It was February 2009, and Enslin had just taken over as the president of SAP North America, the 10,000-employee, Philadelphia-based wing of global software solutions provider SAP.
The trouble was that Enslin was taking over the ship in the midst of a hurricane. The economy was faltering, and along with it, employee confidence was shaken as SAP swam against the economic current, attempting to build and maintain the customer relationships that supply the company’s lifeblood.
But in order to maintain a presence with customers, Enslin and his leadership team needed to ensure that employees across North America were not only on board with the growth-oriented vision and direction of SAP but also confident that the vision would be realized.
“I started doing town halls,” Enslin says. “I went to Chicago, Palo Alto, Dallas, Houston, and I just got in front of every employee with the same message and vision, just to let everyone know where I was. It was important that I got on the road, because when you try to communicate that type of message through a conference call, the dynamics of the interface are missing. People needed to see that I was absolutely sincere.”
Enslin needed to inform and encourage his employees, building their confidence in SAP’s future, and giving them the tools to help SAP’s leaders realize their vision: to turn SAP North America into a solutions-focused company that tailors its capabilities to meet customer needs.
Once he had the employees on board, he needed to connect with customers, discover their challenges and how to best construct SAP’s business model to meet those challenges.
“I had to show everyone that this is how we’re going to connect with customers, this is how they’re going to buy software, this is how we will be successful,” he says. “Internally, this is what we’re going to do to change, simplify our business model and do it really quickly.”
For Enslin, taking on his new role meant putting communication first. He needed to promote a message and stay on it and make sure that multiple groups with varying challenges and concerns were on board with him.
Connect with your employees
Enslin had to overcome a great deal of negative momentum when he took the reins of SAP’s North American operations. The economy was in bad shape, and employees were all too ready to believe the worst about the state of business, in general, and their jobs, in particular.
With that in mind, one of Enslin’s first and most essential messages to employees was to turn off the television, put down the newspaper and focus on the future, not the present.
“A lot of employees were really concerned about their jobs, about job reductions in the marketplace,” Enslin says. “People were concerned about where companies were going. There was a lot of negativity, so the biggest thing was really to have a positive approach to it, lay out how the plan was going to unfold over the year, lay it out in an articulate manner to the employees, and we did that from day one.”
Having a great communication plan is only the beginning when promoting a vision. Messages are made to stick in employees’ minds through hard work and repetition on the part of company leadership. And that’s exactly what Enslin set out to do.
In addition to traveling throughout SAP’s North American footprint, Enslin began to create interface opportunities with employees through periodic morning briefings and other frequent forms of messaging.
“Employees would see our messages when they first woke up in the morning,” he says. “Maybe not every morning, but maybe once a week, once every second week. It was all about clear communication from us as the executive leadership team, explaining the success we are having and how we’re facing our challenges.
“After three or four months, we got the message out, people understood our plan moving forward and started to understand how we were going to get there. From there, we needed to elevate our game. You do that by getting together with everyone on the sales team, vice presidents, managers, consulting, field leadership, and start to focus on an agenda.”
As upper management, vice presidents, managers and employees began to focus on the customer-centric vision, a dialogue began, and Enslin started to see the blossoming of another critical element in developing and promoting a vision: employee feedback.
Enslin wanted to personally gather feedback on his trips. He wanted to hear what employees were saying so he could harvest new ideas and correct misconceptions before the rumor mill could begin churning in earnest.
“The feedback was pretty incredible,” Enslin says. “As you’re on the road listening to employees, you start to break down pieces where you start to find the things that normally don’t show up on your desk. You start telling them why customers are buying in a different behavior and how we need to adjust. Once we got that type of feedback, we were able to make adjustments in a very short time. People were willing to give their feedback because they knew that action would be taken.”
When it comes to implementing your own communication strategy in times that are trying or uncertain, Enslin says that, above all, you need to have an unwavering focus on and belief in your vision. If you communicate your vision and strategy with confidence, chances are that confidence will rub off on your employees.
“First, make sure that they know your vision is rock solid,” he says. “Understand the reality of the situation, and the reality of the situation in 2009 was that people wanted to know the truth. You have to let them know the truth and explain to them the difficulty of the situation.
“It was an unconventional time. SAP America was growing at 15 to 20 percent; then all of a sudden the market changes.”
And when the market changes, your customers’ needs change. Which is why you need to communicate with customers in much the same way you do employees: buoying their confidence in your vision and strategy, creating a dialogue and opening feedback channels.
Connect with your customers
When you go to your customers, you’re really trying to get the pulse of what is going on in the markets you serve. Especially during challenging economic times, customers not only represent your financial support, they provide a wellspring of information on the condition of the market at any given time.
As Enslin settled into his role, he visited with customers and began to paint a picture of their evolving needs and what SAP could do to meet those needs in the coming months and years.
“I spent day after day listening to customers, understanding their problems and how they were trying to be successful,” Enslin says. “It’s just a matter of asking them over and over, ‘How can we help you?’” It’s getting from the customer’s vision to your vision, and to realize that, you have to move at incredible speed. You can’t become consensus-driven. You have to say, ‘We’ve made a decision, we’re headed in that direction, and these are the things we need to change in order to be successful. Once you do that and people start to see success, the rest will follow.”
In the months after Enslin assumed his post, he and his executive tea
m began to debate over the best way to interface with customers. It had to be effective, and as important, it had to be cost-effective.
“We had an internal discussion over what we should do. ‘Should we do this thing; should we save the money? Is it going to help our business? Are people going to fly to Orlando to go to an SAP conference?’” Enslin says. “It’s amazing what customers will tell you when you ask them.”
What customers were telling Enslin was that the world of business was changing with the economy, and SAP would need to adapt, as well. As the economy bottomed out, customers were more focused on cost-saving solutions. Now that the economy has started to rebound a bit, SAP’s customers are once again starting to look for innovative, creative solutions.
“You have to make sure that you’re adjusting your business model to meet your customers’ demands,” Enslin says. “That’s step one. When a market is growing, you’re probably more focused on innovation. Where we’re at now is that customers have seen enough of the efficiency, enough of the employee reductions and capital restrictions. We’re to a point where the profit-and-loss sheets are starting to look pretty good and they’re asking how do we innovate again. So we’ve adjusted our internal business model, and now we’re working with our customers to say, ‘OK, let’s innovate together.’
“What I’d tell other business leaders is listen clearly to your customers on what they need, and then you have to figure out how to adjust your business model.”
The larger your business is, the harder it will be to adjust how you do business. You won’t be able to react to every ripple and wave you encounter. So you need to prioritize what types of services you want to provide and what metrics and indicators will serve as your call to action as an organization.
“When you’re putting together a longer-term vision, it maps around a couple of areas depending on what kind of customer signals you want to go after, what solutions you want to bring to market and how you bring those solutions to market,” Enslin says. “As you’re pulling in the long-term thinking, you need to know how the support services will be structured to actually cater to customers in the future. That is around HR, your financial department, how your contracting process works and how you enable the marketing process with the Web. All of those processes have to be aligned in order to match your vision.”
