When Paul J. Sarvadi and his co-founder sat down to talk about what kind of company they wanted to become back in the mid-1980s, they really didn’t have any idea what they were doing.
But, one thing they did know is they wanted the company to be about people, corporate culture and freedom for employees to do their jobs.
“What’s interesting to me is that most people spend an incredible amount of time and effort to develop their financial plan or their sales plan or their operating plan, but very few people spend the amount of time and effort to develop their people plan,” says Sarvadi, co-founder, chairman and CEO of Administaff Inc. “What’s their people strategy? What is the culture they want in their company? What is their organization and leadership philosophy for the company? How do they want to award people? ... These are equally important issues but generally don’t get the attention. The funny part is, it’s the people that implement all those other strategies.”
With 1,900 employees and more than $1.7 billion in 2008 revenue, Sarvadi is far from those days when corporate culture wasn’t even a common term in business circles.
He still believes in leading by example and communicating the type of culture that will continue to help the professional employer organization succeed.
If it’s after 5 p.m. and Sarvadi sees someone still in the office, he doesn’t automatically think what a great worker he has on his hands. He wants to know why that person isn’t home with his or her family and if he or she needs help with whatever it is the person is working on.
“In our world, we want to have a good work-life balance,” he says. “That’s one of the things we value. I want your work life to be a benefit to your home life. I don’t want you to live to work; I want you to work to live. So, I would rather reward you for innovating so effectively that you could figure out how to do the job better from 8 to 5, than I would reward you for being there at 6 in the morning and 10 at night. What are we doing wrong that we can’t get it done within the work hours?”
It’s that type of caring that has helped shaped Administaff’s culture and working environment today.
“(Your culture) becomes how your company reacts to the things that happen to you, good or bad,” he says.
“Your culture … either enables everything you are trying to do or inhibits everything you are trying to do. In our particular case, it’s been a tremendous enabler.”
Lead by example
Sarvadi wants employees to know he cares about them and wants to create a trusting work environment around him. In order for the message of a trusting corporate culture to permeate through your organization, you have to lead the charge by not just words but also actions.
“Leadership is always more communicated through example than it is through just discussion,” he says.
Which is where walking around after 5 p.m. to see who is still working comes into play. If he didn’t care about his employees and wanted them to fend for themselves, he’d walk right past the late-night worker, instead of inquiring if he or she needs help.
Or, he could chastise the worker for not finishing on time and bark orders. Neither would be effective in building a positive corporate culture.
“I just believe you get a lot more out of people when you lead out of authority instead of out of more of a power base liked you’d have in the military,” he says. “To me, the keys to being an effective leader are all about how you care about the people you are leading and how you develop that kind of influence. To me, it’s a set of skills that you learn and how to interact with people that develops that type of relationship.”
Sarvadi’s leadership style revolves around that kind of authority and developing relationships with people where they really want to follow and participate in whatever objectives have been set.
“That means that people are ready to storm the hill with you,” he says. “In order to get people in that kind of mode, what you have to do is develop personal influence with those people. The way you do that is develop a set of skills that involve how you connect to people. It’s really interpersonal skills — caring about people and respect for them as an individual and caring enough to tell them when they are doing things right and when they are doing things wrong. (It’s about) having the type of relationship that is trust-based where they learn over time that you really care about them and their success. When people know that, they participate at a different level.”
Sarvadi recommends thinking back to your past about someone to whom you gave over a significant level of authority.
“Power is something imposed on people, but authority is something people give you as a leader,” he says. “What you are looking for is situations where you said, ‘Hey, I am going to submit myself to that person’s authority.’ Then you answer the question ‘Why? Why was I willing to submit to that authority?’ What you are going to find out is those people in common had skills where they had developed personal influence with you.
“They were honest with you, they demonstrated they listened to you, they cared about you, they communicated with you in a way that was respectful and honest. Those are the things that make somebody really want to follow.”
Think about how those actions affected the level of personal influence that person had in your life and what made you want to follow that person up the mountain. Then, try to emulate those characteristics.
“It’s the little things,” he says. “Usually they are humble, they are kind, always respectful. They held you accountable but forgave you when you messed up. It was more of a learning thing. A lot of times, they were teaching you. They were willing to take the time to teach, not just correct.”
Don’t think about leadership as only getting up in front of people and talking. To build a trusting culture, the example you set is important.
