Erik Cassano

Tuesday, 26 August 2008 20:00

Investing in ideas

It’s no secret that the downturn in the automotive industry has meant a downturn for the economy in Michigan. When the Big Three automakers can’t make money, it’s usually difficult for most other businesses in the state to make money.

Jim Kreutzer is the regional managing director for Merrill Lynch in Detroit, and though he has the clout of one of the most well-known financial planning firms in the world on his side, it hasn’t absolved him of having to negotiate the murky waters of Michigan’s economy like every other business leader in the state.

So far, Kreutzer has been able keep growing in spite of the economy.

By focusing on growing areas in which Merrill Lynch has historically excelled, such as retirement planning, Kreutzer has been able to buck the negative trend, growing his portion of the company by approximately a 12 percent rate during the past three years.

“We’ve really committed to growing our presence in the state,” he says. “We’ve grown our sales force by about 5 percent per year over the last three years statewide. We’ve opened up some new offices in some of the growth markets while still staying committed to some of the more traditional areas of Michigan, such as downtown Detroit. There is still a lot happening in Michigan, it’s just happening in different ways than it did in the past.”

This is how Kreutzer has grown Merrill Lynch’s presence in Michigan — where Merrill Lynch had approximately $440 million in revenue last year — by tailoring his company’s services to his clients’ needs and by making sure his employees are always ready to rise to the demands of a growing company.

Start a learning process

To keep Merrill Lynch able to adapt and serve its clients in Michigan, Kreutzer first has to put everyone on the same page with regard to goals and the company mission. That’s accomplished through frequent communication, performed in person as often as possible.

“It happens in a variety of ways,” Kreutzer says. “We do hold training events, we have different types of partner meetings where we help people understand what the initiatives will be for the upcoming period.

“We also communicate electronically and via newsletter. We really try to use all means because people learn differently and people react differently to different kinds of mediums. But my preference is face to face and in more of a dialogue setting than simply giving a speech.”

During face-to-face dialogue with groups of Merrill Lynch employees, Kreutzer and his senior leaders attempt to drill down to what truly motivates people to serve clients. Some financial advisers want to focus on a specific aspect of financial planning, such as retirement planning or asset management. Once specific areas of interest have been identified, the senior leaders segment the work force to best leverage advisers’ skills and interests.

“We will segment them via their level of business experience and bring them together for recognition as well as training events and really allow them to have dialogue with us and with each other,” he says. “Because we are a large organization, it has really been a benefit to bring people from Lansing to work with people from Dearborn in the same workshop.”

The workshop approach has been extremely useful for Kreutzer as he has attempted to ready Merrill Lynch to respond to a heightened need for retirement services, as more baby boomers approach retirement age in the coming years.

Recently, the retirement services specialists in Michigan were divided into 21 teams. Each team was assigned to an educational workshop where it worked with a peer who had more experience in providing retirement services.

“That (peer) gave the teams the ability to ask specific questions on how to do something,” Kreutzer says. “When we’re trying to transfer skill sets, we’ll use small groups and peer-to-peer training as well as our national resources, which will come in from New York and also train them on some of the capabilities of the firm.”

While it’s cost-effective to bring many employees to a central location for meetings and training, it’s not always practical. Kreutzer says that when you are trying to relay a message to employees spread across a wide geographical area, it is sometimes better if you can simply take your act on the road, communicating it on your employees’ turf and on their terms.

“We’ll also do meetings in every office so those who couldn’t travel get the same message, albeit in a different way,” he says. “We try to communicate where they sit as opposed to making them travel. It’s better to communicate in their environment, where they might be more comfortable to share some of their thoughts and experiences.”

Ask great questions

Employee feedback is one of the most important ingredients in successful growth. In order to get a reading on the pulse of the markets you serve, you need to solicit and process input from the front-line people who deal directly with your customers.

As Kreutzer conducts meetings and travels across Michigan, it provides him with not just an opportunity to educate, but for Merrill Lynch’s eyes and ears in the field to provide him with insight.

“The feedback I get from the people I work with shapes and forms the direction I go and the message I bring,” he says. “You have to do it every day. An issue for me is to be accessible and active in participating in the financial advisers’ practices. Many times, it’s sitting down with our teams, many times, it’s sitting down with financial advisers and their clients, to help them understand what is going on and help and prepare our region for the opportunities that are approaching.”

Kreutzer says dialogue with employees boils down to one directive: Ask great questions.

“I think one of our greatest roles in leadership is to ask great questions,” he says. “Leadership isn’t about having all the answers; it’s about asking great questions and discovering the possibilities with your team, not exclusive of the team. That builds an awful lot of confidence and desire to be great when you see people in leadership

working alongside you passionately.”

The definition of a great question to Kreutzer is one that gets employees to think in new ways and come up with new, potential solutions for clients.

“Many times with clients, they’ve been doing things the same way for a number of years, and with the types of innovations that come about in our industry, they just haven’t had the opportunity for someone to ask the question, ‘Why do you do it that way?’” he says. “The same can be said for financial advisers. Asking great questions gives financial advisers a chance to analyze what they’re doing and have more conviction about the solutions they are implementing.

“Part of our job is to introduce various ways to accomplish different goals, to challenge our thinking and analyze what we’re doing so we have more conviction about that being the right solution.”

Guard against inertia

Kreutzer wants to see employees who are enabled to come up with new ideas, because he believes that one idea from a single employee can change a company.

If you challenge your employees to think of new ways to accomplish the same tasks, it’s not necessarily reinventing the wheel. Kreutzer says that any new perspective from a person in the field can be a valuable perspective.

“I’ll use the example of client service,” he says. “It has been done in many different ways, but many times, the client is getting many of the same types of service they’ve gotten for the last 10 years. There have been so many innovations and changes in the means of communication and means of expectation for a client, there are a lot of questions I’d ask of someone who was servicing a relationship the same way they had been for the last 10 years.”

Merrill Lynch holds advisory council meetings with every level of management throughout the firm nationwide. The meetings are designed to formulate those types of questions and share them with the rest of the company.

“Every division has (an advisory council) representation who takes ideas and then brings them up to the very top of the firm,” Kreutzer says. “There is advisory council management within each region, which bubble up ideas for improvements on a regional basis for things we can control. They can communicate up in many ways, be it e-mail or phone or visits to New York, and they hold meetings quarterly. The minutes of those meetings are shared with every employee so they can see what the ideas from the field are. It’s a very effective communication process for new ideas.”

Kreutzer says offering challenges and stimulating new ways of thinking helps breed an entrepreneurial mindset in a company. But once you have your employees thinking that way, you have to stay in front of them to continue soliciting and receiving their ideas. As many large companies do, Merrill Lynch’s leaders hold a number of town-hall-style meetings. As with the group training meetings, it’s an opportunity for employees to interact with each other and with management.

“Financial advisers are some of the most creative people when it comes to finding new ways to serve clients, and they bring their ideas individually to people like myself,” Kreutzer says. “I can point to two or three things that changed our firm dramatically, and it was generated from one person who had an idea and it just bubbled up, and now it’s accepted practice throughout the firm.

“An example is the way in which we market to prospective clients through a pitch book. [That] was generated from the field. We needed a consistent, professionally done and informative piece to hand to clients to educate them not only about Merrill Lynch but also about the team and individual doing it on a local basis.”

You have to be willing to build your client and customer service philosophy from the front lines on up. Kreutzer says that is the only way you will be able to build a business truly centered on the people you serve. If you can’t respond quickly to the needs of the people you serve, your business will have a hard time surviving long term. That is especially true in a state with a tumultuous economy like Michigan.

“Without an understanding of what the client’s main concerns and main goals are and then their secondary goals, if you try to implement solutions that don’t fit their needs, it’s not going to be successful,” he says. “Our job is to understand clients’ needs. When you understand the goals of the client, you do a great job helping them achieve those goals.”

HOW TO REACH: Merrill Lynch, www.merrilllynch.com

Tuesday, 26 August 2008 20:00

Global view

Syntel Inc. was about to be left in the dust.

