACH: Home Products International Inc., (800) 327-3534 or www.homz.biz

Sunday, 18 June 2006 20:00

Start-up success

Ever since Jay Chaudhry worked for a start-up company after college, he had had the desire to start his own. It was something he often talked about with his wife.

 

“She was the catalyst,” Chaudhry says. “She said, ‘You keep on talking about it. Either do something, or shut up.’”

 

So Chaudhry and his wife quit their jobs and founded SecureIT, the first of several Internet security companies that Chaudhry would start.

 

Today, he is founder, CEO and chairman of Alpharetta-based CipherTrust. Since its founding in 2000, the company has become the fastest-growing security software corporation in North America, posting a revenue increase in 2004 of 80 percent over 2003.

 

Smart Business spoke with Chaudhry about how he’s succeeded and the importance of hiring good employees.

 

 

 

What does an entrepreneur need to do to be successful?
Lots of people want to start and succeed, but not too many of them have the passion and burning desire to be successful. I think that’s the difference between real entrepreneurs. We all want to be successful, but the willingness and the desire to put the time and effort to do it is really what’s needed, and many times, that is what lacks.

 

Secondly, what has worked for me is I have never chased money. I had a desire to build something and have a sense of accomplishment, knowing that money follows if you do good work. Too many people chase money and it doesn’t come that easily, and then they get disappointed.

 

 

 

How did you find your niche?
I got into Internet security with my first company SecureIT, so I actually had no prior understanding of security at all. But I wanted to start a business in an area that’s a new business opportunity.

 

When you look at a new business opportunity, you have less competition. You are the trailblazer out there.

 

If you go back to late ’96 when I put that business plan in place, the Internet was all over, security was beginning to hit the front page of publications. No one really knew how to ... architect these security products. So we said, ‘Here’s an opportunity to learn and go and do it.’ That’s what got me going — the newness of it. Once you get into it, security has its own appeal, and not too many people want to leave it because it brings new challenges every day.

 

I have stayed in this niche because I haven’t gotten bored. And the problems have not been solved. They keep them coming.

 

 

 

What challenges come with fast growth?
The biggest challenge is you fix two things each month and then you break three, because you are seeing new opportunities and you are trying to tackle them. That’s a good thing.

 

What’s needed is a good team that understands that that’s how young, successful companies work. There aren’t that many processes in place, because processes can be stifling.

 

The biggest thing for me ends up being having people who have the right mindset to work with start-ups, who really aren’t too bureaucratic coming from a big company background and are keen to figure out the new challenges as they encounter them.

 

That’s what I look for from the team. You can only do so much. It’s the team that makes the biggest difference.

 

 

 

How do you attract a good team?
People who want to learn and grow are always attracted because the kind of stuff we do at these new companies is a lot more exciting than what they’re doing at their present jobs. I take pride in the fact that most of the people who come to work for me tell me that they learned more here in three months than they did in three years at their previous job.

 

Attracting is easy. Finding people who are really committed and passionate is a lot harder. I interview a half a dozen people every week whether I have an opening or not, just looking for somebody who is an A player.

 

 

 

How do you make sure that you don’t grow too fast?
I see some of these companies trying to go from 100 employees to 300 employees in six months. I call that indigestion. If I hire 200 people in six months, I know that my quality is going to suffer. I can’t hire that many good people, and I can’t train them and get them up to speed.

 

When we make our business plans, we look for aggressive goals, but we don’t look for growing from $10 million to $100 million in revenue in a year. That type of growth can break it. We look at bottom up and top down to see how we can get to a level that is a digestible growth plan.

 

HOW TO REACH: CipherTrust, (877) 448-8625 or www.ciphertrust.com

 

 

 

 

 

 

 

 

 

 

 

Friday, 16 June 2006 10:02

The Shah file

Born: Morristown, N.J.

Education: Bachelor’s degree, economics, Wake Forest University

First job: When I was growing up in my family’s real estate business, I worked the front desk at one of my parents’ hotels.

What was your biggest business challenge, and how did you overcome it?
It was really waking up on Sept. 12, 2001, and having the reality of the unknown that was there. It was the first time that I really didn’t have a full grasp on what it was that we were going to have to do.

That was one of my most difficult times. It was also one of the greatest times when I look back on it, because that’s when I come back to my team of executives. I had a group of executives that all showed up in my office Sept. 12, all carrying the dashboard ... and all of us sitting by and saying, ‘We don’t know what’s next, but let’s talk about what we have to go do and accomplish.’

My executives treat our business like partners. When times are great, we all are the beneficiaries, and when times are tough, everybody digs in and gets it done.

