Roland Salman says that when you get a group of people together for the first time, it can be difficult to get someone to speak first. And once people are talking, it can be even more difficult to get them to say what’s on their minds.
Salman, president of RW Armstrong, says that this can be a major hurdle to communication, and it’s a situation he tries to avoid at his construction management firm, which generated 2008 revenue of $77 million.
He’s done it by setting an example of straightforward communication for others to follow, an example he repeatedly demonstrates at every opportunity.
Smart Business spoke with Salman about how to say what you mean and how to set the stage for your employees to do the same.
Emphasize quality over quantity. A lot of people focus on the frequency of the communication. I focus more on the type of communication. You have to be very candid, very sincere and transparent. That opens the door for honest debate and working through things.
If you’re going to be a good communicator, many times, you have to make the first move. Communicating is a two-way street, but many people in business might be afraid to take things head-on. A lot of people want to be nice to each other.
My concern right now is we have been hiring people from the outside because we’re growing so fast. We can’t just promote from within.
Obviously, communication in a rapidly growing company is very important, and I find myself catching people communicating, but after the communication, there is a lot of frustration because the issue wasn’t resolved. They were just being nice to each other, talking superficially but not getting down to the issues.
So candid communication is the first advice I would give. Be straightforward, identify the issue and work toward resolving it.
Set an example. The challenge is to set the example and get others to do the same thing. When I communicate, I explain to others how I would do it and then show them by my own example.
When I communicate with people, I dig down and ask the tough questions in a straightforward manner. Recently, I called for a meeting with one of my partners because of certain things I’ve said that I could tell didn’t go over real well. I went to lunch with him and we talked. That is what you have to do.
You have to bring out the issue immediately and force the other person to talk about it. If you open up, the other person is going to open up, and if you speak in a candid way, they will speak in a candid way.
Maximize your opportunities. If you go to lunches and dinners, act like you are meeting your friend or next-door neighbor. I focus a lot on that, and it builds that emotional bank account so that when things get tough and things go wrong, if people know where you are coming from, they know they can come back to you, have that personal contact and find out what is going on. It really helps you work through problems as a company.
I first develop the relationships with my direct reports, and then with as many people in the company as I can. We have 450 employees now, and I try to develop relationships with people at all levels, whether it’s entry level or overseas.
When I meet people and talk to them about business, I also mix in personal questions about how they’re feeling and so forth. I am an emotional, passionate person, and I’m not afraid to ask people questions about how they feel, their families or anything like that. And if you’re sincere and people see that you are sincere and transparent, that helps make that relationship.
If, when you meet somebody, you only talk business, you’re never going to build that personal relationship.
Build trust through communication. Trust is very, very important on a team. You have to make sure that when you hire people and put them in positions of responsibility that their heart is in the right place.
If you do that, if you have that trust and candor among your team, I think it’s easy to talk about issues and communicate. In board meetings or any forum you have, you’re going to have to be the catalyst to do that. If you lead by example and open up to put issues on the table, it encourages others to do the same.
In our company, our senior-management level has been together for a long time. We have that history of trust and credibility, and people know that we can disagree about something in the boardroom, but when we walk out, everybody has come to a decision and walks out with a unified front. When we disagree, we know it is over a certain topic, and it doesn’t have to do with our relationships.
To develop those kinds of relationships, you have to have a combination of circumstances. You have to have the raw qualities in a person to start with, an honest person, someone with integrity, the basic things you expect from people. But you can also mentor people with regard to what you expect and help them to get to that point.
How to reach: RW Armstrong, (317) 786-0461 or www.rwa.com
When Tony Parella took control of Shared Technologies Inc. in 2004, there was no place to go but up.
Years of bad business associations had left the technology solutions company a bankrupt financial and cultural wreck. Shared Technologies had been bought and sold three times during its nearly 30-year history, including by scandal-riddled telecommunications company WorldCom. All three ventures ended with the parent company declaring bankruptcy.
When Parella became the company’s president and CEO, he inherited an extensive list of headaches in every aspect of Shared Technologies’ business, not the least of which was a bruised and battered company culture. As the organization repeatedly switched hands, a disconnect developed between management and employees, to the point that many employees refused to believe that the actions of company managers would ever follow their words.
Parella quickly discovered just how skeptical and jaded Shared Technologies’ employee base had become.
“They were beaten down, they were demoralized, they had pretty much seen it all over those years,” he says. “I had to change the mindset so that they believed management cared about them and was going to the right thing. That took some time.”
It went beyond repairing the trust factor with employees to completely overhauling the entire culture of the company.
“It was in the back of my mind from day one that I was going to make some significant changes, that I was going to change the mindset of the employees,” he says.
Chart a path
Shared Technologies went into bankruptcy in June 2004. Six months later, with a recovery under way, Parella and his leadership team held a companywide kickoff meeting to mark the launch of the new culture.
“In that meeting, we really laid out three strategic initiatives,” he says. “We were going to revolutionize the way Shared Tech treated its employees, treated its customers, and we were going to revolutionize the industry by doing the first two things. All of that would lead to unprecedented growth in our sector.”
As part of that, Parella wanted to give the entire organization a morale booster shot by applying for inclusion on Fortune’s “100 Best Companies to Work For” list. The application process included circulating surveys to employees and gauging their opinions on the type of work environment provided by Shared Technologies.
When the results came back, Parella received a splash of cold reality.
“The good news was I had a road map for what we needed to fix,” he says. “The bad news was I realized just how far we needed to go to before we could realize our accomplishment of making it to the 100 Best Companies list.”
Seventy percent of the company’s overall grade in the Fortune rankings came from the employee survey. The questions covered topics including trust of management and trust of corporate leadership.
In the end, employees gave Shared Technologies a 60 percent approval rating. If it had been a high school math test graded on a standard scale, it would have been one percentage point above a failing grade.
“Needless to say, when I got the results back, I was severely disappointed in how the employees viewed management,” Parella says. “But I also knew exactly what areas we needed to work on.”
Parella decided to start with the company’s raw cultural material: its core values. The values themselves — expressed in the acronym “FIRE UP” — aren’t much different from those of most other companies. “FIRE UP” stands for what Parella wanted in a culture: fun, integrity, respect, ethics, unparalleled performance and passion. But in order to get skeptical employees to take hold of the values, he needed to keep the acronym in front of them.