It was about 10 years ago, during the technology boom of the 1990s, and everything in the technology solutions field was going global. Local IT shops were drying up, replaced by large, well-connected companies with the clout to provide their customers with a wide array of technology services.

In much the same way that neighborhood five-and-dime stores were being pushed out by big-box retailers, small companies like Syntel were finding their share of the market growing smaller and smaller each quarter.

Bharat Desai, Syntel’s co-founder chairman and CEO, faced a decision: Stay small and hope the market would still find a place for his company, or ditch the small talk and begin to rapidly scale the company’s capabilities.

It didn’t take long for Desai to come to the conclusion that a complete corporate makeover was the only way for Syntel to survive.

Launching a global expansion plan, quite obviously, doesn’t happen overnight. At first, Desai’s plan was to phase in a few new offerings here and there while still keeping the old business model intact.

It didn’t take long for Desai to realize that riding the fence between old and new wasn’t going to work.

“We figured out that the two business models have very different success factors,” he says. “Some of them were actually at odds with each other. You can only drive one culture successfully in a company, so we decided that globalization was the future.”

It was at that point Desai realized exactly how radical of a mindset shift such a move was going to require. In any overhaul, the momentum has to start at the top. If those in upper management don’t believe in what is about to happen, they can’t expect anyone else in the company to buy in.

Desai began by laying out the need for change to every employee, presenting statistical evidence that showed in what direction the market appeared poised to move.

“I showed them how the services economy would globalize and what that meant, why our clients were going to embrace it, what some of the macro drivers were that are compelling businesses to move in that direction and how our roles would change as a result of that,” he says.

During the first year to year and a half, Desai and his leadership team tried to get as many people on board as possible. In any change situation, there will be people who jump on board right away, others who need some more convincing and some who just aren’t going to budge.

When the leader of a company thinks employees aren’t going to want to hear what he or she says, the temptation might be to dance around the topic, use vague language and avoid definitive statements.

Desai says that’s the worst thing you can do, especially in a time of change. If you aren’t straightforward with your employees, you will lose their trust. And if you lose their trust, you won’t have much else.

“The fundamental and most important thing a leader has to have is trust,” he says. “If you cannot inspire and win trust, you cannot be effective as a leader. It doesn’t matter what the message is. People will see right through it if you aren’t telling the whole truth.”

In the months after announcing Syntel’s new direction, Desai embarked on a series of town-hall meetings across the country where he reinforced the need for change. He augmented his in-person communication with a series of print and electronic messages.

“My goal was to meet every single employee in some form or another,” Desai says. “We sent out communications, we built posters, rolled those out. We did e-mails; we did focus groups. They had to hear it from me, and they had to have the chance to ask questions and internalize the methods.”

Change can be a complicated, and sometimes messy, process. Any time you steer your company into uncharted waters, a degree of trial and error is going to be involved.

It’s the biggest reason why Desai wanted to make adaptability a permanent part of Syntel. He and his leadership team spent many months trying to find employees and managers who could spur change.

Syntel has successfully performed its transition to a global technology solutions provider, with more than 10,000 worldwide employees and $337 million in 2007 revenue. But Desai wants to see to it that Syntel is never again in a change-or-die situation like it was a decade ago.

HOW TO REACH: Syntel Inc., www.syntelinc.com

Saturday, 26 July 2008 20:00

Carrying the torch

It was 2003 when Bill Hankowsky found himself alone at the top. Less than a year after taking over as chairman and CEO of Liberty Property Trust, Hankowsky was charged with both preserving a legacy and building a future.

Willard G. “Bill” Rouse III, the man who founded the company that would become Liberty Property Trust, succumbed to cancer that May. Rouse was the only leader the company had ever known since its inception in 1972, and he was the one who had set in place the standards, ethics and policies that became Liberty Property’s culture.

Now Hankowsky, who had been named president in 2002, was charged with preserving that culture while building a company that could flourish in the 21st century.

“Bill was a visionary in the business and a beloved leader,” Hankowsky says. “As with all entrepreneurial founders, it was Bill’s company, so I didn’t view it as stepping into Bill’s shoes. I don’t think anyone could have stepped into Bill’s shoes. But it was a tough situation to step into.”

For Hankowsky, taking over for Rouse meant starting with a return to the basics upon which Rouse founded the commercial real estate company: Promoting the culture, building longstanding relationships with customers and real estate brokers, and finding employees who wanted to do the same.

If your company is built on a foundation of solid core values and a strong culture, chances are the moves you should make in the future will become more evident.

This is how Hankowsky has used communication and a strong corporate culture to continue carrying the Liberty Property torch lit by Rouse more than a quarter-century ago.

Build on the past

The day after Rouse died, Hankowsky and Liberty Property’s board were preparing for the company’s annual meeting when one of the board members pulled Hankowsky aside. What he said to Hankowsky helped set the stage for the coming months and years of his tenure.

“We had decided to go ahead with our board meeting because we agreed that’s what Bill would have wanted, and one of the board members took me aside and told me, ‘You have this job to do what you think is right, not to guess what Bill would have done. That’s why he wanted you to have it.’”

The message was clear to Hankowsky: Build on the past, but don’t live in it. That can be difficult because a change in leadership can trigger anxiety in a work force, particularly if the incoming leader is taking over for someone who had held the position for a long period of time. Even though Hankowsky had been with Liberty Property for a number of years prior to assuming the top post, he says he still encountered a moderate level of concern over the future direction of the company after Rouse died.

“There is sort of a subtle pressure because people tend to get anxious about change and the future, to the degree that there is a new leader and he is going to be different,” Hankowsky says. “‘Are we going to change who we are, are we going to change in size, are there going to be new demands?’ So there is a certain balancing act as you move forward.”

Hankowsky attempted to curb any organizational fretting over the future by making decisions a team-oriented process. When a large-scale decision that affected the future of the entire company was placed on the table, Hankowsky and his leadership went out among employees, getting their thoughts and feedback. He says that even if everyone doesn’t ultimately agree with a final decision, if everyone has had an opportunity for input, your ability to build a consensus, or at least a compromise, is enhanced.

“Part of building a team-oriented culture is building consensus, seeking input,” he says. “Two heads are better than one; three heads are better than two. So we encourage people to seek others’ opinions because it absolutely yields better decisions, and we develop a culture where we respect each other’s opinions. That’s the way we operate.

“Of course, while it’s important to gain consensus, in the end, someone has to make a decision and act on it. If you’ve sought input, people then need to respect the fact that it was a fair process, and even if they’re reluctant, follow the decision that was made. In the end, people don’t follow a decision they don’t understand.”

To help build a bridge between employees and management, and involve employees in the decision-making processes of the company, Hankowsky attempts to visit each one of Liberty Property’s 19 nationwide field offices each year. In addition to providing an employee interface with management, the yearly tour of offices offers an opportunity for Hankowsky and his leaders to reinforce the core values of the company.

Additionally, Hankowsky hosts a quarterly employee conference call after quarterly earnings are released.

“I host the call, I take questions, I walk them through the quarter, where is the business, where are we going,” he says. “Through all of that, I try to make a point that our culture and values are part of the building blocks of that. When we hire new leasing people or sales folks, I always tell them I’d prefer they lose a deal than lose our reputation. As important as it is to be competitive and win, we want to make sure we win with integrity.”

Start with the right materials

During Hankowsky’s first year as CEO, he received a call from a real estate broker. It was a call no company leader wants to receive.

“He said, ‘Bill, one of your guys who I’m working with misrep-resented something to us. I know that’s not who you guys are, so I thought it was important that you know about it,’” Hankowsky says.

In just about every business, if you don’t have integrity in your operations, you don’t have much else. The knowledge that a Liberty Property representative was less than truthful in dealing with a broker revealed two things to Hankowsky.

“As much as I disliked that it happened, it was a great testament to our reputation, that it was so strong that it was actually perceived that someone stepped out of it,” he says.

