To Daniel J. Elsener, running a large organization is like producing a play or an opera. The production involves many people who have to not only know their roles but feel inspired to perform their roles at a high level.
“There are scriptwriters, singers, actors, there is storytelling, there is a message, there is a passion, there is a stimulating of excitement,” says Elsener, president of Marian University, a Catholic and Franciscan institution that generated $40 million in 2009 revenue.
The key is to find how each performer in your organizational play best fits the overall production and then playing to their strengths. You do that by building a culture that emphasizes building employees up and encourages them to seek what truly drives them each day.
“You have to build a culture of achievement, a culture of passion, a culture of faith, a culture of commitment to the people you serve,” Elsener says.
Smart Business spoke with Elsener about how you can put the right performers in the right roles for your business.
Discover strengths. If you think about it, when you were a child growing up, along the way, someone might have taken you to a football game and something caught your imagination. There were sights and sounds, and you might even have thought about being a football player then. You certainly wanted to talk about it and be a part of it. If you go to a play, maybe you don’t end up wanting to be the actor on the stage but maybe you want to branch out and go do something that it inspires you to do. Maybe the actor on the stage inspires you to go out and do something, and the message resonates in your heart and mind, and you leave that theater and say that you have a calling, you’ve been prompted to do something.
You find what relates to you, with the talents and gifts that you have, and what you are going to do with it. Great performances inspire us in general to do other great work. That’s how you get engaged. That’s why I think of culture as this production that keeps telling a story.
As far as the leader’s role in that, the biggest thing I’ve learned over the years is that I used to think I could remake people. We don’t try to remake people anymore. God made them, and they develop their talents, desires and passions. The best way to help people find their role, take their role and live it with passion is to work out of their strengths, their desires and their gifts. When people do what they’re good at and what they love, I just stand in awe of it. When you’re forcing them and trying to remake them, when you make the accountant be a great artist or the great artist be an accountant, that’s when you can have problems.
A good friend once told me, ‘Don’t try to teach pigs to sing. It frustrates you and annoys the pig.’ So that’s why we’re always trying to find the strengths of a person and have people on teams understand each other’s strengths and manage each other’s weaknesses. Once that happens, an organization rolls.
Build strengths while neutralizing weaknesses. We do have some instruments that help you find your strengths that are well-tested, but when we have groups of people working together, we’ll put their strengths on the table, and you can kind of see where they’re coming from, how they perform a task. So you try to get a strengths quotient, not only on the individual but also the group. Then you have performance reviews when people set goals and so forth. We’ll show people their strengths and how they can use it to help us here at Marian and how we’re going to support them.
You manage weaknesses by making sure they don’t ruin your strengths. And look for technology and other team members, assigning other people to support that. At least manage the weaknesses so they don’t trip up your strengths. You can do that in a lot of various ways. First and foremost, if a person has weaknesses, don’t give a job where their weaknesses are going to be a constant burden for them. Make sure it’s manageable in a certain situation.
Set the cultural tone. You have to know people and you have to like them. If you’re going to be in a leadership position, it’s a requirement that you have to stand in awe of a person’s goodness and giftedness and what they can achieve.
Being an educator is a great training ground to be a leader. When you teach and you’re part of an organization that teaches and learns, you see how people develop, and you can do amazing things. They can grow so much if you encourage and affirm and get to know them, spend time with them and listen to them. You can do it informally, by getting to know people, spend time with people and listening to people. But you get much better at this when you put it into your philosophy on personnel management and hiring. If you put it front and center in the beginning, talk about it in seminars, develop your capacity to understand strength management in the organization, it becomes a way of life.
It’s also quite interesting that as you work to make it systematically part of your operation, people are less likely to just get angry with someone because they don’t do something. They’re less likely to become frustrated with their bosses. Most performance reviews spend about 90 percent of the time talking about what you’re not good at. But you’re much better off working from someone’s strengths and building them up, and manage those things where they’re not naturally inclined. So you really have to make it a part of your approach to personnel management and selection.
How to reach: Marian University, (317) 955-6000 or www.marian.edu
MaryAnn Rivers was staring at a two-headed monster when she looked at the future of Entertainment Publications LLC.
On one flank was the problem that every business in southeastern Michigan has faced during the past couple of years, to greater and lesser degrees: the economy. Entertainment Publications produces, among other things, coupon books for purchase. But when the economy falters, consumers are less likely to spend money on nonessential expenses, which means fewer coupon books sold, and fewer coupons used from books that are sold.
On the other flank was the changing face of the market that Rivers’ company serves. Entertainment Publications has historically had a major presence in grassroots fundraising, supplying schools and community organizations with sales items. In recent years, some aspects of the company’s fundraising business have undergone a shift in focus.
“We have a gift wrap and products business that we sell to schools as a portfolio of products that we offer for fundraising,” says Rivers, the company’s president and CEO. “For many years, it was a highly profitable product. But if you think about gift wrap and a lot of those gift items, with Costco and some of the big-box stores being very competitive, where you can go in and buy 10 rolls of gift wrap that are fairly high quality for a fairly low price, the value proposition just isn’t there for consumers to pay the price that they need to pay in a fundraising environment. It wasn’t a highly profitable product anymore. We didn’t completely abandon it, but we did make some significant changes to the business model.”
For Rivers and all of the 700 employees at privately held Entertainment Publications, change has been the one constant, and the impetus for change has come from consumers, the marketplace and the economy itself.
Keeping her company nimble enough to react to change has caused Rivers to analyze herself as a leader and a communicator and look for other employees who could lead and communicate throughout the company.
It has been an ongoing task and has required Rivers and her leadership team to embrace change and thrive in an uncertain environment — then ask everyone down the ladder to do the same.
“Once you anticipate what the need is, it’s all about leading people through it quickly, being able to rally the troops and get them moving as fast as they need to, getting them to understand the critical nature of the situation and why it’s so important,” Rivers says.
Stay focused on the basics
When leading your company through a time of change, first you need to identify the areas that aren’t going to change — namely, your core values and operating strategy. Then you have to align your senior leadership on the values and strategy. Leadership team members need alignment first since they are the ones who will carry those foundational cultural principles to the rest of the company.
“I look at (core values and strategy) in kind of two different ways,” Rivers says. “They’re very connected but very different. To relate to the strategy, you need to first get your leadership team very clear and aligned on that strategy. That takes time. It takes a lot of debate and a lot of challenging on what that should be and what that is. But you need to make sure everyone on your team is absolutely aligned.
“From there, you go out and start talking with your stakeholders and constituencies, and really get input from them.”
A focused strategic plan should also be free from distractions that might encroach from the periphery of the business. You and your leadership team should comb through the fibers of your business to see if there are any units or initiatives that don’t fit with your overall direction. A streamlined business is able to adapt to change more effectively and, as a result, is better able to weather the challenges that the market and economy can pose.
“Take all of the other distractions away,” Rivers says. “Get rid of ancillary businesses, ancillary and unimportant initiatives, things that are taking away from the core, uniform strategy that you’re trying to deploy. It’s an ongoing effort. It’s an evolution, and you keep working through it. You keep building momentum over time, and eventually it does pick up.
“Doing that is a lot about assessment and analysis financially. How those businesses or products or channels are either contributing or not contributing to the overall business. You need to understand it, figure out what it is doing and make a case to the organization as to why it doesn’t make sense to play in this arena anymore.”
On the core values side, your task is to engage the company as a whole, creating a dialogue with employees from all levels. You can tell them what you think the company stands for, but they also need to tell you what they think the company stands for.
