Keep your eye on the ball and control growth.
We did it very, very slowly. We’re not trying to be the biggest. We want to be the best.
You have to really pick your jobs. These are some of the problems that companies a little larger than ours have. They take on too much work and they aren’t keeping their eye on it. Suddenly one or two of the jobs go sideways on them. Domino effect is a good terminology.
If we start getting a very heavy workload, we look at the jobs that may be coming up a lot harder than we do if we’re not quite as busy, so we don’t get overloaded. We keep our finger on the pulse with every job that’s going on.
You have to be organized to make things happen. If you go into any kind of a meeting and your agenda is not organized, it’s not going to be very successful.
Keep the lines of communication open.
You have to listen to people when they offer advice. You want to weigh it both ways. If it makes sense, you listen to it, then react to it or put it in place. That is one of the most important things.
We work on a team concept here. Without the team, you’re not going to make it work. I don’t think there’s any CEO that is capable of pulling any kind of a business together without the help of the team.
If you have a problem, you want to bring it to people right away. You don’t want it to get like a cancer and start spreading. We discuss any problems with any person we may be having a problem with.
When we hire somebody, we explain to them we have what we call an open-door policy. They can come to either myself or my son (Frank, the company’s president) and discuss any kind of problem they may have. And if it’s something that might be a piece of advice, a way they see to do something, we listen to that, too. You don’t have to make an appointment to come and see us.
Hire for the long haul.
Somebody who switches jobs quite frequently, I don’t figure that they’re probably going to stay with our company very long.
If you observe somebody that’s got a good approach on how not only they handle people but how they think and how they react, it gives you a comfort level that they’ve had the experience and you’re not going to have to bring them all the way through. If I see somebody I think has potential that has a different type of job that would fit into our little niche, I try to get ahold of them or hire those kinds of people.
Meet with employees regularly and treat them as equals.
I respect our laborers as much as the people right on top. They’re just as important as the top people are.
I go out on the jobs and shake hands with them and acquaint myself with them and let them know that I don’t think that they are at the bottom of the totem pole, but they are very important for our operation.
It builds the morale of the people on the job when they see the CEO coming on the job. They know the interest level there is pretty high. That’s one of the ways we have been able to keep it very tight knit. We don’t just sit in our office.
Be confident about decisions.
Each situation is a little bit different. You have to weigh that to see what’s involved before you can determine which way you’re going to make a decision. There’s not any set pattern. You’ve got to look at each circumstance and decide which way is the best way to go. That’s one of the most important things, being confident.
One of the things I thrive on is the foresight and the risk. We are sometimes thinking a little bit ahead of the game and go out and do some risk factors that fortunately we have been lucky have materialized, instead of waiting to have somebody else take the lead and try to catch up later. You have to have a vision to what might be coming on. You have to have the vision to stick your neck out a little bit.
If you’ve ever read that book, ‘If You Want to Walk on Water, You’ve Got to Get Out of the Boat,’ that’s kind of what it is. If you’re just going to sit in the boat, you’re not going to get any place.
Keep people up-to-date.
Some companies try to hide too many things. We do everything aboveboard. We let them in on a lot of decisions, or at least they’re aware of some of the things that are coming up. They feel more a part of it that way, so they’re going to react better and be more involved.
Obviously, we don’t open our books to all of them. But as far as workload and what’s coming up and what we’re trying to do, we let them know that sort of thing.
HOW TO REACH: Frank Rewold and Son Inc., www.frankrewold.com
At times, Mark Lettelleir and his employees at Modern Business Associates have experienced a huge influx of clients and many last-minute tasks had to be completed, resulting in all-nighters for the employees at the human resources company. But Lettelleir isn’t wishing them luck as he’s walking out the door. Instead, he’s getting his hands dirty with the rest of the team.
“Being a leader is also being somebody who is willing to dig in, and those people respect you and they know you’ve walked a mile in their shoes already,” says Lettelleir, founder and CEO of the company, which posted approximately $450 million in 2008 revenue.
Lettelleir isn’t helping out because he doesn’t trust his people. He’s not doing it because his people aren’t capable of completing the task. And he’s not doing it because he doesn’t have anything better to do.
He’s doing it because he is part of the team, and if that’s what it takes to help make the company successful, then so be it.
“I was here all night with them helping move data over here and rolling up my sleeves and doing whatever needed to be done,” he says. “Did I have great people here to do it? Yes. Could I have gone home and gone to sleep? Yeah. But I don’t think that sends the right message to your people.”
Instead, employees get the message that he is ready to tackle any challenge, which rubs off on them.
“They were willing to go the extra mile, because they knew that I was willing to do the same thing and that we were going to do it together as a team,” he says. “I just think it sends a message that we are all on the same team and we are all willing to pitch in and help wherever we need to.”
Pitching in is just one way to help create a team environment. If you reach out to every level of the company, you’ll find good ideas that can help your company grow.Communicate with all levels
There was a great idea floating around the offices of MBA, but no one was doing anything about it. The company talked about digitizing everything it was doing, but the company thought it would be too expensive, and the idea was tabled.
However, during an employee group lunch with Lettelleir, someone brought the idea up again. This time, someone in the IT department knew of a way to make the idea a reality.
“What’s nice is our clients can now go onto the Web and they can actually pull up the documentation that they faxed or e-mailed over to us,” he says.
The idea helped sell some clients shortly thereafter because they were attracted to the electronic process.
No one planned the lunch to discuss the idea and there may not have even been a plan to bring up the idea, but because Lettelleir created the opportunity to interact with employees and for employees to interact with each other, there was initiative to push the idea forward.
“It starts a conversation that never would have took place, because they would have thought it was a dumb idea or, ‘I think it’s a good idea, but I’m not going to put my neck out there,’” he says.
Creating opportunities for you to get to know employees and employees to get to know each other is a major driver of developing a team environment.
Not only can great ideas come out of it, but it also gets people talking, which is sometimes hard when people are in silos working on daily tasks.
Of course, as you grow, that becomes more difficult as you spend more time on big-picture strategies and you add more employees.
Lettelleir ran into that problem as MBA grew from 20 employees to 100, but he didn’t completely stop trying. When the company was smaller, Lettelleir would take a new employee out to lunch to welcome him or her to the company and to get to know that person. But that has became harder as more employees joined, so he started the “12 at 12” program.
“I get 12 people from all different departments and have lunch in the conference room and just kind of go around and find out where everybody is from and if they have family and what their interests are,” he says. “I just kind of get a little flare for what they do and then give them an open forum to ask questions.”
Lettelleir likes to do the lunch every month, but sometimes because of his schedule, he can only do it every other month. Employees are randomly selected from different departments, but he tries to invite newer employees who haven’t participated before. You want to keep the number of people participating at one time small, because the bigger the group, the less people will want to talk.
“We have a monthly team meeting where everybody is there, but when you’ve got 100 people, it’s less likely somebody has a question or anything else that they are going to raise their hand in the middle of a big group,” he says. “This gives them a little bit of a forum to ask questions and offer ideas and advice.”
You will get some great ideas in forums like this, but you will also get a number of suggestions that don’t work. In that case, you have to explain to the person who came up with the idea why you can’t use it.
“I definitely think it is important to explain that and certainly get their buy-in, because you don’t want them walking away with the answer of, ‘No, we’re not going to do that,’” he says. “Because then it squashes their reason for even wanting to talk out loud and express their ideas and come to the table with something new.”
It also helps to be honest and admit that you know not everyone is going to see your side of things.
“One of the things that I preach from our end is, ‘You’re not going to always agree with my decision, but I hope you will at least understand my reasons for making that decision,’” he says.
“I try to get everybody’s feedback, and I encourage our department heads and managers to do the same. Get everybody’s feedback. Get the information because there may be something you are missing or don’t know about. Get it all and then make the decision and if somebody doesn’t agree with the decision, at least explain why you are making that decision.”Keep the door open
While driving around one day, an employee at MBA noticed three new restaurants were opening in the area. Instead of making a note of three new places she could dine at in the future, she brought the names, addresses and phone numbers of the potential clients to Lettelleir.
He expressed his appreciation for the information and told the employee he would let her know how it turns out. It may turn into nothing, but the fact that the employee brought the potential clients to the boss speaks volumes. Lettelleir is constantly preaching an open-door policy for himself and all managers.