The second revelation was that if you want to perpetuate a culture based on solid ethics and integrity, you must hire people who can move that culture forward.

Hankowsky says having the right skill set and level of ambition can get a candidate in the door for an interview. But for that person to get the job, you really have to be able to dig down and find out whether he or she is a match for your company’s core values.

“If you put people with good values together, you’re going to have a good culture,” he says. “So in addition to wanting to hire people with great skill sets and drive, we want to hire people who share the values we have. You really can’t put values into people. They have them or they don’t.”

There is no secret formula to finding the perfect match for a position. To drill past a person’s interview facade takes multiple interviews and a lot of patience.

“Candidates generally have multiple interviews with different people in the company,” Hankowsky says. “One reason is that none of us are perfect in judging others, so having collective decision-making is good on that front. It’s also a way to, as a group and a team, try to evaluate how somebody would fit in with us. Sometimes, there are people who we literally just say, ‘We don’t think it’s a good fit.’”

Hankowsky says he remembers a favorite saying of Rouse every time he and his management team make a hiring decision: “If you had to let someone go, two people made a mistake.”

In the case of the Liberty Property employee who misrepresented the company, he wasn’t terminated. But he did have to tell the broker he made an error.

“We didn’t let the person go because we also believe that people make mistakes,” Hankowsky says. “You shouldn’t make the same mistake twice, but you can make a mistake occasionally. This person is now a terrific performer in the company, has learned a great lesson from (the mistake), and I’m very happy with the outcome.”

Hankowsky turned the situation around and used it as a positive development, an opportunity to reinforce the culture to an employee and to a broker with whom the company frequently does business.

“I remember speaking once somewhere a couple of years ago and someone asked me, ‘How does Enron happen?’” Hankowsky says. “Enron happens because people tolerate behavior and values when they probably shouldn’t have, and it happens when a company doesn’t have an open culture.

“If there are lots of meetings, if the doors are open and you run a company where people feel like they’re welcome to come to meetings and have their opinions heard, where people do things in a very transparent, open way, then someone who does something inappropriate is going to stick out like a sore thumb. The day-to-day behavior of the people in a company greatly reduces the possibility of an (Enron-type situation) happening.”

Relate the culture to customers

With employees, your culture isn’t what you say it is; it’s what they see it as. The same goes for your customers. That’s why it’s important that your employees not only absorb and internalize the culture but reflect it, as well.

Hankowsky says that in the world of business, and real estate in particular, you never know who is going to be a repeat customer, so you’d better make the best impression you can.

“As much as it’s a very big country and big economy, there is an understanding that there is a real estate brokerage community, and if we deal with a broker, we’re going to see that broker again,” he says. “They’re going to bring in another customer, and they can bring that customer in with a favorable recommendation about us, or a ‘watch yourself around these guys’ recommendation. Whatever happens, you’re going to see these guys again.”

Liberty Property — which had approximately $698 million in revenue in 2007 — has a number of metrics it looks at to gauge the level of satisfaction of both real estate brokers and building lessees, including lease renewal rates, market vacancy rates and periodic surveys.

However, the best way to ensure that the metrics look good is to have a customer-centric approach to problem solving, which again comes back to the culture.

“I have a saying that when a customer walks through the door, his job is not to lease your 10,000 square feet of office space,” Hankowsky says. “Your job is to solve his real estate problem. That could mean telling him we don’t have an answer, that a better solution for him might be something else.

“Culture absolutely manifests itself in the behavior of your people in the field. If we take a long-term view and find the best possible solution for a customer, that customer will come back.”

HOW TO REACH: Liberty Property Trust, www.libertyproperty.com

When Karen Bankston became

the site executive for Drake Center Inc. in 2005, she knew she

was stepping into a whole new

culture. But she didn’t realize just

how different it would be.

Bankston had been working as

an executive within the Health

Alliance, an area network of health

care facilities that has an open

culture and that values frequent

communication with employees.

But when the Health Alliance took

over Drake Center — a physical

and medical rehabilitation hospital

with 2007 gross patient revenue of $97.4 million — and named

Bankston to lead it, it was a whole

new ballgame. She says that

when she arrived, the culture was

not as open and walls had developed between employees and the

previous management regime.

“The employees didn’t trust us,”

Bankston says. “We had to spend

the first 30 to 45 days just getting

them to trust us by being overly

communicative.”

Those first weeks at Drake

Center taught Bankston a great

deal about the importance of

establishing trust between

employees and management.

Smart Business spoke with

Bankston about how to gain the

trust of your employees and how

to get them to buy in to your

vision.

Establish trust through communication. The key is to communicate, communicate and communicate again. But even with

that, the goal of communication as it pertains to getting

people to buy in to your vision

or your core values really is to

establish a sense of trust in the

environment.

People need to be able to

trust that you’re leading them

in a direction that, first of all,

they want to go, and that you

are in control — not from the

perspective of turning left and

right but in control of the rockiness of the environment. The

first thing you have to do is

establish that sense of trust so

that people know that if the

ship starts tilting, you’re going

to be able to throw them a life

preserver fast.

That’s why communication is

so important.

When I talk to people about

leadership and getting people

to follow you, one of the

things I share with them is that

in addition to communication

and transparency, when you’re

trying to establish a sense of

trust, you need consistency of

message. You need consistency in the message that is going

to all of the individuals.

It starts with me and my senior team really owning what

the vision and the direction is,

and then the ability to articulate it to the individuals who

are right with the rank and file

on a daily basis. We all have to

be talking the same language

and modeling the behaviors

we expect as we go forth on

this journey.

Recognize and respect different

opinions. Gaining trust really is

a lot of hard work, and I share

with folks that it doesn’t happen overnight. Sometimes, folks don’t want to go into the

direction you want to take the

organization.

We share with them that it’s

OK to be that way. You might

not want to work here and go

in our direction, but it’s OK to

have a difference of opinion.

We have to have a willingness

to hear those differences

because it might be that we’ve

set a vision or a direction without all the right information or

not understanding a small

quirk in the pathway to getting

to that particular vision or goal.

So you have to try to listen to

everyone, and then really try

to overcommunicate consistently at different levels so that

people start to feel that they

have some ownership in it.

Part of that is people have to

understand what’s in it for

them. They have to understand

the ‘why’ of it. It’s not OK to

say, ‘We’re doing this because I

said so.’ That can work in

some organizations, but in the

new millennium, people are

generally more educated and a

little more in tune to their environment, so they know,

‘Because I said so’ is just not

enough of an explanation.

Remain transparent. You have to

try to make sure that you’re

doing as much as you can to

be as transparent as you can

so that people have the information they need to do their

jobs. One way to have your

organization fail is to have the

associates feel as though you

are hiding something from them. That’s a great way to not

get work done.

I have both formal and informal ways of communicating

with associates. From an informal standpoint, I believe in the

whole notion of management

by walking around, which is

very important and true. That

allows the individuals who are

working in the organization to

see you as a real person and

not some king or queen in

their office dictating orders

down to the people below.

This whole notion of just

walking around and engaging

the associates on a daily basis

is very, very important.

Oftentimes, you find out a lot

of things going on in the

organization that need to be transferred to appropriate individuals in the organization for

the changes to occur.

From a formal perspective, I

hold town-hall meetings

where I will provide the associates with information

regarding our quality situation

and so forth and so on, and

then allow them to ask any

questions they might have.

That allows us to either confirm or negate any rumors that

might be out there.

With my senior team, we

meet regularly in both formal

and informal meetings to make

sure that we’re all in touch

with what each of us is doing.

The whole idea is to be able to

facilitate collaboration and

integration throughout the

whole body of the organization

to make it work efficiently.

HOW TO REACH: Drake Center Inc., (513) 418-2500 or www.drakecenter.com

What causes businesses

and institutions to become detached from the people they

serve?

For James C. Votruba, it boils

down to one word: arrogance.

As president of 1,800-employee Northern Kentucky University,

one of Votruba’s primary

responsibilities is to keep his

school connected to the surrounding community, which he

does through a series of meetings with community leaders every time the university revisits

its five-year strategic plan.