“The values are so personal for employees, and you really want to get them to buy in to those values,” Rivers says. “But there is also a point in time when you’re never going to get consensus, so you get input and you pick core values, and you start to build those values into the organization and the culture.”
Build the case for change
Any time you try to initiate a major change in a large organization, chances are you will face some kind of resistance. It starts when you make the decision to streamline and build a more nimble, agile business that can react to change.
“You can make the case for why you can’t play in a certain area anymore, but there is still going to be resistance,” Rivers says. “Sometimes, those are pet projects or pet businesses that you’re trying to eliminate, things that people really want to hang on to. You can get some of the same issues when it comes to culture. There are things that are great, things that you want to keep, and there are certain aspects of the culture that you need to move on from. You have to be very stubborn in some cases, having patience but also really sending the message that this has to change. Sometimes the most painful moments are when you come to the realization that change has to occur.”
As the leader of the business, you can’t control how every person reacts to impending change. But you can build the case through constant and consistent communication that repeatedly states your reasons for change. From there, you need to listen to what your employees are saying, what their concerns are and what feedback they want to give.
You need to make yourself available across multiple communication avenues, and you need to open yourself up to tough, challenging questions from employees who might have dissenting opinions or concerns about their future — and be willing to answer those questions in a frank, straightforward manner.
“There are always ‘me’ questions,” Rivers says. “What does this change mean to me; what does it mean to my future role? With what has gone on with the economy, people are wondering if they’re going to have a job. They have concerns about their families and themselves. They’re looking for a level of confidence in the business strategy and the way we’re going to market, that it all makes sense.”
As with many other aspects of leadership, fielding challenging questions is a learned skill. It’s something you resolve to focus on.
“I personally like question-and-answer sessions where people ask tough questions that you have to answer,” Rivers says. “You don’t dodge any of them, regardless of how tough the questions are. Then you have to depend on your leadership team, which can continue to work with their teams and get them to understand the case for change. You have to go back and make the case again sometimes.
“You also have to be very involved in walking around. I go out in the field on sales ride-alongs a lot. If you have salespeople in the field, you need to get out and talk to them and listen to what they’re saying. The more you listen and respond to the things that are important to them, the more likely they are to trust you and buy in. If you don’t listen, they’re not going to listen back.”
Listening takes practice. It goes hand-in-hand with a willingness to absorb and candidly answer tough questions.
“You have to provide opportunities and set up situations where people feel comfortable providing feedback and giving information,” Rivers says. “You have to truly be committed to genuinely listening, and recognizing that you get more knowledge and information by sitting back and listening than by continually talking or trying to send messages. Some people have a natural gift for listening, but we frankly can all become better listeners. It just requires practice. You can also find someone in the company who is accountable, someone who is willing to be honest with you and tell you if you’re not listening enough.”
Build change leaders
You can’t build the case for change alone. You need other leaders throughout your organization who can also keep the case for change front and center with their peers and direct reports.
Rivers says that internally, you will be able to identify the people who truly embrace change by working with them over time. But it also helps to bring in fresh perspectives from outside the organization, which means you need a recruiting and interviewing process that helps to identify change agents.
“By working with people, you start to get a sense for how comfortable they are with change,” she says. “Certain people thrive on change. They love it, and it’s fairly easy to spot that. On that front, it’s about engaging those people and spending time with them to really understand where it is you’re trying to go, and doing it maybe a little more intensely than you would with other people. You need to infuse those types of people into different areas of the business, because you have to get the message to different groups.”
When it comes to balancing the internal element with some new blood from outside the organization, you need to find out a lot about potential new hires in a short period of time. Rivers says you can do that by, in essence, scaring them.
“When you interview people, you share everything with them,” she says. “You tell them exactly how it is, almost to the point of you’ll know who you scare. You can kind of tell the people who get a look in their eyes that they’re not sure about this, and then you know the people who are really engaged, really excited about change and thrive on that. You’ll see the people who want to be a part of that.”
Rivers says Entertainment Publications has made “significant progress” in installing a change-focused mindset throughout the organization. The company is continually adapting its processes, products and the way it takes products to market. High school fundraising has become a market that Rivers and her leadership team has zeroed in on, focusing on growth. The company is well-positioned to continue thriving despite the state of the regional or national economy.
“You need to create some level of comfort and confidence with change, and then create a sense of urgency and continue to push people through that,” Rivers says. “The reality is, when people start to see that they can have success on the other side (of the change), and they start doing scary things that different, it becomes invigorating. It becomes exciting, and other people see it. That’s what builds up the momentum that creates the energy, and that’s when the movement starts to take place.”
How to reach: Entertainment Publications LLC, (888) 231-7283 or www.entertainment.com
If you work at SecureState LLC, Ken Stasiak wants to see what you can do.
A lot of executives say that, but Stasiak lives it. The founder, president and CEO of the 50-employee security solutions company tries to put as much responsibility into the hands of capable employees as he can, and he only intervenes when there is a problem or issue that needs to be solved from the top rung of the company.
“I kind of let them run a bit, see how they’re doing, and then offer guidance and input if I see that they’re struggling,” Stasiak says. “But if they’ve got it, I usually let them run with it.”
Smart Business spoke with Stasiak about how you can empower your employees to take charge.
Q. How do you give people the tools and resources to take something and run with it?
I like to have personal one-on-one meetings, so that there are no misconstrued notions about what is going on, like you might have with e-mails. What was said that wasn’t conveyed properly. So I really make myself available to my team. I like to do things via person because you can get a much more finite idea of what we want to accomplish. So really making yourself available to the team is one of the biggest things you can do to motivate them to be successful.
Q. What are some of the keys to staying accessible to your employees?
The biggest thing about staying accessible is delegating. If you delegate your tasks appropriately, you have time. If you take too many tasks on of your own, you obviously won’t have enough time. The challenge, from a management and leadership perspective, is to make sure that you have enough resources so that you have time to spend.
I’ve been in organizations where you can’t get even five minutes with your boss because he’s too busy doing everything else. Obviously, that’s ineffective leadership. It provides no guidance for the team. My role is really to jell to make sure the team and all the players on the field know the calls, how we’re going to play, what we’re going to do. So a lot of times, I’ll get up, walk around and talk to people, ‘How’s it going, what are you doing, what are you seeing?’ and I correlate all that information back, so that when I talk to someone, I’ve already talked to three different people and can bring all those perspectives together.
Q. How do you develop a system for delegating?
Everybody has their strengths and weaknesses, so I use football analogies a lot. If I have a wide receiver who is very quick, I would not put that person as a running back. They wouldn’t be effective in that role. I evaluate my staff and my team regularly about every three months. I try to figure out what they’re doing well or what they were doing well three months ago that they might not be doing well now or where they might have a strength that is better-suited for another role.
When I delegate, I try to give people what I believe is their natural instinct to be successful, and then I let them run with it. For example, if I find that some tasks or duties would be better-suited for someone else or it’s a task that only I can accomplish, then that’s the task that I’ll take. So the formal process as an executive, manager or business owner is that you always have to evaluate your team. We do profiles, so we do a couple profiling standards that rank people on their abilities. The personality profiles let me know if someone is capable of really getting after a project or really capable of managing other people or if the person might work well not so much as a superior but as part of a team.