In a down economy, you sometimes have to make short-term compromises with your vision and business model, recognizing the market’s limitations while still keeping your eyes on the long-term prize of growth and a rekindled culture of innovation.
“The first thing you need to say is, ‘In this quarter, we need to stabilize the environment, we need to go to market, the customers are going to be spending, but they’ll be spending less, and that’s probably going to keep occurring through 2009 and ’10,” Enslin says. “Once you have that in place, what you next want to look at are the longer-term things that you want to work on. For us, our customers are significantly involved in SAP, and they want a relationship with SAP that is a three- to five-year relationship.”
Ultimately, you might need to modify your definition of success in the short term, focusing on short-term goals with your customers and creating company benchmarks focused primarily on incremental improvement.
“There are some things, as you go through this, that are so important,” Enslin says. “One, how do you measure the success of your business? Employees are used to measuring success in terms of growth, but we changed the way we measured success in 2009. We started to articulate to our employees how many transactions we were doing as part of a quota, our customer satisfaction, our partner satisfaction. We started to articulate how we were investing in the future. Once employees see that you’re investing in the future of the business and gain a sense of confidence in that, it’s amazing what you can do when you have that positive flow in the company.” <<
How to reach: SAP North America, (800) 872-1727 or www.sap.com/usa
Kent Holtorf is a medical doctor. And like any good doctor, he wants to put the people around him at ease.
That’s not just his patients. That includes the doctors and staff members who comprise Holtorf Medical Group Inc., a franchisor of medical care practices that generated $12 million in 2008 revenue.
Holtorf, founder, medical director and CEO, says a good leader drives goals and promotes accountability while fostering a nurturing, empowering culture that encourages camaraderie among the staff and offers opportunities for achievement.
“I’m very lighthearted,” Holtorf says. “I never raise my voice. I tend to be a practical joker. It’s all because I think it’s really important to be liked as a CEO, and that needs to go all the way from the top down. Especially in a medical practice, the staff is kind of scared of the physicians. Doctors tend to be of a different personality style, and I really don’t fit that.”
Smart Business spoke with Holtorf about how you can use communication to set the tone for a positive work environment.
Lead by example. Telling people it has to be done this way and that way, and then if you don’t do it yourself, it doesn’t fly well. You’ll quickly find yourself with a very unmotivated staff. Another thing is to do things to motivate your staff apart from just pay. It’s very important to get people engaged in what they’re doing, believing in what they’re doing.
You can’t sell a product you don’t believe in, and in our practice and dealing with very difficult patients, you have to understand it and have it in your heart that we’re the best place for these patients and we’re helping so many of them. That kind of mindset can really get our medical staff through the long hours.
Value your team. You have to respect every single person and the job they do. That comes from the top down. Again, just being motivated by money gets you a very poor work ethic and everyone just kind of showing up to work each day. They have to believe that what they’re doing matters, that they’re doing a good thing, and they see the results. We do have an advantage in that we’re treating patients, so our people see those results directly. We’re not making pens or some other product like that where we’re disconnected from the result. If you can do that and hire people with good attitudes, you can help to develop the attitude in a staff where they want to go the extra mile and really care about the result. So it’s about finding the right staff and then fostering that mindset, and both have been very important for us.
Set standards, especially for managers. The managers need to be very accountable and organized. Our managers present me with a checklist every week about what they’ve done that week to improve a particular area that we were focusing on. One thing I really like is objective measures for performance. When it comes to reviews and this is very empowering for the staff is figuring out how they’re really measured. If you do that, you can give each person an objective measure against a goal or objective. If they have a list of those, they know what is important, and they know that we are looking at that. Many times, staff members can be doing the right thing all the time and no one notices. So what we do, and what is empowering, is we sit down once a quarter and tell each person, here is how you’re doing, ‘Here is how we’re going to rank you, and you’re going to rank yourself.’ We look at all the different points, and if there is any disconnect, if the staff thought they were doing a 10 job on something and we thought they were only doing a 3 job, we figure out what is going on. In that way, you really get a connection between what they think their performance is and what we think their performance is, and then they can better know what they need to do to perform.
To put objective measures in place, basically you sit down with managers and ask what do we want this person to do. You can say that you want them to do a good job and so forth, but really it’s how do we show them how they do each task, what would be the ideal. What you write down is all the points you can think of for each scenario that comes up. Then you grade them on, ‘Did they do it, or did they not do it?’
Get out of the office. In being humans, face to face is so much more powerful, in terms of meeting someone. E-mails are certainly good and phone calls save time. But really face to face conveys empathy for whatever is being discussed and the subtleties of the importance, as well. You can convey more in a face-to-face meeting, so I think those are important.
To engage your people like that, you have to make it a priority. Time is about making priorities. You have time for what you make time for. If you don’t block out time, it won’t happen, because there is always something else to do.
Delegating is another critical aspect of making time for communication. You can’t do everything yourself. Delegating is very key, and the key to delegating is to find a person who you know is going to be able to follow through and report back on whether something is being taken care of. If you delegate to someone who may do something or may not, you spend all your time following up on that. So in addition to delegating, you need to get reports back that allow you to follow up on the task at hand.
How to reach: Holtorf Medical Group Inc., (310) 375-2705 or www.holtorfmed.com
Matt Haddad’s company is disruptive.
It’s part of his business plan at Medversant Technologies LLC, a provider of IT solutions to health care companies.
“We are disrupting processes in order to make an industry more efficient,” says Haddad, founder president and CEO of Medversant, which generated $5 million in 2009 revenue and is projecting $20 million in revenue this year. “In order to do that, you need to motivate people to think out of the box, to face tremendous resistance to what we’re trying to accomplish within the client’s own organizational structure.”
To make that happen, Haddad and his leadership team need to set ambitious goals on both an individual and company level, communicate those goals and hold employees and managers accountable for reaching those goals.
“I challenge as well as apply a lot of patience and repetition in terms of the message, so that I understand that my management team really understands where we’re trying to go,” Haddad says.
Smart Business spoke with Haddad about how you can create an aggressively goal-focused organization.
Start with clear communication. The main thing is to really communicate your objectives very clearly to your team. Make sure everyone understands whatever that goal may be, because they have to understand where you’re trying to go. Then, if it is an ambitious goal, as they usually are with small companies trying to grow large, you need to create challenging expectations for each of the management team members. Don’t let them stay in a comfort zone. Create ambitious goals, but then have patience when those goals may not be met. Keep assisting and helping so that the company can get there and each company can achieve their personal goals.
Know your employees’ potential. You can’t err too far on the unreachable. I don’t think it’s possible. Most people don’t really know how much they can truly achieve because they’ve never been tested. When I’ve set aggressive goals for people, I’ve been surprised in a positive way much more often than I’ve been surprised in a negative way. My philosophy is that you hire good people and then you test them, give them goals that they never thought they could achieve. Generally, they’ll surprise you in a positive way.
A big mistake is to set goals that are too easy to achieve, especially in a growing business.