But, too often, in the world of

successful, growing businesses

and large institutions, Votruba

says the practice is not to engage

patrons, clients and customers

but instead to assume that everything is positive and that the people you serve are completely satisfied with your products.

And that, he says, is an

assumption that could kill your

company if you’re not careful.

Smart Business spoke with

Votruba about how to avoid big-business arrogance and why

staying connected to the people

you serve is essential.

Avoid arrogance. Thirty years

ago, I was on a fellowship program that was designed to produce a generation of leaders

who would have a broad perspective on leadership. We

would get together at various

times throughout the year to

interact with leaders from various industries. In this case, the

leader with whom we were

interacting was the just-retired

president and chairman of the

General Motors Corp.

He was asked, what was it that

caused the American auto industry to fall so far, so fast during

the 1970s. I’ve never forgotten

his response. He said it wasn’t

unions, it wasn’t plant obsolescence, it wasn’t the time it took

to get designs into production.

He said that fundamentally it

was hubris, arrogance. He said

that it was a belief on the part of

the industry that we always built

the best vehicles, that we would

always build the best vehicles

and the problem was not a

product problem but a marketing problem because the public

would buy anything they made.

So arrogance can lead you to

believe the product is about as

good as it can be, and GM defined it as a marketing problem.

They changed marketing firms

again and again until they finally

woke up and realized that they

had lost market share and that

the problem wasn’t with the

marketing but with the vehicles

they were manufacturing.

Universities and other industries can become full of hubris,

as well. The more mature you

become and the more often

you’re told how good you are,

the more vulnerable you are to

losing touch with the public

you serve. Leaders always

have to do whatever is necessary to stay in touch with

those you serve.

In our case, the planning

process ensures that at least

every five years, we have a

structured interaction with the

community. In addition, we

have advisory boards for every

one of our colleges and all of

our departments, and these are

all public advisory boards.

People come in and tell us

whether our programs are

aligned with the needs of the

public.

Remember whom you serve. You

have to remember why you

exist. We exist to serve the community. They are, in a very real

sense, the reason we exist.

That’s been the case for public

higher education ever since it

was created.

In order for us to stay in touch

with those we serve, I have to

be out there, and I encourage

our vice presidents, our deans

and our faculty to be out there,

as well. What happens in my

view is that in mature industries, whether it is higher education or any one of a number of

industries in the business world,

is as they grow more mature,

they often lose touch with their

customers, those whom they

exist to serve. When that happens, it’s a slippery slope.

Any organization depends on

the external environment to sustain it, but as industries become

more mature and isolated from

that external environment, they

become more vulnerable. That

would be true of financial service, auto industry, tech firms.

Look and see if you can find a tech firm that doesn’t understand the impact of iPods or

anything else you could think of.

When you start losing touch

with the market environment,

the government environment,

the social environment, the

demographic environment, all

of those things are going to

impact you.

Stay connected on a personal level. One of the risks in any leadership position is that you can

become isolated. If I spent all

my time in the office on the

eighth floor of the administration building, I would not

have the opportunity to see

the university through the

eyes of others.

I try to make sure that, in addition to my own eyes and what I

see, I see the university through

the eyes of our students, through

the eyes of our underrepresented students, through the eyes of

our faculty and staff, in addition

to other people with whom I

interact quite regularly.

I’ll often stop someone who is

mowing our lawn or painting

one of our buildings and ask

them how they feel about the

university. E-mail has also been

a great opportunity for people

to violate hierarchy and let me

know what is on their mind. I

answer all my own e-mails, and

frequently, it will be folks who I

might not meet with on a regular basis. But they see an opportunity to tell me something and

they take it. That assumes a

trust level that is important for

any leader.

HOW TO REACH: Northern Kentucky University, (859) 572-5100 or www.nku.edu

Wednesday, 26 March 2008 20:00

A taste of success

In the early 1970s, Gerald Shreiber built his fledgling snack food manufacturing company on one cornerstone product: soft pretzels.

Shreiber, founder, president and CEO of J&J Snack Foods Corp., says that back then, soft pretzels basically had no variety. They were some shade of brown, had a chewy texture and were probably covered in large, white salt granules.

Scores of companies made them and sold them pretty much the same way. If you didn’t have a loyal customer base or some way to differentiate your product from the many others on the market, you probably had a hard time taking a bite out of the soft-pretzel market. It was the definition of a commodity.

In order to grow the company, Shreiber needed to either come up with new products, new takes on established products or purchase companies who made products compatible with his company.

Shreiber’s answer? All three. “We’ve done some of our growth organically, some of it by acquisitions, and more and more, we’re gearing ourselves toward innovation,” he says. “We’ve started to move toward innovation through product extensions of what we’re in, new ideas coming from the product lines we’re growing in.”

Along the way, Shreiber has discovered that a pretzel isn’t just a pretzel when combined with innovation and a forward-thinking leadership philosophy.

“Today, we are making (soft pretzels) in different sizes, shapes and forms, to the point that one SKU has become 35 to 40 different SKUs in our soft-pretzel category alone,” he says. “On top of that, we’ve had maybe a half-dozen attempts to further grow that category that weren’t ultimately successful.”

From humble soft-pretzel beginnings, J&J Snack Foods has grown and diversified to the point that the company now offers a wide array of snack foods, frozen foods and beverages. Shreiber says that while every company has different needs and different goals, the need to grow creatively is universal and speaks to the visionary mentality that every CEO should cultivate.

Encourage innovation

Innovation can be an imperfect process. Shreiber found that out firsthand a little more than a decade ago when J&J Snack Foods — which garnered nearly $569 million in sales in fiscal 2007 — rolled out a line of oat-bran pretzels.

Oat bran was the “it” health food at the time, so J&J’s leaders figured they could get the company in on the ground floor of an emerging consumer trend.

But forces beyond the company’s control had other plans. “We came out with the oat-bran pretzel maybe about 12 years ago,” Shreiber says. “It tasted good, it looked good, we formulated it well, put it in an attractive box, then we got it into the marketplace just in time for it to be negatively impacted by the New England Journal of Medicine, which said oat bran was overrated and didn’t deliver on all the health claims attributed to it.”

J&J followed that up with a low-carbohydrate pretzel line introduced during the Atkins Diet craze of several years ago. Like the oat-bran pretzel, the low-carb pretzels didn’t pan out the way Shreiber had envisioned.

“We developed some pretzels with less wheat flour and other types of formulation,” he says. “It looked good and was attractively priced but just didn’t deliver on the critical element of taste.”

The moral of the story: Even a company that has had 144 straight quarters of growth, as J&J Snack Foods has had during its nearly 36 years of existence, is still susceptible to missteps. But it’s a necessary risk to take if you want to innovate as a company.

“We don’t encourage failure, but we do allow for the fact that, now and then, every ball you hit isn’t going to go screaming through the infield,” he says. “What we do is we discourage too many excuses for why something didn’t work. We discourage being stupid, and we discourage not working as a team.”

At J&J, ideas are allowed to well up from within the company. The main conduit is a teleconference call every Friday morning that includes members of the company’s management and the research and development department.

Shreiber says the goal of the teleconferences is to move ideas along as quickly as possible. New innovations do a company no good if they are allowed to sit and gather dust in the company channels.

“We don’t want to sit and allow fresh ideas to become stale,” he says. “We want to get them to an R&D center and get some samples made by hand, in a lab, and have some product meetings.

“Oftentimes, there will be six, eight or 10 new products submitted at a time, depending on the potential of the product and whether the customer involvement is or isn’t there. We are working on ideas that are three months out, and some [are] six and nine months out. But all of our ideas have to pass certain rigid criteria in order to get through our lab and idea-concentrated thinking.”

That criteria covers more than the marketability and customer appeal of the product. Shreiber says that with any innovation that might spawn a new product or service, you must first take a long, honest look at your company’s capability to produce the new item.

The first place Shreiber looks is at the financials. For an innovation to make sense overall, it must first make sense financially.