Subtlety was out. Every employee was given a wallet-sized card with the values listed on it. The values were posted prominently in every office. The values were posted on the company’s intranet, so every employee saw them when they booted up their computers in the morning. Even the mouse pads on every desk became billboards for Shared Technologies’ core values.
It quickly became apparent to everyone at Shared Technologies that those who weren’t on board with Parella’s plan weren’t on board with the company’s future.
“It is constant, consistent reinforcement,” Parella says. “That is what employees believe. If I had a leader who didn’t subscribe to our core values, they’re not here anymore. All it takes is a couple of those (terminations), and suddenly they know you’re not kidding, that you’re serious.”
Parella and his management team put core value leaders in place at each of the company’s 41 locations nationwide. The core value leader is voted on by employees at that location, serving a one-year term. The core value leader serves as that location’s advocate for the core values, holding people accountable for working with uniform objectives.
“It sounds pretty basic that you’re going to write down things like having integrity, having fun and some of these other things,” Parella says. “But on top of that, we established a benchmark in measuring all of our leaders in how they stack up with our core values. We have our core value leaders, who bubble up ideas and issues that are going on in each specific city.”
The core value leaders report to Shared Technologies’ “Best Company in America” board, which consists of one leader from each of the company’s operational areas. One of the board’s jobs is to take best cultural practices occurring at the field level and spread it throughout the nationwide organization.
“The core value leaders hold quarterly meetings at each branch to lay out what is going on with the company,” he says. “Monthly, they attend a best company in America board meeting to suggest things. The ideas roll up from there.”
When keeping a message in front of employees, an organized approach is key.
“Whenever possible, put a quantifiable agenda together, tell your employees what you’re going to do and then be sure you do it,” Parella says. “Be consistent in your messages. Don’t have an objective of the month and then change it. Changing a culture doesn’t happen overnight.”
Keep the culture alive
Employee buy-in came quickly at the rank-and-file level once employees realized Parella was serious about reforming the culture. He wanted employees to see that his actions would follow his words, so every year he makes it a priority to visit every Shared Technologies location at least once, review the performance of that branch and sit down with employees in a round-table setting.
“They can ask me any and all questions,” he says. “That’s in addition to my monthly conference calls and e-mail.”
Parella’s e-mail program, called “Talk to Tony,” is his primary vehicle for staying in touch with employees on a daily basis. Through e-mail, Parella allows employees to bring their ideas and concerns all the way to the top of the company without hurdling gatekeepers.
“Ninety-nine percent of the e-mails I get are constructive,” he says. “If you want to make the company better, you should do this. Every once in awhile, you get an e-mail that is personal or they have an agenda, and I just get those to the right people. But the process of them having a direct link with me, having me visit with them on ce a year in a full-blown review with a round table, a monthly conference call with me, the core value leaders doing a luncheon with me and the Best Company in America board monitoring everything, we very much understand our issues and can kind of take the temperature of our employees.”
The surest way to keep a culture alive is to give your employees a hand in promoting and improving it. It’s something Parella has seen in action in the past year.
“I got an e-mail a little over a year from one of my employees suggesting that we create an employee relief fund,” he says. “We filed with the IRS, created a nonprofit organization within Shared Tech, and we now have a fund supported by employee donations that can take care of employees who are seriously ill or out on disability.
“This fund compensates for the fact that a person’s income is reduced by a percentage when they go on disability, so they don’t have to worry about paying their mortgage if they’re seriously ill and fighting for their life. And this all came from one employee. We absorbed the legal fees, but this was a grassroots idea.”
Parella also helped promote the culture by investing in employee training, something that had been lacking at Shared Technologies. By committing resources to training and refining the company’s training methods, he made a statement about the value of his employees. By extension, well-trained employees who feel valued will provide better customer service.
“What was happening was we’d send a technician off to school — it would typically cost $5,000 for a one-week course — then they’d come back with their new training, ask for a raise, and if they didn’t get it, they’d probably go to a competitor,” Parella says. “That wasn’t changing the company. What I was really doing was training the competition.
“So we created a new portal for training; we did an assessment of every employee of a technical nature who addresses or touches a customer account. We had to find a skill level for every employee. That was a baseline.”
Parella then went to a technical training school and cut a seven-figure, one-year training deal, which lowered the cost per trainee from $5,000 to about $1,500. After trainees successfully completed a course, they were introduced to a two-tier bonus program — $750 for successfully completing the course and anywhere from $3,500 to $5,000 one year later, depending on job performance.
“So suddenly, you have a work force that is very motivated because their skill set is enhanced and their value to the company is improving,” he says. “The result is our voluntary turnover is now around 6 percent. In our industry, it’s usually north of 20 percent. That strategic investment in training has probably changed us more than any one single thing.”
Four years after bankruptcy, the recovery steps taken by Parella and his managers have produced results. The company is in growth mode, with final 2008 revenue projected at between $350 million and $360 million. The work force has nearly tripled from a little more than 500 to approximately 1,400.
Shared Technologies’ culture has been successfully rebuilt. In 2008, the company ranked 25th on Fortune’s top 100 companies to work for, largely because the employee satisfaction survey that produced a 60 percent approval rating in 2005 produced a 97 percent approval rating last year. The company moved up to 18th on the list for 2009.
“We’re certainly a work in progress and always will be,” Parella says. “I don’t think you’re ever done improving your culture. But I believe fundamentally that a great employee experience will lead to a great customer experience and that’s what we have. If the employees aren’t motivated, the customers are going to have a bad experience.”
How to reach: Shared Technologies Inc., (888) 835-4444 or www.sharedtechnologies.com
Heath Clarke is meeting the challenge of a faltering economy by soliciting employee input on how his company should adjust.
Clarke, chairman and CEO of Local.com Corp., is connecting with employees on the subject of change, gathering their ideas on how the local search engine company which generated $38 million in 2008 revenue can meet the faltering economy head on.
“The biggest challenge we’ve had is managing our people through change,” Clarke says. “At a technology company in particular, you have to be very agile.”
Smart Business spoke with Clarke about how to use communication to keep your company adaptable in an uncertain business climate.
Q. How do you use communication to keep your employees adaptable?
You can have both structured and nonstructured communication. There needs to be structure because the opportunity to have stakeholders in the room for decisions is very important.