Give your managers authority. To climb Mount Everest or achieve what you’re trying to do, it’s really not one big goal it’s hundreds of small goals and directives that are achieved along the way. What I do is I sit down individually with my direct reports and come up with objectives that make sense in achieving the overall goal. This is done face to face and periodically.
If you’re setting goals right and the communication is clear with your direct reports, they can drive those goals down to who reports to them and so on. That is the way it really should work. Although I do communicate to the company generally in companywide meetings, in general, I don’t encourage too much direct communication with employees who don’t report directly to me. I try to support managers so that they can do their jobs. I try to not undermine their authority.
Through periodic company-wide meetings, you get a sense of how these goal-focused messages are being filtered down, what the overall sentiment is. If the communication is not where it should be, communication with management to address that message may be necessary.
Obviously, overall company performance also tells you something. Is the company moving forward, is it achieving its goals along the way, or is something not right? That can be a pretty good indication that perhaps the message isn’t flowing.
Be willing to adjust. You also need to remember that goals might need to be adjusted. In today’s world, you really have to be pretty nimble. Steering a company is like steering a ship. Sharp turns are not advisable, but small turns along the way may be necessary to get to where you want to go. Every once in awhile, you might have an event that requires a much different objective than where you started. But that is usually few and far between. Usually in the initial business planning process, if you’ve done it right, if you have a good understanding of the market, you probably have the right goal. It might just be a question of timing or continued commitment in getting to that goal.
I use a very collaborative process in that regard. I have lots of ideas, but I always test them against what the management team thinks. Generally, we come to a collaborative solution to the issue. It’s very important to get commitment from the team so that the turns can be made effectively.
When you’re talking about making those turns and what can and can’t be allowed to move, I don’t think anything is a ‘never.’ I have a pretty open mind when it comes to business and life, and I don’t think you ever say ‘never.’ You have to look at the environment and see what is there. In general, the original business concepts that you came up with, the core of your plan, that is probably valid. Things might happen along the way to persuade you that perhaps they are not, but generally speaking, it’s through failure that you learn of a better way to get to the goal that you want to reach. Generally speaking, you need commitments for goals and to not give up on them too soon.
How to reach: Medversant Technologies LLC, (800) 508-5799 or www.medversant.com
Henry Dabish and his staff have introduced Powerhouse Gym into new markets by creating relationships and brand awareness like any other large company. But there is a twist: At Powerhouse Gym, the market comes to them.
Dabish, president, CEO and second-generation member of the company’s founding family, makes Powerhouse Gym’s headquarters and corporately owned stores in Michigan a must-see destination for anyone who wants to own and operate a gym in any area of the world.
“We used to have an approval process where we qualified the individual or group we were working with,” Dabish says. “Now we do the introductions face to face. Over time, we’ll interact with the person or group via phone calls and e-mails, but we felt those initial introductions, where we really get to know who we’re working with, have been really important. So we handle those in person.”
It doesn’t matter where in the world you want to build a Powerhouse Gym franchise. You need to make the trip to Michigan to learn the company ropes in a hands-on environment and, most importantly, gain a firsthand knowledge of the company culture and values.
“Recently, we had a group that wanted to buy the franchise rights in Bahrain and Qatar,” Dabish says. “We had them come to the U.S. and stay here for about three and a half weeks. They trained in our corporate gyms, and we got to know them very well. We’re now very comfortable with that relationship. They’ve seen how we operate in Michigan and now they’re going to take that model into their market.”
It’s one example of a larger plan to keep the culture consistent throughout the Powerhouse Gym footprint. To build a consistent culture, first you need to clearly define what it is your company stands for. Then you need to find the people, both at the corporate level and in the field, who will embrace and promote that culture to other employees and to customers.
Dabish has had to develop and promote that consistency of culture as Powerhouse Gym which generated $288 million in 2008 revenue has expanded both domestically and around the globe.Look for businesspeople
Whether you’re recruiting people to help grow your business or people are seeking you out for an opportunity to further their careers, you need to find out not only if they’re a good match for your company, but if they’re even a good match to run their own business or business segment.
The first requirement on your list should be to find good businesspeople, but wrapped up in that statement is a great deal of meaning.
A good businessperson has the financial backing to make the endeavor a success and the willingness to embrace and promote your brand and culture. A good businessperson also recognizes the level of commitment that you will need to build and maintain the business in a new market.
“We have to make sure that we provide the right leadership, that the owners at each club have the right character traits and leadership qualities, that they’re going to provide the kind of culture at their health club,” Dabish says. “We try to do the same thing on the corporate level to all of our executive-level employees and create a trickle-down effect that goes from top to bottom.
“A lot of people as they’re getting into a business think that they can come and go as they please. But really owning a business is more responsibility than being an employee somewhere. You are the one who has to be self-motivated and driven, you’re the one who has to care about the success or failure of the business, you’re the one who has to hold your staff accountable and yourself accountable.”
As you’re getting to know a potential field-level manager or franchisee, you need to gauge their aptitude in dealing with customers, leading employees, managing finances and marketing to a new audience. The best way to do that is to turn them loose in a work environment for a few shifts.
Dabish gives all potential franchisees a test drive in a situational environment by having them work shifts in each of the different gym models that Powerhouse runs and franchises. It’s similar to the education Dabish received as a teenage employee working for his dad and uncle, who founded Powerhouse Gym in 1975.
“When I started in the business when I was 15, I did most of the jobs and eventually worked my way up to owning my own business,” Dabish says. “With that in mind, we like to bring new people to our corporate office and spend a few days with them, get them out into some of our different gym models so they can see how each of them run. We let them work a couple of shifts in each of our gyms so we can see them in action and so they can make sure it’s the right fit, something that they’re comfortable with.
“You want them to know exactly what they’re getting into prior to making the decision to get involved. That’s why you need to have every manager learning how to do pretty much every job and have every responsibility within a business.”
When possible, Dabish likes to promote from within. Internal candidates are already trained in your cultural principles and business model, which means capable internal candidates generally have the easiest transition into a management-level role.
It might not work in every situation. In some situations, particularly as you grow your business abroad, you might need to bring outsiders into your ranks. But you should still work to keep the talent pipeline stocked so that you can take advantage of the opportunities you do have to promote from within.
Dabish and his staff try to hire people who are overqualified for their initial position within the company. If the new hires excel in their initial position, Dabish and his team can accelerate their ascension through the ranks.
It comes down to finding a cultural fit first, then technical skills. Finding a cultural fit is often of greater importance than finding a purely skill-based fit. Skills can be taught; values usually cannot.
“Really the character and people skills need to be first,” Dabish says. “You need people who are good at working with and serving individuals, people who feel really good about themselves and are self-motivated. If you project energy, if you find someone who is energetic and motivated, having a good time and enjoying what they do, people can see that. It feeds into your business, and then into your customers.
“That’s why you want to try and hire a more qualified individual and put the time and effort into training them, make sure they are committed to the company for the long term, not just a six-month or one-year run. If you find those people that you’re willing to train and promote, that means you’re hiring the right people, people who are essentially overqualified for the position they began in. It gives you a better talent pool all around.”Reinforce the culture
Once you’ve hired the right people and forged relationships with the right partners who can help you grow your business, you need to continue to promote your culture through regular communication and interaction.