“You go through the investment analysis, what kind of special equipment it takes to do that,” he says. “From an introduction standpoint, you have to find out if you will be able to adequately produce the product.”

If the idea makes sense from a production standpoint, you must then find out if there is a demand for it. Shreiber says that requires constant communication with vendors and customers as you take the pulse of the market.

“Look, listen and communicate, and keep doing it until you’re doing it almost 24 hours a day, seven days a week,” he says. “It’s something we’re pretty good at, but we could always be better at it.”

At J&J, ideas that end up being presented at the Friday teleconferences usually have their genesis at the customer-interface level. As J&J representatives speak with vendors, schools and other places to which they sell the company’s products, the information is fed upward in the organization — first to the regional level and then to the national level. Along the way, ideas that lose steam or otherwise run into roadblocks are usually filtered out. The ideas that are acted upon are then fed back down through the organization for testing and feedback from end users.

Shreiber says innovation from a leadership standpoint is a balance between sticking to your guns and remaining open to change. You cannot stray too far from what your company does best, but you can’t become so rigid that you choke off the creativity of your people.

“The great football coach Don Shula once said, ‘Always have a game plan, but be prepared to change it at a moment’s notice,’” Shreiber says. “You can’t be so structurally oriented that you appear stiff-collared and buttoned-down. Some products are ready for your aim, and as long as you have your sights set on that, you can move on that. But you also have to stay on target.”

Look outside

Shreiber says a growth-by-acquisition strategy can grow up alongside an innovation-centered organic growth strategy. But, in order to splice the two strategies into a single growth philosophy, you need to define the goals of your company.

At J&J Snack Foods, a good acquisition is defined as a company that produces products that complement J&J’s array of offerings.

Throughout the years, J&J has made several acquisitions, including a rival soft-pretzel manufacturer, which helped solidify the company’s standing in the soft-pretzel market, and a frozen beverage and snack manufacturer, which allowed J&J to broach a new market while staying in the snack-food arena.

“A good acquisition should bring together different products,” Shreiber says. “It should also complement and supplement different goings-on in your company. For us, that means it should complement what is going on in our research centers, put us in different categories, such as frozen novelties, apart from traditional snack foods and beverages.”

But acquisitions aren’t just about the products you want to add. Once you’ve made the decision to buy another company, you must consider the people and culture you are acquiring along with the company’s name and product line.

Shreiber says each acquisition is unique, bringing with it its own set of challenges as you attempt to stitch together two cultures and combine two sets of employees.

“Acquisitions are like your children,” he says. “Each one is unique. They each bring different people with them, all talented, but each with their own special set of skills. That’s why you have to mesh the cultures very quickly, because you can’t let things just lay dormant and sit there. That would only fan the forest fire because if you have people who are not communicating and not working together, that doesn’t work for anybody.”

J&J Snack Foods tries to complete an acquisition and integration process in the span of several months. Anything quicker is likely not realistic, and anything slower will likely create stagnation.

“You need to resolve any issues that come up and do it quickly,” Shreiber says. “That’s why we’ll bring these new people in, integrate them with our people, listen to their ideas, give them our views and make sure they mesh.”

Plan for growth

Shreiber has a favorite saying when it comes to growth: “You have to reinvent yourself before someone else does.”

Either you are going to be proactive in leading the evolution of your business or you are going to be reactive in trying to keep up with the businesses that evolved first.

That’s why any growth needs well-defined, measurable goals in place that your company can work toward. With defined goals also comes the responsibility of consistently reviewing them, something Shreiber has his management team do monthly.

“You need to establish your goals, measure your goals and make sure the goals are reviewed,” he says. “First, there is always the financial part of it. If you measure it monthly as we do, it becomes a report card, just as you received in school. It’s a summary of your time-frame goals.

“As a public company, we are measured on sales history, historical growth, future growth and past performance, and to that end, I’m most proud of the fact that my team has led us to 36 years, meaning 144 straight quarters, of profitability and increased sales growth for each year.”

Shreiber says the key to maintaining a growth-oriented mentality, regardless of the manner in which you want to grow, is to never become content. No matter how much growth and success you have under your belt, always believe that you can — and should — do more.

That is a mentality that needs to start with you and your senior leadership. If your company’s leaders are all on the same page and communicating the same values to every employee in your company, you will be able to achieve widespread buy-in and get the full resources and manpower of your company channeled toward the direction in which you want to point the company.

“You can be satisfied and proud of what you’ve accomplished, but you need to have other managers share in the culture and vision,” Shreiber says. “In that respect, I feel very lucky because my company is very fortunate to have leaders who have been a part of our growth and existence. That’s a must for any growth-minded company.”

HOW TO REACH: J&J Snack Foods Corp., www.jjsnack.com

Wednesday, 26 March 2008 20:00

World champion

In his decades-long business career, Marty McQuade has seen a lot of changes. He’s seen a lot of trends come and go, a lot of competitors succeed and fail.

But nothing, he says, has made him sit up and take notice more than the breakneck pace of globalization in the automotive industry throughout the past 15 years.

McQuade is the general manager of DuPont Automotive Systems, the auto industry supplier arm of $28 billion DuPont, the world’s third-largest chemical manufacturer. In five years on the job, he has quickly learned about the importance of looking down the road as a globally growing organization.

“In any business, as you have the business environment changing as rapidly as it’s changing in automotive, you absolutely have to have a comprehensive and very detailed global strategic planning and marketing process in the business,” McQuade says. “As a leader, you need to understand the macroeconomics, not just in the country but in the region. What are the changes in industry demographics and technology, and, in our business, what is changing in the types of vehicles they are building?”

During the past decade or so, the globalization of the auto industry has drawn DuPont Automotive Systems into diverse regions, including Eastern Europe, Brazil, China and India. Each new market presents a host of different challenges for McQuade and his leadership team, but McQuade says there are a number of requirements that are universal for success, regardless of the market you are looking to broach: You must have local connections within the country, you must have a deep understanding of local customs, customers, politics and logistical challenges. In addition, any person you send abroad for an expatriate assignment must have the same in-depth knowledge you do — if not more so.

McQuade says the only formula for creating a successful operation in a new market is a lot of research and a lot of resource commitment. The following are some of the lessons McQuade has learned about taking a company global.

Establish local ties

Before you head into a new market, McQuade says it is essential that you learn everything you possibly can about the customers you will be serving.

Without an extensive knowledge of your customers, what they produce, whom they serve and how they are mapping out their own futures, he says it will be extremely difficult to build a longstanding presence in a new country or region.

“It’s absolutely essential to have an intimate knowledge of your customers, and that goes back to developing intimate customer relationships,” McQuade says. “There is absolutely no substitute for having that knowledge of your customers. You want to know where they are going, so you can react and provide the response they are going to need.”

He says the most effective way to gain a ground-level knowledge of the customers in a country is to first cultivate relationships with local people in your industry. There is a time and place for you to send your own expatriates to a new country, but when you are trying to set up shop, McQuade says the more local talent you can involve, the better off your business will be.

“You really have to have a local culture knowledge,” he says. “My belief is that going into a new operating culture without really having someone who is local and can help you work through that is not a key to success. You really need to have local people on the ground.”

McQuade and his leaders normally try to gain an insider’s knowledge by developing partnerships with local automotive coatings companies.

“The coatings industry is a very large industry, and there are coatings companies in many countries,” he says. “So you’re typically looking to see if there is a local company that has a certain knowledge [that can be combined] with your company. For us, we search that out, we begin discussions and start developing relationships with local people. We try to be ahead of the curve in terms of looking where the markets are going and trying to develop those relationships.”

Your strategy for building partnerships with companies in new markets should be part of a larger overall strategy on how you want to grow abroad. McQuade emphasizes the importance of building a crystal-clear growth strategy for your entire company. All of your decision-makers should have no doubt about what makes for a good growth opportunity versus a less desirable opportunity.