The reason that we’ve been so successful over the history of our organization, and we’ve had a lot of success recently, is because our team knows how to survive. They know what they’re doing. They’re talented professionals and they’re committed to the success of our organization.

What has been the greatest business lesson you have learned?
Maintaining the commitment to your company’s ideals will allow you to achieve whatever it is you want to achieve. When you start wavering from those company ideals is when you start getting in trouble. Maintaining those has been the greatest lesson because we’ve really achieved and learned from that, and it’s made us the company that we are.

Whom do you admire most in business and why?
My dad gave me an opportunity in the early ‘90s to a kid who hadn’t accomplished nearly as much to be afforded that opportunity, which was to invest the family’s entire savings and earnings. People may say I’m still a kid now at my age, but I really was a kid then.

My dad taught me the value of quality and metrics before there was a balance scorecard. He ran quality control for RJ Reynolds, and he taught me the value of measuring and quality. He also taught me the value of surrounding yourself with great people and giving them the keys to be your partners and treating them like partners.

I’ve made him chairman emeritus of our company because people love him so much. The business things he has taught me and what he gave me at such an early age to start this business, I doubt I could search and find anybody else who would do that given the circumstances.

We didn’t know we were coming out of a major recession. This was the recession of ’91, ’92. These were very difficult times in our business.

Tuesday, 23 May 2006 20:00

Preserving culture

When George Grubb and Gary Schwebach founded marketing research firm G & S Research in 1997, it was easy for them to create a good working environment. Their handful of employees could fit around one table, and decisions were a group effort.

However, for the past two consecutive years, the company has increased its employee base by 30 percent, and Grubb, principal, didn’t want G & S to lose its friendly feel.

“To the extent that we maintain a great working environment will ultimately dictate where this company goes,” says Grubb.

If employee turnover is any indication of a good working environment, Grubb and Schwebach have succeeded. Of the 47 employees hired by G & S since its inception, 41 are still with the company today.

Smart Business spoke with Grubb about what he looks for in an employee and how he creates a good culture.

What do you look for in an employee?
A lot of what we look for is off-resume. I’ve seen a lot of good resumes come through here, and by the time they are done interviewing, it’s just not a good fit. It doesn’t mean they’re not a fit somewhere else; they’re just not a fit here.

Most of the people that we talk to have experience. It’s important to find out where they think they are particularly strong, what they really like to do. Enunciate those things to us, and then let’s see if that’s a fit for our business, because if it is a fit, then more than likely we’re not going to have to manage those people very hard. The learning curve won’t be as challenging.

The other thing is their approach to their colleagues and clients. Are they prone to say ‘I’m a little bit light, I’m going to look over the cube wall and see if there is anything I can do to help the person next to me?’ Or am I the type of person that likes to do what I have to do, and if I’m done early, then I’m going to leave?

Those people that look beyond their own individual job are the people who are going to be successful here.

How do you incorporate new employees into your corporate culture?
In the interview process with people that we feel are strong candidates, we don’t want to hold much back. It’s very important for candidates who are really thinking about making a career change to fully understand what they are getting into.

If we are doing the hiring right, if you sign on the bottom line with G & S Research, I hope your days of sharpening up your resume are over. But to do that, you have to make sure there is full disclosure.

They want to understand the foundation on which the company is built, rather than just saying, ‘If you want to know what the mission statement is, here it is in the binder.’ We try to spend time so that they understand the history and how we’ve grown and ... why we continue to grow and expand.

One of the areas that we’ve worked on as we’ve been growing is a much firmer career path. We can lay it out on a piece of paper, and people know how the organization is structured and they understand where they fit in. They also can understand, assuming they are doing a good job, where they can go and what the opportunities look like.

How do you create a good work environment?
It’s an ongoing task. The very first G & S employees, that was a different environment. We’re different now. I see a lot more meetings. I see HR and more structure and I’m not fearful of that.

The essence of the G & S culture though, that I don’t want to change. That’s the openness, the honesty, the fact that you can enjoy your work, you can have fun with your co-workers. There is nothing wrong with having a goal of people actually enjoying where they work and not wanting to leave and wanting to refer other people.

We have a group called the WOW! Team, and they essentially own our internal brand identity. Wowing is important not only externally with our clients but ... that group is also in charge of making sure that they take ownership of things that keep morale high and keep people enjoying things at work.

There are a lot of things that they do to make sure that there is still a little bit of spontaneity around here, that we are stilling putting an accent on activities after work or on the weekend. I can truly say I like to hang out socially with my co-workers.