“Although being able to communicate is really important, people are more about what you’re doing than what you’re saying,” he says. “It’s the integrity between what you say up there and what you are doing day-to-day that people pick up on and determine whether they could trust you or not.”
While leading by example will work its way down the organizational chart, so will your actions differing from your words. If you are preaching one thing and doing another, don’t fool yourself into thinking that no one is paying attention to you going through the motions. They are, and it’s hurting your credibility.
“Some of the things are as basic as listening skills,” he says. “But I always say listening is different than caring. A lot of times, people will listen just because that’s the polite thing to do. But, you know an individual can tell the difference between when you really care about what someone is saying and what their end objective is as opposed to just listening just to be polite.”
Administaff is in pretty good financial shape, even during this financial crisis. There is still money in the bank, working capital and no debt.
t the economy still affected the company, and Sarvadi had to make changes.
“Our customers are affected, therefore we’re affected,” he says. “We’ll still make money. We just won’t make as much money. But in this environment, even though we have that type of financial standing and capacity, it still made sense for us to take a conservative view of the next couple of years.”
Sarvadi gathered with his executive team and they walked through what a conservative approach would look like, and then communicated with the next level of management the new approach.
Making cutbacks when a company is doing well can send a wrong message and leave employees disgruntled.
“We made a bunch of decisions that are not popular,” he says. “We froze wages; we decided to not replace folks and allow attrition to take place. We cutback on the 401(k) match. We did a number of things that a lot of companies are doing these days just to be conservative and to make sure the company stays in good financial shape through the downturn.”
Decisions, especially unpopular ones, need to be explained if you want a positive culture where people are empowered. You can’t expect people to hear what you say, be happy and then just go back to work.
Instead of just sending out a memo explaining the changes, Sarvadi and his team took a whole company meeting to explain why they were scaling back.
“A lot of times leaders don’t take the time to explain why,” he says. “When people understand why, then they help figure out how more effectively than they would if they don’t understand the why.”
Not everyone is going to love the decision or even the reasons why, but that doesn’t mean you keep it a secret.
“But at least people say, ‘Hey, you know what. They have the guts to just tell us like it is, and we just have to live with it.’ But that’s better than people wondering what’s going on behind the curtain,” he says.
You shouldn’t wait for bad news to start communicating. Keep the lines of communication open at all times to engage employees and find out what’s on their minds by giving them the opportunity to ask questions.
Every month, Sarvadi has a meeting with the entire staff, and they broadcast it throughout the country. Employees can ask whatever questions they want anonymously. They submit them in advance and Sarvadi reviews them and answers as many questions as he can in the time allotted.
“What happens is many of these questions give an opportunity to answer the question in a way that supports and reinforces our leadership philosophy,” he says.
Aside from unpopular decisions, there may be other topics people want to know about. The more questions you see about a specific topic will give you a better idea of when you need to explain the reasons behind a decision.
“Part of it would be just when you are making a decision that impacts a broad number of people or when it’s a change to the strategy or direction or a change to a major objective,” he says. “Then, beyond that, it would just be things that kind of bubble up. You can have more of the same kind of questions bubbling up from two or three different parts in the organization.”
Using examples will also help in getting your point across. In Sarvadi’s case, when he announced some of the changes, he also told everyone that the off-site training sessions he normally has for his management team would no longer be off-site to save some money. It shows that management was serious about its decision but that it also wants to meet the company’s goals and objectives for the year.
“Really, it was amazing how people were able to apply that thinking in their own part of the business and have tremendous results and control of the expenses,” he says.
It also shows management leading by example. That, coupled with explaining yourself, will go a long way in creating a trusting corporate culture.
“I don’t think you can have a V.P. of corporate culture because everyone has to be the V.P. of corporate culture because anyone of us can create an environment that’s counter to the culture,” he says. “So, it’s a matter of everybody owning it. But, they can’t own it if they don’t know what it’s about. If you’ve never described it fully, if you’ve never explained why it’s important to you and the business, then why would anyone care?”
How to reach: Administaff Inc., (800) 465-3800 or www.administaff.com
When Sarah Eck-Thompson and her co-founder, Brook Jay, founded their company 11 years ago, they were doing it all. But, as All Terrain Inc. grew, they realized they had to start delegating more at the marketing company, which posted more than $5 million in 2008 revenue.
“It’s a balance on defining what you want the company to be and then allowing people to put their own spin on it in maybe a slightly different way than you would,” says the co-founder, president and chief operating officer of the company.
Smart Business spoke with Eck-Thompson about how to manage a growing company and create a casual culture.
