Tom Richmond isn’t the type of person who can just dive into a book without knowing anything about it. Instead, he has to take a gander at the front cover and read the back cover before he decides to invest his time. He’s the same way when it comes to problem-solving in the business world as general manager of children’s toys manufacturer The Little Tikes Co., which posted more than $100 million in 2008 revenue.
“I’m a problem-solving-oriented person,” says Richmond, who is also executive vice president of MGA Entertainment Inc., Little Tikes’ parent company. “My natural tendency is to go in and try to fix the problem.”
Richmond has to explain to the person bringing him the problem that he isn’t trying to do that person’s job if he asks a lot of questions about the problem.
“It’s important for people to understand that so they know that when I am probing and asking questions, it’s because that’s how I think,” he says. “That’s how I process information. If you understand that, when I dive in and I’m asking questions … and I’m looking for a solution, it’s because that is how I think. That can be interpreted as a lack of confidence. It can be interpreted as, ‘I guess you don’t think I’m doing my job or I didn’t do my homework and that’s why you are asking me all those questions.’”
Richmond says explaining yourself to the people you work with will avoid those types of miscommunications.
“I tend to do that very casually because that’s the way I am,” he says. “But, whether it’s done formally or whether it’s done casually, helping people understand you helps them understand how to manage you because management goes both ways. You’re managing people; they are managing you, too.”
Here’s how Richmond manages by explaining himself and talking to people at Little Tikes.
Talk to people
Richmond wants people to come to him with their opinions and ideas. But for some employees, approaching the boss can be a little intimidating. Richmond takes it upon himself to walk around and talk to employees, but you have to take it a step further. You have to be open with them and encourage them to speak up.
“Someone is probably not going to tell you that your company is really screwed up the first time you meet them,” he says. “But if you open the door to, ‘I’ve always wondered why we did (that) this way because it seems silly to me. What do you think?’ Then you get an opinion and it opens the door to bigger issues. That creates a comfort level where people will come to you more and talk to you more.”
But don’t make it seem like walking around is an orchestrated event you planned because employees will see through it.
“It’s more of an openness of meeting, greeting and sharing, and then seeing what comes back in return and building on it,” he says.
If you are going to try and walk around and talk with employees more, you will get some tough questions you can’t answer. When you’re put on the spot, it’s OK to say you don’t know something, but make sure you get back to that person when you find out the answer.
You will also get questions you simply can’t answer because they are asking about confidential information. In that case, just be honest.
“I just come out and say, ‘I can’t tell you that. It’s confidential information. It’s something that’s company policy that we don’t share,’” he says. “People respect that. People understand that there are things … that you’re not privileged to divulge.”
If you are asked a question that you can’t answer, but you know the answer isn’t favorable, don’t lie or mislead.
“I don’t give comfort where comfort isn’t due,” he says. “In other words, if I knew in my heart this guy is going to be out of a job, I’m not going to stand there — I might not be able to tell him exactly — but I would just tell him, ‘Look, it’s something I can’t discuss with you right now.’”
However, if you are presented with the opportunity to dispel a rumor, you should take advantage of that opportunity.
“If it was something that we were not evaluating that was not on the radar screen, I would make the extra effort to explain that,” he says. “‘Look, if this is what you are worried about, I can’t tell you specifics, but if you’re worried about whether this will impact you in the area that you are working in, I can tell you it’s not going to.’”
Whether you’re answering a tough question or just making conversation, remember that each person you speak with is different from the next.
“(It’s) understanding that not every individual fits into a specific box — their life experiences, their talents, their hobbies, the things that they do outside of work, quite often are things that could be invaluable to a company,” he says. “But if you never ask or you never tap that talent, then it’s a great loss.
“The one pearl of wisdom I would explain to any other fellow manager is that if you understand that every human being is a discreet individual who has unique and different life experiences — if you can respect an individual from that and understand them from that perspective, you are going to be a great manager. Because, at the end of the day, everybody is different.”
Get out of the gray
Richmond finds some of the roughest times are when he is stuck in a gray area on a decision, and that’s when it’s even more crucial to explain yourself and why you’re asking questions.
“Most of what senior managers deal with is all the gray stuff because everybody else is hopefully doing the black and white,” he says. “So you are always in the gray zone. That’s when you really have to ask yourself, ‘What is the right thing to do?’”
When facing an especially difficult problem, Richmond will make a list of pros and cons and ask other people involved to make a list, as well. He then compares his list with theirs and usually finds that 90 percent of the lists are similar. It’s the difference among that 10 percent of lists that takes some discussion.
To get to the right solution, Richmond wants all involved parties to explain themselves, including himself. If you explain yourself, you will get more buy-in for a proposed solution.
“When I started (in business), it was whatever the boss told you to do, you did,” he says. “You didn’t ask questions why. You just went and you did it, even if it was stupid. Today, people want to know why, and if you don’t have a good reason why, they’re probably not going to do it. Or they’re going to tell you they’re going to do it and then they don’t do it.”
Having to explain yourself challenges you to be a better leader.
“People are challenging your position and you have to defend it,” he says. “People are just not going to blindly obey. Now you have to defend your position. Many times you come back and say, ‘Maybe they were right. If I don’t have a good argument for doing this the way I want to do it, then why am I asking someone to do it.’”
Explaining the “why” behind a decision or p
osition also helps people deal with the outcome more.
“They don’t have to like it; they don’t even have to agree with it,” Richmond says. “But at least they have a reason, at least they can go away and say, ‘I don’t agree with it,’ but at least (they) understand why I made that decision.”
Before Richmond presents a position regarding a serious decision to someone, he also assumes that he will be challenged.
“I defend in my own mind that challenge,” he says. “I say, ‘OK, let’s say someone is laying this issue on my table, how would I receive it? What would be arguments to the con be, and how would I defend them?’”
Richmond challenges his team to do the same.
“If you are going to bring me a problem, be prepared to propose a solution,” he says. “It may not be what we are going to do — at least have thought it through to the point where that’s what you get paid to do. You are a manager. Come to me with a problem and a solution, then we will discuss the solution.”
Another way to get help if you’re stuck in a gray area is to ask for assistance outside of your company, because it may give you an idea you never thought about. At a previous company, Richmond was at a meeting with the CEO of a multibillion-dollar company, and he explained his problem to the CEO. The CEO said he had the same situation early in his career and gave Richmond some advice that hadn’t crossed his mind.
“He said, ‘We sold the business,’” Richmond says.
While it was completely out of left field, Richmond took the idea back to his team and they were able to find some solutions from the suggestion.
“We sat down and brainstormed, ‘Well, what would that look like? Let’s say we did (sell), what would the new folks do coming in? They’d probably do this, and they’d probably do that,’” he says. “Then we said, ‘Well, if that’s what they’d do, why wouldn’t we do that now?’”
And don’t be afraid to reach out to another leader in a different industry to get ideas to help get out of that gray area.
“I really enjoy talking to people, who are in similar positions in totally different industries,” he says. “I’ll talk to anybody. The president of Akron General — I haven’t (talked to him), but I’d like to (and ask) ‘How do you run a hospital? What do you do when you run into this situation?’ You get a totally different perspective in a totally different industry. It’s amazing how similar the problems and issues are, but sometimes unique solutions come out because you are dealing with the different population, you are dealing with a different demographic, you are dealing with a different structure. A wealth of knowledge can come out of that.”
Though you might not get the advice you expect to hear, asking for another opinion is a simple way to help solve a problem.
“It’s amazing how open people are when you ask,” he says. “Generally speaking, everybody wants to help. I think we do want to help each other. Generally, you get it. It might not be the advice you want, but you’re going to get the advice.”
How to reach: The Little Tikes Co., (800) 748-2204 or www.littletikes.com
When Bob Dutkowsky arrived at Tech Data Corp. as CEO in October 2006, he was joining a company that lost $97 million in fiscal 2007.