But when things come up, you can’t wait for the next scheduled meeting, and you don’t want to always call a meeting since everyone’s calendars are pretty full. So it’s OK to stop someone in the hallway and tell them something, if you’re having a problem with something and maybe you get a subcommittee formed. Not on a formal basis, but maybe you get a couple of your people into a room to talk and come to a decision on something, which you then report on in the next formal meeting.
Our meetings are a way to ensure that everybody who should be involved in an idea is involved. What we have are round-table meetings we have quite a few people in our meetings talk about the status of the organization and things that we’re working on. But it’s really an opportunity for us to ask questions.
We meet weekly, sometimes twice a week, on projects that we have. This communication comes from the top down, but also the bottom up. That’s part of how we get input and make sure that everybody at every level understands what we’re trying to do. It’s constant communication.
Q. What advice would you give other business leaders about managing people through change?
Basically, communicate frequently and clearly.
One of the biggest mistakes I’ve made was to presume that when you first communicate an idea that everybody got the idea, understood it and processed it. You have to continue to sell and effect the difference that you are doing and why you are doing it.
The core things stay constant. In our case, we’ve been focused on three key areas for the last four years, and that’s not going to change. But how we execute in those key areas might change depending on the market conditions.
So we set forth the key things we want to do in the coming months. We spend time as a business trying to see what the next 12 months will look like, to make sure our people have that kind of visibility. That’s about communicating where we’re headed.
You need to communicate that frequently and freely, and have an open dialogue about it. People need to fully understand it and understand what they’re doing on a daily basis.
People become reserved about the things they tend not to understand. What we try to do is communicate regularly to everybody in the company about what we’re doing. You have to go in and remind people what you’re doing and why you’re doing it.
Q. How do you develop adaptable employees?
Some people are built to adapt to change quickly and with few problems. Other people just aren’t that way. Some people can be trained that way to be more accepting of change.
But I think that if you look back, it’s helpful to try during the interview process to paint the worst possible picture of the job. That way, when someone walks in, they don’t have some notion of the job, of what it is going to be or not going to be.
It can be that you were working on something this week and you have to change direction the following week. Another priority may come up, and you might be asked to work on something else. We paint that in the worst possible light.
You’re going to be pulled in 10 different directions, you’re going to have to work autonomously and be held accountable at the end of the quarter for the results. We make it sound awful, and the ones that are game for that are the ones we hire.
The ones who aren’t, they’re typically not going to want to work for us. That’s good for us, because I’d rather figure that out during the interview process than 90 days later when they’re unhappy and not performing.
HOW TO REACH: Local.com Corp., (949) 784-0800 or corporate.local.com
If you work for Adea Inc., Abid Abedi’s vision and values are all around you.
Abedi believes in managing by setting an example, and that’s exactly what the founder and chairman of Adea — an information technology consulting firm that generated $52 million in revenue in fiscal 2008 — does for his employees, with help from his management team. With every move he and his team make, Abedi reinforces the values he wants his employees to embrace and models the behavior he wants to see them exhibit.
“There are some things that cannot be taught overnight, but through association with people for a long period of time, people self-select themselves to align with your style or select themselves out,” Abedi says.
Smart Business spoke with Abedi about how to set your own example for your employees to follow.
When you have more and more people who believe in the vision, the more people believe in the values system, the quicker it trickles down.
You can change a lot about an organization, but you cannot change the culture of an organization. The reason is that vision and values tend to remain the same with the same leadership in place. You will have a continuous culture and core values in place. But when you have changes at the leadership level, that’s when you run into problems because the people don’t know what values system to follow.
But having a common tenure at the leadership level tends to repeatedly drive the same vision and the same values. That’s the best way to have people remain focused. If the leadership believes the same values, that moves throughout the organization.
The best way to tell if the organizational values are reaching everyone is through retention. In India, where the average industry turnover is 20 or 30 percent, we had less than 2 percent turnover. The rate of turnover tends to be indicative of the fact that the vision and values are understood all the way down to the bowels of the organization. People tend to stay longer if the values system is similar to their own and if they share and believe in the vision.
Unfortunately, in the society we live in, we spend more time at work than with our families. These days, you spend 50 to 60 hours a week either commuting or staying at the office.
You might spend three hours per weekday with your kids or family, maybe 35 hours a week. But you’re spending 50 to 60 hours a week at work. So it needs to be a place you look forward to coming each day.
Your values system cannot be radically different to that of the organization. You won’t be able to put up with 50 to 60 hours of that each week. If you’re not in line with the vision and values of the organization, it’s going to be very difficult to achieve peak performance, and you self-select yourself out of the organization.
That is why turnover is an indicator of whether the vision and values are reaching everyone.
Bring your values to life.
It takes people visually seeing the values in action. Anybody can say what they want to say, but people need to clearly observe whether management is adhering to the vision and the values.
You are on candid camera if you are the manager. People are going to view how you walk and talk, how you interact, how you behave. They are all indicators because people are observing you.
When I travel, people want to know what hotel I’m staying at. If I’m trying to instill a sense of frugality and saving costs, but then I stay in a five-star hotel, there is a disagreement in terms of what I’m saying and what I’m doing.
If I’m flying first class and telling people to fly economy or taking a direct flight and telling people to take five different stops, if I’m treating myself different than what I say the values are, nobody will believe me. So it is critical for leaders to demonstrate that they are adhering to the values of the organization.
The bottom line is you lead by example. That is the only way. Actions speak louder than words. You can say all you want, but if you don’t behave in the way you are saying you should, you lose credibility.
That’s why the leadership of an organization should have an absolute view of the vision and what it means to demonstrate the values on a daily basis.
Remember what makes a leader.
I tell people to treat others like you would want to be treated. It’s a simple philosophy.
I tell people to give me respect for who I am as a human being; don’t give me respect because of my title, because of my position or my money. If a title can make all the difference, let me call myself God. That doesn’t make you God.
By calling yourself a chairman, you don’t actually become a chairman. Leaders are not leaders because they have a title. Leaders are there because people look to them, people respect them for who they are and what values they have, what competencies they have.
The title you give yourself doesn’t make you a leader. How people perceive you, the example you set and the job you do is what makes the difference.