Q. How can you get an accurate picture of what a person brings to the table?
One of the things I don’t do is I don’t look at the resume during the screening process when we’re looking for a new hire. When I screen people, it’s predicated on a conversation. I can get a pretty good vibe within the first few minutes of meeting someone of what they are. It’s in how they present, the way they come in the door, how they talk, the way they act toward me. I take that, and then I couple that with a technical interview with one of my folks. If I think they have a good personality and could contribute here, I want to know their technical skills. So I never really evaluate people outside of meeting them in person. From that, I can get a much better picture about how someone can fit here and the ways they could be effective.
The reason I don’t look at the resume is that people have had a lot of time to put stuff on the resume. It’s not a free flow; some of that stuff is canned. You can get a false connotation of a person if you just read a resume.
How to reach: SecureState LLC, (216) 927-8200 or www.securestate.com
When Realty Income Corp.’s Tom Lewis goes to work each day, he’s working for one person.
She’s a 75-year-old retired schoolteacher in Dubuque, Iowa, who has invested her money with Realty Income and is relying on her monthly dividend check for financial support.
Every person at Realty Income is working for that same woman. Employees are coached to work for her from their first day on the job.
“If you can’t relate what you’re doing at this moment to her needs, it’s likely that what you’re doing is not what we’re trying to accomplish,” says Lewis, CEO and vice chairman of the board. “But if you can focus your needs on her, you can relate your overall effort to buying real estate, doing the research on it, keeping the balance sheet in line and generating cash flow.”
Every employee needs to learn it and remember it. Lewis and his leadership team dish out random pop quizzes when walking the halls at the company’s Escondido headquarters.
“We have a little test where we go around and ask people here, ‘Who are we?’ The response needs to be ‘The monthly dividend company.’ Then we ask, ‘Why are we the monthly dividend company?’ and the answer has to be ‘Because there is a 75-year-old retired schoolteacher in Dubuque who needs that monthly check.’”
The retired schoolteacher doesn’t actually exist. She’s a fictitious representation of untold numbers of Realty Income investors who rely on the dividends the company generates to make ends meet from month to month. Without their investments, Realty Income can’t buy the small retail properties in which it specializes or generate the revenue that allows the company to pay out dividend checks. So Lewis decided to put a face on the customers that everyone at Realty Income which generated $330.2 million in 2008 revenue serves each day.
It’s part of a larger strategic plan spurred by Lewis and his team to focus the entire company on a single mission and vision for the future. The unnamed retired schoolteacher in Iowa has helped every employee at Realty Income know what their company is, what it stands for and where it needs to go in the coming years.Define yourself
Before you can define a direction, you need to define what your company is what it does, what it doesn’t do, what it stands for and who it serves.
Lewis and his leadership team have worked that message into their company’s slogan, “The Monthly Dividend Company.” It’s a tagline that serves the mission as much as marketing.
“We chose that because it’s very consistent with who we wanted to serve,” Lewis says. “When we did that, it was also about what we didn’t do. It was really about understanding a customer who was looking for a consistent dividend stream, so our entire investor relations and corporate relations was focused on financial advisers and their clients individually, rather than the larger institutional investors. Then we made sure our staff knew there was only one reason the company existed, and that was to pay monthly dividends to shareholders. It required that any action the company made would be consistent with that strategy, and that means … really focusing our efforts on generating cash flow off the real estate that could consistently pay dividends to investors.”
It was a financially sound plan of action, but it required a mentality shift for employees, particularly those who worked for the company prior to its 1994 initial public stock offering.
Lewis needed to undertake an intensive communication campaign to repeatedly hammer home the monthly dividend message. Lewis and his team held a number of staff meetings, where the idea of the 75-year-old retired schoolteacher was born.
“It’s consistency and culture, deciding exactly what the mission is and what it takes to accomplish that mission,” Lewis says. “Then, it’s making sure that you set goals as an organization, both corporately and individually, that match exactly to that mission. It’s almost a vertical line from the top to the bottom of the company. You need to state the message and restate it. It should be very clear to everyone what you’re going to be and, even more importantly, what you’re not going to be.”
Knowing what you’re going to be means defining and executing on what you do best as an organization. Lewis and his team focused Realty Income on the goal of purchasing small retail properties under long-term leases and using the revenue generated off of those properties to pay shareholder dividends. The company’s leaders refined and streamlined the message so that it became clear-cut and not open to interpretation. The more straightforward your company definition is, the less of a chance you will have of becoming sidetracked by the latest attractive proposition to come down the road.
“In a lot of industries, there tends to be trends, fads and things that are considered profitable and different,” Lewis says. “But you need to pursue what you want to be, not what others would define you as. That all goes back to the mission and staying on message. It also speaks to how consistent you are in your actions. As you set goals and do your reports at the end of the year, whether you’re looking at what you did individually or how the company has performed, the measurement you’re going by should be what you accomplished that is consistent with the mission.”
Identify your strengths and play to them but also identify your weaknesses so you know where to steer clear. In some cases, you might not steer entirely clear of an organizational weakness or an area in which you don’t want to specialize or build muscle, but you might need to do enough to become at least competent so that your weaknesses don’t inhibit your strengths.
“You circle your mission around what it is you do well, and then you understand what your weaknesses are and fill them out only to the extent that they at least match up with the mission,” Lewis says.Get strategic
When figuring out where they want to go and what they want their business to stand for, a lot of leaders undertake a three- or five-year strategic plan. Lewis doubles the effort.
Depending on your situation, you might think that it is far too difficult to gain an accurate picture of where you want your business to stand in 2020, but the longer you can project into the future, the more you can look past short-term fluctuations in your market, talent availability and other factors. Looking a decade into the future allows you to truly spin the altimeter and look at things from a 30,000-foot level.
“It gives you a much bigger ability to focus on what you want to be and what you want to look like,” Lewis says. “There will still certainly be changes in conditions during the time of your plan, but a period of 10 years gives you a long enough period to transcend short-term conditions, whether they be an economic slowdown in your industry or challenges in getting resources and people over a short period of time.”
Whether you want to try and project 10 years into the future or think three or five years is plenty, the need for a well-defined strategic plan is universal in the world of business. Your strategic plan gives employees and management an instruction manual for how to carry out the vision and mission of the company and a series of goals that define success.
At Realty Income, Lewis and his team have committed people and resources from inside and outside the organization to building the strategic plan. Since the 1994 public stock offering, Realty Income has gone through a major strategic planning process three times.
“The process is basically to bring in an outsider who facilitates this, spending a number of months talking about the process you’re going to go through, letting people talk about the key questions they have, then getting together off-site with this group to really take a look at the company’s current mission,” Lewis says. “You take a look at the company’s performance toward the mission and then decide whether to recommit to that mission or if there might be something else you need to be doing.”
The rigorous self-analysis includes taking a look at where your company stands financially, its customers, the area it serves, its talent base, recruiting practices and other factors critical to a business’ success.
“It’s really to look at the business and do the so-called SWOT analysis: strengths, weaknesses, opportunities and threats,” Lewis says. “If we could pick exactly what we want to be 10 years from now, what would that picture look like? You get a clear picture of that, and then a clear picture of what it would take to get there. We come up with every possible idea that we can in order to paint that picture of what we want to be in 10 years, and then we kind of work backward from there.”
Lewis says you should ask yourself some basic questions regarding the cultural change it would take to carry out your strategic plan, whether the plan overly ambitious or not ambitious enough, and above all can your company be the best at what you’re trying to accomplish?
“Can we do this without betting the farm, yet at the same time be bold enough not to fail?” Lewis says. “Then the big question is to identify the game changes in the industry and business that would allow you to achieve that picture.”
From there, you need to develop a means of implementing the plan. At Realty Income, Lewis recruits people from within the ranks to oversee specific initiatives tied to the strategic plan.