“If they see that they have success, and what I mean by success is that they get in, talk to me, and that I’m really listening and taking their ideas into account, I think that message is going to come back and filter down,” he says. “At least I hope so, and I think it has for the most part.”
In a perfect world, you’d talk about an open-door policy and situations like the above would happen all the time. You’d get information that you can use, and employees would take all of their other issues to the individuals who should be dealing with them.
However, if you drive an effective open-door policy, you may hear things that are someone else’s responsibility.
“It’s important to express the message down to your people,” he says. “Not only your management team but even … to your line-level workers that, ‘We have a lot of stuff to do and everything is important, but let’s make sure we prioritize what we need to bring to the forefront. If there are small issues, if it’s facility-driven or anything else, talk to so-and-so.’”
You also have to be careful not to get caught up in employees jockeying for a better position in the company
“When you have an organization that is large, there is going to be office politics,” he says. “Even each department has their groups. I don’t think you can avoid that aspect. But I think the key is, in this case, I listen to it and I listen to the situation, but I also say, ‘Have you talked with your department head about this and what was their take on it?’”
If people feel they can come directly to you, they may get in that habit and start viewing you as someone they report to directly.
“The one thing you don’t want is you don’t want to have somebody who’s playing office politics and trying to go around managers,” he says. “That’s why I said, I may listen to people, but the first thing I will say is, ‘Have you brought this up to your supervisor or your department head?’
“Because, I don’t want to see people going ... behind people’s backs because that does cause problems and it does create issues.”
Some managers will feel uneasy because an employee may jump ranks and go directly to someone above his or her manager with information or an issue.
“Unfortunately, some managers, they get paranoid, if you will, about their people and what goes on in between them and who they are talking to,” he says. “I think sometimes that part of the problem is not necessarily the line worker but more the manager and their insecurity with handling situations.”
To deal with that insecurity, you have to handle it promptly and directly.
“The best thing to do is meet it head-on and talk to them … and reassure them that you have their back and that you are on board with them,” he says. “But also encourage them to develop their people. There’s no bigger compliment then having one of your people that used to work for you move up into a management-type position or continue to grow because that means that you did a great job in developing them through the ranks and as a leader.
“What I think people do sometimes is they try to keep people at bay because they get concerned that they are going to try to take over their job.
“But they should be developing their people and getting them to grow and get better. That’s the way we are going to grow as an organization is with a stronger team.”
Having a cohesive work environment will help build that stronger team to get the job done.
“That open door and making sure that people understand and know that they are part of the team, I think they are willing to do anything,” he says. “They are willing to push it to do whatever needs to be done to get the job done.”
How to reach: Modern Business Associates, (888) 622-6460 or www.mbapeo.com
“Many times we try to bite off more than we can chew,” says the CEO of the mattress retailer, which posted more than $500 million in 2008 revenue.
For instance, when the company has meetings to review its strategy performance, percentages are displayed to show the team how much of a goal it has met. A goal that is close to 100 percent completion would get a green color, while a goal the company isn’t reaching is in the red.
“When you realize you have so many of those percentages at 50 or below, a little more red or yellow than the green, you realize, ‘Why aren’t we doing it?’”
Before Fazio starts to point fingers and reprimand people, he has to think about whether the company is spreading itself too thin.
“When you realize that so-and-so has six or seven of the top 20 priorities, how is she going to get those done? It’s just not fair,” he says. “You really have to be cognizant and understand that we also have other things that we are doing on the day-to-day. To accomplish our goals, some of these priorities are not going to get the attention they need.”
Fazio finds it’s better to be great at a small amount of things than to be average or good across the board.
“You’ll feel better about what you are doing, and frankly, you are going to accomplish more because instead of trying to accomplish 28 (goals) maybe at 75 percent, you are better off trying to do 15 (goals) at 100 percent.”
Either way, Fazio isn’t going to play the blame game if something isn’t at 100 percent.
“Blaming people is really not what it is all about,” he says. “It’s about helping everybody and making sure you are getting it done. But if you are trying to do too much, no one can do it. It’s just not possible.”
Besides limiting the overall number of goals, Fazio has found that being clear and following up are key leadership traits when it comes to getting the job done.
Fazio says he sometimes likes to use a sense of humor to get his point across. He’s able to joke that it might only be his view of a sense of humor, but nonetheless, it adds some levity to a situation.
For example, Fazio will ask an employee if he or she can take care of a task for him. When the employee agrees, he waits a minute for that person to get back to his or her office. When he or she gets back to their chair, the phone rings, and it’s Fazio asking if the person is done with the task yet.
“It’s a sense of humor, but I am also sending a clear (message) that I have a sense of urgency,” he says.
Fazio doesn’t care if his leadership style makes someone uncomfortable. That’s how he leads, and he will be clear about the fact that he wants to see results.
“If someone is going to work with me, we’re going to have a discussion about what that is going to be like,” he says. “It’s an expectation that you have to have. If it’s not what you feel comfortable with, well then, we probably shouldn’t work together.”
Through that clarity, Fazio shows that he is pressing to get results, and those around him should be doing the same.
“You’ve got to set the pace,” he says. “Respond to e-mails faster than anybody else. Answer questions very clearly and quickly and leave no one without clarity on what I think about things. It doesn’t mean I’m always right either, by the way. I just want to make sure I am clear though. If I’m wrong, I try to follow up on that, too.”
Because Fazio is a goal-oriented leader, he has be clear on what the goal is that the team is trying to achieve.
“You really need to make sure that the people that are around you are directly communicated (to) and understanding of the expectations of the company,” he says. “Through that, you really are setting a very high standard. Your personal standards have to be impeccable. It doesn’t mean you are always going to be perfect or right or any of those things.
“But, you realize whatever it is that you are doing is a reflection of the standard that you are willing to accept and people will gravitate to that standard that you set. They rarely go above it. They’re only going to go as high as you set it. So, your expectations have to be clear and you have to set a really high standard.”
Simply saying that you want something done won’t be any help to that person you are directing. Fazio doesn’t leave a room until everyone in there understands what he is thinking.
“There’s no doubt when I leave a room, or they leave a room, that we may not be on the same page, but they know where I stand and I hopefully understand where they stand,” he says.
While he sets clear expectations, Fazio also wants to listen to what people are telling him, so he can understand them, and respond clearly and concisely
“You really give people their due,” he says. “Ask a lot of questions, be very direct and accept absolutely nothing less than what you want and what you expect. It’s when you begin to compromise what it is that your standard is, (that’s) when problems occur because you eventually realize later that you should have not compromised. Then you end up with putting blame and there is all kinds of noise in that.
“So, the advice is that you keep going at it. You just keep asking questions, being very direct and being very open with that person. Direct doesn’t mean you have to be harsh. Direct means you are being very open about what you are feeling and what you are thinking.”
Fazio had a younger manager who didn’t tell him there was problem with a project that the manager was working on. Eventually, Fazio found out and had to step in and help fix it. He had to explain to the manager that the delay in fessing up only created a bigger problem, and now the manager has to give Fazio an update every day.
He said to the manager, “You just have to trust that I’m on your side. I’m not mad, I just want to get it done. I could have helped you because I have broader information than you do. I’ve been around longer. You have a chance here to learn from somebody that knows more than you do.
“I might not know everything or as much as you do on certain subjects within your business, but I probably know more just because I’ve been around longer. I’m not smarter. I’ve just been around longer. So take advantage of that.”
You have to be diligent in keeping track of where managers are on projects, especially with managers you haven’t worked with that much.
“I have found that you can’t have the expectation with a newer manager that they are going to follow up at the speed that you discussed initially,” he says. “So you are going to have to follow up in the interim. If your date is 30 days from now, in 15 days you want to find out where we are at. If it’s a manager that you have been passing that ball back and forth with each other for a long time, you don’t have to check in 15 days. You can wait for the 30 days.”
When the manager didn’t come to Fazio with the problem, it bothered him because he wants managers to trust him.
“Newer people need a different kind of management approach than people you’ve been workin
g with, because you may not be on that same page,” he says. “They may be reluctant to push back on issues and the clarity and communication isn’t there yet. You haven’t, what I call, ‘put deposits in the bank’ with that person and they don’t have that trust in you yet. It’s really up to you to develop that trust. It’s not up to them. It’s up to you. Then, once you get that trust, then you are going to have that real honest exchange, and clarity and communication are going to be crystal clear.”