“We have seen the need to develop very clear business strategies on how we’re going to enter newly emerging markets,” he says. “You need to look at if this is a market you want to enter yourself, do you want to acquire a business, do you want to enter a joint venture with another business. But in the end, you need to be clear on what your strategy is when going into a market so that it’s clear to your organization who is really executing the plan.”

Introducing expatriates

McQuade says you can’t simply send your own people to a new market and expect them to build the business without local connections. But, he says, you probably won’t be able to rely solely on in-country connections to build a presence there, either. You will likely find that sooner or later, there will be a need for you to send expatriates into a new country.

The locally hired talent must be able to develop constructive working relationships with the managers you send overseas. To make that happen, you must find the best candidates among your ranks for overseas assignments, then train them extensively on the culture they are about to enter.

McQuade calls it “cultural immersion training,” and it’s meant to give expatriate assignment candidates a comprehensive view of the country in which they will be working.

“We hire from the outside, but we invest in that (training),” he says. “The training typically takes employees and possibly their families through a couple of weeks of education about what it’s going to take to live and operate in the new culture.”

Cultural immersion training covers everything from social customs to local food and dining habits, education systems, language training and the cautionary tales of other expatriates who have encountered pitfalls in adjusting to life in a new country.

The training stresses the importance of having expatriates develop support groups and surrounding themselves with people they can trust for advice and answers.

“People who have not been expats before might not realize that they’re going to lose their support group from whatever country they now live in,” McQuade says. “We try to get them to think about different ways they can have a support group.”

McQuade says you must be selective in who you send overseas. Expatriate assignments aren’t for everyone.

At DuPont Automotive Systems, McQuade and his senior leadership attempt to match up-and-coming managers with the right assignments by matching a person’s interest in such an assignment with his or her level of ambition and career path.

“Our placement process does a good job of clearly identifying someone’s career path and what they need in terms of their personal development in order to achieve their career path,” he says. “In these cases, if an expat assignment is important for an individual to achieve that development, then that becomes part of their development plan.”

If someone in your organization has the talent and ambition to become a senior executive at some point, McQuade says you should encourage that person to travel whenever possible and experience many different cultures.

McQuade spent four years living as a business expatriate in Germany.

“Expat assignments are a tremendous growing experience in today’s business world,” he says. “This is a very global market, whether you’re talking about automotive or other markets. If you have a desire where you want to become a senior leader, president, CEO within a global organization, and you have the opportunity to go into a different culture, work and operate there, it is a tremendous learning experience for anybody.

“From the business side, the benefits of having expats getting experience on these assignments means you are getting people who have a broader view of the world. If you spend your entire career in one country, it is very difficult to understand that the world is so different depending on where you are trying to do business.”

Diversify your leadership

McQuade says it is important for the senior leadership team of any business to be composed of a diverse group of people — not only in business matters but culturally, as well.

An ethnically and culturally diverse leadership team can assist you in a big way if you are in the process of taking your business global.

“You do not want your leadership team to be only of the native tongue of the country of your headquarters,” he says. “If you have a diverse group, your senior leaders will speak multiple languages and can help you with that translation.”

Translation skills are highly valued in the people who manage the international communications pipeline at DuPont Automotive Systems, whether they are on-site managers, marketing or public relations managers.

Poor translation of company messages can stall a company’s growth. If messages aren’t effectively reaching the ears of those who need to hear them, McQuade says it’s as bad as not communicating at all.

“We take a view that, although English is the world’s business language, if there is an important message we’re trying to get out to the organization, we’ll invest the time to translate it to the local language, recognizing that there is a very large percentage of the organization that won’t understand the message otherwise.”

McQuade refers to his senior leadership team as his “arms around the world.” He frequently meets with his leadership team to foster alignment among the various aspects of DuPont Automotive, making sure that messages are consistent, regardless of where in the world the communication is headed.

“As I travel to many of our different regions, I view those trips as being in support of our local management team,” he says. “It’s all about how I can help them and support them to reinforce whatever the message is. It’s very important that your senior leaders provide a consistent message. Otherwise, you can confuse the local organization.”

Things to remember

Growing a business overseas is a complicated proposition. It addition to strategic planning and training people, McQuade says there are other issues you’ll need to consider, as well. Here are a few of them:

 

  • Familiarize yourself with local environmental laws.

     

    “You need an understanding of how to operate with the local government in the way of environmental restrictions and what we would refer to as product stewardship, in terms of regulations around hazardous material control. For us as a chemical business, that’s very important.”

     

  • Familiarize yourself with local politics.

     

    “Taking China as an example, you absolutely need to understand how the Chinese government operates, as opposed to a Western government. In China, we’ve invested a significant amount of time as a corporation establishing those relationships with local government. Having the local government be a supporter of your entry into their country can be very helpful in establishing your operation.”

     

  • Form a detailed logistical plan.

     

    “When you’re operating a global business, when you think of functional expertise, I would look at my operations to make sure the leadership of my operation has the right operating capabilities and processes in place to serve us globally.

    “It’s along the same lines in terms of overall supply chain organization. We have, within our core supply chain group, the understanding of how to move our products globally. On a very general view, when we’re setting up in a market, we’re looking for a local partner that brings operational expertise. That partner is then very helpful in understanding the logistics in that emerging market.”

 

HOW TO REACH: DuPont Automotive Systems, www2.dupont.com/Automotive/en_US/

Sunday, 24 February 2008 19:00

A sense of purpose

Communication with your employees has to be two things above all else, says Chris Baggott: consistent and visionary.

Baggott — who co-founded ExactTarget Email Marketing, a 300-employee company, and who more recently co-founded Compendium Blogware, where he serves as CEO — says that employees need to, first and foremost, believe in your integrity as a leader. If they trust that you will tell them the truth, it is then your obligation to inspire them by showing them that they can achieve the personal satisfaction and advancement that they are looking for in their careers.

Failure to motivate your employees with your words — both written and spoken — can result in a stagnant company, Baggott says, which can lead your best and brightest workers to look for new challenges elsewhere.

Smart Business spoke with Baggott about why inspiring and motivating employees has to start at the top.

Inspire with your communication.

Always be honest when communicating. You never have a chance to get your integrity back.

Be consistent. You can’t say one thing one day and totally shift gears the next day. You have to be ‘on-message’ and clear. You have to be consistent and visionary.

People want to aspire to something, so when you’re talking about things, you have to be aspirational. ‘We’re going to make the best widget in the world’ isn’t so aspirational, but how people are going to benefit from that widget, that’s where the aspiration comes in and makes people excited.

People want to find value in what they’re doing. I just had a young woman who I met a year ago, right as she was graduating college. She was going to move to New Jersey and work in a large pharmaceutical company in corporate finance.

She was all excited, she was a corporate finance major, and she reached out to me after eight months and she said, ‘Get me out of here.’ She was in an organization where she sat in a cubicle and people counseled her on her career in terms of decades, like, ‘Don’t mess up here, and in five years, you might get to be a director-level person.’

It wasn’t inspiring, it wasn’t a meritocracy, she knew wasn’t going anywhere, she was surrounded by 20-year veterans who were completely unmotivated, just doing their jobs and getting the heck out of there. There was nothing to look forward to, particularly for young people, who probably aren’t looking at their lives in terms of decades.

They expect to have many jobs in their careers. You have to give them something that says, ‘This is really, really cool; this is changing the way people are doing things, and your role in this is really important.’

You have to tell them that if you do a good job, it doesn’t matter how old you are or how long you’ve worked here, if you’re worthy of a promotion or leadership role, you’re going to get it.

Set the stage. It becomes really important for the leader to set the stage. You do that in a lot of ways. You have frequent communication; you share information with all employees.

Specific strategies we’ve executed have been things like monthly meetings. Every month, we bring the entire organization together for lunch, anybody who is out of town calls in for kind of a review of all major areas of the company. Everyone sees what everyone else is doing, and when they see we’re all rowing in the same direction, those monthly meetings really help.