“I create silos outside of the normal operations of the company, and each represents these three or four initiatives,” Lewis says. “I bring people in from throughout the company who work outside of the normal organizational chart, and they work with the teams that are pursuing these initiatives. You have a function that separates the initial implementation of the plan from the regular constraints of the business, whether they are budgetary, hierarchical or people’s egos. Then you spend a lot of time on it. That’s my primary function.”
In strategic plan implementation, there is a time to recruit from within and a time to look outside for your leaders. There are advantages and disadvantages to each route. If you pull someone out of an existing position, you need to make sure you have a succession plan in place for that position. If you hire someone from the outside, that person needs to fill a need, whether it be a skill set or a new perspective.
“Any time you’re undertaking an activity in a manner that is dramatically different from what you’re doing right now, if you don’t already have people who can transcend that knowledge, you need to go outside,” Lewis says.
“I’ve often heard it said that people who come up in a business, they develop very great strengths. Then when they become an executive, their greatest strengths often become their greatest weaknesses. So it’s identifying people in-house who can transcend those strengths and current thought processes to do what you need to do. If you don’t have them inside, you need go outside.”
Developing the mission and vision, then developing a strategic plan to carry it out, and finding the people who can make it happen. It’s the inside workings of a company that a 75-year-old retired schoolteacher in Iowa never sees. But in the case of Realty Income, it ensures that she and all of the investors like her keep getting their dividend checks every month.
How to reach: Realty Income Corp., (760) 741-2111 or www.realtyincome.com
James Luck is an inclusive leader. As the president and CEO of the 250-employee Orthopaedic Hospital, there is more to that statement than meets the eye.
In his position, Luck has to bring together employees from a wide range of disciplines doctors, nurses, administrators, office and support staff, among others.
To make it all happen at the hospital, which generated $34 million in 2008 revenue, Luck has to focus on communicating clearly and frequently and identifying others who can help further his communication strategy. It’s a team-focused approach that has worked for Luck throughout his career.
“I really like to have everyone feel that they’re having an active role in decision-making for the organization,” Luck says. “It’s my personal psychology. My whole life, I have very much enjoyed team efforts as opposed to individual efforts. I relish the idea of working with a team on a challenging, complex problem and coming up with a solution.”
Smart Business spoke with Luck about how you can build great communication throughout your organization.
Take an interest. Styles of communication are highly variable. People can be great communicators and do it in a variety of ways. But one of the most essential components is that the leader has a strong personal desire to communicate, that the leader cares about communication and cares about the people of the organization and cares about how they relate to the mission. That personal interest level is critical, and there is no substitute for it. You can’t fake that.
Great communicators are focused on people, a ‘people person,’ but they vary in terms of how extroverted they are. But they genuinely care about the communication, care about the people they are talking to and care [about] being able to engage people in the discussion. That is pretty obvious when you listen to these people speak. You do get engaged because they have established a connection with you. That is the most essential element of a good communicator.
What form the communication takes, writing or verbal, that is not so critical, but it is critical that they have that strong personal interest in communicating.
I am very much a walk-the-halls kind of leader. I’m personally involved in the health care delivery I see and take care of patients in addition to my administrative responsibility. I walk the halls and understand the challenges that exist in the various departments. I’ve been around here long enough that people know me well, and they’re not hesitant to come up and talk to me if they have some ideas or concerns.
Doing the things I do, especially the patient care activities and the residency program, really gets me out with people. ... We also have managers that do a great job with their own particular departments. For example, if I were not a physician, if I were just an administrator working in my office, there would be a whole different level of communication and awareness about what is happening.
Identify and develop communicators. You do have to try to identify people who have the potential to be good communicators, even if it is not well-developed potential initially. But we do recruit and recently did recruit the head of our children’s program. One of the key things we were looking for was vision and communication skills. That can be enhanced and fostered in someone in a variety of ways. You can send someone off to courses and stuff like that, and that is of some value. But I think setting an example and establishing communication as an important accomplishment, then monitoring their progress, that is what you need to do. Someone coming into this organization should see that there is a high level of communication and be a part of that, then gradually assume more and more of that responsibility.
When it comes to finding people with communication potential, there are two factors at work. First, it is what they have accomplished thus far and what you can glean from letters of recommendation. If you look at someone and you see that they have moved up the leadership ladder, that they have been asked to assume leadership roles and responsibilities, that generally would indicate that they have pretty good communication skills. You don’t get there without good communication skills.
Second, it’s the interview process itself. We ask our applicants to give presentations, to study our organization and give a fairly lengthy presentation on what they see for the future, what they would establish as priorities and goals and where they would take the organization. That is then open for discussion afterward. It is an elaborate process to determine if that individual really has that communication ability.
Bring people together. Direct communication is what I’ve found to be the most effective. Newsletters are great, people look at them, but they may or may not take the time to read or think about it. Getting a group together and giving them an update on what is happening in an institution, but even more important than that, getting them to ask questions and get engaged in the discussion, that is the best method.
We have team meetings on a regular basis. We have senior team meetings twice a month, and we have employee forums quarterly. We have an internal journal newsletter we send around on a quarterly basis. We have a lot of functioning groups that meet as often as necessary in every department. For the physicians who work here and senior staff, we have lunch together every day. That is extremely valuable, a lot of important communication occurs there.
We place an emphasis on team building. As an example, I am part of a team that takes care of patients with bleeding disorders. The reason they have orthopedic problems is they bleed into their joints and have terrible arthritis starting in childhood. The only way people can make progress in a disease of that magnitude is with a team, and that team has to be a very broad team of hematologists, orthopedic surgeons, nurses, physical therapists, social workers, clerical staff and so forth.
How to reach: Orthopaedic Hospital, (213) 742-1000 or www.orthohospital.org
On one hand, he is a part of a cable and Internet service giant with more than 100,000 employees and $34 billion in 2008 revenue. Comcast Corp.’s brand recognition is extremely high throughout the country.
On the other hand, Stemper is trying to sell a lesser known array of products in the Comcast cache. The company is primarily known for residential cable and Internet service. Stemper’s job is to build its business customer base by connecting with the needs of businesses.
“We have a great brand that is known for our residential services,” Stemper says. “The challenge has been to build the same brand awareness and understanding with businesses.”
Stemper has responded to the challenge by leveraging Comcast’s ground-level presence in the markets the company serves. In other words, he is relying heavily on local-level employees to build relationships with potential customers and keep corporate management in touch with the wants and needs of businesses in the company’s footprint.
“We have a lot of employees out in the markets we serve, people who are citizens of the areas we serve,” he says. “We really stretch hard and spend time in the field, and do it all the time. We’re always getting information on what is going on in the markets, what is working, what do these customers want and how can we offer them the best services. It’s listening, it’s probing, it’s seeking to understand how to come up with the best ideas.”
The lesson has been reinforced to Stemper time and again: If you want to grow your business and your brand, stay close to your customers by building relationships at the interface point. You do that by enabling employees to build those relationships and by getting out of the office and personally visiting your markets. If you use what you learn from your customers, it all adds up to a company that is more nimble and responsive to customer needs.
Stay plugged in
To build customer engagement into your work force, you must first set the example from the top of the company. Stemper has made it a priority to get out of his Philadelphia office and visit Comcast’s field employees in the markets with the most growth potential for the company’s business services division.
Stemper calls it “zero degrees of separation.”