HOW TO REACH: Adea Inc., (972) 764-1700 or www.adeasolutions.com
Satish Gupta says it all startswith communication.
Your company goals, thebasis for your culture and corevalues, the wide-ranging, big-picture concepts that form thetemplate for your businessoperations — all of it beginswith simple, face-to-face communication.
At SB International Inc. — a steel pipe and tubing producerfor the oil and gas industry thatposted fiscal 2007 revenue of$195 million — face-to-facecommunication starts with dailymanagement meetings. In thosemeetings, Gupta, the founder,president and CEO, relays themessages he wants the managers at SB International to cascade throughout the organization. He then gives his managers the authority to communicate that message.
It’s a system of developing avision, informing others abouthow that vision will be reachedand then giving others the ability to carry it out.
“My leadership style is a lot ofdelegation, as much as possible, and I try to give maximumpower to my key managementpeople,” Gupta says.
Smart Business spoke withGupta about how to communicate on a small-scale level andhow doing so can affect the bigpicture.
Make communication personal. Ireally believe in face-to-facecommunication as the bestsource of communication. Ittells us the other person’sbody language, and it alsogives us better feedback. Ittells our key managementteam that they are accessibleto each other and to the topmanagement.
Once a week, we havelunches and dinners with thekey employees and the keymanagement team, so that isone way I try to make myselfaccessible. The second thingis we try to have every monthor two a family get-togetherwith the key managementteam. We get together at acertain place, have a wonderful dinner, and that gives themaccessibility to each other,and at the same time, we havesome fun.
We get two things out ofthose dinners. We want eachperson in the company to feelproud of working for thiscompany, so we try to readtheir body language, how theyfeel about it, talk about it. Italso gives us a social time tomeet and get to know them alittle bit more.
I believe that since we arehuman beings, knowing eachother better always improvesour productivity and motivates us, and each person isbetter because they are partof a team.
Identify goals. First of all, wedefine what the companygoals are, the long-term andshort-term goals. Once thoseare defined, then I try to pick acouple of key managementpeople with some of thosegoals, breaking down whichone wants to be responsiblefor each goal.
Then I give them the powerto achieve those goals. We listwhat it is going to take toachieve those goals and givethem the power to go achievethem. If it requires purchasing a processing plant or hiring more people in that area,that power is given to them.
But before that, the key partis that when we work withpeople for many years, yourealize that not all key peoplework the way you want towork. Some are good, someare bad, so you figure outwhich one has the chemistrythat goes well with what youare doing, do they understandyour vision and values.
We try to keep those whohave shown that they arealigned with our goals, haveshown an ability to take onresponsibility, and thenempower them.
Drive goals downward. Most ofthe time, the top managementmay have a certain goal, andat the CEO or CFO level, theywill understand. But beyondthat, nobody understands thegoals very clearly.
So you need to have thevision, values and goals, andput them in writing to theteam so that there is a clearunderstanding of which wayyou want the company to goand what they are trying toachieve.
It’s like a team. The wholeteam has to understand whatthe goals are. Whether it’s alower level or not, the personmay not understand the totality of the goal, but he is asimportant as the CEO or theCFO because the companyneeds that person to achievethe goals. It is very importantthat each person understandswhat the company goals areand what his role will be inachieving those goals.
It’s very difficult for department-level employees to getthe wide perspective. Butwhat I try to do is define thegoal as much as possible andthen break it down into narrower department-by-department roles.
The heads of those departments are then responsibleto get it down to each andevery person in that department to get them to understand what their role is goingto be. It’s very possible thatperson may not understandthe goal of the company, buthe will understand what thegoal of that particulardepartment is.
For example, we’re tryingto achieve a certain increasein our sales, and we figureout how much tonnage it willtake to achieve that goal,then we break down theresponsibility of the operation, what that is going to befrom the logistic side or theinspection side, then breakdown that within that department, what is it going to taketo carry out that task. We’llbreak it down into areas sothat each department understands their role and arefully aware of what we aretrying to achieve.
HOW TO REACH: SB International Inc., (214) 526-4423 or www.sbisteel.com
William C. Tauber has something in common with 16th century Spanish explorer Juan Ponce de Leon: Both have searched for the fountain of youth.
Ponce de Leon, according to legend, came to America searching for the revitalizing waters of an actual fountain. Tauber is in pursuit of a different type of fountain, one that draws on the energy of young businesspeople.
The founder and CEO of Progressive Lighting & Energy Solutions Inc., which posted 2007 revenue of $12 million, has made it a point to build his business around young employees. Tauber believes that a young work force is an aggressive, enthusiastic work force with vision, provided that you train them in the ways of your company.
Smart Business spoke with Tauber about how to build your own fountain of youth to grow your business.
Q. What are the keys to developing a successful mentoring program?
You have to be committed to it. It’s not just an idea where someone just says, ‘I’m going to be a mentor.’ Whether you make it an informal practice or a formal program, you have to be committed to it. While I make it a committed program, I do it in kind of an informal manner. I’ve broken it out into five categories.
One of them is what I call delivered learning. It’s actually what I try to do to promote intentional learning, which is really a method I use for coaching, instruction, advising.
I actually talk to the people, and I try to create a learning lesson forum because every project we get into is really meant to be a learning process.
The second part is failure and success. One of the things I learned a long time ago is that the learning process comes with failure. You don’t learn anything by doing it right the first time.
If you did it right the first time, you got lucky. I really put a lot of my teaching in storytelling. I show them where I did it wrong in the past.
The third part is I try to make it personal. I try to show them that they can adapt this learning on their own. Mentors who talk about themselves and their experiences really establish a rapport with their employees.
My fourth point is development over time.
It’s a maturation process. When mentoring works, it’s really tapping into a continuous learning cycle. It’s not an event; it’s a cycle or a stream of different events. Once your people understand their place, they can use the same stories to bring up the next person in line.
My last point is that mentoring is really a joint venture. It’s really sharing in responsibilities. I learn, as well, so they share their stories back with me.
Q. What would you tell others about mentoring?
Look for somebody who has the ability to stand on their own, somebody who is willing to take a little bit of a chance and stand behind their decisions. Somebody who has vision, who understands how to look forward. And somebody who understands that once you have a vision, it’s like your child.