Dabish and his corporate leadership team promote the culture throughout the Powerhouse Gym organization through twice-yearly meetings that bring executives and franchisees together. Upper management reinforces the cultural principles of the organization and franchisees share what has been working at their respective locations as well as areas that need improvement.
In essence, it’s a giant information-sharing session focused on the culture and promoting best practices.
“The first half of the day is really our corporate office addressing everyone in attendance,” Dabish says. “Then we break up after lunch and have individual workshops where we share ideas and share best practices. It’s one of the ways we stay in constant communication with our network. If someone in Tampa has a new product or a new service that has taken off, if there is an exercise class in California that is working well, if there is a new sales promotion that really seems to work, we want to share it with the entire network.
“That is one of the main benefits of keeping everyone involved in a communication network. Everyone is able to stay connected with each other and with the corporate office. If you own multiple stores, management needs to stay in constant contact with the managers of those locations. If it’s a franchise situation like we’re in, you need to stay in touch with those store owners on a regular basis. The key is to maintain constant communication and keep networking with each other.”
If you have the opportunity to bring your managers together, whether in person or via electronic media, you need to make the most of the opportunity. That means having a clearly focused vision for the future and a process for how to achieve that vision. Without a clear focus, no one in the room will be able to focus their efforts in the right direction.
“A focused vision should be one of your main goals,” Dabish says. “You need to have your executive-level people focused on a common task. If you have a formal goal that you are launching with a common purpose and mission and you get your team to buy in to that purpose or goal, that’s what makes things work. People have to buy in to what you’re preaching. You have to practice what you preach in order for it to work.”
The final key aspect of focusing people on a uniform set of goals is to create a sense of familiarity among your company’s decision-makers. Dabish picked up an idea from some employees who used to work for the Ford Motor Co., and it’s helped build positive relationships among managers before they even sit down to talk shop at a company meeting.
“We have a welcome reception at our company meetings,” he says. “During those receptions, people get to know each other and put a name with the face. That way, the following day when we start to talk business, people have already gotten to know each other a little bit and have gotten a chance to speak with each other. We’ve been doing that for the past four years. It’s an opportunity not only for our owners to speak with each other but with vendors. And a lot of times, it’s the first chance our corporate office managers have to meet with people from other locations.
“You can get to know each other in a formal setting, but it can also be a great help to break out for cocktails or hors d’oeuvres in a more casual setting. Many times, that’s the best way to get to know the people you’re going to be working with.”
How to reach: Powerhouse Gym, (248) 476-2888 or www.powerhousegym.com
A business is mobile. And like any vehicle that has to get from point A to point B, it needs good sight lines for the driver.
Peter Ross, co-founder and CEO of Senior Helpers, maintains his good sight lines through communications with employees and franchisees of the in-home assistance provider for senior citizens, which generated $65 million in 2009 revenue.
“Line of sight in any organization is very important,” Ross says. “You do that shared vision and line of sight by constantly communicating those messages throughout the organization.”
Ross says the key to keeping your basic operating principles in front of your employees is to keep yourself in front of your employees. You need to get out of the office and engage your people in formal and casual settings. When in-person communication won’t work, use other communication methods at your disposal to keep the vision and mission out there.
Smart Business spoke with Ross about how you can keep your employees focused by keeping your communication focused.
Display the message. Messaging on all communication needs to be something you value as important, whether it’s mission, vision, core vales, tagline or any of those kinds of things. Whether you’re communicating in writing or electronically or the old-fashioned mail, you need to keep continuing to remind folks what that is. But it’s really all about reaching out to people and not assuming. I worked for a lot of Fortune 500 companies before I started Senior Helpers, and I was always amazed that the CEOs would basically walk around and ask anybody, ‘What is your vision, what is your mission, what is the most important thing for your department?’ This could be the person emptying the trash cans, let alone an executive.
I’ve always thought that was very powerful and that was good feedback to the department heads and the organization that everyone is on the same page. In this organization, I’m not dealing with thousands of people like I used to do. It’s a group of people that are very focused. The challenging part of our organization is that we have 300 offices around the country owned and operated by franchise owners. Unlike the days when I had offices that were basically managed directly by myself, now I’m working with franchisees who own the businesses. So in this case, you do need to constantly communicate, solicit feedback and test for understanding to make sure that everyone is on board with the message.
It doesn’t help if you have a message that no one believes in to start with because no one is going to keep that core value and take it to heart. That’s why I always look for participatory input upfront, so that I’m jumping into a pool that has water in it. But it’s a never-ending story with different levels of communication and different levels of acceptance. Do they buy in to the message; do they buy in to the strategy?
Repeat yourself. You have to do it often, and you have to do what I call, ‘inspect the expect.’ You can continue to mention it, but are they paying it lip service or do they get it? Unfortunately, for adults, it takes hearing a message seven times to actually get it. That means you have to get their buy-in initially and keep repeating it over and over, making it a part of your everyday encounters with your staff.
It’s making sure that you do review the mission and vision as part of meeting, as part of the go-forward strategy. We don’t just sit around and talk about the strategy all day, but we want to make sure that we’re reviewing it, that we’re talking about it is it resonating; are we living the values of the organization? You do that through action, but you also do it by ensuring that everyone lives those values, and make sure that it’s always mentioned and talked about whenever anyone is talking with any of our franchisees.
Know your audience. There is an overarching vision and mission for us as far as wanting to be the No. 1 home care provider in the world. Everyone needs to embrace and understand that, but the people on the ground level might not need what is behind every core value. They might not need to know what was the thinking process behind the vision ‘How do we make that vision live within the client?’ Those kinds of things are more geared to the people actually dealing in those business environments, like the owners and business consultants.
Understanding all the details might not be key to everyone’s success in an organization, but it is key that they understand the overarching vision and mission of the organization. The people on the ground level will need to live them every time they pick up the phone.
Be willing to change, to a point. Missions and visions aren’t in stone; they’re living and breathing things that change with changes in the markets and industry. Which is why it’s important that your people are well-grounded on the basics of the business that don’t change. That’s why you have to stay on your messaging. It’s not just one time.
The parts of your vision and mission that talk about your core values as an organization, those aren’t going to change. Those are going to be overarching. But, for example, one of our goals is continually improving our systems and support. We’re not just going to rest on our laurels. You can get more specific on those types of things when you’re communicating.
You are going to have the foundational core values that aren’t going to change, but then there are certain core values that are detailed to specific missions within the organization, which need to be modified over time. I don’t want to change the core values statement, but I don’t have a problem changing what’s behind it.
Business leaders use a number of adjectives to promote their communication cultures open, honest and candid are among the favorites.
But Arthur Hargate, the president and CEO of Ross Environmental Services Inc. a hazardous waste management company that generated $35 million in 2008 revenue would like to add another adjective: connected. And that, he says, is possibly the most important adjective of all. Before communication can be open and honest, you need to establish a real connection with your employees.
“You have to meet people where they are, and people have individual preferences as to how they want to provide and receive information,” he says.