But he didn’t see a company that was in shambles. Instead, he saw an organization with plenty of potential.
“The fundamentals of the company were very strong,” Dutkowsky says of the technology products distributor. “The core capacities of the company were very strong, but I think the company we just kind of lost our way in some regards.”
His solution wasn’t a new vision for the $24 billion company; it was a new game plan.
“I’m not a big fan of a vision,” he says. “I’m much more of a fan of a game plan or a strategy. I think visions are nice, but people can’t necessarily see how they can contribute to the success of a vision. It’s too nebulous versus the game plan.”
The game plan centered around three things: to acutely focus on execution, to figure out how to diversify the business into other areas where the company could add value and to use innovation as a way to differentiate themselves in the market.
“We have to sell and deliver $70 million of products every day as a company,” he says. “Our average order size is under $1,000 so you can see how crucial execution is. We have to bite that $70 million apple in little small chunks repeatedly over and over and over again to be successful as a company.”
To get the game plan to work, Dutkowsky didn’t have to change what the company did. He had to identify the people in management that could help him implement it and empower employees to execute it.
Identify the best managers
Because Tech Data was the fourth company that Dutkowsky joined as CEO, one of his talents is to be able to come into a company and relatively quickly size up the capacity of the business and the management team.
“You really look very carefully at the domain knowledge that people have,” he says. “Do they really understand the business; do they bring expertise to the business? You look carefully at their leadership capabilities and you’re really interested in, ‘Do they match up with what your leadership philosophy is?’”
You then have to look at their pure leadership skills.
“Have they been able to scale up to that capacity and that requirement of the job?” he says. “When I joined Tech Data, what I found was the vast majority of the people on the leadership roles where very capable and had all of those skills and requisite skills that I was in. So the vast majority of them stayed in their jobs.”
To find out if you and another executive are on the same wavelength, you can’t just speak with them a few times and then make your decision.
“Really, what you do is you watch them in action,” he says. “You sit in staff meetings or team meetings and you try not to say anything. You try to just watch how the process unfolds and watch their leadership skills, competencies and core beliefs in action. You don’t see that the first day. You see that through a period of observation, and then you make a determination.”
You can’t always expect a perfect fit, which was the case with Dutkowsky when he was evaluating executives.
“But, I believed that if I could work with them, I could help them see my way that the company should be operated,” he says. “They were flexible and smart enough and skilled enough to migrate their mode of operation to more of the way I would like to see the company run.”
Getting them to migrate to your mode of operation may seem like a huge challenge, but Dutkowsky says it’s much more difficult when you join a company that is reveling in its success. When you take over a company that isn’t doing well, you need to jump on the opportunity and take advantage of managers who are looking at things with more of an open mind.
“In Tech Data’s case, where we lost money, people were very interested in finding a different way,” he says. “So, there wasn’t a lot of resistance to thinking about the business opportunity differently.”
Once you have chosen the people you want on your management team, you still have to watch their actions to monitor if they have bought in to your philosophy.
“It’s really easy to have people tell you what they think you want to hear, especially in the beginning,” he says. “When the new guy comes in, it’s really easy for the existing team to kind of mimic back the ideas and direction that the new executive is articulating. But, what you really watch for is the actions.”
For example, if you want to find out if the sales executives have bought in to your philosophy, go and make a couple of sales calls with the salespeople and see how they deal with the customer.
“It’s very simple to see what people really believe in the end,” he says. “It takes a little time sometimes to see it. But you can pretty quickly figure out what other people have the moral and ethical backbone that you demand that they have.”
Turn employees into believers
Dutkowsky knew the company had a lot of potential, but he had to get employees to see what he saw to make the game plan work.
“That’s a process that never ends,” he says. “It’s not like you call everybody in a room and say, ‘OK, today we’re here and tomorrow we’re going to be there.’ It doesn’t work that way.”
You have to do that in much smaller baby steps and avoid using brute force to get buy-in
“There are a lot of executives that come in and join companies and make changes with brute force,” he says. “I’m not a big fan of that. You need to get buy-in from the organization as opposed to telling them what to do.”
A better method is to use communication to empower employees and establish buy-in.
“If there’s one place where I tried to go overboard, it would be on the idea of communicating,” he says. “Because, once you communicate to people what you think is important and where you think the company needs to go and where our strengths and weaknesses are, then they begin to see where the out-of-bounds lines and where the goal line are.”
Dutkowsky has an all-employee quarterly meeting where everyone on campus comes in a room and talks about the company’s performance, reviews initiatives and recognizes the best employees of the quarter.
“You figure there are 1,000 people in a room and then at the end of that you say, ‘Now are there any questions?’ and no one is going to ask a question in that an environment,” he says. “But, you reinforce behavior with the way you recognize the employees of the quarter, and you reinforce the importance of execution and diversification in the way you talk about the performance of the company. But then you’ve got to give people the opportunity to talk about it in smaller groups.”
That smaller group meeting doesn’t have to be a formal get-together. Dutkowsky has monthly birthday parties for employees with birthdays in that particular month.
“Now, as opposed to having a meeting of 1,000 people, we have a meeting of maybe 50 or 60,” he says. “In that meeting, there are no flip charts, there are no Power Points. It’s just dialogue, and you try to get people to … ask questions and probe into what they want to know about the way the company is going to work. And again, it’s a great opportunity to reinforce what’s important in the company, what the strategy is, what the game plan is and where the company is performing well.
“I talk pointedly about our competition and where I think they are outperforming us. I talk about what our customers are saying about us when I talk to our customers in the marketplace, because the vast majority of our employees never talk to a customer. You don’t know what the customer thinks of Tech Data; our salespeople do. But, the average employee doesn’t hear that stuff. So, in small groups, you communicate again about what’s good and bad about the company, you get their feedback and you answer their questions.”
Creating that relaxing environment will allow employees to let their guard down, and ask some questions they wouldn’t in a group of 1,000.
“When you come to a birthday party, we have cake and ice cream, and we sit around and we chit-chat about things a little bit before we get into the business,” he says. “I think the idea is people get more relaxed than if you say, ‘You’re going to have a meeting with the CEO. You better dress right and think of the right questions,’ versus, you come to a birthday party, and it’s much more casual.”
Reiterating your game plan numerous times using different avenues, such as small and large group meetings, is an effective way to get your point across.
“You lay out for the organization what needs to happen for it to be successful, and you try to articulate that in as many different ways as you can think of so it connects with people,” he says. “There’s theory written that a person has to hear something seven times before they comprehend it.”
The same thing happens when it comes to leadership.
“People don’t meet the leader and say, ‘Hey, I buy in to everything that guy says, and for my 40 or 50 hours a week that I’m at Tech Data, I’m just going to put all my energy to what that guy just told me is going to happen.’ It doesn’t work that way,” he says.
“It happens over many touch points. Again, that’s why my belief on communication with the all-hands meetings, the smaller meetings, with video. Every quarter, we record a video that I try to talk in three minutes or less about what went on in the company the last 90 days and what do we need to be focused on as we go forward. You can’t communicate enough as a leader to get people to buy in to where you think the company needs to go.”
Dutkowsky’s game plan took the company from losing $97 million to generating $123.6 million in net income for fiscal 2009.
“I didn’t join the company and say, ‘Hey, you know what, tomorrow, we are going to stop distributing technology and start distributing Wrangler jeans or something,” he says. “It was, ‘We have a set of core competencies, and let’s just make sure those competencies are as effective and efficient as they can be and that the right people were driving the right initiatives around those core competencies.’”
Overall, Dutkowsky says to understand instantly that you are only as good as your team of people.
“Implied in leadership is that there are other people, other individuals, other personalities, other backgrounds that need to be led or asking to be led,” he says. “I think the problem that most senior executives face is they think they are going to do everything on their own and the idea that I’m going to join the company and I’m going to change the company is a fallacy.