You have to believe in it, nurture it, stay with it all the time and never give up. Once you’ve identified what you want in the future, you never give up. You reach for that vision 100 percent of the time.
Q. How do you help young employees to develop their skills?
One of the things you need to do when you’re working with young employees is to position your people with other successful companies, to learn from other successful companies as they grow with your company. So we align our people with other professional people, and we’re teaching people how to be successful within our company. Once we’ve identified someone’s strengths, we put them in a position where we can capitalize on their strengths, and then we get out of their way and let them do what they do best.
We give them a basic knowledge of our industry. We work closely with the local electric companies; they put on very good training programs. We send them to their classes so they get a very good basic knowledge of the industry.
After that, we work with them to partner with other companies that are in the same industry as we are, and then we create strategic alliances within their personnel. We believe that every department here is a profit center, so we do that with our people.
We teach them that, no matter where they are, their position is really a profit center. Their income is really based on the amount of profit that can be generated from their area.
So we teach people the industry, and we put them in a situation that best serves their talents, then we have to get out of their way and watch them as they grow.
HOW TO REACH: Progressive Lighting & Energy Solutions Inc., (714) 542-5490 or www.proglighting.com
Jim Rose doesn’t back away from the spotlight. He can’t afford to.
As the chairman and CEO of Mosaic Sales Solutions — a $200 million company that offers marketing and branding services for businesses — Rose knows that his employees analyze every word he says about the business, picking apart his words for layers of meaning.
Rose says that every CEO is in a similar position when it comes to communication, so you need to be as upfront and accessible with your employees as possible because without informed employees, you are missing a crucial building block for your business.
“When I was in graduate school, we had CEOs come in as guest speakers,” Rose says. “We’d ask them where they spent their time. I always thought they’d say things like production, finance, books and all that. But they said people, and it’s true.”
Smart Business spoke with Rose about how to communicate and enable employees and why leaders who don’t communicate are leaders who lose out.
Stay consistent. You have to have integrity in what you say, and embedded in that word is consistency. People are very smart, even at the lowest levels of the organization.
They listen to what you say, but more importantly, they respond to how you behave and what you do. They’ll look to see if you’re doing what you said you’d do.
Openness is a second key piece. Sometimes, there is bad news, things you don’t want to discuss. But you still need to get that out on the table. That is really important.
The last important key is frequency. You can’t just have a once-a-year meeting and then go hide in your office. Communication needs to have some level of frequency to it. It’s not a production schedule, like every third Thursday, I’m going to do this. But I definitely cycle through.
In our Canada office, I want to be up there if I haven’t been up there in five weeks. So it’s not something that’s hard and fast, but it’s the awareness that I want to cover a lot of people over a period of time, and I need to work that into my framework.
Getting the mission and strategy delivered is through people. People are a huge piece of what you do. I’d say 85 to 90 percent of my time is spent with people in some capacity, be it a small group meeting, walking the halls, groups sessions, client strategy sessions. It’s a probably the No. 1 thing, because without people, answers don’t flow and customer satisfaction doesn’t flow. So it is my No. 1 thing. It’s not a matter of going by the watercooler in my spare time. It’s front and center to what I do.
In my job, I don’t do much, as strange as that might sound. I’m not a doer of tasks; I’m a doer of culture and of strategy, of mission and vision. The kind of things I do are very intangible.
Solicit feedback. In all our employee events, whether they be town halls, coffee talks or whatnot, we always solicit feedback. The thing I use almost every meeting, I go around and ask if there is anything else, anything they want to contribute, so I give them a chance to have the final say.
They may have a clarification, they might have a rebuttal, they might have another idea. I’m always seeking feedback because of my openness and communication. I also don’t put people in trouble if they challenge ideas or the status quo. I very much say I don’t know everything.
As the leader, you have views and perspectives on things, but you don’t know everything. The people closer to the action are more in the trenches and can give you that different view and perspective.
Hire other communicators. I got my MBA out of the Kellogg School (of Management) at Northwestern University, and their whole philosophy is team-work and team building. From an academic foundation, I kind of got those principles and values, and then implemented them over my professional career.
But it’s also about hiring and your people decisions. When you’re hiring, you need to find people who have that mindset of communication and collaboration. You don’t necessarily want people who are identical to you in every way, because you do want to have diversity in backgrounds and skill sets, but you do want to hire someone who shares that basic value and foundation, that we’re all in this together and it’s not just all about me.
I don’t hire people with egos; I don’t hire people who are trying to be all about themselves. If you’re not part of making Mosaic successful, we don’t want you here. The hiring decision is very important.
The theory is that if we have a good team, if we’re collaborative and Mosaic is successful, then lo and behold, the individual will be successful.
My whole career has been in the service industry, which means it’s an intangible business, it’s a people business. ...
So my whole career has been in the services business, which gives me a high respect for people, gives me a high respect for relationships, communication, collaboration and those kinds of things.
With that as a backdrop, my leadership is very participative, very engaging and very human, a lot of personal contact. People are the center focus of what we do, and their advice and guidance is very helpful because, one, it makes my thinking better, and two, with decisions, we can have the whole organization bought into it.
The days of the dictator at the top calling all the shots are gone. I’m not a believer in that as being a successful leadership method.
HOW TO REACH: Mosaic Sales Solutions, (877) 870-4800 or www.mosaic.com
To Mike Crowther, leading means staying connected to your people, communicating, collaborating and strategizing.
In contrast, managing means focusing more on processes, the nuts and bolts of what makes an organization run. There is certainly a time and a place for managers to manage, but if you concentrate too much on managing and not on leading, Crowther says you’re probably robbing yourself of time to focus on your people.
“If you operate at an appropriate level for a leader, it’s fairly easy because the type of connection that is involved in sharing strategies, collaboration, which is not quite as overwhelming from a time management standpoint as trying to operate as a manager,” says the president and CEO of the $23 million Indianapolis Zoo.
Smart Business spoke with Crowther about the differences between leading and managing and why the best CEOs are big-picture thinkers who don’t let opportunities for communication and collaboration get clouded by processes and policies.
Keep communication active. The most important thing is to not let communication turn into a policy but instead keep it as an active process. There are different methods of communication that are needed for different times of the year, different times in the life cycle of an organization, different audiences.