I’m a big fan of being an industry leader because your team wants to be associated with a winning team. The more you can project that you are a winning team, the better it is. So your PR efforts, your conferences and meetings, and I’m even a big fan of blogging, these are the things that show your people that you are winners and a winning organization. You set the culture of winning and that you are leaders.

However, the bigger the organization, the harder it is to set and maintain that kind of tone.

There isn’t a magic bullet for that. You try to talk; you try to manage by walking around. You do talk to people and try to solicit feedback.

You want to create that kind of culture. If you surround yourself with yes-people and put up this barrier of inapproachability, people won’t approach you. You’ll get that result. You have to be able to be approachable and accept and act on ideas. You have to let people constantly know that you are accessible and that you care about this. It’s showing people that you care. That’s the biggest thing. It’s the about the health of your organization.

Make yourself visible. People like people. I was recently at a conference, and we were talking about the social-networking phenomenon. I made the argument that it’s not such a new thing; it’s just different.

In the old days, in the small organizations in olden times before we had megacorporations, everybody knew everybody. We shared our lives together. Then we went through this phase in probably the 1920s or ’30s with the formation of big conglomerates that institutionalized everything — business and hierarchies and unions — and we kind of lost that touch.

Now, we have new tools that all us to get face-to-face with people, but you can leverage tools like blogging and video and e-mail to get your message out to people with a personal touch.

HOW TO REACH: Compendium Blogware, www.compendiumblogware.com; ExactTarget Email Marketing, www.exacttarget.com

Sunday, 24 February 2008 19:00

Collaborative effort

Denise Christy has a special formula for building a sense of teamwork among her senior managers. It’s centered on two main ingredients that form the backbone of her weekly interaction with her direct reports: eggs and coffee.

Each Friday morning, Christy and her seven-member managerial team at Humana Michigan meet at an area restaurant for breakfast. The team talks about in-house items of business, customer matters and trends in the local economy that might affect the $332 million Michigan branch of nationwide health insurer Humana Inc.

Christy, the president of Humana Michigan since 2003, says the breakfasts started as an attempt to stop a growing negative trend in her business. Her managers were becoming so wrapped up in running the business, they weren’t finding opportunities to connect with one another.

“I found I wasn’t getting enough downtime to speak with my direct reports, so we started to have breakfast with each other every Friday morning at 7:30,” Christy says. “We go to a little café, and it’s not a staff meeting, it’s just a cup of coffee and some eggs. We’ll tell each other what is going on in the marketplace; what are you hearing on the streets, what is going on with your customers? It’s an opportunity for the whole team to have a chance to dialogue about the business.”

Those breakfasts, she says, have done more for developing unity and camaraderie than any formal meeting she could ever hold.

There is still a time and place for formal meetings with an agenda, but Christy says any good business leader will never underestimate the power of casual banter over coffee and food. It is one of the most effective ways to not only allow employees to share ideas with each other but to also strengthen the personal relationships that will allow them to comfortably work together.

At Humana Michigan, Christy tries to make everyone feel like they are a contributing member of the team. She says a team-oriented environment isn’t something you can control from the head office. You must cultivate teamwork by getting out among your employees and setting the example.

Encourage collaboration

If you try to do too much by yourself, Christy says you’ll quickly learn the importance of a group approach in business. She learned that lesson the hard way when she once tried to shoulder an entire project on her own.

“I had one of the hardest, most humbling experiences when I tried to do this huge project on my own,” she says. “It clearly wasn’t the success it could have been had I brought my colleagues and others in the organization on board earlier and made them a part of the process.”

It gave Christy a new perspective on the old phrase, “No person is an island.” After that experience, she made it a point to place an emphasis on collaboration. The only way to emphasize collaboration is to communicate the need to collaborate to everyone in the company, and do it repeatedly.

Christy says the key to getting employees to buy in to a collaborative environment is to show each person that his or her contribution makes a difference to the entire company. That means you need to be able to take the wide-scope goals of the organization and drive them down to the individual level.

“You need to be able to personalize it,” she says. “Make sure people understand how important they are to accomplishing our goals and that you see what they’re bringing to the table personally.”

Though it’s time-consuming, Christy drives her message of team unity down to the lowest levels of the company with in-person engagement of her employees. If you put people first, chances are your employees will put people first.

Christy meets with her management team once a week over breakfast, and while that’s an important aspect to her weekly casual communication, it’s only the beginning. She says you can’t just stop with your direct reports; everyone else in the company needs to see you and interact with you on some level.

Christy has quarterly all-company meetings in which she brings together virtually the entire Michigan wing of Humana and makes herself open to questions. But she says some of the most effective engagement can happen on a much smaller scale.

“There are regular staff meetings and ongoing chain-of-command communication,” Christy says. “But then there are more simple forms of engagement, like gathering around someone’s birthday cake. It’s that personal inclusion and being a part of a team that is so important, and everybody sees that and is supporting each other. A lot of fun and camaraderie happens in that type of communication, and that’s important.”

Putting aside the persistent waves of e-mails and paperwork in order to speak with employees requires discipline on your part, but she says it comes back to setting the right example.

“Sometimes, you just have to put it aside,” she says. “People might walk into my office, and I can tell that they want to talk. I might be responding to something, but when I sense they need to talk, I shut down the e-mail, turn around, sit down and grab a cup of coffee.

“As a leader, you have to be tuned in to that. The most important thing as a leader is to be about not your agenda but your team’s agenda. Ultimately, that’s the real work that needs to get done. What you need to find out is what they need from you so they can do their work more effectively. Sometimes, it’s just 20 minutes with you to get you up to speed, share a problem or get your thoughts on something. The most important thing a leader can do is be present for that person, really listen to them and give them what support you can.”

Explain the big picture

Companies from coast to coast have spent untold gallons of ink printing company newsletters in which executives wax poetic about the virtues of teamwork and unity.

Newsletters and companywide e-mails are a great way to disseminate information to many people in a short amount of time. But Christy says there is no substitute for the example that a few well-placed people can set. If you can get even a few people to buy in to the message you are trying to communicate, it increases the odds that others will buy in, as well.

Once again, it goes back to the example you set. If you demonstrate and ask for the right things from your employees, she says they will usually give you what you are looking for in return.

At Humana, Christy wants her team members to always consider the broader picture of the state of health care in Michigan when making big-picture decisions. To gain that perspective, she asks that her managers serve on area nonprofit boards.

“I have a different approach from a leadership perspective,” she says. “I don’t think it’s about just coming to work every day. I think we have to be connected to the community.

“My giving policy is that if there is a nonprofit that needs financial support, I don’t necessarily give that underwriting support unless someone on my team is involved in that organization. The money has to go with the talent and the people so there is a deeper connection. I want my associates to be connected to the community, to understand the broader issues in Michigan, not just what is happening within our industry.”

Putting your employees in a position to gain a new perspective on how their work affects the larger picture in both the company and the community is a great enabler. Christy says it not only fosters a collaborative mindset, it also allows many employees to feel empowered to start team-based initiatives of their own. When you have people who feel enabled to take charge, they will find other people who have the same teamwork values, and a positive snowball effect can begin in your company.

“Many people spend so much time focusing on their day-to-day activities, they don’t see how it relates to the community at large,” she says. “With putting that policy in place, that emboldens them because they actually go to nonprofits, they get positions on boards, and they have their company’s support behind them. It really widens their eyes, and they start to hire talent and find resources that connect with similar values.”

Be persistent

If you have the communication culture and people to support a team-oriented environment, your job still isn’t done. You need to keep hammering away at the same messages and demonstrate the same accessibility that got you to where you are.

Christy says slacking off on your message once you’ve had a measure of success is possibly the worst thing you can do as a leader. Not only will weeds grow under your best-laid plans for teamwork, your employees will lose confidence in your ability to follow through on your messages.

She says it’s especially important when you are introducing new ideas or procedures to your team or if you are new to the job.

“You’re not going to go in and win the business fast,” Christy says. “It’s not a quick hit. Persistence is everything. It’s about everybody being consistent on their messages and staying true to their journey. Ultimately, long-term success is nothing more than building on previous successes and learning from failures you might have had. If you can keep everyone on the same page and learning from their mistakes, you become a better company.”