“It’s not just one person, even though at the end of the day someone sits at the top of the pyramid. That’s just the way it works. But, the reality of it is a company is only as good as the team of people that comprise the company. The leadership team is only as good as the team of people that comprise that group of leaders. As lame as it sounds, there is no ‘I’ in team. That is my fundamental business belief.”
How to reach: Tech Data Corp., (727) 539-7429 or www.techdata.com
Every once in awhile, you’ll find Keith Olsen sharing a bowl of ice cream with his employees.
It’s one of the ways he tries to lighten the mood for his 330 employees at Switch & Data Facilities Co. Inc., a provider of network-neutral data centers that house, power and interconnect the Internet.
Olsen, the president and CEO, sees the ice cream breaks as a way to bring together people who may not normally interact at the company. It’s a way to get people who might otherwise not spend a lot of time talking to each other to come together in a nonthreatening environment.
“Sometimes people just don’t like to kind of step forward,” Olsen says. “Some people feel, ‘I want to be more reserved.’ But, if all of a sudden they see everybody else participating, it becomes a bit contagious.”
Of course, giving away ice cream to employees isn’t the main stimulator of the company’s success, but it’s one of Olsen’s leadership ideas that has helped the company grow. By focusing on hiring the right people, having a solid plan and empowering employees, he has created steady growth highlighted by a 24 percent increase in revenue and a 34 percent increase in EBITDA between fiscal 2006 and 2007, increasing revenue projections for fiscal 2008 and a projection to hit more than $200 million in revenue this year.
Here’s how he did it.
Hire the right people
Olsen is looking for employees who fit in to a performance-based environment that, as the company performs better, the employees get better rewards.
“If someone overachieves, someone achieves and someone underachieves, they will all be rewarded differently,” he says. “That’s a performance-based culture. People sometimes don’t like that culture. They shouldn’t be in this company. But people that like that kind of culture, then it becomes contagious, and the overall company benefits.”
To find the people that best fit in to your company’s culture, he says you can investigate within the company to find the groups that have had a high rate of employee success. If one group is full of successful employees and their retention rate is great, you should go talk to that group and find out what they are doing right.
Olsen also finds referrals from people whom you trust are a good way to go when hiring.
“Use your customers and use your employees,” he says. “Your customers and employees who are the most interested in you having the best people are a great resource.”
It’s always helpful to go off a trusted reference when hiring someone, rather than just looking at a resume.
“As long as you have a high degree of confidence in the reference as the source,” he says.
When Olsen was a hiring manager, he would tell someone that the first meeting he or she was going to have would be about 15 or 20 minutes. Olsen did this so neither he nor the individual would waste time if the two didn’t hit it off.
“But, it could go for two hours, that 15- or 20-minute interview,” he says.
If Olsen is impressed in the first meeting, he then wants to see that individual again and he wants a couple of other people to see that same person.
“Then the third time I see them, if they didn’t get better from the first time, I have to do an analysis because they have to get better each time I see them.”
Overall, Olsen doesn’t see any difference between hiring people for a company that is looking to grow or one that is content with its success. In both instances, you are going to look for the employees who can benefit your company.
“You are looking for competent, capable people that fit the operating environment and the cultural environment in the company,” he says.
Have a plan
As you start thinking about making multiyear plans, you need to have a different team thinking about the long-term execution versus the near-term execution.
In Olsen’s case, he looks at his business in two regards. He has his executive team, which he refers to as the “invest in the business (ITB) team” and his “run the business (RTB) team,” who are the people that report to his direct reports.
“I’m not looking for people to do each other’s jobs,” he says. “I’m looking for them to compliment one another for the execution. As the RTB is running the business, the ITB team is looking out more than one year.”
Olsen stays in touch with his teams through various meetings. They have weekly, monthly and quarterly reviews that allow Olsen to get a feel for what is going on at the company. Inside those meetings, there are many strong opinions, and Olsen describes the room like an ice rink.
“We move the puck around a lot,” he says. “Then we decide, once we’ve banged it around quite a bit, what’s the best return for the shareholder based upon what resource we are applying against what projects in what type of timing, so that we get the appropriate return.”
While discussions and opinions are important, Olsen still wants data as part of his structure. The company has playbooks, which are the company’s go-to-market plans for a specific customer segment, and are built based on customer and analyst research. Olsen describes them like a sheet of music where, if executed properly, you have perfect symmetry.
“When there is no sheet of music and people are tuning up a symphony, it’s just a cacophony of noise,” he says. “But the sheet music provides the guideline and the tempo so all of the different instruments are going in concert to actually build that beautiful sound that was expected because of the execution. Through practice and through competency building, you fine-tune that execution.”
The use of playbooks removes someone’s strong opinion from being the guiding word on an issue.
“We’re trying to diffuse from ego being involved,” he says. “We are using business metrics to be able to utilize that as building strength in the business.”
Data is important for any business because it not only gives you concrete evidence of how you are doing, but it also backs up the art of leadership.
“You use the science to confirm your gut,” he says. “Your gut is all the years of experience that you and your leadership team can accumulate.”
Olsen says the science will be able to show you that, if you want to go north and you aren’t heading somewhere between northeast and northwest, then it allows you to step back and adjust.
“You use the numbers to calibrate,” he says. “Then you kind of perpendicular check and say, ‘Now let me go out into the market and talk to them.’ Or, if it happens to be an operations group, go and see that. That’s where the art form comes in. But most of business is science.”
To avoid drowning in data, you need to make sure you are getting out and talking to employees and customers, which has helped Olsen get information outside of just what is on paper.
“We have built rapports over the years to get kind of the perpendicular views besides what I am just reading through reporting mechanisms,” he says.
Once you’ve hired the people y ou want and have a plan in place, you need to empower those employees.
One way to do that is by talking with them and listening to what they have to say.
Olsen has breakfast with six to eight employees, which his assistant chooses randomly from across the organization, about once every six weeks.
If you want to meet employees in a more casual setting, make sure you aren’t doing it with someone you interact with on a regular basis.
“Think of it as, it’s not a skip level,” he says. “It’s skip two or three or four levels.”
The company reserves a private room where the employees can take their time, eat and talk, and not feel rushed. Employees don’t know what to expect before they arrive, but when they do, Olsen tells them to order whatever they like and the group engages in some small talk.
“Then, all of a sudden, the dynamics turn around always to something around work, something around business,” he says. “Then, someone says, ‘Well, do you know I can help you with that?’
“Then, all of a sudden, that level of the organization that has their hands on the steering wheel are now engaged in cross-functional communication. We expect them to do that on a regular basis. That then bubbles up into the process work that we have the process teams looking at. Then, you can now build a playbook around the improved process. You don’t try to build the playbook and then jam that down people’s throats. That doesn’t work because there is usually breakage between what I could potentially see … versus the folks that are building the tasks.”
That communication is not only needed from side to side in the organization but also up and down. While it’s beneficial to have the macro view of the organization, you need to hear from the employees on the lower levels, which holding get-togethers like a breakfast helps accomplish.
“It’s sort of like watching a football game, and I get to see where the open receiver is because I have 20 TV cameras showing me,” he says. “I don’t have the defensive lineman about to crush me. But the person that is down on the field has the ability to understand the speed of the game that I have no appreciation for from where I am sitting. Therefore, those two views end up providing a much better type of equation to solve versus either one of them on their own.”
Another way to empower employees is to show them that they may know, in some cases, more than you do about the company.
“Then it builds also an interesting human dynamic issue,” he says. “They actually see that I don’t know a lot and I have to depend on them. They also get to see that I am thinking about things two or three years out.”
During the breakfasts, as well as town-hall meetings, employees sometimes ask Olsen questions he doesn’t have an answer to, or they ask him questions he hasn’t really thought about.