The worst thing to do is say, ‘These are our communication policies; this is what everybody will do,’ because everything becomes rote and it isn’t really communication. At that point, it’s simply going through a process.
We do regular all-staff meetings where everyone on the staff gets together, and we provide information and update everybody. We do send out e-mail communication on things that are relevant, but I think the most important thing for me to do is understand and trust the people who have the job of communicating to their own staff.
I have five direct reports, and we have had no turnover in those positions in the six years I’ve been at the Indianapolis Zoo. Because we have had no turnover in those positions, they know me and I know them. I can rely on them to guide me as to what I should be doing.
I get great guidance from the people who are responsible for the divisions of the company. Every week, I go out to lunch with all of our executive staff. We go somewhere in town and sit down, and we might not talk about anything that has to do with business.
We might talk about a specific project or multiple issues related to the industry, or we might just talk about the Indianapolis Colts. But we have that kind of off-site regular meeting each week with the executive leadership.
You need to have that connection, even if you’re not talking shop, because dealing with human beings requires you to behave like a human being. The person you see out doing their job hopefully woke up in a bed that morning and was thinking about their personal situation, how their kids and spouse are doing, whether they need to change the oil in the lawn mower, those kinds of things.
Those are human beings; they are not machines doing jobs. If I want somebody doing a job efficiently, the first thing I have to do is recognize that it is not a machine, that it’s a human being, so how will a human being react to performing a certain task? I don’t know until I know the details of that person.
While it is not my job to go around and watch them do the job, my job is to let them know it is another human being that is providing some of the strategy and direction for the institution and making the policies that impact them directly.
Create platforms for collaboration. One of the great things about collaboration that many people overlook, they think collaboration is collecting a bunch of diverse opinions and coming up with a compromise solution. Collaboration is actually an evolutionary process where a group of people work together to derive the best solution.
As an example, we opened up a new exhibit last year called ‘Oceans.’ We started about three years before it opened.
We started a series of meetings in which anyone on the staff could participate.
We were talking about why we were doing the exhibit, what we wanted to accomplish, then we started listening to what others wanted to accomplish, what they thought and what their ideas were. Then we had meetings with specialist groups like the aquatic engineering staff who would work in there and got information from them.
As time progressed, the ideas and thoughts were narrowed down until we knew exactly what we were going to design and create. There is no question that what we ended up building was not like what many of the first group participants expected or even wanted to see. But as the process continued, it became obvious what the end product should be.
Keep moving. I have a strong belief that you can’t lead if you’re not moving. So my leadership style is that the institution and by definition, me are always moving, and hopefully, that means moving forward.
We’re definitely a dynamic operation, and I try to stay that way myself. To do that, you have to be connected to the rest of the body. If you’re moving and the rest of the organization is not, you’re in trouble. So you have to stay connected.
Those are the two things: Keep moving and stay connected. Then that takes you to the next step: If you are moving, you have to know where you are going.
HOW TO REACH: Indianapolis Zoo, (317) 630-2001 or www.indianapoliszoo.com
Janet Caylor wants to see Merrill Lynch & Co. Inc. out in the community. She wants to see the company’s name, its people and its services in front of thousands and thousands of potential customers in the Houston area each day.
That’s a big reason why Caylor, the regional managing director for Merrill Lynch in Houston, has helped spur a number of initiatives aimed at connecting her wing of the company to the community it serves.
Since arriving in Houston about three years ago, Caylor — a 30-year employee of Merrill Lynch, which was recently acquired by Bank of America — has created a company culture that values volunteerism, acknowledges racial and ethnic diversity, and encourages feedback from all groups within the community.
In part, it’s a branding strategy. But under Caylor, the stated goal of raising the profile of the Merrill Lynch name in the Houston community isn’t solely to drum up business. It’s to become a key player in improving the community and creating relationships that will benefit both Merrill Lynch and the surrounding community. Through those relationships, Caylor and her leadership team have built the presence of Merrill Lynch in the community and developed loyal customers.
“First and foremost, I felt it would be a branding strategy to give back to the community,” she says. “Rather than looking at it from the standpoint of how do we gain business and market share, it was really from the standpoint of how do we add value and quality to this community.”
Philanthropy and community causes are noble endeavors for any business in any situation. However, Caylor says you are missing out on opportunity if you don’t take the relationship seeds planted by community involvement and use them to build long-term relationships that can ultimately help strengthen both your business and the area your business calls home.
This is how Caylor has strengthened Merrill Lynch by making it a positive force in the Houston area, where the company earned approximately $446 million in revenue in 2007.
Identify touch points
After Caylor became the leader of the Houston office, she and her senior leadership team prepared a questionnaire and distributed it to all the Merrill Lynch employees in the area.
Through the questionnaire, Caylor and her team sought answers to the question, “How can we better connect Merrill Lynch to the communities we serve?”
Employees were asked where they volunteered their time, on which boards they served and where they wanted to see the company move in terms of staying connected to Greater Houston.
“The answers came back around children, education, helping the disadvantaged and reaching out to all of the ethnic groups in the area,” Caylor says. “We kind of gathered this information, and then in our 11 offices in the Houston area, people were nominated to step up and make some connections with these groups in the area. We created a process for new opportunities to get involved, so that every employee got to do that on a regular basis.”
Through the questionnaire and feedback, Merrill Lynch began developing what Caylor calls “touch points” within the community — organizations through which Merrill Lynch could strengthen its connection to its community and potential customers. In 2008, the company had 35 such touch points throughout the Houston area, including business, civic, philanthropic and arts organizations.
After identifying the ways in which to best connect to the community, Caylor and her leadership team began formulating ways to make it happen. She says she wanted to bring together representatives from the various departments within Merrill Lynch as part of a community involvement group, which was charged with developing a single, uniform way of integrating the company into the Houston community. She calls it “delivering one firm.”
“There is a weaving together that needs to take place, and we’re doing it by bringing all of our business units together on our community involvement group,” she says. “We have a lot of services offered here in Houston. The trust company is here, private banking our investment bankers, and what we have done is create a council to deliver one firm. We are one of the early marketplaces to have done this, and we have senior leadership representatives from each of those business groups who meet and talk about how we effectively [connect with and serve the community], how we bring our intellectual capital to bear in the Houston area.”