Getting a culture of collaboration to take root is a process of repeated teaching and learning every year. The best employees will open themselves to learn from their mistakes and will realize that just because they might have had some success, it doesn’t mean they have all the answers. Christy says underlying it all is a constant focus on the core values of your company.

“The success comes from the fact that the employees who will make you successful have learned from that journey, that they have understood that underlying it all is our mission, our journey, and as long as I stay true to that course of action, I can get creative, be innovative and allow us to have a long-term impact in the marketplace,” she says.

“One of my favorite customers is a Japanese-owned company. Through them, I’ve learned so much about this notion of Kaizen, the idea of learning from our mistakes, using them as that teachable moment — to be able to gain insight from it. If a mistake happens once, that is a learning opportunity. If it is repeated, there might be a deeper problem that we need to change. But the first place you go is to learn from the opportunity. That is a principle that serves every company well if they adopt it, and it starts with you sharing mistakes openly, being humble and learning. If you can do that, it takes the fear away.”

HOW TO REACH: Humana Michigan, www.humana.com

Tuesday, 29 January 2008 19:00

Laser focus

Günther Braun calls “vision” an artificial word.

The president and CEO of ROFIN-SINAR Technologies Inc. says companies often fall into the trap of creating long-range visions that state an overall objective but don’t give employees any idea of how they are going to get from here to there.

Braun says visions that state a grand five-year goal but are rooted in nothing more than ambition are visions that your work force will have a hard time latching onto. You might want to accomplish something major in the next five years, but he says the best picture to paint for your employees is one of manageable goals that can be accomplished in the short term.

Your job is to look at the big picture. But while you might want to give your employees a general idea of where you want to take the company, you have to give them the smaller picture first.

“The problem with a vision is that you have certain targets,” Braun says. “You can have it as a hard target or a soft target. A hard target can be financial, to go to the next step, to grow into a bigger company. The soft target can be creating a better reputation, serve the customer base in the right way, be more responsive. So I can’t really go out there and say what is the vision, and we have to be there in five years. I have learned that even if you do five-year plans, they do not always come true.”

ROFIN-SINAR is a $480 million laser systems manufacturer founded in Germany more than 30 years ago, but through acquisitions it has become a worldwide company based in Plymouth, Mich. With a wide base of employees in 30 business units throughout the world, Braun says he has learned that short-term planning and narrowly focused objectives are the best way to keep everyone on the same page and driving toward the company’s mission and goals. This is how he does it.

Build relationships

If you have operations in many countries around the world, you might dictate the policies by which each branch is governed, but you are going to have a hard time being the face of the company to every employee in every location.

That’s why Braun says you need to build strong relationships with the leaders in each of your markets, and those leaders need to have strong ties back to you and your management team.

“You have to have those relationships with your leaders in those countries,” he says. “You have to have a broad organization with the right people. On my side, I have an open-door and open-phone policy. I’m reachable whenever there are challenges, but we also talk with the communities in those countries. So it’s kind of a floating communication we have throughout the world.”

Having an open-door policy and keeping the lines of communication open with your leaders in the field is a good initial step, but passively awaiting communication from your managers is not enough. Braun expects his leaders to get their feet on the ground, in the offices and on the plant floor in every one of ROFIN-SINAR’s markets — a practice which he leads by example.

Braun travels approximately 200 times a year to meetings, exhibitions and presentations, attempting to foster a team approach to leadership wherever he goes.

“When you go out to your locations, people start to see that, ‘Our CEO, he wants to talk to me, he wants to see what is going on and address me on the special things we are doing,’” he says. “When you have a special topic you need to address, it’s good to take that as a chance to get out and talk to your people. When you get out, you get a flavor for what is going on in the working environment and so forth, what people are dealing with in various places.”

As you get out among your workers and begin to develop relationships with the people in each of your locations, Braun says you will begin to identify skill sets within your work force, and the people who possess leadership potential will begin to emerge.

With nearly 20 years of experience at ROFIN-SINAR, Braun has had an opportunity to get to know many of the company’s managers over time. He says there is no substitute for the experience you get from repeatedly interacting with your people over the span of years.

“People have grown with the company, so over the years, you get to know them,” Braun says. “Having a longstanding presence in your industry also helps you develop a reputation among the competition.

“When you are looking for new people, you tend to go looking into your industry, who is great, who is good, who could you look to when you have an open chair. You look through the network. In our case, on one hand, we have a good reputation within the industry, so people want to work for us. On the other side, there is a competition around the industry for the best people, so that’s how we try to find the right people. Sometimes you are successful, and sometimes you are not.”

Innovate with goals in mind

Along with “vision,” Braun is wary of another business buzzword: innovation. Braun says innovation is a word that is overused in many companies.

While Braun does say that innovation is an important part of his business, innovation means nothing if it doesn’t help the business in some definite way. That’s why when he encourages employees to develop new ideas, he also encourages that they do it in line with practical goals that can be accomplished in the foreseeable future.

“Innovation is important, but it’s also important that the innovations become new products,” he says. “It’s important that your innovations fall in line with what you can sell and what you can grow in your business. Just innovating does not help your performance. Sometimes, you need to develop a department that can truly think about just technology. We benefit a lot from our relationships with institutes and universities, where a lot of the groundwork for innovation is done.”

Braun tries to avoid ambiguity when defining innovation, a word that can mean many things to many people. Finding a sharp focus to define innovation can be a challenge.

“Innovation is a nice word, but it’s a stressed word,” he says. “Not everything is an innovation, but it can still be beneficial to the company. My thinking is, what is innovation? Is it when you change a little bit or when you develop a completely new technology?

“Innovation to me is when you create and develop something very new, something that was not done before, and it really opens up a new business opportunity.”

Braun says companies that innovate in a vacuum, apart from their customers’ wants and needs, are companies that will lose out to competitors who take their innovative abilities and apply them to serving customers.

“You can be innovative, but you can be a loser on one side because you cannot commercialize your innovations. The key is to have innovations, which you can translate into your normal business.”

Leverage talent

Whether your plans for your company are long term or short term, Braun says you won’t be able to realize those goals if the right people are not in the right positions.

If you value innovation as part of your company’s culture, he says you need to learn to identify innovative people, then put them in places where you can best leverage their creative abilities.

“You can see innovators with the people you have,” he says. “Of course, you can learn how to innovate a little bit, but there are always people who have new ideas — sometimes great, sometimes not great. It’s a type of human being you find, and I think experience teaches you that. You see how they react and behave, you might have people who are really sales-oriented or marketing guys always thinking of ways to change products or make it better. So you see them, then use those people in the right way.”

You need the involvement of your managers to put employees in the positions that will best help drive your company forward. At ROFIN-SINAR, Braun relies on his front-line managers to match talent to position.

“You have to talk to your managers and see if it might make sense to switch someone,” he says. “The worst thing is if you don’t address such questions, so the managers have to see the talents of the people and understand them, then come up with proposals to switch or whatever else could be done.

“You just have to see the potential in your people. You have to see where their passion is, what is driving them.”

Braun says what drives workers at ROFIN-SINAR is less about individual glory and more about making a mark in the laser solutions industry. While Braun says fair compensation and bonuses are important motivational tools, he doesn’t place a high emphasis on individual awards.

“We aren’t McDonald’s with an employee of the month award,” Braun says. “Our workers want a competitive base salary and the chance to earn additional money through successfully reaching targets, be they individual or for the company. If you give them an opportunity to share in operating profits or some kind of additional pay, then they are happy.

“I don’t believe in the employee of the month idea because how would you select such a person? What is the criteria? Because someone worked 20 hours more than another? Because they did better quality work? That’s the question. That’s why, at the end of the day, we are team players. We have individual incentives where if someone does something outstanding, maybe they get a one-time bonus, but we really emphasize the need to be part of the team before anything individual.”

HOW TO REACH: ROFIN-SINAR Technologies Inc., www.rofin.com