If you find yourself in that position, remember to just be honest.
“I find that if you are just direct, frank and truthful, you don’t have to be that smart,” he says. “I don’t have to remember a lot of things if I’m direct and truthful. I just have to remember that it’s the truth. That doesn’t mean you have to tell the truth harshly. You can tell the truth as attractively as possible, as long as it’s the truth.”
It’s also OK to say you don’t know the answer, instead of trying to give a half-informed response. If you don’t know the answer, admit you don’t, but make sure you let that person know you will find the answer and get back to them.
Overall, having breakfasts and skip-level meetings helps empower employees, which leads to a more productive company.
“People come up with creative ideas,” he says. “They now don’t think that they shouldn’t raise their hand and come up with ideas to improve the cycle times and the operations,” he says. “Then they see us implement some of these decisions and spend money on these decisions, and we talk about the pride of ownership of it.
“Now, there are many more ideas than what you do. As long as you have the process and they understand that it’s going to take a serious look, but the minimum ante is that you have to build a case. It’s not just a whim and an e-mail saying ‘Hey, did we ever think about standing on our nose?’”
How to reach: Switch & Data Facilities Co. Inc., (813) 207-7700 or www.switchanddata.com
When you look at a Checkers Drive-In Restaurant, you might see abuilding that’s smaller than most of its competitors. Rick Silvasees a competitive advantage. A potential franchisee won’t needthe same capital outlay to open a new Checkers as he or she wouldfor a McDonald’s, and that’s something that Silva says is a competitive advantage for him. Silva, the president and CEO ofCheckers Drive-In Restaurants Inc., which also operates storesunder the Rally’s name, is constantly studying his customers andfranchisees. “We look at those two tiers and say, ‘How do we differentiate ourselves from the competition?” Silva says. “‘How dowe set ourselves apart from the competition in those two areas?’That goes to where our core equities are where are we reallygood at?” For instance, the drive-through restaurant chain, whichposted systemwide sales of approximately $650 million in 2007and employs 18,000 people, offers seasoned fries that the competition doesn’t. While on the surface, something like seasoningmight seem insignificant, Silva sees it as a core advantage his company has over the competition.
Identifying those advantages and then leveraging them in yourfavor are the keys to creating a vision and driving it throughout theorganization.
“When you talk about a vision, you’ve got to understand thatfirst,” he says. “Sometimes people jump ahead and say, ‘OK, whatis my vision for the company?’ If it’s not ground in who you are,how you compete and what your core equities are, then it’s a nice,intellectual, maybe even emotional experience, but it won’t yieldyou much benefit.”
Know your strengths
The first thing you have to do when deciding on your core equities is to check your ego at the door and forget all preconceivednotions.
“I think if you’ve been in the business for a long time, you may bevery vulnerable to not having clear vision, and I think you need tounderstand that,” he says. “So, if you’ve been in a particular business and that exact brand for a long time, we all begin to acceptthe paradigm we’re in. So, sometimes you begin to believe yourselftoo much.”
You should look to external factors for data to find out where thecompany excels compared to competitors.
“That is finding a good way to talk to your consumers directlywithout a bias, without a filter, without them knowing what thebrand is,” he says. “There are inexpensive ways to doing that. Weuse focus groups a lot here to evaluate ideas, concepts as well asspecific food, and it’s amazing how easy and how relatively inexpensive that can be. Because you can have people sourced thatare, for example, in my segment, we can purposely source consumers that are heavy users of the category. We can purposelysource people that are users of the category but not of our brand.So, we purposely get those insights from people.
“Obviously, external sources beyond the consumer are critical,as well. If you have a board of directors that have smart people onthere that potentially have different industries there are folksthat can help you figure that out. The other thing is just your ownexperiences.”
Once you have that data, you have to be careful because toomuch data can hinder progress. There are always 100 things thatpeople want you to look at, but there could be only three that arethe most important. The other 97 might be potentially important,but at the end of the day, they aren’t the reasons the customer is orisn’t patronizing your business.
“Information is very valuable,” he says. “Data is the buildingblocks to information.”
You convert data into information first and foremost by theprocess of integrity that ensures that, one, your data is clean, and,two, that you are testing for the right thing.
“You and I both know that you can manipulate data,” he says.
“So, you can look at a set of numbers and say, ‘Wow, this is tellingme this,’ and someone says, ‘It is telling me something else.’
“The way you do it is, first, by making sure it’s clean, making surethat you are asking the right questions, and you limit it to thosethings that are most important.”
Silva says to make sure you have integrity in your process, makesure data comes from reputable sources.
“When you start looking at your own business directly though,you are generally going to have to go out to an independentresource that can help you take data that is out there and potentially get some additional data from your consumers,” he says.
A lot of businesses think they are good at something, but youneed to have metrics in place to factually compare yourself againstthe competition.
“If you don’t have a metric to understand what you’re good at,you’re going to begin to work against the wrong one,” he says.
Accentuate the positives
While knowing your strengths is vital to developing a vision, youneed to know how to leverage them to win in the marketplace.
“I may know I have a height advantage over you, if you and I areplaying basketball,” Silva says. “But, my ability to use my height onthe court is critical to winning. You and I have seen it a milliontimes: A guy may be taller, but he gets his butt whooped in basketball because he’s not using his height advantage. Just havingthat advantage is nothing. It’s understanding how to use it. Peopleassume because you have it, you use it and you win with it. Quitehonestly, it’s scary how many businesses you look at that may havean advantage but aren’t using it appropriately.”
While it may sound as simple as just doing more of what you aregood at, Silva says that is not the case.
“Although that sounds intellectually logical from a reasoning perspective, organizations don’t work that way,” he says. “You’re notconnected by a metal chain. It’s just not that simple. The activitythat is happening in one of our 830 restaurants across the countryis being done by people who are humans and the people turn over,so it’s not always the same person doing it.
“A great deal of the success of creating, making the activity successful goes into how you train, how you hire, how you communicate, what the environment is like, what systems you have in placeand what reward programs do you have in place.”
In order to leverage your advantages, you need to make sure youcommunicate what those are and engage the whole organizationby explaining why you are successful.
For example, an engaged and motivated employee might have thebest intentions when trying to improve the company. But, if theemployee’s efforts go against what the data show, you have toexplain to that employee why you don’t do it his or her way.
“Our policy is to put a half an ounce of ketchup on a burger,” hesays. “So, when you are training your employees, it’s a half anounce of ketchup. It sounds pretty simple, right? But an employeeloves ketchup and loves more ketchup on their burgers, and theyreally care about guest experience, they are going to pour on theketchup, right? I want you to give them ‘plus one’ service. I wantyou to give the service that you want to give your family member.He’s thinking, 18;Man, this is cool. I’m going to give them a full ounceof ketchup because it’s going to make that burger taste better.’
“Simple example, but the reality is, if you explain to that employee, ‘Guess what, we’ve done tests, and we’ve tested it, and we realize that half an ounce of ketchup is optimal because it doesn’t overpower the onions, it doesn’t overpower the pickles and it ... complements the taste on the beef.’ (You) go through that with them andsay, ‘This is why it is so important that you get exactly half an ounce,not more, not less.’
“That employee will be focused on saying, ‘Well, hold on a second. If I want to give this customer the best service ever, it’s gettingexactly half an ounce.’”
While you may not be dealing in ketchup and burgers at your company, an employee could be well intentioned but uninformed, whichmeans you need to communicate why something is done a certainway to effectively leverage the data you have collected.
“Once you explain that to people, they understand why they’redoing it and how it connects’” he says. “You don’t have to continueto remind them about half an ounce. It’s amazing how much moreemployees will give you when you explain things to them.”
Find the best talent
Once you’ve identified what you are good at and determined how toleverage those advantages, you then have to surround yourself withthe best talent. When Silva came on board about two years ago, heneeded people who were going to be able to fulfill the company’sgoals, which meant he had to make changes on the executive team.