But you have to work at that. That’s really the challenge that we’ve had here as we’ve grown. Can we maintain that spontaneity? Can we maintain that togetherness? I think that we can. It just comes down to the extent that we put in importance on that. HOW TO REACH: G & S Research, (317) 252-4500 or www.gs-research.com

Thursday, 27 April 2006 10:47

The Orr file

Born: Akron, Ohio

Education: Bachelor of science, communication, Ohio University

What is the biggest business challenge you’ve faced, and how did you overcome it?
Taking over as CEO of Myers was the biggest challenge to date. I don’t know that I’ve overcome it yet, but I’m working on it. When you get to the position where you are actually in charge of the whole operation, which has 5,300 employees, it does put some responsibility on you.

I do work fairly long hours to try to make sure that I am up to speed on what is going on and what needs to be done. I spend a lot of time thinking about where we are going in the future and hopefully, we have been successful so far. As we go forward, I think that is probably the biggest challenge I have — how do we keep Myers continuing to grow profitably?

What is the most important business lesson you’ve learned?
People are probably the most important thing. It really does mean a lot having the right people in the right jobs. It’s really not bad people; it just might be the wrong person in a particular job.

Having the courage to step up to that, because not only is it the right thing to do for the company, but it’s the right thing to do for the employees — to point out where their strengths and weaknesses are and helping them to get better. It might mean making a potential change in their job position to do that. I think that is very critical.

Thursday, 27 April 2006 09:47

Michael Uremovich

Michael Uremovich founded STARCON out of necessity. He had recently been laid off and needed to provide for his family, so started his own full-service mechanical contractor company in 1983 based on two basic principles: Take care of your people, and provide value to your customers. STARCON has prospered under those principles, reaching $135 million in revenue in 2005, up from $100 million in 2004. Smart Business spoke with Uremovich about the importance of good people and how he creates a positive work environment.

Develop a plan.
Most entrepreneurs when they start out don’t have a long-term plan as to where they are going. You have to be looking out for the future. You have to develop a plan and communicate the plan very well with everyone in the organization.

If a quarterback went into a huddle during a football game and only half the huddle heard the play, how successful would that play be? You have to make sure that everybody on your team understands what the plan is.

Delegate work.
You have to surround yourself with the best people possible and delegate to them. Most entrepreneurs can’t make that transition. They start out as a small business owner, and they are wearing multiple hats and are controlling all different parts of their business.

And at some point, for them to be able to grow their business, they have to be able to take off one of those hats and hand it off to someone else and let them take care of that part of the business.

Fortunately, I have been able to bring in some great people that I have been able to delegate to, and they do their jobs better than I could do their jobs.

Create a good work environment.
There is an outside firm called the Great Place to Work Institute that will come in and do an interview of your team members. They will give us feedback on how we are doing and the areas we need to improve.

We go around to each one of our divisions once a year and do a formal strategic planning process where we have an outside facilitator sit down with a group of 15 to 20 people from each one of our divisions and get input from them as to where they feel we need to improve and the areas that management can help them execute their jobs better.

We also have a process called opportunity for improvement where our team members can submit ideas about how to make the company better. (The ideas) are reviewed by a panel of their peers, and we get feedback to them within two weeks about whether we are going to move forward with their idea or whether we are going to shelve it because it is a major initiative and we don’t have the capital funds to move forward with that initiative, or if it’s something that maybe we have tried in the past and it doesn’t work. We have a constant feedback loop.

We also use behavioral-based safety. It gets every person in the organization involved in the safety process, out making observations and able to stop any job. We can have an individual that [is hired] at STARCON today, and if he goes out on a job site next week and sees something that he thinks is unsafe, then he has the authority to say, ‘Stop. I am not going to do this job because I am concerned about some things.’

Then we will address those concerns and try to make the job as safe as possible and then proceed with it. In the areas of safety, we empower everyone in the organization to take control of it.

Invest in education.
We have a very extensive training program for all of our team members. We do skills training at all levels. We have a leadership development program where we take up-and-coming leaders and put them through a formal process to teach them management skills.

We have a college tuition reimbursement program, so everyone in our organization, if they want to take additional college classes, if they get a B or higher, the company reimburses them for that tuition. We really built a culture where we believe people should be life-long learners, and we invest a substantial amount of time and money into training and developing our folks.

Be compassionate.
You have to have compassion for the people in your organization. I am a good salesman. I could sell ice to Eskimos. But if I don’t have people who can perform, then the company doesn’t succeed.

You have to have compassion for the people that are out there on the front line doing the work. Take care of them every day and understand their needs, not only their needs on the job site but their personal needs and their family needs.

If you have compassion for your people and show them that you really care about them, then they’ll care about the company. Then everybody wins.