That trust is built through follow-ups and being able to show that manager that you aren’t going to fire them if they need help with something.
“Trust is going to be built over time when they are coming to you and saying, ‘Hey, I ran into some issues here,’ or, ‘I got this done and here’s where we’re going,’ or, ‘I changed my mind.’ You can tell when there is real, honest communications. When they come back to you is when there is trust.”
Since Fazio is so intent on following up and being involved, he has been accused of being a micromanager, and he’s fine wearing that label.
“I’m very involved,” he says. “I think every leader should be. It depends on the size of the company on how involved you have to be but ... it’s not a matter of micromanaging. “You’re abdicating leadership if you’re not going to roll your sleeves up, as well, and really help somebody. Two people can do things better than one, generally. It doesn’t mean you don’t hand out. It doesn’t mean you don’t delegate. It just means you stay on it.”
Though Fazio does want to be hands-on, he has to remember to move back up to the 30,000-foot level.
“You can only be in one place,” he says. “It’s tough to be in both. I think sometimes I lose a little, because I’m so into the execution issues and pressing an urgency to the matter.”
Fazio says he should spend 10 percent more of his time at the 30,000-foot level. He tries to spend at least one week a year where he travels not on business but to learn. He will go to a conference or visit other retailers outside of his industry to get a broader look at the world.
“You try to broaden yourself a little bit and come out of that foxhole,” he says. “But I would rather take the chance that I wasn’t above it all, but I was in the middle of it, and if I couldn’t get it done, then I can at least fault myself for trying. But I can’t fault myself for not trying.”
How to reach: Mattress Firm Inc., (800) 628-3476 or www.mattressfirm.com
Ian MacKechnie doesn’t care where an idea comes from. It can come from him, someone on his management team or someone who’s been with the company for two days. If it’s a good idea and can help the company, sign him up.
“A lot of my ideas get shot down,” he says. “And I don’t mind, because that’s OK. We want the best idea to win.”
MacKechnie has used that attitude to lead Amscot Financial Inc. from $85 million in revenue in 2006 to $145 million in 2008.
The chairman, president, CEO and founder of the financial services firm checks his ego at the door for most decisions. Of course, being the leader, if he really believes in a decision, he wants the organization to buy in.
“If I’m passionate about it, it’s kind of first among equals, if it’s a pretty important decision,” he says.
But that doesn’t happen often. If it did, MacKechnie would be driving away those who have good ideas or have valuable input. He could also be consistently making the wrong decisions since he is more at the 30,000-foot level of management than those who are below him and on the front lines dealing with customers.
“We want the best solution,” he says. “We don’t care where it’s coming from. It’s not who’s right; it’s what’s right. It truly is because you have to remember, why would I not want the best thing? When you’re running a company, if you are a leader, you want what’s best.”
Such was the case when the company wanted to tweak its brand. It wasn’t MacKechnie on his own who came up with idea of referring to Amscot in advertisements as “The Money Superstore.” It was everyone involved in the process.
“If you don’t mind other people getting the credit, you’ll be really successful,” he says. “That is the trick. You are going to get a lot of the credit anyway, if you are the leader. So who cares where the ideas come from?”
And that’s what MacKechnie wants Amscot’s atmosphere to revolve around.
“Running a company is not about me, and it’s not about the chief executive,” he says. “It’s about all of us growing the company. It’s not me that built this company. I’ve helped to get it started, but it’s all these great people around that are making it happen. The bigger it gets, the more they are making it happen.”
Here’s how MacKechnie drives that message home by inspiring people, setting guidelines and coaching those who fall short at delegating.
MacKechnie recalls reading a report that people want their direct report or supervisor to be inspirational.
While he says your employees have to possess their own inner motivation, you as the leader can still inspire the people around you to be better.
“It’s got to come from within,” he says. “I don’t believe I can really motivate anyone. I think what we can do in a company is we can create the environment, which is a new kind of trend.”
You are part of creating that environment by the vibe you put out to employees.
“If you are a wet rag as a leader, you aren’t going to lead anyone,” he says. “If you don’t have any spark in you, how are you going to get spark in other people? So enthusiasm is critical in any walk of life but certainly as a leader.”
When you hear the words “inspirational leader,” it may conjure up thoughts of a motivational speaker throwing out new age sayings or an over-the-top, always smiling, cheerleader type.
But that isn’t what it takes to inspire people.
“We all show enthusiasm in different ways,” he says. “One leader may have a low-key form of enthusiasm, but his people still can get it. He quietly has that enthusiasm for the task and for what we are doing and so forth, where someone might be more at a different level. I’m not talking about jumping around and singing songs and holding hands or hugging. If you listen to President Barack Obama or Warren Buffett, you can just here the enthusiasm from what they do in their voice.”
You can do little things like sharing good news with the whole company or sharing a compliment someone received from a client or a customer. You can also e-mail something to employees that relates to the company.
“If I see a nice quote or a great quote that seems appropriate about customer service or something, I just go on and send it to everyone,” he says. “Then I’ll get feedback from them. We try to make sure that we are listening and that our management is approachable and people are able to talk to us easily; that’s the culture we want.”
You have to be effective at delegating to be an inspirational leader who creates a team environment.
You may think you are delegating by pushing off tasks that don’t interest you and telling other people to take care of them.
But, that’s not the case.
“One of the things I learned early in business life is you can delegate but you can never abdicate,” he says. “If you give someone a task to do and they are not able to do it, you are abdicating that responsibility and I can never abdicate my responsibility.”
Abdicating your responsibilities can create chaos. You have to have systems in place to guide employees so they know what they are doing when you give them a task or a problem to solve.
MacKechnie refers to setting up guidelines and then delegating as a culture of discipline.
“When you have a culture of discipline, you need less hierarchy and people can be left alone and they can be encouraged to grow and blossom without someone looking over their shoulder all the time,” he says. “Typically, you and I don’t want someone looking over (our) shoulder all the time. That’s not fun. We want it to be fun.”
For instance, a branch leader at Amscot is trained to follow procedures from the minute he or she enters the parking lot to the minute the branch leader leaves. While that sounds like it may create a stifling environment, MacKechnie sees it as quite the opposite.
“I would say it does the reverse,” he says. “It frees them. It frees them because they now know beyond that, it’s just looking at customers.”
You have to explain to employees that the rules and guidelines aren’t meant to micromanage them. That gives employees a better idea of what is expected of them, and gives them the freedom to make decisions within the set guidelines.
“If you create these strong procedures, you can leave people,” he says. “You can leave the branch leader once they know these procedures, … [and] then we can delegate because they know the procedures and they can be more empowered to go help customers.”
You want to monitor what you’ve delegated, but you also want to show faith in your employees.
“You have to go back to trust and verify,” he says. “But you’ll never grow your business if you can’t delegate.”
While you have inspired your team by delegating, you also have to make sure your managers are following the same practice.
For MacKechnie, it’s easy to identify a le
ader who is great at delegating.
“You can see it,” he says. “One of the best ways to tell is (to find out) how many people has that individual developed in the company.”
If you see a manager who has people below him or her rising up the ranks, you know you have someone who is strong at following guidelines and delegating.
“A great leader develops lots of great people,” he says.
However, you may also have a manager who is slow to delegate, but fantastic at his or her position. The manager works hard, he or she is dependable, and when something needs to get done, you know he or she will come through in the clutch. But the one problem is that the manager doesn’t share your philosophy that delegation is more effective than doing everything yourself.
You have to go beyond simply telling someone to delegate.
“We are going to be coaching them and working with them to improve their skills,” MacKechnie says. “If they’ve got all the other qualities, but just lack that a bit, we are going to work very hard with them.”
Don’t be so quick to dismiss someone because he or she isn’t buying in to the procedures or delegating. You spent a lot of time and resources to hire or promote a manager, so don’t be so quick to dismiss that person if you see some flaws you didn’t see before.
“It’s expensive for us to hire people and train them,” he says. “So, we want them to succeed. We want our management team to do everything we can to help mentor them, and foster and explain to them why they are doing these things. They’re not doing them just blindly, but, ‘Here’s why we want you to follow this procedure.’”
That’s why you can’t just tell someone to be better at delegation and hope for the best. You are going to have to step in and help him or her realize the benefits of delegation.
“It’s got to be done with one-on-one coaching,” he says. “You really have to spend some time and care about these people,” he says. “Good leaders don’t want to lose people. They don’t want to lose talent. But at some point, a decision has to be made.”