Q. What advice would you have for another leader who is going through growth?
I am definitely an advocate of a leadership coach or just someone like an objective, third party that they can just sit down and talk to and talk through some problems or issues. Because it really helps give you some clarity on how you are communicating and how you are affecting other people in good and bad ways.
When we started our company, I didn’t ever really think of how we were communicating because we were still a really small group, so we were just going doing our work.
As we were growing and adding more people and different layers of management and stuff like that, it was really crucial for us to take a step back and look at that.
Q. How do you communicate feedback?
Our environment is pretty casual, so I would say it’s not a big issue.
(It’s) just calling (employees) into your office and saying, ‘Well, such and such didn’t go so well. Why don’t we take a look at what went wrong and how we would attack that differently in the future.’ …
The key to being a good leader is being accountable. It’s easy to jump out in front and claim the big wins and the big successes, but it’s also you need to acknowledge and appreciate people’s accomplishments and not jump in front of them and take credit for them.
At the same time, you need to, as a manager, take some ownership of the failures, too, and make sure that you use those as a way to learn from them. Look at them honestly and learn from them moving forward.
If someone has a failure of some kind or fails in their job before trying to say, ‘Oh, they screwed up,’ I like to look at it and say, ‘Well, did this person know what their job was? Did they have the skills and traits in order to fulfill that job and did we give them the resources to do it?’
Before saying, ‘This person isn’t right for this job,’ looking at the situation like, ‘Did we give them everything they needed to have to be successful and were they the right person to be successful?’
Q. How can a leader create a casual work environment?
It’s just the way the physical space is set up. We have workspaces where there are maybe four people working in a space together. We have dividers, but it’s not like a normal cube. It stimulates conversation between people.
So, just setting up the physical space. Our previous space had a pool table and Pop-A-Shot, which people didn’t actually play them very much, but it felt cool and more comfortable and casual.
We have, once a month, an innovation jam where we just invite the whole company to come and sit around on couches and just talk about cool stuff they’ve seen or they’ve done. It’s not totally free form. A lot of times, we will put forth a specific topic to have them thinking about.
It’s just time for everybody to step back from their work and sit around in a more social way and talk about cool stuff.
We will take ideas from the group if they want to establish something to do (that’s) extracurricular. Someone suggested having a yoga morning. So, we found a yoga instructor that would come in on Wednesday mornings and lead a yoga class. It’s cheaper than if they did it at a fitness studio or something like that, so we’re helping subsidize it a little bit. This is a way for people to get together. It’s been great because people from different teams from inside the office, different workgroups, are doing that together.
Q. What is the benefit to having a casual work environment?
It’s a difficult balance for sure. We like having a casual work environment because people are more social, there are definitely a lot of friendships that have emerged through it.
I think people feel like they can speak openly and there is a lot of trust. So, the balance is that, as we grow, we also need some more structure and systems in order to just manage the workflow and provide a feeling of stability inside the company, as well.
We employ a lot of younger people, so having a more social, casual work environment, I think stimulates a lot of creativity and camaraderie.
We really encourage our staff to be active and try to locate emerging trends. We encourage people to do extracurricular things and arts or culture because it really helps. Being out there and seeing what’s happening in some of these cultural and artistic communities really helps us build better programs for our clients and infusing new trends into our programs.
How to reach: All Terrain Inc., (312) 421-7672 or www.allterrain.net
Within two weeks of joining GE Security Inc. in 2007, CEO Dean Seavers was at an industry trade show, and it wasn’t just to schmooze and get word out about the company. He was there to meet with customers and find ways the company, which focuses on security and safety products and is a wholly owned subsidiary of General Electric, could improve.
He kept hearing the same things from customers: The right solution at the right time when they needed it.
“When you hear a recurring theme, you realize there are a couple of challenges,” he says. “So, there at the show, we actually had most of the senior team with us, and we pulled everyone aside, we talked about it, and we said, ‘What seems to be the biggest challenge in terms of making sure we could deliver that, because those are fundamentals to the business?”
Working the trade show was just a start for Seavers. He had to listen to those around him to get an idea of what the best direction was for his organization.
“We spent a lot of time with our customers so we could understand their needs and how we were performing relative to their expectations,” he says. “We also spent a lot of time with our channel partners to better understand how we could be a better partner. Of course, we spent a lot of time with our employees who had great ideas about productivity improvement. There were a lot of common themes coming from these sessions and that was really the genesis of our strategic imperatives.”