Create opportunities.
We’ve been growing by about 25 percent a year, and that creates opportunities for people. Everyone today wants an opportunity to move up. If you put together a good plan and bring good people together and your organization continues to grow, you will continue to create opportunities, which allows you to bring more great people into your organization.

Never lose touch.
The greatest piece of advice is to not lose touch with the people that are out there doing the work. I had a custom trailer made, and I can cook 500 pounds of beef briskets at a time. I make a point of going out to our job site and cooking lunch for our team members. On our major job sites, I do this once a year.

I then have an opportunity to reach out and touch all the individuals in the company who are out there working on the line, and it gives them an opportunity to give me feedback. Not losing touch with the people that really get the work done is critical to the success of any company.

Too many times, as companies get big, there are so many layers between the guy at the top and the folks who are out there doing the work that it gets filtered and you lose touch with what is really happening in your company. HOW TO REACH: STARCON, (815) 478-4615 or www.starcon.org

Wednesday, 26 April 2006 20:00

It’s always personal

For Kirk Smith, personal attention is the key to his success.

Smith, who founded mortgage company SouthStar Funding with Brian Smith, Mike Fierman and Tyler Wood, did so with the idea that if you form close personal relationships with your employees and clients, you will keep turnover low and encourage repeat business.

“We’ve always believed that you have to differentiate yourself with the service that you provide,” says Smith, president of SouthStar. “That is the one thing that we feel like we can do consistently, day in and day out.”

The company’s motto, “It’s always personal,” has been SouthStar’s backbone and propelled the company to rapid growth. Its revenue has increased from $60 million in 2002 to $144 million in 2005, and the number of employees has grown from 270 to 828 during that time. It has also been named one of the best companies to work for three years in a row by a local publication.

Smart Business spoke with Smith about his unique hiring procedures and how he creates a positive corporate culture.

How has hiring people from outside the mortgage industry helped you grow?
We say we want to be different than everybody else. If we hire everybody else’s employees, it’s pretty hard to maintain that differentiation.

When you bring people in from competitors, they typically have a preconceived idea on how they are supposed to do their job and how the industry works. Sometimes people struggle when they come here from other companies because they are not used to they way we do business because it is a little unique.

Underwriters, for example, are the decision-makers (and they) talk directly to the customers. Most other mortgage companies don’t allow that.

We’ve also found that both salespeople and administrative employees who come to us from other mortgage companies are 2.5 times more likely to leave than people who come to us with no mortgage background. Our goal as a company is to experience less than 10 percent turnover in any one year. The industry standard is somewhere between 25 and 30 percent.

If we continue to want to get our turnover down, we’ve found that most times, we’re better suited to hire people without experience and then train them on the way we do things.

How do you find employees?
We have a very active program for employees to refer friends and family. We like to hire people who our employees are recommending to us. They must be pretty good, or people wouldn’t be referring them to us because that would be a negative reflection on them if they didn’t perform.

It also works vice versa. The person coming in obviously wants to do well because someone has stood up and vouched for them. In addition to that, we do a lot of college recruiting.

How do you create a good work environment?
About half of our marketing budget is spent on marketing to our existing employees, as opposed to external customers. We spend as much money on making our employees happy as we do on making our customers happy.

We take a customer trip. Everyone in the company is invited. We go to a beach location. We have done this six years running. The company pays for the airfare, the hotel, typically they are all-inclusive. We take it on a holiday weekend and then close the office one additional day, so it’s typically a four-day event.

We do quarterly socials where people get out of the work environment, and we’ll go to ball games, bowling, trivia contests — you name it, we’ve done it. The idea is to try to get people to know each other in a social setting.

We have a profit-sharing plan where we take 5 percent of the company’s profits, and that goes directly into everyone’s 401(k) a couple months after the end of fiscal year. People get birthday cards, birthday gifts, anniversary gifts. We’re constantly focusing on ways to make the environment for our employees a fun one. The idea is if they like working here, they won’t want to leave.

As you continue to add employees, how do you incorporate them into SouthStar’s corporate culture?
Any new employee who starts with us, their first day is in Atlanta at a two-day orientation. They hear from the managers on what our values are, what’s important to us as a company.

Hopefully, we make them more comfortable with who to go to if they have issues and problems. Many of our employees start off immediately after the orientation in a training program.

When anyone comes into our company, they are assigned a mentor. The mentor spends a lot of time with the individual, making sure they understand how we operate as a company. They’re there to answer any questions, they’re there to go to lunch with them and kind of be their pal for awhile until they’re incorporated into the culture.

HOW TO REACH: SouthStar Funding, (866) 350-2302 or www.southstar.com