He says if you are facing a similar situation, you shouldn’t automatically write off everyone from the previous regime.
“I may have a physical asset or a people asset that actually all I haveto do is reprogram, change,” he says. “The person hasn’t been told thatthis is what I want them to accomplish, and they may be very capable.In fact, they may be demoralized in the job they’re in and you realize,hold on a second, there is a real capacity there.
“You explain it to them ‘Guess what, the history is the history. Letme explain to you; this is what I need you to do. These are the skills Ineed. You’ve got them. Let’s see you excel.’ People will step up andexcel.”
If you do have to replace people, you have to be very clear aboutwhat you want out of the person and the position when searching tofill the position.
“Put together a great job description where you truly set down yourexpectations for the job, what you expect them to do and what skillsyou are going to need for the person,” he says. “We all sometimesassume we know what it’s going to look like. Until you put it down inwriting, it’s truly hard to draw the line and go, ‘I like this personbecause he or she meets all the requirements.’”
Before the interview process, start by asking yourself what the position is that you are hiring for, what you want the person to do and howthat fits in to your overall business strategy. Once you do that, write itall down.
“That will help you frame what that job is,” Silva says. “Then youlook and say, ‘OK, I need someone who could do that. What skill setsam I going to need in that position?’ You force yourself to go throughthat process. Now you’ve given yourself a filter to use.”
HOW TO REACH: Checkers Drive-In Restaurants Inc., (813) 283-7000 or www.checkers.com
Joseph Dzierzawski, or “Joe D” as he’s known in the steel industry,didn’t have the typical first job experience that most kids right outcollege have. He didn’t have the benefit of an experience where he’dbe able to test the waters in a somewhat challenging job as hebecame acclimated to the working world.
Instead, Dzierzawski was a production supervisor at a steel company just outside of Detroit and was in charge of 35 union guys.
“I was a young guy with no hands-on experience and running aproduction facility,” he says.
“I was 23 at the time, little experience, and it was an uphillbattle,” he says.
Fortunately for Dzierzawski, he had a little bit of credibilitybecause he grew up outside of Detroit, and he had a good understanding of people and different personalities.
“You’ve got to stay strong,” he says. “You have to use common sense, and once you demonstrate that you aren’t going toback down, slowly but surely, you gain the respect of othersand you are accepted as one of them.”
Today, Dzierzawski is the president and CEO of SMS DemagLLC, the North American operation of parent company SMSDemag AG of Germany. Dzierzawski manages more than 200employees and his unit posted about $130 million in revenue in2008.
The days at his first job are long behind Dzierzawski, but hestill carries lessons with him today that he learned back then.
“It comes down to understanding people, and people are different,” he says. “There are varying personalities, and you can’ttreat everyone alike. As much as you wish you could treateveryone alike, everyone has a different personality. It’sdemonstrating that you understand those people and theirissues and their values and, at the same time, demonstratingthat you are in a leadership position, but you also have thesame struggles as they do.
“I think if you can come out and demonstrate that humantouch, it strengthens the trust that your employees have inyou.”
Here’s how Dzierzawski connects with his employees todrive growth at SMS Demag.
Rely on a good staff
Chances are, the best talent is not going to come right to yourdoorstep, so you have to get out of your office and search outthe best workers. In Dzierzawski’s case, the steel industry is atight-knit group, and the cream of the crop is well known. Buthe still has to work his network to get the positives about thecompany around that circle and to potential employees.
Dzierzawski also needs to find out for sure if the employeehas the skills needed to excel at his company.
“Our key employees are, many times, those that are willing totravel, to make sacrifices, especially family sacrifices for thegood of the organization,” he says. “That individual is notalways so easy to find. Our company is very global. It can bevery demanding on an employee to sacrifice weekends because they are traveling to the other side of the world or areat a construction site for some time.”
Dzierzawski estimates that he is out of the office about 40percent of the year. That means once Dzierzawski finds thebest people, he has to empower and heavily rely on his staff toget the job done while he is gone.
“My general approach to being a leader is ... relationship building with our colleagues in Germany and with customers,” hesays. “You’ve got to get out of the office to achieve those objectives. You are out of the office, you are focused on the customer,you are focused on colleagues from the headquarters. Therefore,you have to rely on a strong staff to continue to manage the dayto-day operations of the company.”
Making sure your employees know you have faith in themwill go a lot further than if you are constantly looking overtheir shoulder.
“When it comes to executive staff in particular, it’s all aboutempowering people and showing your confidence in thoseindividuals and encouraging them on a regular basis that further increases their confidence in their abilities to performtheir functions,” he says. “So, it’s key that you have good people, again, and that you demonstrate the confidence in them tocarry out their responsibilities. I think it’s very key to avoidmicromanaging. It’s an area that you can easily slip into without recognizing it, though.”
To avoid micromanaging, Dzierzawski recommends pushingthe responsibilities that you can delegate as far down the ladder as possible.
“One key is you’ve got to be informed, especially with theamount of traveling and time away from the office,” he says.“You’ve got to keep informed as best as possible with as muchinformation as possible, especially with all the importantissues. You have to keep informed but, at the same time, try tokeep one step back so you clearly demonstrate how you areempowering the people below you and demonstrate a trust inyour executive team in order to execute those responsibilities.
“I will slip occasionally to micromanaging, but I try to leaveit where my executive staff are the ones making the decisions,”he says. “I leave it up to them to come to me to bounce ideasoff of, share, discuss issues and try to, if they feel it’s necessaryto come to discuss with me, to come to a collective decision onimportant issues.”
To form the type of environment where you can rely on yourstaff to succeed and where they know they can share ideas,you need to constantly emphasize and encourage an open-doorpolicy by communicating honestly.
“Just being vigilant about it and demonstrating transparencyof all important corporate issues to the entire company,” hesays. “We have what we call an all-hands meeting, which is acompanywide meeting we hold twice a year, that this point is
constantly emphasized. We share all important issues, currentfinancial status, important projects.
“It’s all employees. We don’t share the details behind the financial information, but we will share information like importantprojects, the value of the projects, the status of orders that areunder execution, how we are performing relative to the budget.So, we give a general snapshot in time of the performance of thecompany, and we have a variable bonus program that is directly linked to the financial results of the company, as well.”
Based on an advertised formula, employees can see the company’s year-end results and somewhat accurately calculatewhat the variable bonus will be for each category of individualin the organization.
Being honest about the results and giving employees enoughinformation to figure out their bonus can also help build astronger culture.
“Everybody is working for a common good, for a commongoal, for the success of the organization,” he says. “Everyone isfocused on doing the best they can for their particular projectand knowing that, at the end of the year, it will all come together as being a more positive result for the overall organization.”
While communicating honestly can lead to a healthy corporate culture, you need to be careful not to give away too muchinformation.
“You can’t tell the whole story because I have a certain visionfor the organization,” he says. “My vision is usually dynamic,but it moves a good couple years out, and it doesn’t happen allovernight. Personnel obviously makes up an imp ortant factorin structuring an organization for the future, and you can’tshare all those personnel decisions that will ultimately happendown the road. You have to convince the organization, as bestas possible, with as much information that you are willing tomake readily available, that they accept your vision, they hopefully will embrace your vision, but they won’t understand allthe decisions that are being made until all the pieces are put inplace.”
Dzierzawski stresses those future personnel moves are something he is very careful not to give away too soon.
“It’s structuring an organization and bringing people upthrough the organization to ultimately fill positions that arekey for the long-term success of the organization,” he says.“What that sometimes means is that individuals that are currently in certain positions, ultimately, are going to be shiftedsomewhere else. You can’t be so open with the entire organization about these personnel moves that are going to happenseveral months, if not a year or a couple years down the road.You still want the organization to be operating in as harmonious of a manner as possible and all the individuals to befocused, fully dedicated to their position and their associatedresponsibilities.”