Smart Business spoke with Hargate about how you can build communication by staying connected.
Q. What are the keys to being an effective communicator?
Let me start with the issue of listening. It’s really critical to make a connection with folks, and to do that, you need to establish a level of trust. They really need to understand that you have their best interest at heart. To get there, they need to feel as if they have an influence on you, because the communication is two-way. In order to establish those open lines of communication, you need be very open and honest and listen for meaning. You need to be interested in their welfare, and once you’ve established that, they’re willing to listen to you. But they’re not going to be willing to listen to you until they trust you.
Listening is undervalued, and I mean listening really hard for meaning with everyone with whom you interact. You have to make a connection, and I don’t think you do that until you demonstrate that you can be influenced by what someone is saying to you. People really turn off when you make them feel invisible, and not listening well does exactly that.
Q. What advice would you give about learning to become a good communicator?
You can definitely build the skills. Willingness is a little more difficult. It’s a process, just like any other process. I’m fortunate enough to have had an opportunity to be educated in that area, and I’ve found that you need to study the process. It does require thought, it does require study, it does require analyzing how specific and precise you’re being with folks.
It takes additional things like understanding body language to recognize whether you’re being understood. You as a leader are responsible for the entire communication process. You’re taking the responsibility to make sure that you understand where the other person is coming from, and the second step in the process is that you’re taking the responsibility to confirm that they have understood where you’re coming from. If you have two people in a room who are both approaching communication from this direction, you’re really going to hit the mark. Both individuals are taking 51 percent of the responsibility to make sure that they understand each other.
Those are skills that can be taught. It’s definitely a process; there is a lot of science behind it, many years of business management theory, psychological theory and understanding how people communicate.
Q. Can you hire good communicators, or do you need to groom them?
It’s critical in any business to have good communicators, and it’s certainly more critical as you go up the chain of command. The willingness to communicate is No. 1 when you’re trying to groom others. That comes down to a personality aspect finding people who really care about other folks, people who have the capacity to empathize. That’s tougher to teach. That goes to background, education, upbringing and your whole genetic code. If you are dealing with a person who hasn’t developed an interest in other folks and a desire to be empathetic, that can be problematic.
You can begin to identify good communicators in the hiring process. When I’m interviewing somebody, I ask a lot of open-ended questions and give them an opportunity to express themselves. Most of interviewing is getting folks to open up and talk about themselves. The people I interview, by the time they get to me, they’re going to be qualified. The skills and experience are going to be there, and by the time a candidate gets to me, those aspects are far less important than how they’re going to fit into our organization. That’s what I’m trying to assess, what is that fit going to be. A huge part of that fit is, can they communicate with other people [and] are they going to take the time to understand the people in our organization, our history, successes and challenges as an organization?
That’s the first step in being a good communicator. Understanding the environment and the people with whom you’re dealing.
Q. How do you make time for face-to-face communication with employees?
Face-to-face and one-on-one communication is always very effective, and especially in a small company, there’s no excuse not to make that a priority. That’s the best way to establish rapport and trust in all directions and, especially, the connection where everyone starts to realize that we all have each other’s best interests at heart. You make time for it because it’s important, so it’s a matter of discipline and not letting it slip down the list of priorities. I get a lot of help from my assistant and our corporate communications team. They know how important it is, so they help me make it happen.
How to reach: Ross Environmental Services Inc., (440) 366-2000 or www.rossenvironmental.com
Many companies become reactive when it comes to hiring talent. A position opens or a need arises, and the company’s leaders spring into action.
That approach isn’t adequate for David Becker. As the founder, chairman, president and CEO of First Internet Bank of Indiana, he’s built his company from a start-up to 50 employees. To achieve growth, Becker has taken a vigilant, proactive approach to finding and hiring the best talent.
“I’m a hands-off leader. I don’t get wrapped up in the details,” Becker says. “But as a general rule, the success of my company has been hiring and retaining very talented individuals from the get-go.”
Becker uses every meeting, every conference, even the occasional restaurant lunch, as a means of finding his next potential top performer. It’s an approach that is rooted mostly in a willingness to keep your eyes peeled and ears open.
Smart Business spoke with Becker about how you can find the next wave of top talent for your company.
Keep your eyes open. You consistently look for people. We don’t just wait until we have an opening. We’re always open to take applications from people. I probably talk to three, four, five people over the course of a month, whether we have an opening or not. You just want to find some good, quality people, have some resumes, have some folks on deck for when an opportunity comes around.
As an example, I was at a luncheon once, and there was a young lady who handled one of the most abusive customers I had ever seen in my life. He tore this young lady apart, just made a complete ass of himself. But she defused him, got him through lunch, everything was great, and I handed her my business card on the way out the door. I told her, ‘If you want to get out of the restaurant field, give me a call.’ I made a position for her the following week, and two years later, she’s running my customer service department. So you’re always keeping your eyes open, always looking for good people wherever they might be.
Recruit before you need to. Look for the people beforehand. You borrow when you don’t need to borrow; you look for people when you don’t need to look for people. You’re not just looking for a body. You’re looking for a person and a leader. That’s a constant job for me as a leader. Among our ranks, probably 70 percent of the people I’ve hired were gainfully employed at the time, and I took them away from somebody else. I met them through some association or some business. When we have an opening, I’ll go through my Rolodex of people I’ve met around town and make that inquiry. A lot of times, the best candidate is someone who isn’t looking for a job.
Hire self-starters. The biggest issue is self-motivation. They have to build that enthusiasm and do it on their own. You want a self-motivator, someone who has their own desire and push. We’re a pretty lean organization on a body basis, so we want fast people, quick thinkers.
I’ve always believed that you should hire an A-player, and hire them with an idea that they can take your job. So we want to get great quality people, cut them loose at the outset to do the best they can do. If you’re not hiring someone who could take your job, you’re not moving forward.
As we interview, one of the statements I make is the only constant we have around here is change. In something like the software industry, that’s always in play, but the banking industry has a reputation for being a little bit stodgy, kind of a 9-to-5 job. We don’t do that. We’re a pretty lean machine, we have constantly tried to re-innovate old practices, doing them differently. The hiring play is to find people who think outside the box, think creatively, everything is up for grabs. Never believe that you should do something just because you’ve always done it that way. We perpetually try to improve through change.
A lot of our new hires from over the years have come from referral. We have an internal recruiting program, kind of refer-a-friend, [and]that sorts out a lot of people who you might not want. It takes a special person to be the type you might want to work with. A lot of friends become enemies when you get close together. The employees themselves kind of weed out some of the players and really give us a great pool of candidates.
Ask the right questions. One of my favorite interview questions is, ‘If I’m the fairy godfather and you can do anything you want to do, what would it be?’ It’s phenomenally insightful. Some people would lay on the beach and read books all day. It would tell you that they’re not very self-motivated or very focused. If someone says they’d travel to a third-world country and build irrigation systems, that shows you they’re motivated to do things. I’ve had phenomenal answers to that question. My answer when I was in college was that I would race sports cars on the weekend and do photojournalism, going site to site, race to race. It’s intriguing, off the wall, and catches most people a little off guard. They know they have to respond relatively quickly, so they don’t get a tremendous amount of time to think. You get insight into their characteristics, their background and motivation.