You can give that person a couple of years to adjust, but if he or she still hasn’t learned to delegate, you need to step in and bring in someone to whom he or she will have to delegate. You involve the manager in the selection of the person, but you have to let the manager know this person is being hired to help with managerial duties.
If that doesn’t work and you’ve exhausted every avenue to help the manager delegate, then you will have to part ways.
“We can’t retain them if they are unable to delegate,” he says. “By delegate, I would say that is the ability to get great results through other people. If they’re not able to do it, they shouldn’t be in a leadership position.”
It might not be the result that you wanted, but you did everything you could to help the person. If the person isn’t promoting the team environment by delegating, then you won’t get an environment where people are motivated and will feel free to come to you with ideas. Because, as a manager and a leader, you are only as good as what your team produces.
“It’s not managing what people do in a company,” he says. “It’s managing what they do together.”
How to reach: Amscot Financial Inc., (813) 637-6100 or www.amscotfinancial.com
At a previous company, Dennis E. Murphree would sit in the company’s conference room every Wednesday morning. He told everyone below the officer level, such as receptionists and bookkeepers, that he would be there to answer any questions or hear any feedback they may have.
“They would have to voice what they were going to say in front of all the other secretaries and bookkeepers and so forth,” says Murphree, founder and managing general partner of Murphree Venture Partners, a venture capital and growth equity firm that posted $150 million in 2008 revenue.
“It took a little while,” says Murphree, who is also a professor at Rice University. “The first few meetings people were reticent about saying anything in front of other people. But, after awhile, what I would do is start asking them questions. It would force them to talk because I was looking for answers from them.”
Smart Business spoke with Murphree about how to get employees to open up and how to deal with failure.
Show people you are listening. Since the day I got out of graduate school, I’ve always worked for myself. I am your classic entrepreneur. I’ve been the boss from day one in a whole variety of companies.
One of the things I learned very early is employees, in some regards, are judging how things are going by the mood the CEO is in. If the CEO is fearful or in a bad mood, they just naturally assume that things aren’t going well. I’ve also watched in my early years, I’d listen to people say, ‘I wonder if today is a good day to go see so-and-so? I wonder what kind of mood he is in?’
I cultivate a very calm, even-tempered mood. I tell my people, both our portfolio CEOs and the people that work within my own firm, ‘Every day is a good day to come see me. I’m going to be in essentially the same mood every day. You’re not going to know if I am having a good day or a bad day. So, whenever you are ready, come see me.’
Secondly, I have a total open-door policy. My door is never closed. They can just walk in and interrupt me at any point and time. I think that is absolutely important. I think also as a leader, you’ve got to be able to make decisions. You’ve got to walk the walk and people have got to see that you’ll do what you say.
Be willing to listen to people. Especially countervailing opinions. I see too many leaders that they didn’t want to hear anybody contradicting what they think or what they want to do. I find a real good leader is more than happy to listen to all points of view.
Keep going. I’ve seen tremendous failure myself. I went spectacularly broke in the middle-’80s. I went from the front page of the Wall Street Journal and a boy wonder to, one year later, completely flat broke and half of a billion dollars in debt. I know something about failure. I know something about hard times.
One of the things I tell our portfolio CEOs is, I just kind of put my hand on their shoulders and say, ‘Look, there is not a thing you are going to face that I haven’t seen before. If you will tell me what the problems are as soon as you know about them, I will try and help you through it. Where you are going to get into trouble with me is when you try and hide it. Then the problem becomes worse because you tried to hide it from me.’
Be respectful. In this day and age, the day of the volatile CEO or leader that’s yelling and screaming and somebody makes a mistake, they’re chewing them out, I think that day is over with. If it isn’t, it should be.
If someone makes a mistake, my first reaction is not to get mad at them. It’s to say, ‘OK, you’ve made a mistake, and now how are we going to fix it?’
The second question would be, ‘What did we learn from this?’
I’ve had volatile people around here and I’ve sat down with them and had those discussions and said, ‘You can’t be doing that. You’re not going to engender respect nor are you going to get the best out of people if every time they slip up you start yelling at them.’ Who wants to work in that environment? I’ve never met anyone that wanted to make a mistake.
They made a mistake it’s, ‘OK, you goofed up. How are we going to fix it, and how are you going to learn from it so it doesn’t happen again?’ I tell my employees all the time, ‘Look, I want to be constantly making new mistakes. But hopefully, I won’t make a whole lot of the same ones over and over again.’
Things happen. Sometimes people make big mistakes and little mistakes, but things happen. I tell people all the time to be a good leader. You’ve got to be able to deal with ambiguity. You can’t deal with ambiguity by just checking in because the truth is, nothing is certain. Nothing is going to turn out like you thought.
I tell my students this all the time, ‘Whatever you think is going to happen, probably isn’t.’ It’s more likely that it’s probably going to be better than you thought it was going to be or worse than you thought it was going to be. But very unlikely is it going to turn out like you thought. You’ve got to be able to deal with that ambiguity of how things are going to turn out. When mistakes happen, you try to fix them, whether they are big or little.
How to reach: Murphree Venture Partners, (713) 655-8500 or www.murphreeventures.com
Ken Young doesn’t want to be the sole mind or voice behind a decision.
“I encourage the people in our organizations to come up with offbeat ideas,” he says. “I’ll do it myself. Then, let’s all shoot holes in it, and who knows, maybe by the time we’re done, we come up with something that is excellent or we’ve decided not to do something.”
But Young, co-founder and president of Ovations Food Services LP, hasn’t always led this way.
“When I was younger, I didn’t delegate nearly as much in decision-making,” he says. “I was much more hands-on. But as I picked up more responsibility, at a certain point, I said, ‘I’ve got to let other people make some of these decisions. I’ve got to let them do their thing. I can’t be involved in everything.’”
He’s led the company from $112 million in 2006 revenue to $170 million in 2008 revenue.
“I think that’s one of the things that has permitted our food services company to grow at an accelerated rate because our clients know that our management is permitted to make those decisions, and I’ll explain that to our clients also,” says Young, who also owns four minor league baseball teams and one minor league hockey team.
It’s not to say that Young wouldn’t have been successful with his old style of decision-making. Certainly, there are plenty of old-fashioned, strict leaders who want everything done their way. While that could work, they could be missing out on great opportunities.
“When you start looking at someone who is a dictator, it’s tough changing their opinion,” he says. “The old manager could have been successful, but he could be three times more successful if he did it a different way.”Guide the decision
When Young needs to make a decision that involves key people in the organization, he receives input from those people and they have a healthy discussion. Young won’t share his opinion unless it’s needed.
“I purposely don’t let people know where I want the decision to go,” he says. “I’d rather have them come up with it. ... I feel that’s part of leadership.
“If you can get buy-in and feel that others have made that decision, I think that’s important. The way you do that is just talking things out.”
You can guide the conversation, but you don’t want to let it be known you have chosen a side in the discussion. Once the decision is made, you don’t necessarily need to take ownership of it.
“I don’t think in leadership that people need to know that you have made the decision,” he says. “There can be subordinates and others in the organization. As long as you buy in to that decision, let them think that they’re the ones that made the final decision.”
If the discussion is veering off in a way that is getting away from the main topic, he will bring everyone back on course. But he still will keep his opinion to himself.
“Because I realize one of the things when you’re leading, whether you are the president of one organization or even the leader of a committee, often people want to hear your opinion and then they’ll buy in to that opinion,” he says. “But that doesn’t always make the best decision.
“I don’t want people to agree just for the sake of agreeing. That is something that you need to convey to your employees, and then have them buy in to it. If I say something is red, and it’s really blue, I want them to tell me that.”
To reach that level of comfort will take time, so you have to continually work at it.
“It’s easier if they’re not sure where I am on an issue,” he says. “They’ll open up a little bit more. That’s where I think the best discussions take place.”Learn to live with mistakes
Part of delegating decision-making is dealing with the mistakes that come along with it. If you want your lower-level managers to make decisions and take ownership, you have to let everyone know that you know mistakes will be made.
“The biggest thing I tell them is, ‘If you make the wrong decision about something, I’m not going to be overly upset about that. We can use that as a learning experience. However, if you make the wrong decision because you were careless or you didn’t gain the knowledge you needed, that upsets me,’” he says. “I’ll tell people that right upfront.”