You have to be very focused on communication, and thatincludes thinking about what you communicate.
“You have to consider every e-mail that you send,” he says.
“Are the right people being copied on it? Should you be discussing it with somebody else before you send the e-mail?For example, e-mail in general, as much of a business toolthat it has to improve productivity, at times it can be anti-productive, as well. I don’t know how many examples there arewhere the guys in the neighboring offices, instead of goingand sitting down face to face and discussing something, theysend an e-mail instead. So the personal touch, if you’re notcareful with it, can be removed by the power of e-mail, and itcauses a problem.”
You have to avoid becoming a slave to e-mail and other ways technology helps you communicate efficiently. ForDzierzawski, it’s a double-edge sword. He travels a lot to haveface-to-face communication with people, but that means he isaway from the office.
“The BlackBerry is key to keeping abreast of importantinformation that you need to know about,” he says. “But thereis no compromise for face-to-face dialogue and the need forthat in order to establish the proper relationship to build on.”
HOW TO REACH: SMS Demag LLC, (412) 231-1200 or www.sms-demag.us
If you want employees to buy in to your vision, you have to involve them in creating it, says Craig Erlich.
When Erlich’s company, pulse220, was developing a plan for the future, his key people all had a stake in the outcome of the vision.
“They all have an opportunity to participate in crafting what that vision sounds and feels like,” says Erlich, president and CEO of the marketing and corporate events company that posted 2007 revenue of $10 million.
Yet, before you can get employee buy-in, you have to take charge and put the plan in motion to create the vision.
Smart Business spoke with Erlich about how to develop and communicate a vision for your company.
Q. How do you create a vision?
The first thing is, as a leader, you need to be able to crystallize who you are and what you want to become, and you’ve got to take time out to do that. Once you set in place who you are and what you want to become as an individual, you can look for ways to channel that energy.
I set aside time in my day or my week to really get deep into who we want to become and how we’re going to get there. Then, I repeat it and repeat it and repeat it. Then, I repeat it some more.
Q. How do you crystallize that vision of who you are?
It has a lot to do with determining what your core values are and your guiding principles as a human being. That manifests itself by the things you do and the people that you surround yourself with, whether it’s workwise or personally.
It’s just taking the time and investing the time and really digging deep. There are a variety of ways that are more subjective to do than testing and things like that. I think that’s a good way to provide a baseline. Then the most important thing is acceptance. Maybe it’s not everything you want to be, so you can work toward changing it, but first, you have to accept it.
Q. How do you communicate the vision to employees?
You only hire the people you believe can embrace that vision and those values.
When we interview people, we look first toward, do they share our vision and our values? If they do that, then they passed test No 1. In our employee reviews, the first item on the review is our values.
When we fire people, typically it’s because they don’t meet our values. We can teach the skills in our business and we can teach our industry, but you can’t teach someone to have those key values that make you who you are as a company.
Q. How do you determine whether a potential employee shares your vision and values?
You are never going to be certain, but you are going to get clear on it. We have specific questions that we ask, and look for specific answers. We look for certain life experiences that people may or may not have had.
Those things all kind of drive back to who that person is, and once you can get a sense of who that person is, you know where they sit on that value scale. The only thing that can help you there is your gut.
So, it starts with asking the right questions and then interpreting the answers with as much clarity as you can get.
Q. What kinds of questions can you ask in a job interview to get at those things?
We’ll ask questions about specific things in someone’s life that they were really proud of doing. Then, they will go into a story about how they were proud about it it could be an award that they won or something like that.
Then you listen to the tone and the passion in which they explain how they felt about that. You can get a sense right there if this person exudes pride in what they do, which is a key value in what they do.
So really, a lot of the questions we ask are about life experiences
I’ve been known to walk into an interview and ask one question and one question only, and it serves for an hour interview. Typically, just by asking that one question, I get all of the answers that I need to determine whether an individual has the characteristics consistent with our values.
That question is, ‘Tell me about your life from about midway through high school until today. But don’t give me the stuff I already read on your resume. Tell me when you laughed, tell me when you cried, tell me what made you scream for joy and what you agonized about.’
You can really get a level deeper and really get in to how people really tick and what’s important to them.
HOW TO REACH: pulse220, (248) 200-3900 or www.pulse220.com
Scott D. Bade says learning to let go can be a big challenge of delegating, but it’s something you have to do if you want your company to succeed.
“You need to avoid the micromanaging,” says Bade, whose document management and workflow processing company employs about 50 people and has a three-year sales growth of 111 percent. “It doesn’t do much good to delegate and then to henpeck or be looking over people’s shoulders continuously. It’s not productive, and you really defeat the whole purpose of delegating. If you’re going to do it yourself, you might as well just have done it.”
Smart Business spoke with ImageSoft’s president and CEO about how to effectively delegate.
Q. How do you know which tasks to delegate?
You need to obviously establish roles for your key people, and then you need to be disciplined enough to give people tasks that fit in to their role.
Obviously, as an executive leader, you need to keep certain roles for yourself. Those are mainly oversight and strategic type roles.
Q. How do you monitor what you delegate?
It depends on the type of task you are talking about. We use electronic tools to track to-dos and things like that. If I give someone something, I’ll put it in a particular file to make sure that I circle back on it, if it is important enough.
The day-to-day stuff, you can’t necessarily track every little thing that you give people. So you make strategic decisions on what are the most important things you need to follow up on.
If you try to follow up more at a high level based on measurable goals, instead of following up just to say, ‘Yes or no. Did you do this?’ the results are what should show. So, if you are setting the right kind of goals for staff, then that will show when you look at, for instance, sales numbers or customer satisfaction ratings, different types of things like that.
Q. How do you deal with a task that has not been done correctly?
Most of the time, if you are an executive and you are delegating, you are delegating to other management-level people. Generally, you don’t have to really baby-sit those people or, if you do, you’ve got a real problem. Most people at that level, just a simple reminder of your priorities or just a simple question ‘Did you understand (the) priority of this?’ or, ‘Is this something that’s going to happen in a certain amount of time?’
Obviously, you treat management people with a little more latitude and a little more, maybe rope, if you will, than you do other types of employees.
I think that it’s important to have some structure. You don’t want to have too many levels. Obviously, that depends on the size of the organization, but everybody likes to keep a flat organization.
But you just absolutely need to have some structure and some reporting mechanism. Otherwise, you’ll never have a moment to think of strategic things during the day.
Q. What advice would you give another CEO on how to delegate more effectively?
Organization skills are critical. When I say organization, I’m talking about just keeping the things that you’re focused on organized keeping your tasks organized and keeping your goals organized and written down, so you have some focus. Once you do that, then all the kind of subtasks begin to fall into categories and are a little easier to control.
As you get higher in the leadership, you need to have some tools in place to slow things down, as far as the speed at which information and distractions hit you.
Q. What kind of tools can you use to slow distractions down?
Set aside times during the day to do certain administrative tasks, and then try to shut those off. E-mail can be a big distraction if it’s not properly (managed). Just managing your inbox and your e-mail is an important thing to be on top of.
But, regularly scheduled meetings with different departments and different managers are important to have those touch points, so you know what is going on.
You absolutely have to take notes and write things down and store them in an organized way. I store my customer meeting notes and all of my business-related notes. I scan them, and I store them in an electronic system.
You need them in some organized place that’s probably getting backed up (so) that you can retrieve things quickly based on dates or people’s names or things like that.
If you look at just the information you accumulate in a single day, let alone a week or a month, it’s pretty overwhelming. If you’re not, on a regular basis, keeping that in an organized fashion, (then) all we have is our memory and our past experiences to help guide us in the future.
HOW TO REACH: ImageSoft Inc., (248) 948-8100 or www.imagesoftinc.com
To keep his 300 employees motivated, Chris Dalton communicates to them both the progress and achievements of Acquity Group LLC.