How to reach: First Internet Bank of Indiana, (888) 873-3424 or www.firstib.com
It was mid-2008 when the U.S. automotive industry started crumbling around Yazaki North America Inc., the North American arm of global automotive component supplier Yazaki Corp. By mid-2009, both General Motors and Chrysler had filed for bankruptcy protection, and plant shutdowns, layoffs and bankruptcy proceedings were rampant among automotive suppliers, as well.
It was more than a downturn. It was an emergency.
“I’ve been in the business a long time, and I’d never seen a crisis so severe that even our customers were unsure of their future,” says Perry, who retired last month as Yazaki North America’s president and CEO. “They couldn’t even give us guidance as to what the next quarter or year would hold.”
Revenue at Yazaki North America dropped from $3.1 billion in 2007 to $2.2 billion in 2008. The loss of income necessitated cutbacks throughout Yazaki’s continental footprint. Approximately 25 percent of salaried employees were let go through layoffs, attrition and buyouts. Many other employees were affected in some capacity through plant closures and restructuring. That was on top of a corporate restructuring that was already under way when the economic crisis hit.
“Even with our revenues down, we still had to find the cash to restructure the entire company,” Perry says. “We were already in a mode where we were completely overhauling the business system so that we could have one integrated business system. We were in the middle of all of this, which was a major undertaking, when this high level of uncertainty hit the marketplace.”
It was instability piled on top of instability. The company wasn’t sustaining just economic damage. It was sustaining damage to employee morale, which if left unchecked, can damage or destroy a company’s culture.
Perry and his leadership team had to react quickly, both to salvage Yazaki’s finances and reinforce its culture.
The problem with downsizing is that what is good for your company’s coffers is most likely bad for your employees. Saving money means cutbacks, closures and layoffs. Employees generally don’t react well to any of the three.
Perry recognized that, so before he even talked to his leadership team about formulating a communication strategy, he sat down with them and formed a detailed plan for the company’s direction and explained the reasoning behind the decisions that would affect the entire company.
“Before you even talk about communication, you have to make sure you have clearly thought out the direction you’re going to go, the issues everyone will be facing and that you have all stakeholders on the same page,” Perry says. “It’s important that once you start the communication process, that everybody is aligned.”
The plan has to start at the top and work its way down. Managers at all levels of the organization need to have a say in the plan, so that each executive and manager can take a sense of ownership in the company’s future direction.
From there, corporate management can begin communicating with managers down the line and on to employees and associates on the lower rungs of the company.
“During any kind of crisis period, there are all kinds of rumors, so you can’t afford to have different and mixed messages coming from the different levels of management,” Perry says. “It’s very important that you clearly get the leadership team focused on where you’re going, how you’re going to get there, what this will mean in terms of any of the stakeholders in the company. After that, you need to make sure that you’re available, that you’re approachable, so that you can support any of the communications that go out.”
Perry started communicating the need for change via e-mail and voice mail. He left a personal message on the voice mail at every employee desk. His leadership team sent out memos outlining the need to reduce Yazaki’s structure for the sake of staying competitive. Follow-up written communication helped keep employees abreast of the plan as it progressed.
“We wanted to be sure that everyone always had more advance information if we were going to do anything in terms of concrete actions that were going to affect the work force,” Perry says.
It’s critical to keep people involved in the plan from the first steps. It’s one of the best ways to engage managers and employees and enable them to have their voices heard as the company is changing.
The bottom line is, even when you have to communicate bad news, it will make a lot more sense to your people if they feel like you have gone out of your way to explain the reasoning.
“If you get people involved in the development, they know what questions were asked during the development phase, how you arrived at the conclusion you arrived at, why you’re going where you’re going. Then, when you start the communication process, you have consistent communication throughout the organization.”
In order to stay visible and accessible, Perry uses the tried-and-true method of management by walking around. The term might be an overused business cliché, but Perry says it’s still relevant.
“It can be casual,” he says. “I eat lunch in the cafeteria every day. People can join me, or sometimes I just join a table of associates. It’s sort of an open forum. They can ask me any question they want, whenever they want. They can ask me in the cafeteria, in the hallway, in casual meetings, wherever they are. And through all of it, they’re always hearing the same message. And you can’t be afraid to answer tough questions.”
When hard times hit, your willingness or lack of willingness to candidly answer tough questions can go a long way toward either reinforcing or tearing down your culture. Your willingness to answer challenging questions — and your employees’ willingness to believe your answers — is rooted in how you conducted yourself before the crisis.
“Honesty and integrity are characteristics that are extremely important,” Perry says. “If you have built credibility within the work force, there is really no reason to be concerned about being available for answering the tough questions.”
Perry says you can’t have different policies for different situations. In your employees’ minds, either you are open and straightforward at all times or you’re not. And if you’re not, your integrity will suffer.
“You have to give the good news and the bad news,” he says. “You have to talk about where the company is going in the long term and the impact it will have on everyone. Sometimes, you’re not going to achieve what you would have liked to achieve. It all goes back to honest and open communication.
“Don’t give anyone the feeling that you’re holding back and hiding something because you’re afraid of the consequences. That’s not a position you want to put yourself or your company in. Employees sense that, react to that, and it takes away from doing the things that need to be done so that your company can survive and recover from the crisis.”
Build up your people
To keep your messages active and circulating in a challenging time, you need advocates throughout your organization.
They’re in there somewhere. You just have to know how to find them, groom them and empower them to keep your company together.
If you can create communicators throughout your company, it’s another way to generate trust between management and employees, even when an air of uncertainty is swirling around the organization.
“Identifying them is pretty easy,” Perry says. “If you walk around your company, you’ll find them. They’re the ones who speak up, who participate. They’re the people who others cluster around. What you have to find out is, are they working on behalf of the company or against it? You need to get to know them better before you can assess that.”
A leader doesn’t have to hold an upper-management title. When you’re trying to promote a new way of thinking in your company, the leaders are the ones you highlight as people who can create buy-in from the people in their division or department.
“One of the things I’ve learned over time is that you will find leaders at every level of the organization,” Perry says. “Leaders aren’t just those who happen to have a management title. They are the ones who really help keep a company together in bad times. Having those people in place and informed can really help to offset those few naysayers who just think the sky is falling all the time. If you have people at all levels who are saying positive things, it can help to head off an undercurrent of people who are saying negative things.”
Recognition — when it is genuine and warranted — is another key factor in building a positive mindset among employees during challenging times. Every win your company achieves is something you should promote and encourage others to promote. It doesn’t matter if it is an individual accomplishment, a team goal that was met or exceeded, or something in which the entire company can share.
When employees are hearing about nothing but cutbacks and downsizing, it is good to remind them that the company is still making positive strides. But you need to be careful in how you recognize individuals and teams.
“You need to really investigate the data in terms of the person and their accomplishment,” Perry says. “What you don’t want to do is give someone credit in front of the organization, and then realize that the work was actually done by other people. So you need to make sure you do that for all high-level recognition.