“I spend a lot of time in the field offices, with front-line sales and customer care and technical folks,” he says. “They are the ones who are really out there with zero degrees of separation between them and the customers. And when we get customer complaints, if they find their way to me, I personally follow up with them. I don’t delegate them away.
“You really want to see and understand, touch and feel, what is happening out there, both in the good areas and the areas in which you can improve. You need to do that to understand firsthand what it is your customers need, what they’re happy and not happy about. That’s not something you want to leave to chance and levels of filtration. When a customer or a business prospect comes along, that’s not something you want to leave to chance.”
Staying accessible to customers is something you really have to live. Stemper says you have to believe, as a leader, that what customers have to say is important and can help you improve your business. You need to work each day toward building and maintaining the relationship between customers and all levels of your organization.
When Stemper isn’t traveling to a market, he’s frequently on the phone with Comcast’s representatives in the area, bouncing ideas off of them, getting feedback and taking the pulse of the market. It’s an ongoing process.
“You really have to be that way all the time,” he says. “This isn’t something where you can just read a book and decide to be this way. You really have to believe that this is critical to how you operate, the way you process and take in information. You have to want to get as much firsthand information as possible.
“When I call up someone in one of our markets and ask them what is going on, it drives the culture. It says that those of us in corporate management want to know what is going on. If that is a part of your culture, the people who interact with the customers are going to think very naturally about sending ideas up the chain, and people in leadership are going to think very naturally of reaching back to the people in the field.”
Enabling all levels of the organization to feed ideas upward is critical to the customer interaction process. Once a customer comes to a ground-level employee with a concern or idea, that employee becomes the bearer, and in some cases the advocate, for the customer’s message. If you don’t construct avenues for feedback or you aren’t responsive to feedback, those avenues will wither and you’ll end up with frustrated employees and customers looking to take their business elsewhere.
Like any other aspect of communication, it takes constant maintenance and repeated requests for feedback sent to all of your departments and geographies.
“It’s just being relentless in terms of being hands-on, listening and seeking to understand,” Stemper says. “Then you have to take action. When people see their ideas go into action, the pump is primed. But you can’t let up. You can’t do it for the first six months of a job, and then you get into a routine where you operate differently. This has to be the way it is all the time.”
In many cases, responding to customer needs isn’t about rolling out a new product or service that takes large helpings of time and money or fundamentally alters the way you do business. Sometimes, it’s about taking what you already offer and presenting it in a specific way.
Stemper and his associates have kept their eyes and ears open for those exact types of opportunities — ways to serve up Comcast’s standard business offerings to meet the wants and needs of a given market.
“Because we have a local presence in each of our markets, we know how a market ticks,” he says. “We know what they react to, what is important. It might be a sports team that is the be-all, end-all. It might be a particular business issue that is critically important to the broad geography. I trust the intimate understanding of the people in each of our markets to help us know what is going on.”
Develop from within
To help promote a customer-focused mentality throughout your organization, you need people within your ranks who can help promote the cause. You need people who value customer service and are willing to do whatever is needed to keep the feedback pipeline between your customers and your management hooked up and flowing.
You can find a lot of answers in the recruiting and interviewing process if you know the right questions to ask. At Comcast, Stemper and his leadership team often have to sift through many resumes and rounds of interviews to find the right match.
“Clearly, we want people who come from a background that values customer service and who can focus on the idea that you deliver what you promise, you make good on your promises and that a handshake is as good as your word,” Stemper says. “The question is, do they already have that in their professional DNA?
Or, if they’re right out of college, can that DNA be formed?”
When a management-level job candidate comes to Stemper and his staff for an interview, they try to gain an extensive knowledge of the person’s background. You can find a lot of that through checking references, but you can sometimes find interesting answers if you pose situational questions during the interview.
“We try to really draw out of them situations they’ve been in,” Stemper says. “Have you ever dealt with an irate customer? Were you ever in a situation where something you told a customer you could deliver turned out to be a challenge through no fault of your own? How did you handle that?”
Maintaining the discipline to find the right person for the job, not just a warm body to fill the position, is one of the most difficult challenges a leader can face. You need to have a plan in place that will allow you to wait out a gap on your team. It can save you a lot of backtracking — and maybe even prevent damage to your culture — later on.
“It’s something you don’t rush, whether it be in hiring entry-level personnel or senior personnel,” Stemper says. “You want to make the right hire, not just make a hire to make a hire, and you need a plan to wait that out. Sometimes that’s easy to do, and sometimes that is painfully hard to do. But when you’ve experienced a hire in which you didn’t wait for the right person, it makes you become a lot more clever in the ways you prepare to wait for the right person.”
Stay light on your toes
Staying close to your customers is one thing. Taking the ideas that bubble up from the customer-interface level and using them to better your company is something else. The latter requires a lot more action and an ability to keep your company as nimble and adaptable as you can.
Stemper says a nimble company does two things well: It develops channels for customer and employee input, and it minimizes the layers through which that information must travel. Depending on the size of your organization, you might need a certain number of administrative layers to run the company effectively. But information from the ground level should pass through the fewest number of hands possible before reaching the desks of you and your leadership team.
It goes back to building a team that is focused on the common goal of customer service. You can’t reduce the number of links in the communication chain if your company is full of silos, fiefdoms and toes waiting to be stepped on.
“As leaders, you have to be able to leapfrog and get to the front lines,” Stemper says. “You have to build a culture where everyone is trying to be at the front line and nobody takes offense if you leap over them to get to the front line. You want everybody to thrive on the ability to do that.
“To build that kind of an organization, when you come across problems, you don’t take it out on the people in between. It’s called work because you have to work, and you generally work because something isn’t going the way you want it to. That’s why you need to have a management style that is focused on getting it right and doing what it takes to fix things. You want to understand the flaws in your organization and sort out the solution as a team. If you can do that, you are developing a positive place to work.”
How to reach: Comcast Business Services, (866) 647-6516 or business.comcast.com
If you are a management-level employee at Advanced Bionics LLC, it’s probably not because Jeff Greiner made you that way.
Whether he’s hunting for management talent internally or externally, the first thing Greiner acknowledges is that there is only so much he, the president and CEO of the 650-employee cochlear implant development company, can do to mold the next generation of leaders. Ultimately, you need to be a judge of competency and character, not a creator of it.
“What I’ve learned in the last 20 years is that the selection of the people is the most important thing. If I’m selecting people who have 20, 30 and 40 years of experience, I’m selecting people whose values and personalities are already shaped, so there is little I can do other than select the right people,” Greiner says.
Smart Business spoke with Greiner about how you can learn to identify the best leaders in your organization and why you should look to hire leaders, not create them.
Know your limits. The notion of a leader shaping the team is overblown. The notion of a team’s performance being determined principally by who they are as people, in terms of their character, expertise and energy, is probably not stated enough.
You see the tremendous number of leadership books out there. Most of them are pure crap in terms of the leader’s ability to shape people. What is not crap, and I’ve never read the book, I’ve just learned it as I’ve gone, as a matter of principle and a matter of my own life experience, is the notion of going out and trying to shape the team into a greater team. The notion is you take C players and you make them B’s, or they’re not on your team anymore. That is a correct idea. If I do that with my leadership team, as such that people have the kind of character, expertise and commitment that is necessary for us to be successful or I get them off the bus, that is a correct notion. But the idea that you shape them, that you influence them tremendously on a daily basis and change how they operate, is way overblown. It’s basically not true.