However, that gets harder as the company continues to grow.
“You want to stay as active in communicating the health of company and the good things and the bad things,” says the co-founder, president and CEO of the digital communications company, which posted 2007 revenue of $65 million. “The more you do, people rally toward playing an active role in executing on the day-to-day tactics that are necessary to complete the vision.”
Smart Business spoke with Dalton about how to use communication to keep your employees engaged.
Q. How do you create a culture where people will be involved and motivated?
I really believe that people get motivated by passion. As a good leader, you have to be passionate about the business and passionate about your vision. I think those who believe in it will rally toward that, and through that energy and through that excitement and through that vision, I think you can get people motivated.
Now, it has to be something you sustain. So, you have to stay diligent on communication, you have to stay diligent on people being informed and involved in the progress.
I can remember early on in our success, we were crowded in a very small 1,200-square-foot office with quite a few people.
So, it was very easy to know when someone was getting a win or know when someone was accomplishing something because you were within arm’s reach. As you continue to grow, you have to stay diligent about communicating the progress that you’re making within the year and within your multiyear plan.
But you have to do that in a genuine sense. You have to do that with a sense of real conviction and real interest to make it successful.
Q. How do you make sure employees are informed about what is going on?
You can’t be too aloof. You can’t be management from top down and shout out edicts without getting into the trenches. I spend a lot of time in the field. I spend a lot of time talking to people on projects. I spend a lot of time getting feedback from all levels.
I meet every new person that comes into the organization, which is a little challenging given our size. But every person that starts in the organization, after they’ve gone through their recruiting process, comes into orientation and spends a few days in the corporate offices getting acclimated to the business and the different nuances of our operations.
I spend an hour with them, and I talk about how important it is for them to get involved and how important it is for them to take accountability, important for them to stay active in their career and in the development of our organization.
I do that on a very intimate level with every individual because I want them to know my face. I want them to have had time to sit down and talk to me. I want to be able to have said to them, ‘My door is always open, and I want you to feel comfortable to challenging things that you see that don’t look like they are working the way they should.’
Q. Does simply meeting new employees communicate an open-door policy?
It certainly breaks the ice, in a sense. If you never met the boss, if you never met the guy at the top of the food chain, you might walk away from his office more so than toward his office.
What I try to do in my orientation sessions is sit down and talk candidly about why they’re energized and excited about coming to the organization, and I tell them, ‘If you’ve gotten here, our company believes in you and you’ve passed through a number of screening people to validate that you’re going to be successful here. Now, what I’m here to say to you is, we’ve gotten past that part. Now, what can we do creatively together to build upon the vision that we have?’
I think when you motivate people right from the get-go, right out of the gate, they have a choice: They either stay engaged, they stay involved, they take a proactive stance to sort of continue to be involved in that vision, and/or they shut down. If they shut down, I talk to them candidly, and I say, ‘If you do and you got here by chance and somehow you’re not that type of personality, then I can tell you, you won’t be comfortable because everyone around you will be wanting to be adding to the equation.’
HOW TO REACH: Acquity Group LLC, (312) 427-2470 or www.acquitygroup.com
William Clapper likens getting the right people in the right positions to running a football team. The founder, president and CEO of MTI Information Technologies LLC says that if your team has good passing skills, you should-n’t try to force people to run the ball, and the same is true in business.
“Don’t do things or don’t give (employees) assignments or tasks or challenge them to do things they’re probably going to fail at,” says Clapper, whose $24 million company optimizes communications to physicians.
Smart Business spoke with Clapper about how to use the hiring process to find the right employees to fit in to your culture.
Q. How do you evaluate employees’ skills to see where they fit in the organization?
It begins with the hiring process. It begins with a clear understanding of what you are trying to accomplish. Then, implement that through having a singular focus of the kinds of people you think fit specific roles.
Again, the football analogy — you want to make sure that you’ve got a quarterback that has certain skills versus a line-man that has certain skills. So, you’ve got blocking and tackling people in the organization, you’ve got skill players in the organization, and you want to make sure they match up.
Q. How do you use the hiring process to find the right fit?
It begins with understanding what the job is all about and what you are trying to accomplish on that job. Now, I don’t mean so narrowly defined that you can scope out a daily activity for someone, but I mean a broad view, a strategic view, of what you are expecting from that position.
Then, you try to find people who do two things or two key things. One, they match up from the skill standpoint of what that job would require, and two, most importantly, that they fit in to the culture of the organization.
Q. How do you judge whether a potential employee will fit in to your culture?
Especially if it’s a senior manager, I like to talk to people in different environments. You might have one where there’s a formal environment the first time they come in the office. You might have another one at lunch, or something like that, to make sure you can see people at different times of the day and different days of the week, so you can see how people are over time. Because anybody can act at any given point, but it’s difficult to communicate a consistent view or a presence over a period of time.
The second thing is to get opinions of your associates. We like to do two things here. We always like to schedule interviews here where people can talk one on one with someone who they may be reporting to or who they may work with, so that maybe we get three or four different views.
Then, oftentimes, again depending on the level, we’ll bring people together for a group interview where you can see how that person interacts within that group that you’ve assembled. Pretty soon, these patterns begin to emerge.
Q. How do you decide whom to hire?
That depends on the position in the organization. There are some I don’t even see anymore who come in to be interviewed. The manager of that group, that team, the leader of that team would make the hiring decision.
But, generally, it’s a question of, if we look at middle management or senior management, where I would be involved. Oftentimes, we’ll even develop score sheets. They would say, ‘Here are the 10 characteristics of this position that we’re looking for,’ and give weighting factors to each one of those, and then have people fill those out independently and anonymously.
Then, assemble the score, and we see that, generally, we all think about this or we all think about that. Then, when you get some dissenting opinions, that’s when you really drill down and start to discuss the differences. Why do you see that differently?
Q. What advice do you have for leaders who want to make sure they are getting the right people in the right places?
The No. 1 thing that you could do is ... have a clear vision of what you are trying to accomplish. I think people tend to try to think about something in very general terms and then develop the vision on the fly.
I always had problems with that. I always like to think through, ‘How do I visualize this position working, and how does it fit in to the organization?’
Then, I like to think about who the people they’re going to interact with, and then you think about people that you know. Then I pretty much, by the time I’m ready to interview, have a perception in my mind of what I am looking for, and then I test against that.
HOW TO REACH: MTI Information Technologies LLC, (267) 569-2400 or www.mtiadvantage.com
Dave Gallatin had no training as a health care executive, but thatdidn’t stop him from taking the reins of three merging hospitalsthat were losing a combined $27 million from operations.
Sure, he had a long association with Westmoreland RegionalHospital and the former Westmoreland Health System, serving onits board of trustees since 1983 with terms as vice chairman andboard chair, but he had no formal training in leading a health careorganization.
Yet, when Westmoreland and Frick hospitals, which merged in2001, joined forces with Latrobe Hospital, the board decided hewas up to the challenge of leading what would become ExcelaHealth as CEO.
“Serving as a chairman of the board, it became clear to the boardthat our CEO was really not able to integrate that merger very well,and the financial performance really deteriorated very rapidly from2000 to late 2002,” he says. “The board felt it was time to look for anew leader.
“What happened was, we actually started very quickly with mergerdiscussions with Latrobe Hospital in late 2003. It became clear that itwasn’t an appropriate time to look for a new CEO since we knew wewere going to be in transition, so I agreed to stay on through the merger process, and I am still here today.”
In 2005, Excela Health formed and things began to turn around forthe merged hospitals. The operating margin was a positive 1.5 percent, growing to 2.2 percent in 2006 and to 2.4 percent in 2007.
After the acquisition of Mercy Jeannette Hospital on May 1, theorganization now employs 4,500 employees and is projecting revenueof $450 million for 2008, an increase from the $372 million posted inJune 2007.