Those imperatives superior customer experience, competitive products, winning solutions, global growth and simplification would become the drivers that would give the company a clear direction and the ability to excel for the future.
“We all get caught up in our current assignments,” Seavers says. “So, taking a step back from that, initially for me, it’s really having a clear direction in terms of where you are going.
“The way you really get there is spending time with customers and employees to figure out what’s really important and what you’re really good at and developing a vision to go after it.”
Here’s how Seavers interacts with employees and customers to find the best course for GE Security to take.Listen to customers
To find out what customers want and what they think of your company, you and your team have to talk to them directly. That means you need to get out of your office and actually see how customers use your products on a day-to-day basis and talk with them about it.
“For us, it’s getting out there on the front lines and actually seeing how people work with our product both our partners but also customers just to see what works well. How do they use it and what are they challenged with?” he says. “That gets beyond the people that actually pay for your product. It gets more to their employees who actually use it.
“That’s a good first step really see how your product or solution is being used.”
After that, you want the customers to give their perspectives on what they need and how you can help them before you tell them what you can do.
“All of our senior team, and I’d say our midlevel team, it’s all of our responsibilities to talk to customers,” he says. “I do travel a lot. I think most of my teams travel a lot because we are a global business. But, I think, when you are going out there, whether it’s to see an employee, whether you are going to a trade show … whether you are just dealing with a problem, make sure you spend time to be in front of customers on a proactive basis.
“Do not just react to a challenge, but, on a proactive basis, make sure you are in front of customers.”
One thing to be prepared for if you aren’t proactive is dealing with unhappy customers.
“At the end of the day, we all encounter disgruntled customers,” he says. “Quite frankly, a disgruntled customer that’s talking to you is not necessarily a bad thing. It’s the disgruntled customers who aren’t talking to you that are a challenge.”
The first thing Seavers does with a disgruntled customer is the same thing he did when he became CEO of the company.
“With a disgruntled customer, the first thing I do is just shut my mouth and I listen,” he says. “I let them explain what their frustration is, let them explain what their challenge is. I do truly try to listen as opposed to try to figure out what the right answer is going to be. I always commit to fixing the problem or at least getting to the root cause of the problem.”
Sometimes there is a perception from the customer that the company does not care, which you have to explain is not the case.
“So, typically, you want to make sure you explain to them what your organization is about,” he says. “Then, I always commit to saying, ‘Here’s what I’m going to do. Here’s what the next two or three things are I’m going to do.’ Part of it is obviously looping back with the people involved and making sure I understand what happened, so I can give the customer a full explanation.
“The second piece is coming up with a solution, and the third one is trying to figure out if it’s a challenge we created, how to put in some sort of mechanism or try to put in some sort of procedure that eliminates the problem so you don’t have to fix the same problem two or three times. I usually give them a timeline for when we’re going to do that.”
If a customer stops doing business with you, don’t just shrug your shoulders and move on to the next customer. Most disgruntled customers will talk to you, so take advantage of that opportunity. If you can’t get time with them over the phone, make an appointment to meet in person.
“It’s one thing to call a customer and they’re busy and they’re putting you off and they don’t want to talk, but it’s another thing to show up,” he says. “Commit to being there, and then (say,) ‘Listen, I understand that you may not want to do business with us anymore, but I just want to listen. I want to hear what the problem is because, while you may have made a choice to go somewhere else, I ultimately want to hear what the challenges are so I can make the organization better. I’d say 9.9 times out of 10, we’re all businesspeople. Businesspeople are reasonable, and that’s the story that gets me in the door.”
Taking the time to talk with both satisfied and unsatisfied customers will set you up for success in the long run.
“One, it builds a relationship,” he says. “Two, it just makes you smarter as an organization. Three, if we are all doing it I’d say front-line employees, midlevel managers, senior-level managers when we come together and talk about who we are and what we want to be as an organization, we’re doing it not just from gut feel but doing it from real-world experience and doing it with customer feedback in mind.”Listen to employees
With so much on your plate, it’s tempting to look for the simple way out on some responsibilities. Don’t let that be the case when it comes to listening to employees.
“With employees, sometimes it’s easy to go out and just tell them what to do,” he says. “But I think the smarter thing is to go out and listen to them and understand what their challenges are. Make sure you communicate what the organization is about, wher e are you trying to take the organization and what’s really important to the organization, but make sure you listen, too.”