Twenty years ago, I thought I was really good at the selection process. But I guarantee I haven’t been any better than a 50 percent success rate. I’m talking about building a company from scratch. When you’re building a company from scratch, you have to go outside, you have to go through the interview process. You can ask all the questions you want, but until someone is out there doing the work, you’re not going to be sure if they can do it with the kind of expertise that you need. You’re not going to see that until someone is in a place where they have something to win or lose. That’s when you really see their character, so gaining that kind of picture of a person is really a tremendous challenge.
As for people on the inside, that is all about identifying the characteristics that you want in a leader and observing them over time. Internally, your record should be 80 to 90 percent success when it comes to internal leaders, because you’re observing them constantly, you’re seeing them over time.
In our organization, we have vice presidents, directors and then managers. Whether someone at the director level can become a vice president, you ought to be able to make a choice in that regard. That is a much easier task to identify people within the organization who are going to do what you think needs to be done, than trying to build something from scratch and hiring the right people.
Be willing to correct. You have to know what you’re looking for in a leader, and you have to have the courage to admit hiring and promotion mistakes early on. If you make a mistake hiring for a leadership role, you have to be willing to turn around in the first three months, or at least the first six months, of the leader’s tenure. That’s a hard thing, but it’s something that you get better at over time. It does depend on the personality of the leader. I don’t want leaders in here who are quick on the trigger. I want people to appreciate that we’re all human, we’re all flawed, but there are certain fundamentals that a leader has to have.
Fundamentally, a leader has to have integrity, and not everybody does. Fundamentally, a leader has to have the expertise to drive a particular function, and sometimes it’s difficult to figure that out. As a CEO, you’re not necessarily knowledgeable about every function that reports into you. Fundamentally, you have to have a work ethic that makes this more than just an 8-to-5 job, because nobody succeeds with that mentality. Those are some of the fundamentals of what you’re looking for, but it takes time to get better at identifying those things.
Develop a support system. You have to have the discipline to critique your own hires. But you also have to have support on top of you, too. If you have any kind of dysfunctionality on top of you, it makes your job that much more difficult. If you’re a CEO, you have to have a board that you have developed and with which you have developed a sense of trust. They trust that you are going to make the right decisions, they trust that you are going to communicate with them as to why you’re making these decisions, and if the business is going in the right direction and they perceive it, that strengthens the trust.
All along the way of building a company, there are going to be ups and downs, so that trust might be stronger or weaker depending on where you are in the building of the company. That affects your ability to move forward with some of the tough change decisions that you make.
How to reach: Advanced Bionics LLC, (877) 829-0026 or www.advancedbionics.com
Last year, Dave Wathen was facing the same issue that a lot of business leaders have faced during the recent economic downturn.
In a nutshell, what was OK a couple of years ago wasn’t OK anymore.
Wathen’s company, TriMas Corp., wasn’t playing fast and loose with its money. But like a lot of businesses around the country, it had loosened its belt a few notches over the years, spooning a few extra helpings of debt onto its plate.
Soon after the full force of the economic downturn hit TriMas in early 2009, Wathen quickly realized that even a few extra pounds of debt and a few extra discretionary expenditures could pose a health hazard for the company.
But with 10 business units located around the world, playing to a large degree by their own rules, it wasn’t as simple as sending out a memo from corporate headquarters. Wathen, TriMas’ president and CEO, had to refashion the company’s approach to business.
“The biggest challenge we had was converting the way we operate to put an equal intensity on cash as we have on earnings,” Wathen says of the $1.02 billion provider of engineered and applied products. “Basically, TriMas had been run as a holding company with a group of businesses; now we needed to convert ourselves to an operating company. We had to convert from a holding company mentality and culture, metrics and processes, to behaving like an operating company, which has a different set of processes.”
Wathen and his leadership team needed to build a plan, cascade it and create buy-in throughout all of the organization’s units.Build a plan
In order to convert TriMas’ culture and strategy into those of an operating company, Wathen and his leadership team needed to first define what an operating company is and how an operating company should behave.
He didn’t want to take away all the autonomy of the company’s business units, but he wanted to govern all of the units with a uniform set of values, processes and expectations. He wanted the head of each unit to know the dimensions of the field on which he or she was playing and where the out-of-bounds lines are.
“Most of my career, I had a title that sounded something like ‘division president,’” Wathen says. “And I think back on what were the best times for me in that kind of a role. They were really when I understood exactly what was expected of me, I understood exactly what freedoms I had and what constraints there were and what I needed to go to the corporation for. I’ve seen good leadership and not so good leadership, and I’ve tried to apply the good principles to this company.”
To get all of the business units together on a common set of guiding principles, a leader needs to not just set the ground rules but he also needs to find ways to ensure that those rules are enforced.
For Wathen, it started with developing a clear strategic planning process a process with built-in means for him to keep his finger on the pulse of each business unit.
“I’ve told everyone that I want to be involved in what the projects are,” he says. “Every area should have six to 10 major programs and that’s it. I want to agree on what those areas are and that they’re consistent with what TriMas’ vision is.”
Wathen and his leadership team developed a companywide focus on the vision by condensing the company’s vision down to a several-sentence statement, then putting the statement in front of every person in each business unit through cascading communication.
“I’m a big believer in consistency, so we have one vision statement: ‘We provide engineered and applied products that customers in growing markets need and value, and we build and run agile businesses that provide high returns on capital,’” Wathen says.
“What that says is that we’re a technical products company. We try to build things that are a little hard to build and design, things that maybe our customers can’t get from other companies. That implies that we’re not in a commodity-based business and that we’re trying to run a very agile business. It implies that our businesses know what their marching orders are, what I want to be involved in and what I don’t want to be involved in.”
Wathen wants his company’s business units to focus on six primary business drivers: revenue, earnings, how cash is employed, productivity, growth programs and people. The company’s leadership reviews each unit based on those six drivers quarterly. The unit’s performance in the six categories gives TriMas’ leadership a good idea of whether the vision and operating company mentality is taking root.
There is also a responsibility on the part of upper management to make sure that business units, departments and employees have the tools to improve in the measurable categories. Even in the face of a recession, when you have to adapt to compensate for dwindling coffers and a sluggish marketplace, you still need to make investments in your company, both in terms of time and money. Otherwise, you can damage your future ability to grow, your collective morale and your culture.
“There is the recession response, which is to cut everything,” Wathen says. “That’s the easy response. Of course, you have to do some of that; you have to size for what is going on in the marketplace. But if you cut everything, you’ve damaged yourself so much for the future that you’re not going to have new products, you’re not going to be growing and training, you’re not going to be doing the things you need to do for the long haul. That is one of the truly difficult judgment calls that a leader has to make: the short term versus the long term.”
You can also engage employees particularly at the management level by putting a part of the company in their hands. Wathen says that if employees buy in to the company in a real way and are allowed to reap the financial benefits in a direct way, they’ll be more inclined to see the bigger picture and realize why your vision makes sense for the long term.
“It’s having a strategy and operating reviews, and then having incentive systems that tie it all together,” he says. “Ideally, anyone who is making decisions that matter, I want some stock in their hands. There are a bunch of ways to do that, like options and grants, but the real issue is that you are putting stock in their hands so they are part of the total and can reap the benefit over the long haul of you improving the company and the market recognizing that. Something like that ties everybody together.”Stay on message
If you’re changing the way your company does business, your employees need to buy in at or near the outset in order for the transition to be successful. But that’s not the only place where a transition can get off track.
You need to get employees to buy in, but you also need to keep them on board once they’ve bought in. That means your communication can’t stop with the initial rollout. You need to repeat your vision in some form at every opportunity with your employees.
Wathen says it boils down to one word: consistency.