“I’m really pleased and proud that right after the merger, we turnedthe corner,” he says. “And we’ve been producing profits from operations really from day one, which has allowed us the luxury of saying,‘OK, now that we’re not losing money from operations, again, whatcan the organization become? What is the next level for this organization? How do we become truly a long-term provider of care for thecommunities that we serve?’
“So, our mindset went from going from managing a monthly P&L[profit and loss statement] to I had to transition to managing a five-year strategic plan.”
Here’s what Gallatin learned from guiding the organization throughthe merger process and transitioning it to growth mode.
Plan and listen
Prior to the merger, the organizations engaged consultants to helpthem put together an operating plan, which was really a to-do list ofthings to get accomplished in the first years of the merger. That included back-office consolidation, staffing the organization and clinicalconsolidation.
“We couldn’t share information between the organizations prior tomerger, so we used a consultant to help us process that information,”he says. “But it was time and effort well spent because it gave us anagreed-upon plan for the first several years of the organization.”
Gallatin says the preplanning was vital in making the transitionsmooth.
“Typically, in health care mergers, they merge, then people figure outwhat to do next,” he says. “We took the proactive approach and really tried to have a really well-defined operating plan for the first coupleof years, in particular, of the merger that would allow us to bring theefficiencies and generate the economies of scale that we thought we could do as we did this merger.”
The leadership of the merging organizations formed the StrategicIntegration Group to facilitate the merger and bring people together.However, Gallatin says, people were, at first, hesitant to speak theirminds on ideas.
“There was some concern about what you could say in the roomand if it would be totally well received or people were afraid theymight show a sign of weakness by saying something,” he says.
Gallatin says a key to leadership is listening, which is a good way tocreate an environment where ideas are shared.
“It’s more about engaging in conversation, I guess, than it is in justlistening,” he says. “It needs to be a two-way conversation. But, youreally need to be hearing from your executives and your direct reports what’s really on their mind, what their concerns are about, howthey can conduct their day-to-day responsibilities in the organization. You really need to be an active listener, which means respond tothe concerns that are being brought to your attention.”
Once you’ve heard the opinions, it’s important to get guiding principles down on paper, so everyone knows the direction the company isgoing. When developing those guiding principles, remember what youwant your organization to become.
“You focus on the reason your organization exists,” Gallatin says. “Ifit’s an accounting firm, it’s probably there to serve the shareholders ormaybe another higher purpose. The advantage we have is that we areowned by the communities that we serve. So, really, making a profitis a means to an end for our health system. We need to do that so wecan produce the resources to replace our depreciating assets, to buythe technology that we need to provide the care for the community.”
Start by thinking in terms of your mission and vision before anymerger.
“Come to some agreement prior to a merger is that the combinedmission of this new organization and, if not, why are you merging?” hesays.
Gallatin emphasizes the need to establish principles and reasons forthe merger and to keep those reasons in the forefront of your mind atall times. He also reiterates the need to plan ahead as much as possible.
“Plan your work and then, after the merger, work your plan,” hesays. “As much planning as you can do and agreement you can getpremerger, whether it’s government or whether it’s operations orwhether it’s things like communications as much preplanning asyou can do is certainly worth the investment of time and resources todo that. You need to be careful you do it appropriately and in a legalway, but it can be done.”
Focus on the future.
Though there has been some attrition as the organizations consolidated functions and some people have been moved around, therewere no direct layoffs associated with the merger.
“We didn’t merge to shrink,” he says. “We merged to grow the organization. I think that’s been a big part of our success. We have been ableto provide that growth for the organization, so people may not bedoing exactly the same things they used to do, but they certainly havemore opportunities in this organization today then they would haveprior to the merger.”
To set sights on the future, Gallatin and the organization formed theExecutive Strategy Council, which is a present-day incarnation of theStrategic Integration Group.
The council exists to make sure the organization is staying on track
with its strategic plan. The council comprises senior leaders and vicepresidents essentially, those with system responsibilities.
The council meets weekly to avoid overanalyzing information.Additionally, the weekly meetings keep everyone’s attention focusedon the long-term strategy and away from the day-to-day operatingproblems.
“It really keeps strategy at a higher level,” Gallatin says. “Many strategic plans can become a plan that is put on the shelf somewhere andreferred to when needed. Ours is actually a work in progress everyweek, as we see things that are changing in the external and internalenvir onment. We can really monitor our performance relative to theplan and have the folks who are necessarily involved day in and dayout on their operating responsibilities to think more strategically.”
There is also an agenda set for the meeting to make sure the discussion sticks to the long-term strategy of the organization. Keeping thetopic focused is a main key in establishing a group like the ExecutiveStrategy Council.
“You clearly want to have objectives for the group,” he says. “Youwant to have a focus for the group. It can’t just be a ‘come as youplease and talk about what you want.’ Things that are discussed in thisgroup, for example, need to have strategic implications. So, I thinkyou need a focus for the group and a purpose kind of a missionstatement and also a defined agenda every week, and the person leading the group really was responsible for putting the agenda together.”
While the meeting is not an open forum for anyone to attend theorganization has town-hall and group meetings for that employeescan come to their direct reports and discuss an item they feel may beappropriate for the council. The executive it is brought up to is free tothen bring the issue to Gallatin to appear on the agenda, but only if theitem fits with the council’s objectives.
“Certainly, anyone can request items be put on the agenda, but itneeds to be a specific, thoughtful, planned process in terms of whatare the big issues the organization is facing that impact all of us on astrategic level that need to be discussed,” he says. “So, it really is aboutstructuring your free-flowing conversation.”
Gallatin looks at each issue and the extent to which it impacts theother participants in the meeting.
“If an executive has a problem with his own direct report for example, that obviously wouldn’t be appropriate for discussion,” he says.“But, if there is an issue with culture, for example, where we’ve got agroup of employees who may be across campus who are feeling oneway or another, that would probably be an appropriate topic of discussion.
“The metric would be, how many people in that room have responsibility over the issue or how many people in the room does that issuetouch?”
Once an issue is brought up for discussion during the meeting,everyone is expected to listen and respect everyone in the room. Therules are defined, specific and in writing as far as what the objectivesof the group are and the expectations of each member.
“The rules of the game in the council are that we all listen to eachother’s concerns, and that we engage each other in good conversationand that we all are encouraged to participate and give opinions,” hesays. “The group actually, many times, reaches its own kind of consensus. But, the understanding is, whether or not you support thatconsensus in the room, you certainly need to support that consensuswhen you leave the room. So, it’s really been establishing the habit ofhaving all our executives even though they have many people reporting to them day in and day out, many of our executives have theopportunity to talk with their peers about what’s on their mind on aweekly basis.”
While Gallatin says he sees the need for unofficial hallway conversations, he wants his executives to be able to communicate in an official manner
“Instead of getting a consensus by having to talk to seven of your peers individually, you can bring it into the room and talk as a group,”he says. “I think that encourages much more openness and responsibility, when you do it that way.”
As Gallatin begins to focus more on the future of the company, KimHollon was hired in March as CEO of Excela Health Hospitals andexecutive vice president of the Excela Health system to handle moreof the day-to-day operations.
Gallatin says he realized he was much too involved in the day-to-dayoperations, and as they developed the strategic plan, it became clearthat to achieve the strategic vision, it would take much more than justgetting better at operations.
“It was clear to me once we had that strategic plan that we had tomove in that direction,” he says. “I think that’s a natural progression ofthe organization as we moved from really worrying about surviving asa new entity, getting our operations in place. Now that we’ve done thatnow, we need to look at long-term survival. So, it was totally a logicalprogression of the organization from survival mode to really a fulfillment of what we could become in terms of the vision.”
HOW TO REACH: Excela Health, (877) 771-1234 or www.excelahealth.org