When Young was 26, he was working for a food service company in Kansas City. The company was running the food service for the 1976 Republican National Convention, and he had the opportunity to put together a program for the convention.
It was a pretty substantial investment, but he received permission from his superiors for the project.
At the time, Young thought it was a great idea, but after the first day of the four-day convention, the programs weren’t selling like he thought they would.
“After one day, you get this pit in your stomach that you think, ‘Maybe tomorrow will be better, and I know it’s not going to be,’” he says.
“So, it turned out it was a bad decision. I’ll never forget this because I did think this was a bad enough decision that this could cost me my job.”
It didn’t cost him his job, but his boss did have a talk with him about it.
“We’re talking, and he says, ‘You know Ken, we could have sent you to Harvard Business School for what you lost on this,’” Young recalls.
“It relieved me because he was able to joke a little bit about it, but at the same time, we saw what the seriousness of that situation was.”
That situation hit home with Young because it said something about leadership and dealing with somebody who made a bad decision.
“If somebody has weighed something similar to how I would weigh making a decision and it just isn’t the right decision, I think you have to support the person usually in that case,” he says.
If someone makes a mistake that cost the organization $20 million, Young will have to hold himself accountable for allowing someone to make that decision. You have to avoid putting a manager in the position where he or she is left on an island when making a decision with big financial consequences.
“There’s obviously a point, especially with financial decisions, there’s a point where I am either going to buy in or make the final decision,” he says. “When you look at something that can do great harm to a company if it’s the wrong decision, I’m going to at least approve that decision.
“You come down to at what point is the risk that you are not going to permit somebody to make the final decision without coming to you. That just depends on the circumstance.”
If a wrong decision is made, then you need to sit down with the involved parties and talk about why the decision didn’t work.
“Because you have some great employees that just aren’t always going to make the right decision, just as I’m not always going to make the right decision,” he says. “When I make a bad decision, I just tell my own people, ‘I blew this decision. It wasn’t a good one. Here are the reasons I made it, but XYZ didn’t pan out so it turned out to be a poor decision.’”Go your own way
W hile you may make a move to involve others in decisions, and you are ready to live with possible mistakes, at times, you still have to go with what you want.
“A good leader just doesn’t always go with the consensus if you think the consensus is wrong,” he says. “A good leader looks at why he thinks a decision is a right one and tries to explain why it is a right one, even though a larger number of people don’t agree with that.”
If you are in a situation where the room is against what you were thinking, but you believe your way is the best direction to head, then you have to make that decision.
Such was the case with an idea Young had about one of his baseball teams. The team would allow kids to run the bases a few Sunday afternoons a year, but Young wanted it to be an every-night occasion.
Young presented the idea in a meeting with about 20 staff members.
“We went around and there were probably 15 reasons why maybe you didn’t want to do it every night,” he says. “But every one of those reasons, they weren’t very good ones ‘It’s going to keep the staff there an extra 20 minutes, it’s going do this, or it’s going to do that.’
“At the end, I said, ‘OK, I’ve heard everything you said, but the customer service and having those kids and their parents go home as happy as can be because they got to run … that’s going to send a great message, so we are going to do it every night.’”
You don’t want to make a habit of making decisions this way, but in instances where you feel very passionately, you should.
“It’s something like that where if I feel strong enough about something, I may listen to everybody, but in the end ... I haven’t been able to convince them to look at it from the same perspective I have, but that’s the way we are going to go,” Young says.
After making a decision that goes against the majority, you have to explain your reasons why you made the decision you did.
“When I explained in the end, ‘This is why we are doing it this way,’ they may or may not agree with me, but the fact is they say, ‘OK, he is doing it for a certain reason and we looked at it from a different perspective.’
“So, you get them to buy in. Then, the proof is in the pudding. They see the reaction of the fans and so forth, and if it’s a ho-hum, they might say, ‘Ken, this didn’t work the way you thought.’ Or come back and say, ‘This is pretty enthusiastic for everybody,’ and so they are then eager to go along.”
How to reach: Ovations Food Services LP, (813) 948-6900 or www.ovationsfoodservices.com
Early on in Kay A. Henze’s career, the then president and CEO of Verizon Wireless told her something she still remembers to this day: Good leaders say the same thing over and over and over again. When they get sick and tired of hearing themselves say it, they say it again.
“It really has helped me, especially in that first year when we became Verizon and were bringing all these different cultures together,” the president of the Houston/Gulf Coast region says.
With 1,800 people following her lead, Henze has to work extra hard to guarantee everyone is on the same page, which she does by being visible and staying in touch with employees and customers.
“In large organizations, especially as managers increase their level of responsibility, that becomes more and more of a challenge because the workload continues to grow,” she says. “But you always have to remember that in my business, it’s a very consumer-centric business, and the business really happens where the customers are and where most of your employees are. It doesn’t really happen in your office.”
That type of attitude is contributing to the company’s success.
From a customer loyalty perspective, Verizon Wireless has flourished. The second quarter of 2009 was the 19th consecutive quarter that the company, which serves 87.7 million customers, experienced the industry’s lowest customer turnover rate, and the organization continues to see year-over-year growth.
“I think it’s definitely benefited our organization, because it’s helped the company grow,” she says. “At the end of the day, it does come down to the results. At the end of the day, it does come down to what we produce and what we give back to the corporation. By being engaged and visible and committed, we help each other grow.”
Henze and her team were having trouble articulating the competitive advantages that Verizon Wireless had over its competitors. She and her team talked to some front-line employees at retail stores and found those employees could articulate very crisply and succinctly what they saw as competitive advantages.
She took the ideas, shared them with directors and formed a cross-functional small group of the employees. They drafted in their own words what they saw as the company’s competitive advantages in Houston, and those words were adopted nationally.
Without getting out and talking with employees, Henze and her team might still be looking for the best way to summarize the company’s competitive advantages.
“The more that you are out there, the more comfortable they become,” she says. “So, it’s not a big event, or it’s not a big deal that Kay just walked in my store.”
Making yourself available for employees and customers is key to being a great leader, but unfortunately, it is sometimes easier said than done.
“At the end of the day, you have to remember that you control your own calendar,” Henze says. “For me, that is really the biggest piece of it. I schedule time to be in front of my customers and in front of my employees all the time.”
Henze spends time with business customers and business sales representatives and tries to make announced and unannounced visits in retail stores once a week.
“You have to schedule it,” she says. “Through the years, if you set a goal that you’re just going to do it and don’t have the discipline around it, like any goal, it never really occurs.”
Don’t overdo it, though.
Scheduling visits once a week instead of once a day is much more realistic to achieve, and gives you time to work on problems or ideas you are hearing when you are out and about.
“I can’t think of a time that I haven’t spent time with our employees or our customers that it hasn’t resulted in work that needed to be done,” she says. “You have to allow yourself the time to go do that work. Because, otherwise, the employees lose faith.”
When making the rounds, be aware that you will run into all different types of employees. From the overachieving to the disinterested, you have to gauge the temperature of the room and be ready to interact with everyone you meet.
“Sometimes you’ll find an employee who is disgruntled and just doesn’t want to necessarily share for the betterment of themselves or the company,” she says. “Sometimes you’ll find an employee who feels, for whatever reason, that it’s inappropriate to share directly with a president as opposed to following the chain of command. Sometimes you’ll find, unfortunately, an employee who simply doesn’t care. You hate that, but it’s reality.”
When Henze runs into employees who feel uncomfortable going outside the chain of command, she will ask other people to step in.
“I might ask one of the HR consultants to go to the store and see if they are more willing to open up to HR, which sometimes they are and sometimes they’re not,” she says.
“But it’s always a sign to me, and I always just try to use other resources to get to what exactly is going on.”
A pitfall of being an engaged and available leader is the reality that you may undermine your managers. If you are making the rounds and speaking with your managers’ direct reports and employees, you could create a situation where a manager feels like you are micromanaging him or her or interfering with his or her leadership style.
To avoid that situation, Henze will give a new director some insight into what she does on trips.
“When I have a new director come into my organization, the first time that I go to visit their locations or work with their managers, I do it with that director,” she says. “They can see for themselves what I’m looking for, the questions I am asking and I can give real-time feedback with them right there with me. I can point things out, and then I think you can build from there. The employees also see you together, which is very important.”