“Consistency is the primary requirement of communications like these,” he says. “I have an operating map with strategic goals, and I take it with me every place I go. I used it in S hanghai recently. I use it with outsiders. I use it when I do presentations to stockholders and debt-holders. I make myself get to each of our business units regularly and continue to share the message. That’s the key to the whole thing: reinforcing what matters over and over.”
In any time of change or uncertainty, you want your communication to be frequent, precise, concise and answer the ever-present question that employees have, “How does it affect me?”
“It’s total honesty and transparency,” Wathen says. “‘Here is what we’re doing; here is how it affects you.’ I always approach it with the idea of what everyone is going to go home and tell their spouses about my message. That’s the test question. If they can relay the message to their spouse and the spouse understands it, my message was probably clear. You don’t want ambiguity. There is psychology in this. Every person in tough times might view the worst. So you need to tell them exactly what it is and what the message means to them.”
You need to paint a picture of where you are taking the company and the reasoning behind the plans you and your leadership team have put in place. But if the situation isn’t entirely rosy, if there are going to be bumps in the road and hardships to endure in the journey to realizing your vision, you need to be frank about that.
“You have to remain transparent about the way you have to operate,” Wathen says. “What I’ve told our people over and over is that we’re still in a recession, and you have to hunker down and manage costs way tighter than what feels good. You have to do a few things for the future and be careful about it. We still have a lot of facilities running four-day workweeks. It’s not something that anybody wants to do, but it’s a choice we made to keep more people around for when things get better.”Make an example
When you’re driving any type of change, you need to leverage the wins you achieve as much as possible. They might not be the most profound, foundation-sculpting victories your company will ever achieve, but they still matter.
By promoting small victories throughout your organization, you’re solidifying the idea that the vision will work, and it will pay off for everyone in the end.
“You sort of brag about what somebody else has done, and you do it from the top,” Wathen says. “For example, one of our businesses early last year bought a batch of equipment from a bankrupt competitor at a bargain price. Everybody in the company has now heard that story, along with a request that they try and find the same kind of deal. So you give examples and see who else in the company might have some similar ideas.
“That is one of the ways you reinforce things in a diverse company. You have folks doing some great things, having some good ideas, and there is a lot to be said about copying those ideas. Plus, it makes you feel good if you’re the person whose ideas are being copied.”
Moving forward, TriMas has the operational structure that Wathen and his leadership team want. The company has a strategic plan for each business, and the board is on the same page with the leadership team. Up next for the company, Wathen wants to develop a process to find talent and match the right people to the right jobs. He calls it a “people planning process.”
Change management is an ever-evolving process that you need to constantly monitor. You have to make sure that everyone in the organization remains tuned in to your vision, but you also have to make sure that you’re going back and revisiting your vision, and leave the door open for revisions as needed.
“Once a year, you step back and think about your key strategies, what are the projects you’re going to do,” Wathen says. “You don’t have to constantly redesign the business, but you stick to the basic things you’re going to manage, and those go to the top of the list. There are probably a lot of other things you’d like to do, but those don’t make the list right now.
“It’s easy to say you’re going to keep it simple, but you have to employ some tactics to make it happen.”
How to reach: TriMas Corp., (248) 631-5450 or www.trimascorp.com
Every employer has a vested interest in the well-being of their employees. But Dick De Witt says it’s how you show that interest that can really make a difference.
De Witt is the president and chief operating officer of Marketplace Chaplains USA, a provider of chaplain services to businesses throughout the country that has $12 million in revenue. From his perch, he’s seen business leaders with many different kinds of leadership styles.
In his experience, the best leaders don’t just take care of the employee who works between 8 a.m. and 5 p.m. They take care of the person with a life apart from work, which, in turn, helps create better employees.
“I lead with three E’s: engage, empower and encourage,” De Witt says. “As a leader, you have to be touching your people, and in the process of getting to be with them, you understand what their strengths and weaknesses are, and you want them to use their attributes to the best of their ability.”
Smart Business spoke with De Witt about how you can build better employees by showing that you care.
Live the three E’s. Engaging is a matter of communicating with employees on many different fronts and making in-person contact with them as often as you can. Empowerment is a matter of building up and augmenting the strengths that each one of us have. We all have weaknesses and we all have strengths, so to find those and be sure the giftedness that is present in each person is used to its fullest extent. My job as president and COO is to bring those skills out, draw attention to them and encourage them in the process.
The encouragement side is really a matter of so many attaboys. We do not use monetary rewards since we are nonprofit and our chaplains are more driven by helping people day in and day out.
You do need to show a genuine and earnest interest in your people. Most leaders do that. But in doing so, there has to be another mechanism by which you can get to the heart of the matter with a person.
Someone can put their best game face on for a good interview, but who are they really on the inside? As a leader, if you can get closer to that real person, that real employee, that part of the team that you really care about and are investing in, you’ll have a better employee who is not going to be distracted, who is not going to be absent, who is not going to leave after you’ve invested in them and trained them to be ready.
Look outside the organization. The stuff of life that drives each employee, if you’re the leader in a corner office, you’re never going to hear it. You might say that’s why you have HR, to find those things out, and they might do a great job. But it might also help if you have an outside party to help get a grip on some of the real sometimes ugly things that affect your people in life. In a lot of instances, people in a company might not want or have the opportunity to tell the boss what is going on in their lives. That’s why I think it’s important to have someone in a company, an employee advocate, who is from the outside and not on the payroll. Because there is always the possibility of that fear of telling someone on the inside, that it’s going to find its way up to the boss, and they don’t want that to happen, for whatever reason.
Every business leader today needs to be focused on one employee at a time. I’m appearing in this issue of Smart Business, and to me, smart businesses are always looking at their employees and taking care of them, both at work and, when possible, away from work.
We go to work, we have to work at each of our jobs, but we also have a family and a life that drives that presence, and if you show up to work thinking about medical problems or an argument with a spouse, a child in trouble or your personal problems, that is going to hold onto you, and you need a way to talk it through. Once you can somehow open that up, make that connection with employees, talk it through with someone who they know will not use anything against them, it is enlightening and freeing to the point that it could revolutionize what we do in corporate America.
Realize what is at stake. The fact of the matter is that the government says that every single employee represents $4,500 worth of fraud a year. You think about absent employees, unplanned absences, the so-called Monday morning flu, costs a company a lot of money each year. You talk about turnover and keeping talent, the battle for talent is very real, so if you have an employee who feels that he or she is not appreciated, not cared for, there are a lot of other companies looking for top talent, and that top performer could go there.
If you put methods in place to care for employees emotionally, physically, spiritually, whatever they need, it creates a definite culture shift within a company. We see it all the time. It’s the difference between wanting to go to work and having to go to work. The employer becomes someone more than just that person who sits in the corner office and tells you to get the work done. They become the person who realizes that it takes special people to do the jobs they do, and employees realize that the boss will care about them and what is going on in their lives.
How to reach: Marketplace Chaplains USA, (972) 941-4400 or www.marketplacechaplains.com
The biggest challenge Charles Paquin ever faced in the business world started with his first day on the job.
It also bears mentioning that Paquin wasn’t the newbie. The company was.
In April 2007, Paquin transitioned from the head of Resun Corp. to the president and CEO of ModSpace, a modular building provider officially known as Modular Space Corp.
The genesis of ModSpace a 1,000-employee company that generated more than $500 million in revenue in 2008 occurred when Resun acquired the modular buildings division of General Electric. It was a less-common form of acquisition in which a smaller company acquired a bigger company.