The community involvement group now meets monthly and helps organize events attended by Merrill Lynch employees, clients and community leaders, including a distinguished speaker series and a campaign to assist philanthropic organizations.
Caylor has also tried to take her community-oriented mindset to the Merrill Lynch organization at large through her communications with peers and superiors around the country.
“We have gotten together with a lot of collaboration and have done it at the divisional level and have had dialogue across all the touch points of Merrill Lynch,” Caylor says. “I just returned from a leadership meeting for women sponsored by our general counsel. We had representatives from our chief financial office, from human resources, regional directors around the country, national sales managers, talking about a number of issues, including this concept of delivering everything we can bring to bear to the cities that we live and work in.”
Inspiring other managers is a major key to spreading the idea nationwide. A philosophy of community involvement and community connection won’t survive in a business unless the leader sets the example from the front.
“Lead from the front, but do it with heart and passion,” she says. “Engage your people. You can do it broadly, as we did through questionnaires, but organize people who really care and do it from a giving back standpoint, not a getting more business standpoint. I have been confident from the day we began that business will flow. That’s not what this is about. This is about truly adding value to your community, to all of the citizens.”
As with any other process in a business, you need a way to measure how community involvement is affecting your company, then you need a means by which to adjust and refine your strategy.
Caylor says it’s nothing you haven’t heard before. “You set up a process, as you would run a business,” she says. “You set up your goals, your tactical game plan, you’re going to review your commitments and make sure that you have regular touch points. Longer term, you want to review business results.”
Caylor says some business leaders make the mistake of immediately evaluating every strategy in terms of its bottom-line impact on their companies. But when developing relationships with the many potential customers in your community, you must have a longer-term view of the results.
“This is a key point: Because we didn’t approach this from a standpoint of return on equity — and I think some leaders might do that — we had a longer-term time on the horizon and weren’t expecting business or employees to come in one month or six months or even a year,” she says. “We were expecting that there would be benefits down the line. We are now two and half years into this and are now starting to be able to quantify the results.”
Caylor and her senior managers have set up semiannual meetings to review the action taken in the previous six months. The initiatives undertaken are analyzed to gauge their impact on both Merrill Lynch employees and the community.
Caylor also holds bimonthly meetings with the community involvement group, and those include members of the company’s diversity marketing team.
“They participate, and we’ve just built a system around it,” she says. “We’re evaluating, we’re measuring, we’re changing course, and we push out information and create venues for all employees to give us feedback. Through that, we’re really able to modify, change and improve on what we set out to do.”
Stay on the message
Caylor has to keep her message of community involvement in front of about 1,000 employees and 11 offices in the Houston area. The most effective way to do that is by getting out among your employees and engaging them in person. But when dealing with the mathematical realities of 1,000 employees, 24 hours in a day and seven days in a week, face-to-face reinforcement becomes more than a little problematic.
While the message needs to start with you, Caylor says you can’t be the only force driving a wide-ranging community-centered philosophy throughout your company. You need help to drive the message, and sometimes, the most powerful teaching tools are your employees’ own peers.
“I find that the more we’re able to surround our employees with examples of things their peers have done, with opportunities for them to replicate that, there are some pretty important success stories that come out of that,” Caylor says.
Caylor uses Merrill Lynch’s worldwide communication network to broadcast community involvement success stories throughout and beyond the Houston area. By quickly disseminating stories about their peers, Caylor tries to create a conversation-starter, whether it be in meetings or banter around the watercooler. The most effective way to make the message of building relationships and community involvement relevant is to get people talking about it.
“We have a broad distribution list, we can touch everyone in a matter of seconds via internal communications, and we have regularly scheduled meetings throughout all of our offices,” she says. “We have multiple touch points, and I’ve found it to be very effective. Every partner at Merrill Lynch, every employee, can now talk about the vision of being an essential partner, the vision of being a responsible citizen and vision of being one seamless firm.”
Your company’s vision for the future has to come from the top, and you have to communicate that tirelessly. But the energy that will turn that vision into reality will come from your employees. Caylor says inspiring your employees to follow you — and making sure that inspiration does not wane — is one of your most important jobs as long as you occupy your company’s top perch.
“There is a quote, and it’s also a book title, ‘From success to significance,’” Caylor says. “I know so many people feel that way. You have to organize your vision with a smaller group of people, engage your people, follow up and follow through again. Do not treat this as a flyby. Make the commitment to be there again and again, year after year.
“It takes a lot of energy, a lot of time and a lot of commitment, and you just have to know that going in upfront. The benefits to your organization will come down the line — and they will come. But you first have to be willing to put your heart and soul into it.”
HOW TO REACH: Merrill Lynch & Co. Inc., www.merrilllynch.com
In Bruce Vincent’s business, finding oil and gas beneath the Earth’s surface can be hard. But finding the next wave of talented employees flying beneath the radar can be even harder.
The president of the $650 million Swift Energy Co. says human capital is the most important resource in his business today, but it’s a resource with notoriously cyclical availability, as difficult as crude oil to discover, refine and maintain.
“The industry has age gaps in it, and some of that relates to the cycles the industry has gone through,” Vincent says. “If you go back to the ’60s, the industry wasn’t doing particularly well, and we didn’t have a lot of people going to engineering and geology schools to come into the oil and gas industry. But 1973 is when the embargo came and you had a significant influx of people.
“But when you moved into the mid-’80s and into the ’90s, the industry went through a long down cycle, you saw school attendance decline, and some schools even shut down. So the industry has an age gap particularly from the mid-30s to mid-40s. But we’re now getting an influx of young people in the business again.”
With large age gaps in the oil and gas business, it can be difficult to build and sustain a successful company culture. In order to rally everyone around a single set of objectives and core values, Vincent needs to not only overcome the natural gaps that exist between different locations, disciplines and departments but overcome age gaps, as well.
Vincent says getting the right talent in the door and in the right positions is a critical first step. But if you can’t get those talented employees aimed in the same direction and following the same set of values, it will make the task of moving your company ahead much more difficult.
Start with a vision
The first step toward a unified team is having a clear vision. The leaders at Swift have seven core values around which they try to focus the entire company: stewardship, continuous improvement, high performance, integrity, passion, trust and teamwork.
Those qualities are valued by just about every company, but you can’t assume that your employees are going to reflexively embrace those values — or any values you emphasize — from the first day they set foot in the office.