You also need to report back what you learned on the visits almost immediately. Henze’s first call she makes after a stop is to the director of the location she just visited.
“Feedback to the next level is always provided,” she says. “It’s always in the spirit of improving the business and making sure that our employees have a good level of morale, that we are putting our customers first and that we are working together across all the layers to improve. So, my managers, my directors, when I leave a store they are usually the first phone call I make and the response that I always get is, ‘Thank you for the feedback.’”
The call will also let your managers know that you aren’t going behind their backs or keeping information you learn on the visit a secret.
“There is no hidden agenda,” she says. “Everybody is on the same page and because of that, (it) filters throughout the entire organization. It’s very transparent.”
Deal with trouble
About five years ago, when Henze was a director, she had a district manager who was uncomfortable with the visits she made. It turns out, the district manager was not guiding the business by the company’s core beliefs. Eventually, the manager resigned but the damage had already been done.
It took about two months from the start of the process to the resignation, which may not seem like much, but to the employees under that manager, it seemed like forever.
201C;It took many months before the employees really felt that they were moving in the right direction, and that they felt supported because they had not felt that way for a long period of time,” she says.
Either you or people whom you trust will have to stick around that location to make sure that everyone gets back on the same page and is buying in to the company’s beliefs.
“That’s what I call hand-holding,” she says. “Not micromanaging, but that’s a period of time that you really have to hand-hold the leadership in that organization as well as the employees in that organization.
“What I mean by that is making sure that if you are not there as the leader that there are other people there representing you that you trust and that are on message. You may infuse some additional leadership for an additional period of time.”
You might also move a more productive manager to the troubled locations to settle things down.
“You might move one store manager to a different store and put the other store manager in the troubled store,” she says. “You really have to strategically ensure that you’ve got the right people there in the long-term permanent positions.”
Don’t put the new leader hired to replace the bad leader in the troubled location. Instead, start them out in a location that is doing well.
“Because then the new leader, if they are in another location and if they are in a store that is really getting it and they want to improve, they will feed off of their employees and they will feed off of that new environment,” she says.
“The other, trusted employee going into the troubled store — the employees will respond very quickly. You’ve got to kind of mix some things up sometimes to make sure people get the support they need.”
If you stay engaged, not only will the employees get that support, but you may be molding a future leader, while, at the same time, keeping the company heading in the right direction.
“We foster a growth and development culture within our organization, which helps us see what the customer sees and helps us hear what our employees are seeing and doing,” she says. “So, we are constantly building the future leaders of the company and we are constantly focused on how we can improve our results. For us, the good news is that it’s worked and that our results continue to be strong. We have the highest customer loyalty in the entire industry. So, I think that’s the benefit. The benefit of it is in the results and in the development of your people to become the next leaders to help carry the company forward.”
How to reach: Verizon Wireless, (800) 922-0204 or www.verizonwireless.com
“One of the things we try to keep in mind is the saying that, ‘Culture eats strategy for lunch every day,’” says the chairman and CEO of RPM International Inc., a holding company with subsidiaries that manufacture and market coatings, sealants and specialty chemicals, primarily for maintenance and improvement.
The strategy needs to be supported by a free and autonomous culture.
“You can have the fanciest strategies in the world, and if they are in contradiction with the culture, the culture is going to win,” he says.
Sullivan breaks down culture at his company, which posted $3.37 billion in fiscal 2009 revenue, into four groups. First, there is the group that buys in to the culture and also puts up good numbers.
“Your best leaders don’t need direction day to day,” he says. “Your best leaders already get the culture. They are innately performance-driven. They are people that like to win, and they are people that really don’t like to lose. So they don’t need to be motivated to perform. They are people that celebrate organizational accomplishments. They recognize other people. They’re all about building something great, which is different from somebody that is all about me.”
Second, there is the group that doesn’t get the culture and isn’t producing.
“That’s easy, too,” he says. “You get rid of them. As soon as you identify them, you get rid of them. When you do that, the flip side of that is, pretty soon, you get a culture that starts rejecting the nonperforming naysayers.”
It’s the two groups in the middle that tend to be the most challenging for leaders.
“You’ve got folks that aren’t performing but are trying their best to live the culture and get it,” he says.
“Then you’ve got the people that are putting up the numbers, and despite their performance, they are what the Army would call toxic leaders. They don’t get the culture. It’s all about them. As long as they are making their numbers, it’s, ‘Get the hell out of my way. Let me do my thing.’”
Here’s how Sullivan handles those two middle groups at RPM.
Get better performance
Every company has them. That batch of employees who exemplify your corporate culture to a tee. They work hard, get along with everyone and always start the day looking to make a positive impact. But some of those employees aren’t the strongest performers when it comes to results.
You have to make an effort to work with those types of employees, but you have to keep in mind that the bottom line does matter.
“At the end of the day, we don’t pay or promote for effort,” he says. “We pay and promote for performance. But I think you do everything you can to work with people whose hearts are in the right place and who are making a sincere effort to improve and get it.”
In fact, you may have created the problem yourself by promoting an employee out of his or her comfort zone.
“The hard thing about that circumstance is sometimes you find folks that were exceptional in a position maybe below the leadership level they’ve been promoted to,” he says. “Now, they are in a position of leadership where they are just kind of one step above their capability. It’s really hard to keep somebody motivated by putting them back into a position that they feel they’ve got the ‘been there, done that,’ but where they are really good.”
But don’t give up on those employees without trying to improve their production.
“You can try and overcome the areas where they are weak by supporting them with other people who have strengths in those areas,” he says.
“And recognize them and celebrate them for where they are strong and exceptional, and try to back fill, if you will, with expertise from other folks who work with them or maybe work for them.”
Because a demotion can really be a shot to someone’s ego, you can avoid outright demoting people by simply doing an organizational shift.
“You put more direct leadership on top of them,” he says. “Not necessarily without changing their status or their position directly, but effectively recognizing they can’t perform at the level that they’re at. So, maybe organizationally, you can make a shift so that they can get the type of direction that they need to be successful.”
You have to be patient in these types of situations. Sullivan usually gives about three years to a person who buys in to the culture but is coming up short on the production end.
“If three years is the average, it’s probably about the right amount of time — maybe a little short on the people that are trying to improve,” he says.
Unfortunately, those people tend to leave your company and go back to the positions where they can excel at a different company.
“Oftentimes, if you’ve got that person that isn’t performing, but otherwise is with the culture, a lot of times, it’s a recognition that they ultimately might come to, although maybe not admit, and the organization does,” he says.
“Then, when they leave, it’s been a failure of the organization or of top leadership. That person leaves and goes on and is probably successful elsewhere with a greater self-awareness of what they are exceptional at and what they’re not so good at.”
But that doesn’t mean you simply give up and you don’t bother trying to help them stay with your company.
In addition, while you may feel like you’ve failed by promoting someone who isn’t fit for the new position, don’t let that make you hesitant on your promotion decisions in the future. That’s a lesson Sullivan’s father taught him, which he still uses today.
“You can’t let circumstances like that stymie your ability to keep promoting people because people most often will rise to the occasion,” he says. “You’ve got to maintain an environment where people feel like they will have opportunities for greater responsibility and greater authority. I think the lesson people need to take from that is you can’t let instances like that inhibit your desire to keep promoting people. You can’t be gun-shy.”
Deal with toxic leaders
The other group that really challenges Sullivan is the one filled with people who are great producers but stick out like a sore thumb when it comes to culture.
For example, RPM had a business unit that grew from $20 million to $200 million between a 15- and 20-year period almost by sheer force of the leader.
“But one of the critical aspects of leadership is, particularly as your business unit gets bigger, is leaders have to delegate, especially in our culture, and this guy couldn’t delegate,” Sullivan says.
At $20 million, the leader didn’t have to delegate, but at $200 million he couldn’t handle everything, but he still went against the company’s culture and wouldn’t share responsibility.
“His inability to trust that other people could d
o certain things right, let alone as well or better then he could, ultimately became his demise.” Sullivan says.
Sullivan faced the challenge by trying to convince the leader that he needed to trust his employees more because if he didn’t, it would hurt him in the end.
“You sit down and have very candid conversations about what you expect versus what is happening,” he says.
“You can do it through compensation in terms of changing some of their objectives — sometimes the subjective things or some identified things that relate more to culture than performance.”
You have to try and work with these toxic leaders because they made it to a position of power, so they must have some good in them.