Because employees interact with customers and your products all of the time, you need to spend time with your workers.
“Definitely coming on board, we spent a lot of time with employees and now we’ve got a regular rhythm around, whether it’s town-hall meetings, whether it’s round tables, whether we do what we call skip-level meetings,” he says.
With thousands of employees, Seavers has to travel a lot. He travels to different locations and meets with groups of about 10 people made up of employees from a couple of levels below him. The groups comprise a good cross-section of employees from different departments.
“So that way you’re not just talking about engineering, but you’ve got engineering, you’ve got product management, you’ve got tech support, you’ve got everybody at the table so you can have a pretty rich dialogue,” he says.
Since Seavers doesn’t come to the meetings with an agenda and managers aren’t present, he and the employees can talk about any number of topics that come up.
Group members quickly go around the table, including Seavers, and introduce or reintroduce themselves and give a quick snippet of who they are and what they do at the company.
“That takes a few minutes to do that,” he says. “Typically, when people are introducing themselves, telling where they work, that sort of thing, it may spur something. I may just ask them a question to get to know them a little bit better. Once we finish with that, what I like to do is say, ‘Listen, there is no agenda here. The whole point of doing a round table is so we can have communication, so I can tell you what’s going on in the business. You can ask me questions that might be on your mind. I can learn a little bit more about what you are doing.’ So, I spend a few minutes sort of letting them know there is no agenda, letting them know that it is an open environment and they can ask me anything.
“Whether it has to do with GE Security, whether it has to do with GE, if they are concerned about the economy, whatever they want to talk about is fair game.”
Stressing that any topic is fair game will get the ball rolling in the right direction.
“Typically, what happens is you get one or two softball questions, but if you give a rich enough answer, I think it opens up the door for people to really dig into the things that are on their mind,” he says.
The back and forth conversation will give both you and the employees something to think about after the meeting. Employees get their questions answered and Seavers gets two or three ideas he can take back to his senior team.
“I find those meetings to be incredibly beneficial,” he says. “One, I’d say at a simple level you get a chance to sort of talk about the strategy, the message for the organization. But, I think sometimes at a deep level with the employees, they get a chance to tell you what’s on their mind, what they’ve heard, any concerns that they have, ideas that they have.
“I think what it also fosters is you can say you have an open door, but when you do those kinds of meetings, when you do the round tables, it really demonstrates that you mean it. I think you get great ideas when you do that.”
Those ideas couldn’t have come up without you speaking with customers and employees.
“While there are always things that can take you away from spending time with employees, don’t let it,” he says. “Make sure you get out there with employees; make sure you get out there with customers. So, if you are going to see employees, make sure you schedule a customer visit. If you are going to see customers, try and make sure you schedule a little bit of time with employees, because I think it’s easy to get separated from that.”
How to reach: GE Security Inc., (888) 437-3287 or www.gesecurity.com
Sharon K. Hahs doesn’t want to lose sight of the big picture at Northeastern Illinois University. To minimize distractions at the university, which has a budget of more than $127 million, Hahs places reminders in different places.
“Inside my little door that I open to get some of my materials in my office, I have pasted the university values,” the university president says. “They are also hung in beautiful banners on my wall. The strategic plan is on my table … and I actually do pause every now and then and read some of these pieces.”
Hahs has to keep focused on those goals if she wants to have integrity as a leader and communicate a consistent message.
Smart Business spoke with Hahs about how to lead with integrity and deal with failure.
Q. How do you lead with integrity?
You want to start with trying to figure out what the big long-term goals are for your particular assignment, your role, your company, whatever it is you’re leading. Then think about where the difficulties in the path are and, really, you work on communication skills. Because, sometimes there is a difficult issue and you’ve made your decision one way and everybody thinks it’s because you lied to them last week how you communicate the need to have made the decision sort of as a surprise or differently or whatever, that’s where the integrity I think will come in.
Q. How can you improve communication skills?
You try to communicate in as many different ways as you can. We do town-hall meetings here. One per semester for faculty and staff, once per semester for students, once for our other campuses, and we combine faculty and students on our other campuses because they are smaller.
Town-hall meetings have two or three little things in it. They have, ‘Hello, I’m here. I’m glad to see you.’ Every question is welcomed. The second thing is, as long as it is done according to the university values, and I actually quote out about our communications and our values and our respect, and then, occasionally, there are two or three information items, and then it’s open.