Vincent says you have to treat your vision for your company’s future as the foundation, then build on top of it.
“You really start with your vision,” he says. “You have to create a vision that people can see and understand. It has to be kind of short, sweet and to the point, but allows them to envision what the future is going to be like at the company. Then, you have to establish a mission statement that articulates where you are going, how you are going to get there, what are the key components of the mission. Beyond that, you have to establish a culture within the organization that really cements a set of values within the culture and how people work together.”
Defining the vision, mission and values begins as a top-down process that requires consistent communication from management. However, at Swift Energy, Vincent says his method isn’t to simply give orders from the top, it’s to involve employees in shaping the future of the company.
“As you establish the mission and the vision, you don’t just dictate it, you involve people in the process so that they understand what the values are, they believe in the values, but more importantly, they are part of identifying the behaviors we want to have practiced in that environment.”
In an effort to get employees interested and involved in shaping and refining the vision and mission, Vincent and other leaders at Swift Energy communicate with them in multiple ways. Casting the widest possible communication net allows you to appeal to the widest possible audience.
“Management has to take the first cut at it, but ultimately, you need to involve everybody, and you do that through large company meetings, smaller group workshops, digital communication, e-mail and the like as you get feedback from people,” Vincent says.
But the communication doesn’t stop at the conference table or computer terminal. Once the mission, vision and core values are out there, they need constant maintenance from management.
Create an emotional bond
Vincent frequently says he wants his employees to “live and breathe” the Swift Energy culture, and they won’t do that if management doesn’t set the example.
Every time you interact with peers and subordinates, it’s an opportunity to build up or break down your culture.
“Living and breathing a culture really means that in all your interactions with your peers you’re practicing these values,” he says. “Leadership can establish values in a company, but you can’t enforce that. How you make that work is not through an enforcement mechanism, but it’s living and breathing it.
“For example, if trust is important to you as a core value, you’re always telling the truth and making sure that your behavior reflects your words. The thing I always tell people is to go with the behavior, not the words, because people can say lots of things but their behavior tells you what they’re really thinking. You want to promote transparency.
“Another part of it is calling each other out when we’re not practicing those values. I’ve made it clear to people that if I’m not practicing our core values, you tell me and let me know. If I’m not practicing the values and they didn’t call me out, I’d quite frankly be disappointed in them.”
Enabling employees to take charge of their part of the company is an element in creating what Vincent calls “emotional ownership.” He says it’s a form of ownership that is entirely separate from monetary ownership and, in some ways, more important to the long-term health of your company.
“Ownership is a hard thing to do, but if you have ownership from the heart and not from the wallet, you’re going to have a higher-performing company,” Vincent says. “Every single one of our employees is a shareholder, so we think that’s important. But creating emotional ownership is the greater challenge, and you have to do that through the culture of the company.
“It would be easy to start a company, hire the people and give them all equity so that they’re all shareholders. But they wouldn’t, at least in the beginning, feel like they’re real owners of the company. It takes time to cement that (emotional ownership) in place so that people are living it and breathing it. But you need constant reinforcement. It has to be clearly practiced from the top down, and you have to communicate it all the time so that people believe it’s real.”
Measure your progress
Swift Energy performs an annual cultural survey aimed at measuring how effectively employees are internalizing and passing along the company culture. Over time, trends develop, and Vincent is able to see both areas of success and areas in which improvement is needed with regard to bringing employees on board with the vision, mission and core values.
“The survey is designed to get feedback from our employees on what kind of an organization we are,” he says. “Over time, you see trends develop. One of the things I’ve always been particularly proud of is that one of the things that gets rated at or near the top every year is the values of the company. The other thing that gets rated at or near the top is safety. So two of the things we talk about, that we believe are important, you are seeing evidenced in feedback from employees.”
But feedback can’t stop with an annual survey, no matter how enlightening it is. Vincent also emphasizes taking the pulse of the culture through day-to-day interaction with employees.
“Day to day, there is not a formal process, and I don’t think you want a formal process,” he says. “The process is more informal in the sense that we rely on each other to hold each other accountable for our values.”
Setting the standard for accountability starts with senior management. Vincent says you and your direct reports need to show the rest of the company that you are willing to work as a team to promote the values of the company.
“We expect people to perform as a team every day,” he says. “We have to constantly make that an important issue for us — something we practice at the top. You can’t have divisiveness in the highest ranks of the company without expecting that divisiveness to be rampant throughout the organization. If your senior-level leadership is working as a team, if they’re transparent and open to each other, if they’re not building silos or fiefdoms, that is going to ripple through the organization.”
Focus on the big picture
Vincent says every business leader should have one overarching goal when it comes to building a culture and core values: If you left your company tomorrow, it would stay on the course you set.
Human nature is often slanted toward small-picture thinking. People are concerned with the job on the desk in front of them, how their direct bosses are treating them and how their direct reports are performing. But in order to have a big-picture company, you need to have people who realize that a company and its culture are greater than the sum of their parts.
“None of us are so important that the company couldn’t go on without us if we left one day,” Vincent says. “That’s why you have to cement it in everybody’s minds and hearts, this idea of a company being greater than the sum of the parts. Once that is solidified, then whoever is at the top could leave tomorrow for whatever reason, and the people in the company are going to continue to live those values because it became a part of them.”
You must eradicate small-picture arguments before they can escalate. Vincent says disagreements largely develop within a company because someone isn’t practicing the company’s values. When that happens, there are usually only two potential solutions.
“That’s one of the challenges leadership has in any organization, you have personality conflicts or legitimate different points of view,” he says. “We see that played out every day in politics. Ultimately, it comes down to living the values that you’re talking about, because when you get into those disputes, it often results from someone not practicing those values. You have to get in the middle of it and get them to work together, or sometimes, someone has to go.
“Our attitude at Swift is, we’re not going to tell you that you have to live these values. But we’re going to tell you that if you don’t want to live these values, you should probably find another place to work. That doesn’t mean that you go fire somebody, but you make it clear that if you’re going to work here, we expect you to live these values.
“You want people to know that if we all share this vision, this mission and we all live these values, we will be a much higher-performing company, and that’s what we’re trying to accomplish.”
HOW TO REACH: Swift Energy, www.swiftenergy.com