“People like that aren’t bad leaders early on,” he says. “The real toxic leaders that can hurt your organization badly, they can only hurt your organization badly because they’ve reached a level in the organization where they have enough responsibility and authority that they can actually cause problems.
“So how did they get there? Well, they always weren’t bad leaders. Maybe they were exceptional in some areas. Maybe they had a functional excellence that was widely respected and exceptionally good. Maybe it goes down to simple issues like being able to delegate.”
In Sullivan’s example, he had to fire the leader who had been with the company for many years because he couldn’t get the leader to change.
However, you don’t want to lump a leader who disagrees with you in with the toxic leaders. That’s a pitfall some leaders fall into, and you should actually do the opposite with leaders who challenge you.
“You need to have the willingness to argue about different strategies and tactics and direction, and you need to have a thick enough skin to take shots right in the nose and try to be thoughtful about what that means as opposed to react,” he says.
“If you end up with a revolving door and you fire everyone that disagrees with you, you are going to end up with a bunch of yes-men. Then you’ve got a whole different problem.”
Whether you are dealing with those who get the culture but are coming up short in results or those that are rocking the boat but hitting their numbers, you have to remember to at least try and salvage the relationship.
“You need to work with folks, and you need to understand how different people are motivated,” he says. “Some people are motivated by financial rewards. Some people are motivated by recognition. Some people are truly motivated by their team, and you need to understand what drives people’s motivation.
“But you really need buy-in. You need people to buy in to the big picture and then be strong enough in their personalities to argue tactics and strategies and give you different ideas.”
How to reach: RPM International Inc., (330) 273-5090 or www.rpminc.com
An impressive list for sure, but it wasn’t a commander in chief that most influenced the chairman and co-CEO of Stewart Information Services Corp.
When Morris was a senior in high school, he was responsible for chauffeuring evangelist Billy Graham to the dedication of Houston Baptist University.
The duo arrived late, but as they were walking toward the university, Graham wanted to take a detour.
About 70 or 80 yards away, the workers were finishing the landscaping, and Graham knelt down and thanked them for building the university.
“I said that is a humble person who recognizes the value of what somebody else is doing,” Morris says. “He told them what they are doing would be attracting the students that would one day be leading America.”
To Morris, that is still more impressive than any president he’s met, and it’s an attitude he tries to drive every day at the company, which provides title insurance and related services to the real estate and mortgage industries. He wants to be a trustworthy leader who puts the organization, which posted $1.5 billion in 2008 revenue, ahead of him and lead a company where the customer and employees come first.
“That’s the most important thing you can do,” he says. “I’ve seen too many organizations where the organization was about serving the leader rather than the leader serving the organization.”
An effective way he drives that point home is through the company’s open-door policy.
“What is interesting is to hear people talk about it in the field,” he says. “I may get one call in three years from a person and that same person is saying to their customers, to their team members etc., ‘You know, I have access and I can call the chairman of the board of the company and he knows me, and he’ll pick up my call anytime I call him.’
“But they don’t abuse that. Yet, it is a sense of pride to them that they do have that openness.”
Here’s how Morris uses an open-door philosophy to lead Stewart Information Services Corp. to new heights.
Set the example
Morris recalls visiting a company where the CEO was smoking cigars all the time. The CEO wasn’t alone.
“Every layer of management of the people trying to get ahead in the organization had a cigar in their mouth,” he says.
Morris isn’t saying that’s bad or good. The point is, your employees are watching you, and if you start doing something, it will spread throughout the organization. The same goes for something that you say you’re going to do, and then you do the opposite.
“People learn from your examples,” he says. “So, if you say one thing and do another, then you basically void your ability to earn that trust.”
Because Morris says he has an open-door policy, he has to live that day in and day out. Otherwise, people will not buy in to it and they will see it as lip service, which will hurt the amount of trust employees have in him.
“The main thing is you’ve got to practice that,” he says. “So, if somebody has got a major issue, you can’t tell them you don’t have time to deal with it. That has to become a priority. Deal with it the same day. Don’t put it off a week.”
Morris received a call from an employee a thousand miles away because her boss took another position and she was lost in the middle.
He took her call, spoke with the parties he needed to and got back to her in a couple of hours. He then followed it up with an e-mail with her and those taking care of it, thanking her for bringing it to his attention.
“It wasn’t anything that was an issue, but if a person gets something in their mind that it’s an issue, then it’s an issue with them,” he says.
That’s important to remember. It might not be a big deal to you, but if someone is taking the time and courage to approach the CEO, it means something to that person.
If you aren’t available when an employee contacts you, your assistant has to be the one to tell him or her that you are unavailable, but you have to realize it is an important matter.
Morris tries to leave some white space on the calendar between meetings so he can look into any issue brought to him while he was away. If it’s something he needs to handle immediately, he can at least start dealing with it in that 15-minute window or prepare for the next meeting.
“If you don’t have an emergency, you have time to write down your thoughts about the meeting you’ve just completed as well as review what you want to review before you are going into your next meeting,” he says. “Then, if you do have an interruption, at least you’ve got some time where you can handle something.”
If you are available and someone is angry or upset, take his or her call, but let that person calm down before speaking.
“You never establish anything while somebody is ranting and raving,” he says. “It’s like throwing rocks back, and you are giving them ammunition. Pretty soon, they’ll run out of gas.
At that point, you can have a reasonable discussion.
“If they’ve got an issue that’s upset them, let them finish, state what you heard and ask them what they would see as the solution,” he says.
Don’t undermine managers
The employees at Stewart are given a very clear message when it comes to the company’s open-door policy.
“We encourage everybody to follow their report in management, but we also encourage our management to say to somebody under them, ‘If you disagree with my decision, I encourage you to appeal above me.’ So, that message gets out.”
Morris and his team obviously want people to come to them if they feel it necessary.
But, be careful. While that kind of an environment is effective and essential, it can create problems.
“That’s the kind of openness you have to have, yet you don’t want to manage around your leadership,” he says.
If an employee leapfrogs a manager and comes to you with an issue, get the manager involved, especially if something is going to be changed. You want to keep the manager in the loop so he or she isn’t blindsided.
“We (get) them involved,” he says. “If you are going to change some decision, then I think it’s important to go through the decision process with that manager and make sure you both are understanding the same facts.
“You go through how you analyze it, get the feedback of that manager on it, and you’re basically looking to get the buy-in of that manager as well as use it as a training opportunity. So if a situation came up again, perhaps that person has a little more insight into the decision process.”
Because the open-door policy is so strongly communicated to all employees, it keeps managers on their toes, which keeps the number of people coming to see Morris down.
“They don’t come in that often,” he says. “I think that is the magic of it in the organization. If people know that is available, I think your management all the way down the line is saying, ‘I really don’t want that call coming, so I am going to
do that job and I am really going to pay attention to what this person is saying.’
“It’s not that you aren’t getting any calls from an area. Getting some calls is good and it helps maybe to do things better in the company or plan some things better. But, if you are always getting bellyaches from an area, you know you’ve got a problem. You’re going to get those anyway. They are going to surface up through the organization.”
Just because you get a call from a disgruntled employee, don’t automatically assume the manager is wrong.
Part of forming a trusting and open-door environment is delegating and getting out of the way. Yes, you want employees to feel free to come to you if something isn’t right in their department. But, if you’ve delegated authority and responsibility to a manager, they may be doing something differently than you would, but that doesn’t mean it can’t be just as effective.
“Remember, what’s important is the end result and not the road to get there,” he says. “I can actually say Dallas is due north of Houston on a compass, but if I take a compass without reading the road signs, I’m going to wind up in a dead end somewhere in a cow pasture because I took the most northerly turn.”
Whether you use the scenic route or the interstate, you wind up in the same place, and that is what’s important.
If the manager is doing something wrong and not reaching the goal, you need to coach him or her instead of just taking the job back.
“If you sign the job out, don’t take it back,” he says. “If you’ve assigned the job out and you want the person to get to the goal, then let’s coach and mentor that person if they are having trouble getting there.
“Either you do that or you waste a lot of time and money and effort and potentially harm the reputation of that employee.”
Don’t just tell the manager what to do. Get him or her to participate in the process.
“In a time-constraint society, it’s a whole lot easier just to tell somebody, ‘Do this,’ especially if you’ve done it 50 times, and you know exactly what to tell them,” he says. “However, just like rearing your own children, if you tell them to do something they’re less likely to do it than if they learn why to do it.”