“But overall, recognition is positive. It’s a way to reinforce that you’re headed in the right direction. We always make sure that we’re talking about the good things along with the bad things. We talk about some of the positive changes that have been made, some of the advancements we’ve made by going through a particular issue or crisis, even if the outcome isn’t quite what we desired. You just have to be sure that the recognition you give people is well earned and well deserved.”
Perry’s people-first approach to crisis management has helped Yazaki North America weather the storm, though the company isn’t in the clear yet. Despite signs of improvement in the U.S. economy in the last quarter of 2009, the face of the U.S. auto industry has been permanently altered. Chrysler is now connected to Italian automaker Fiat, and the post-bankruptcy GM is far more streamlined than its previous incarnation, having purged some of its well-known brands, such as Pontiac, Hummer and Saturn.
Perry says any normal amount of contingency planning couldn’t have totally prepared Yazaki or its employees for the disaster that befell their industry in the past 18 months. But it doesn’t mean that planning and preparation didn’t help Perry lead his company through the minefield.
“We’re still in a mode where the future is uncertain,” Perry says. “It’s not very clear how long the recovery will take and in what form, which means we still have to adapt. That’s why you always need to be planning. Any company that isn’t planning has a real problem. You can’t just react to whatever happens.
“In a major crisis, the bigger issue is, how do you react? How do you react in a crisis that wasn’t anticipated? Do you stay true to your values or react in a way that makes people think you’re panicking? As a leader, you need to make sure that your people know that even in a crisis mode, with very uncertain times ahead, the company is staying true to its values and is doing everything possible to care for its employees.”
How to reach: Yazaki North America Inc., (734) 983-1000 or www.yazaki-na.com
Danny Wade says it’s one of the hardest things a leader can do. But it’s also one of the most necessary: Sometimes, you have to show that you’re human.
You might think it decreases your employees’ confidence in your leadership abilities when you step up and tell them that you don’t know something or that you were wrong about an idea or initiative. But the president and chief operating officer of Goodman Networks Inc. — a network solutions company that generated $221 million in 2008 revenue — says it can actually do the opposite. Admitting that you don’t have all of the answers shows your team that you’re willing to admit fault, seek input and continually improve yourself as an executive.
“One of the things is that organizations need to see their leaders willing to accept and acknowledge when a decision they’ve made may have gone in the wrong direction,” Wade says. “It makes you more human and relatable.”
Smart Business spoke with Wade about how you can use self-evaluation, feedback and criticism to better your leadership skills.
Learn from failure. Self-evaluation is one of my strengths on a personal level. I am the youngest of 10 boys, so I had nine older brothers, which tends to put you in a more humble position. And I have just been the type of person who steps back and truly looks at myself and what I’ve done and decisions I’ve made.
I’ve told the organization numerous times that I learn more by my failures than my successes. By analyzing our failures and determining where we went wrong is how we truly improve in our personal lives or our professional lives. So I do a great deal of introspective thinking and putting myself in other people’s shoes, seeing how they perceive things. Those two traits and characteristics make for a better environment in an organization. It shows employees that this is leadership that is truly going to work with them to evolve and get better versus being set in your ways and driving things down the way they always have, not making adjustments along the way.
It’s a balance, because on one hand you want to use the methods and the tools in the past that have made you successful. But the problem is that you can’t bring everything you’ve done in the past into different environments. As you come into a different environment, you have to know how to be able to adjust, how to tweak yourself so you can drive the organization to achieve optimal execution. The success is in how the organization performs, not how we as leaders perform.
Encourage feedback. I tell everyone in my organization to come talk to me about anything you want. Just do it in a professional, nonattacking, nonthreatening manner. If you do that, I’ll listen to anything you have to say.
You can be argumentative with me as long as it’s done tactfully and professionally. You can tell me that you think I’m not moving in the right direction, express why you think it’s wrong. We’ll have a conversation about it, and if you have an influential message and can sway me to some degree, I’ll accept that. If not, we’ll maybe agree to disagree or I’ll sway you.
You have to allow people the opportunity to have their say. If you give people the opportunity to get stuff out in the open, it cuts down on rumors and it cuts down on back-door conversation. It ultimately cuts down on people getting distracted. If the things on your employees’ minds don’t involve how they can be successful and how to better serve the customer, if they’re focusing on how they felt they were treated incorrectly, you’re not getting the best performance out of them. So you have to be willing to let people share things and you have to be willing to listen to some criticism. Sometimes you learn something from the criticism.
Stay close to the ground. Some-times leaders get too far away from where the rubber meets the road in the business, sometimes feedback has to go through so many layers that it can’t reach you. So it’s critical to get that firsthand feedback from your people that are down the ladder, doing the tactical jobs. You really can learn a lot from them.
Keeping feedback channels open has been a big challenge. There is no one model that I have been able to uncover that says, ‘This is what you do.’ It’s a matter of making sure you keep yourself tied to what is going on in the organization. You have to have very consistent and formal communication with regard to what is happening inside your business and in your distributed markets.
We try to spend a lot of time and focus on how we get that information up to the executive level, so that as executives, we really understand what is happening.
Be willing to adjust. You make adjustments by constantly looking at how things are performing and executing in the business. If you see something not making progress or trending in the right direction, you’re evaluating what the root cause is. If it’s something we can control or something we initiated, we go back and adjust.
Maybe you picked the wrong person for a role, someone who is not following through, you have coached them and worked with them, and you just need to accept that they are the wrong person in the wrong role. If there are tools and systems that got implemented incorrectly, you need the commitment of resources to correct those. The tweaking is that you’re constantly looking at whether you have the right people in the right roles — are they executing and trending correctly? Do you have the right environment for them to be successful? If not, you make the appropriate changes.
How to reach: Goodman Networks Inc., (972) 406-9692 or www.goodmannetworks.com
PETCO Animal Supplies Inc. was becoming a victim of its own momentum.
It was 2004, and Jim Myers had just taken over as the CEO of the nationwide pet supply store chain. The company had achieved tremendous success, experiencing significant growth on sales and earnings in the 1990s and early years of this decade.
PETCO was in the right spot at the right time.
“People were really starting to humanize their pets, and our initial success came from being innovators and creating ideas around that,” he says. “I think we were the first to allow pets into the stores, the first to have adoptions of animals in the stores. Almost all the elements of what is now the pet superstore experience are things we initially tried ourselves.”
But as PETCO vaulted into the retail stratosphere, cementing itself as a giant in the pet supplies industry, a new problem sprouted: The spirit of innovation that had built PETCO had been choked off by a companywide desire to not mess with success.
“What developed in our organization was a fear of making change,” Myers says. “It was working so well, the message down through the organization became ‘Don’t change it, it’s working.’ That stifled innovation.”
While PETCO stayed on its treadmill, competitors closed the gap, expanding their retail arsenal to offer many of the same products and services PETCO offered.
If PETCO was to maintain its standing as a pacesetter in the pet supplies business, Myers knew he needed to rekindle the innovation fire within his employees and get his company back to the cutting-edge thinking that had set it apart from the competition to begin with.