“GE’s modular space division was, at the time, probably the No. 1 or No. 2 player in the marketplace,” Paquin says. “Resun was probably three or four. GE had identified the business as a nonstrategic unit, and after looking at their [financial] portfolios, decided it was a business unit it made sense to divest themselves of.”
It was a strategic move designed to increase the newly formed ModSpace’s clout in the industry, but with it came a set of problems faced by many business leaders who take their companies through an acquisition or merger: combining of systems, finances, policies and, perhaps most importantly, combining cultures.
For Paquin, that was a major hurdle, given that the acquired business unit was previously held by GE, a corporate giant that carries an extremely entrenched culture and set of processes.
“Going into it, we recognized that bringing the two cultures together was going to be the biggest challenge,” Paquin says. “It’s often one of the biggest risks to any large-scale merger. You have to recognize that the cultures of the two companies are both outstanding, but when you try to bring the two together and they’re very different, that could potentially create a lot of risk.”Define the vision
To create a new company culture, Paquin had to first create a vision for what ModSpace stands for and what goals would drive the business into the future.
To make that happen, he needed the involvement and buy-in of leaders from both former companies.
Ultimately, the process involved getting everyone into a room and talking about it, but underlying that was a lot of prior history, a lot of former Resun and former GE associates used to a certain way of doing business.
“You had a small company in Resun that prides itself on being very entrepreneurial, very opportunistic, very nimble and quick, able to capitalize on market opportunities as they develop,” Paquin says. “At the other end of the spectrum, you had GE, which is very process-oriented and methodical, doesn’t take risks and is very linear in its approach to business. We had to bring together those two types of companies and not lose any of the advantages that either one brings to the table.”
Paquin gathered all of his new company’s management-level employees and held a full-day session behind closed doors, during which the basics of ModSpace’s vision, mission and values were hammered out.
The end result was what Paquin termed a “quest,” a statement that summarizes the guiding principles of ModSpace. Unlike an open-ended vision, the company’s quest is a definitive statement with an end point.
“Our quest was, ‘By championing unparalleled value, service and quality, ModSpace will be the largest and most profitable provider of modular buildings and storage solutions in North America,’” Paquin says. “The first part of it really says what we stand for, how to get there and what our goal is. It’s not something that is going to happen 50 years from now. It’s something we’re going to have to refresh over time. But the message of what we stand for is very clear: We’re North American, value, service and quality is what is going to differentiate us from our competitors, and we have two core products in modular buildings and storage solutions.”
With some cultural principles in place, Paquin began harping on the ModSpace concept. Getting the one-company concept to sink in was a difficult task not because managers and employees were necessarily resistant to the idea, but because they were so used to the old way of doing business at their respective companies.
“People started referring to themselves as ‘former GE’ or ‘former (Resun),’ which drove me nuts,” Paquin says. “It’s anti-what you’re trying to accomplish. You’re trying to bring people together, and now you have this wall where people are saying, ‘I used to be at GE,’ or, ‘I used to be at Resun.’ Both groups thought it was good to be former GE or former Resun, and that language drove me crazy.”
Paquin’s solution was rooted in basic communication: Model the behavior you want to see in your employees, and keep doing it every hour of every day.
“If someone wants to identify themselves by their former company, I correct them,” he says. “I made it very clear with my team that they are not to use that terminology. By leading the behavior, we are able to mitigate it. You do have to be willing to make some corrections from time to time.”
Building a new culture is a sometimes-messy process that involves course corrections and setbacks. You have to keep pointing everyone in the right direction and remain patient. You can identify the principles by which you want to guide your business through a time of transition, but in the end, your employees will need to accept and drive the culture.
“The culture is something that needs to be built block by block,” Paquin says. “It’s not something the CEO or business leader can dictate from his office. It’s a belief system. You have to establish it first, and then at every opportunity you have, tie back to it. It relates heavily to how you communicate and how you compensate people.”
The initial steps of creating a new culture aren’t unlike the initial steps you might take to create a new brand or integrate finances after an acquisition or merger. You build a playbook that outlines short-term and long-term goals and the time frame within which you plan to achieve those goals.
“Typically, you’re going to have a 100-page playbook that says, ‘Day one, this is what happens on all fronts,’” Paquin says. “Then it outlines what needs to happen in each area further down the line. You’ll have timelines and milestones in place. My advice is that you need to have the same type of plan for your cultural integration, with the same level of detail. You need to outline what you’re going to do, how you’re going to do it, when it needs to be done by and contingency plans if something isn’t working.”Add to the momentum
Once you have set your new culture in motion, you need to develop ways to perpetuate it. That means switching from a building mindset to a maintenance mindset. In a maintenance mindset, you test the cultural foundation of your company to see if it still fits your direction. You take steps to prevent the vision and culture from becoming stale. You ensure that your employees stay engaged and interested in the direction of the company.
Sometimes that takes tweaking the mission statement or core values, adding or changing a word here and there.
“This isn’t static; it needs to change and evolve,” Paquin says. “We recently added the term ‘innovation’ to our quest, because we felt long-term growth would require us to do more than just what we’re doing today. If you put the change in writing, it allows you to stand up in front of your employees and show them the course adjustment, that your mission has evolved.
“Part of the maintenance of the culture is staying ahead of the curve, not letting the vision or the culture get stale. Even if it doesn’t need changing, I’d change it anyway so that you have the opportunity to stand up and use whatever form of communication is available to you and talk about it with your people. If your culture stays static and you just keep repeating the same message, there is some value to that, but it becomes dull, and people don’t stay engaged, they don’t become excited about it.”
Paquin says electronic media is a great way to reinforce the culture and keep it fresh in your employees’ minds particularly if you operate a business that relies on an intranet site.
Many jobs at ModSpace are organized to include their intranet site. Employees frequently have to visit the site as part of their daily tasks, which gives Paquin and his leadership team something of a captive audience when it comes to promoting the culture.
“For example, our asset management department keeps their database on the intranet site,” Paquin says. “We populate the site with what I’ll call propaganda, but it’s really just whatever message we need to share. We always have the word ‘quality’ on the front page of the site, knowing that employees aren’t necessarily going there to see how we’re doing with our quality program, but as they’re passing through our intranet site to get to the information they need, they’re going to see it.”
In addition, Paquin ties his company’s performance review, reward and incentive programs to the culture. Employees are reviewed, in part, based on their ability to help ModSpace achieve its goals and promote its culture.
When an award is handed out by management, Paquin and his team always announce what the recipient accomplished to receive the award and how it ties into ModSpace’s cultural principles.
“We have something called the ‘Bravo Awards,’ and we’ll typically tie them back to a value,” Paquin says. “If someone went in and stole a key customer from a competitor, that’s exhibiting no fear, which is one of our values. ‘Bravo, here is $500; go do it again.’ So you need to celebrate those small victories, and tie them back to your goals. We want to tie it all back to what makes ModSpace be ModSpace.”
Paquin ties bonuses at all levels of the company back to the values and culture. That includes upper management, all the way up to Paquin himself.
“We want to keep focusing on quality in our business, so 10 percent of my bonus is tied to that quality factor,” he says. “That goes all the way down to our sales reps. They have the same performance element to their compensation.
“The point is, it’s not a single thing that is going to drive your culture. You need to establish the objective, and then in every way you touch your employees, whether it’s through compensation, your Web site, meetings, informal communications, you need to tie it all back to the culture. That’s what we’ve been doing obsessively for the past two and a half years.”
How to reach: ModSpace, (800) 523-7918 or www.modspace.com