Those same managers will be able to learn faster if they feel more comfortable coming to you and asking for help, instead of never seeking advice.
It also makes a difference when you bring in new employees.
“We have had people who have come to our company from competitors and they say, ‘We never met the CEO of the company. We never were able to talk to them. They were very elusive. This is incredible.’ It takes very little time.”
How to reach: Stewart Information Services Corp., (800) 783-9278 or www.stewart.com
It can be frustrating and time-consuming, but in the end, it’s a key to any successful company. The “it” he’s talking about is setting up a plan and establishing goals.
More importantly, communicating the plan and those goals from the top of the organization all the way down to the bottom.
“What we find is there is a lot of benefit to articulating what we’re doing and why to as many people as possible,” he says. “I spend a good deal of my time trying to translate the goals of the company at a high level into something that makes sense to people who are working in plants or working in marketing or sales and so forth.”
The CEO of Chromalox Inc. wants his employees to be able to take those top-level goals and tie them into their department’s specific goals at the manufacturer of industrial heating applications, which posted almost $200 million in 2008 revenue.
“When we set high-level objectives for the company, we work very hard to say, ‘OK, how do these top-level goals and objectives translate in a way that makes sense to sort of the vice-president level of the company,’” he says. “Then, how does that translate in a way that makes sense in terms of projects or activities to sort of different levels in the company.”
That includes finding a way to measure your business with objective and realistic goals that employees can relate to and then involving employees in the process of establishing a plan to reach those goals.
At the same time, you have to give direction and monitor progress, without micromanaging the organization.
“That takes a lot of work and a lot of repetition, but it pays off in the long run, because if you’re able to align the activities and the goals of the people down in the organization to what you are trying to do, your chance of success goes up,” he says.
According to Dysert the foundation you have to build off of is having the right measurements in place that will give you objective data.
“If you have a good measurement system in your business, then that should drive the conversations in whatever planning sessions or review sessions you are doing,” he says.
“If you don’t have a really good measurement system, you can have sort of a parade of interesting factoids that kind of go through a meeting and you really don’t accomplish anything.”
Dysert tries to align his measurement systems as close to financials as possible. Even if it’s not a financial measure, he tries to get it as close to a financial source as possible, so managers or supervisors aren’t adjusting numbers to make themselves look good.
“The closer your measurement system is to financials the better, because a pure financial measurement typically has a higher standard than any other measurement in the company because it’s audited,” he says.
“The closer it is to an auditable financial result, the more likely it is to be objective. What I find is even the most honest, forthright manager, if they are left to develop a measurement system to evaluate themselves or their department, over time, they’ll tweak that measurement system in a way that under the guise of fairness, they are taking out things that don’t count and they’ll just adjust it until it looks good.”
You should also look at the difference to the company a measurement would make if you completed it at its highest level. If you measure something and it’s really good but doesn’t move the bottom line much, then it should be lower on your priority list.
For example, you have measurements that revolve around the absentee rate for your company. If 100 percent of your workers are at work every day and the direct results on the bottom line are insignificant, you might not want to pay as much attention to that measurement.
“When you are talking with the team, you say, ‘What would this do if we got this to world-class numbers? What would it do to the bottom line?’ You realize, not a whole lot,” he says.
In addition, when setting plans and goals, you have to be careful not to set the bar too high. While you want your employees to aim high, you don’t want to set unrealistic goals.
“There should be some sort of a relative component to goal setting — relative to other parts of your company, other plants, other product lines … relative to last year,” he says. “There should be a component of your thinking where you can explain the logic, ‘On a relative basis, we did X last year; we’re going to do X plus whatever this year.’”
For example, if the economy has gotten worse since last year, you may want to scale back your financial goals based on the market conditions.
“If you try to stretch your people too much, you demoralize them because they realize that’s just an arbitrary goal,” he says. “It’s beyond aspirational. It’s delusional and you lose credibility.”
To create an effective plan, you also need to involve people outside of the executive suite.
At Chromalox, there is a four-year growth plan and a four-year operational plan that the company refreshes every year. It goes over what worked, what didn’t work and what needs to change due to internal or external forces.
Dysert involves the top couple of layers of management in the process to get their input and to spread the word down throughout the organization.
“We try not to do the work ourselves,” he says. “We try to build consensus and buy-in by asking a larger group of people to develop those plans.
“What you get when you develop a plan that way — it takes longer and it’s harder to do it like that, but when you’re done, you have a plan that has a richer perspective and it has more buy-in from people who actually are going to do the work.”
The manager can explain that part of the process and why the company is taking a certain action or why a goal is set at a certain level.
When managers become involved in the planning, they have to show how their department is doing to help reach the company’s goals.
“We say, ‘If we’re going to accomplish these four-year plans, what do we need to get done this year? Let’s put these objectives together in a way that is specific, that is measurable, it’s actionable and it has a time frame to it.’ That’s what we use to develop the objectives for our various departments throughout the company,” he says.
For example, if the company wants to take cost out of their products, the engineering department has to give input on how they are going to contribute.
“We can find $500,000 worth of savings by re-engineering these two products to use less steel in a particular application,” he says. “So, that engineering department would have that goal to save $500,000, and then an individual who’s in that engineering group would have a goal because he is working on one of those products and that product has to save $200,000. So, that is in his objective to save $200,000 for that product, but it ties all the way back to the four-year plan.”
It’s vital to get others involved in the planning and goal-setting process, because it now empowers your managers t
o help the front-line workers understand why the company is doing something.
“That goes a long way toward helping the broader population understand what you are trying to accomplish because, chances are, there’s a manager who’s been part of this process who down the road encounters questions from people who are doing the day-to-day work,” he says.
Direct and monitor
As much as Dysert wants to give freedom to his managers and his employees in the planning process, he still has to give them direction and monitor their progress.
About three months before the plans are due, Dysert and his vice presidents have a planning session on who’s going to research different aspects of the plan. It’s there that he can give them a nudge in the direction he wants them to go.
“I just don’t sort of surprise them at the end and tell them that I don’t like the plan,” he says. “Three months beforehand, I start to plant some seeds. I don’t tell them how to do it; I try to articulate sort of a vision where I think they need to head.
“It’s not giving them the plan. They need to think for themselves. But, it’s giving them sort of the CEO perspective on how things have gone and, directionally, do we need to steer the ship slightly left or slightly right.”
The vice presidents start to develop plans and they start to get feedback from the next level of managers about developing their individual plans. He then can get updates once or twice a month from the vice presidents about how the process is going.
“Informally along the way, they come back to me and say, ‘Hey, we had a good meeting yesterday,’ or, ‘Man, everybody is down. They can’t figure out how we’re going to do this,’ or, ‘This just seems unrealistic,’” Dysert says.
When you are having these discussions, you can adjust based on the new information that you now have. When the final plan is due, you don’t want people’s ideas coming from left field and having no chance of success when they present their ideas to the executive managers.
“It’s an informal way of aligning our thinking along the way so that we’re not getting into a two-day report out session where people are presenting just what I think are ridiculous ideas,” he says. “Or, I’m not standing firm with what they think is a ridiculous goal.
“We’ve done some sort of calibrating along the way so that when we have the plan together there, we’re not as likely to say, ‘This is totally wrong. Go redo it.’”
Dysert bases his involvement in various aspects of the planning process on the experience and capability level of the staff members involved and the risk associated with their task.
If someone is involved in a process for the first time, he will do a lot more coaching than if he or she is more experienced.
On the extreme end, if it’s an activity that can put the entire company’s financial well-being at risk and it’s in an area with a manager whom he doesn’t have a lot of experience with, then he will micromanage.
“I try to back off as much as I can because the more involved a CEO is, the more a CEO says, ‘This is where we need to go,’ people will go that way just because the CEO said it,” he says. “As opposed to a CEO saying, ‘Well, these are the areas I want you to research and I want you to come to the conclusion yourself.’ You are giving them the leeway to think for themselves.”
While checking in once or twice a month, or maybe more frequently, might keep you busy, it will save you time down the road.”
“It can be time-consuming, but if you don’t have that planning process, you can waste a lot more time backtracking and trying to figure why you didn’t accomplish your goals or why things aren’t going as well as you hoped.”
How to reach: Chromalox Inc., (412) 967-3800 or www.chromalox.com