“It was really time to shake up the thought process and bring some more risk-taking back into the organization,” Myers says. “We made it a personal challenge to come up with the next innovations.”
Build a message
To reawaken an innovative mindset in his employees, Myers needed to tweak their collective thought process.
Over time, the company had rested into a comfortable groove of going through the same motions each day. Employees had been coached to concentrate on their own tasks and leave the big-picture thinking to the administrators further up the ladder.
That type of thinking can make for an efficient organization but fails to stimulate ideas. With that in mind, Myers says he needed to build interest in innovation by showing employees how their ideas and their work could impact the company as a whole.
“We started really encouraging individuals to view their jobs as not just work but that they are each an integral part of what we do as an organization,” he says “They make it easier for our customers to take care of their pets.”
With a work force of approximately 22,000 in nearly 1,000 locations, communicating that message was more complicated than bringing everyone together for a company meeting. Myers and the company’s leadership team needed to cascade their messages across both geographic distance and administrative levels. And they needed to figure out a way to prevent the message from losing steam as it cascaded away from its corporate-management source.
The first step was to engage the company’s top managers. To get all of the primary decision-makers on the same page, Myers instituted a monthly conference call for the top 250 managers and executives at PETCO.
“Every month, we review how we did as a company and the near-term objectives for the upcoming period,” he says. “We consistently use this forum to talk about the dimension of each of our leadership principles and providing solutions for the customer.”
From that central meeting, communication needed to reach all the way down to the associates who work on the sales floor at each PETCO store — and the associates on the lowest rungs of the company needed to take the message of innovation and new ideas to heart.
The large-scale communication strategy focused on two principles: Keep it simple and grab employees’ attention.
“In today’s business world, sound bites are really important,” Myers says. “That is why we promote each of our basic organizational elements in a way that they can be easily remembered as concepts by themselves.
“We hold a leadership summit where we bring all the general managers in charge of every store together in one place, and spend a couple of days together. We go through some in-depth discussion on our basic principles, some tactics and training on how you bring these things to life for your associates. From there, they bring it back to their stores and have your own store huddle and relate the short-form version of what you worked on at the summit.”
Depending on the size of your company, it can take some time for a philosophy change to take root with every person. But if you can involve management at each level, you can help the message cascade more quickly and efficiently.
“If you can do it this way, the whole company feels like they’re touched at some level with the message,” Myers says. “There is no silver bullet, and no easy way to do it. The way to do it is to be consistent, be regular in your communication and ensure that you have a plan as for how that information will filter down through the organization.”
Innovate within a structure
Myers had to walk a fine line as he rekindled his company’s innovative spirit. While he didn’t want PETCO to maintain its status quo, he also didn’t want to drift so far into new territory that the company no longer focused on the products and services that had become its calling cards.
Innovating is good for a company, but innovating without a structure and set of goals can become a destructive force to your company’s vision and mission.
Myers met the challenge by communicating PETCO’s foundational principles of pet care and customer service as he was spurring an innovative mindset. In addition, he attached employee incentives to the company’s annual goals.
Myers didn’t want to hinder new ideas, but he wanted to create a culture in which employees and managers at every level of the organization are held accountable for setting personal goals that fall in line with the company’s overall goals. Within that structure, employees could innovate with the same targets in mind.
“We set specific goals for performance each year, and we have a program that acts as a repository for that,” Myers says. “It starts with me and our senior executive team. We sit down and lay out our financial plan for the upcoming year and all the various elements that will be required for us to be successful. We embed personal goals and company goals in each of our performance objectives.
“The system allows you to cascade that throughout the organization. My goals are cascaded down to the store level, so that everyone knows about them, and store-level goals are rolled up to organizational goals. By demonstrating personally that you start at the top by setting those goals and those goals are going to integrate with achieving the company goals, it sets a strong example for the rest of the organization.”
Personal goals at PETCO are linked to the company’s rewards plan, creating another connection between innovation and company goals. Half of an employee’s year-end bonus is based on the extent to which the company achieved its goals and half is based on the extent to which employees achieve their personal goals.
“In addition, halfway through the year, you have to meet with your manager as a kind of check-in,&#x
201D; Myers says. “At that meeting, you go over what progress has been made against the goals you’ve set for the year. It might also be a case where you have to adjust your goals if some external things happened that made the goals less likely. You don’t want to set goals that can’t be reached.”
Building innovation into your company’s collective mindset is a constant process of education, reaffirming, funding and gathering feedback. That’s why building a system for implementation is so critical to success.
“You can’t just say, ‘We need innovation,’ and just sort of hope that it bubbles up somehow,” Myers says. “You have to put money in your budget for trying new ideas and develop a process for submitting new ideas. You embed the process and then fund some of the ideas that match your overall goals. Then you have to share with the organization how it worked or didn’t work. After that, you have to solicit recommendations for future areas in which you can innovate.”
It also helps if you can maintain an open-minded approach when you’re soliciting and vetting ideas. You have to accept that there might be different ways to accomplish the same objective, and the way your company has always done it might not be the best way.
“As a leader, you need to have a personality that allows for innovation,” Myers says. “By that, I mean the idea that you can try different things at various levels of the organization. You need to realize that it’s OK to do things a little differently in an effort to find a better way to accomplish the same things. You’re not setting new objectives, you’re setting new approaches and new ways to better satisfy those objectives.
“With that, it’s OK to have some failures as you try new ideas, because you have to find out if they can be proven or not. You do your best to make sure each idea is properly vetted, but sometimes ideas fall short of expectations.”
Test new ideas
PETCO’s renewed focus on innovation has helped keep the company thriving (it generated more than $2 billion in 2008 revenue) in spite of the economic downturn of the past two years.
PETCO’s success has much to do with its ability to keep producing fresh ideas for employees and customers. But there is one more wrinkle that Myers and his staff have to deal with: how to get those ideas from the drawing board to the sales floor.
Once you give the thumbs-up to a new idea and green light it for rollout, it’s usually better if you can get a sample-sized result before you implement it throughout your company’s entire footprint. That way, if miscalculations are made, the effects won’t hurt the entire company.
Myers has set aside regions of stores for new product, service and policy testing. If the reception and results are positive, PETCO will roll out the new idea to larger regions until it takes effect across the entire chain.
Throughout the rollout process, Myers and his leadership team are frequently checking the new idea’s progress and gauging how well it is being received via feedback.
“You don’t just roll a new concept out to 1,000 stores and see how it turns out,” Myers says. “You take some small samples, learn what the outcome is there, what the challenges might be in implementing that new direction, and be sure you keep communicating with everyone on how to overcome them and how to avoid the pitfalls.”
If an idea is a success, it will begin to sell itself as people throughout the company start to buy in.
“More often than not, you find someone who has been a success with what you’ve just tested, and you let them be a promoter of change with the people they work alongside,” he says. “That one-to-one communication makes the new idea more personalized, and the more personalized you can make the experience, the more receptive people will be to the idea, and the more they will believe that it can be successful.”
How to reach: PETCO Animal Supplies Inc., (888) 824-7257 or www.petco.com