I would say, of an hour of a town-hall meeting, more than 45 minutes is whatever people wish to ask. That’s a forum, and it’s a way to realize, ‘Wow, everybody else thinks I was thinking this way, but, in fact, I’m not.’
I eat almost every day in the cafeteria. Some days I have business lunches and other things. You tend to eat with people that you know are going to be in the cafeteria, but, in fact, I try to move around. Also, make it known, if you want to eat lunch with me in the cafeteria, just let me know and we’ll work out a day and a time.
So, you have the written word, several forums, you have oral, several forums, and you have walking around.
You spread it all out, and you always ask, ‘Is there any other way I could help with communication?’ Sometimes you get a new idea, and sometimes it’s one you’ve already done several times. I don’t think you can overcommunicate though.
Q. What advice would you have to communicate better?
Ask those around you how your communication might improve. See if you have a written style or an oral style that there is one element that drives people nuts, if somebody is willing to tell you that. You have to have a good climate. Ask others how they see the possibility of improving. If you don’t have good grammar and structure and all those things, then that is certainly something you want to work on.
Another piece is to read other folks’ communications and see what you like about it.
Q. How do you go through the feedback you get?
I seldom do anything by myself. I can. I’m very capable, I feel good about it but (I bounce) it off of either one or two vice presidents because the topic might be appropriate. We have a group of 10 or 12 that we call the president’s council. So, those are where I bounce ideas most. Then I bounce ideas off folks at lunch, which could be just about anybody.
So, bouncing ideas off and then distilling to, ‘OK, this one makes a lot of sense. That one we’ve already tried. That one is not me.’ You have to be authentic in what you do. So, that’s where we kind of distill down to what we should try.
Q. What is a pitfall to avoid when being a good communicator?
You need to remember you never have all the answers. If you end up communicating that you think you know the answer before it’s had a wide audience that can get you in trouble.
Q. What advice do you have for dealing with failure?
If it’s really failure, and it isn’t actually always failure, but it’s an opportunity to learn and improve. Sometimes failure is like a dead end it’s over, it’s done, it’s not happening.
But, most of what we do, if it hasn’t worked out well enough, we come at it differently or, in the end, we still work on whatever that was. It’s an opportunity to learn and improve.
One of my favorite people that I worked for years ago, he said, ‘Today’s news in the newspaper is lining the birdcage tomorrow.’ It’s that notion of, ‘The world didn’t end. We’re going to be fine.’ Yes, these things happened, but stay with the big picture and stay with the long horizon. Take your lumps, learn and move forward.
How to reach: Northeastern Illinois University, (773) 583-4050 or www.neiu.edu
When Howard “Hoddy” Hanna III and his team decided to set a new vision for the $250 million real estate firm in 2005, they didn’t sequester themselves in a conference room to create it.
Instead, Hanna, chairman and CEO, was completely hands-off in the process. Two committees composed of a 120-person sampling of the company’s 4,900 employees were charged with forming a new vision and mission statement to reflect the firm’s new outlook following the acquisition of Smythe Cramer Co. the year before.
The committees successfully navigated the vision-setting process, and as a result, the company ended up with an employee-driven set of goals that everyone could immediately buy in to.
For Hanna, it was just another example of the benefits of having a collaborative culture.
“You have to have a sense of people believing that they are part of something and that your input is worthwhile as well as your productivity is worthwhile,” he says.
When you do that, you create a driver for success in your business.
“It’s a direct link,” Hanna says. “Nothing beats hard work, nothing beats knowledge, but you have to have a culture you are working from. If you’re not part of that culture, it comes across in any organization you are with. You’re not going to get 5,000 people all with the same culture and philosophy, but if you get the great majority that are following that culture and that philosophy, you make yourself a lot stronger, (with) a lot better people and a lot better organization overall.”
Here’s how Hanna connects with employees to keep his company growing.
Communicate with employees
It might be a simple gesture, but Hanna sends birthday cards to each employee on his or her birthday, not just with a signature but also with an individual note. If he remembers something he and the employee talked about, he will reference that in the card.
While he isn’t mentioning anything about the company’s vision or using the card to write something about the culture, the action itself speaks louder than words.
“We do build the belief that we are a family business,” he says. “It differentiates our style of management, our style of ownership, our style of leadership from others in the industry.
“It’s a niche that we pride ourselves in. You can say you are a family business, but I think you have to walk the talk a little bit and do some things that take more time and more energy to show that you are concerned about (the employees), [that] they are very important and they are part of the family.”
While birthday cards are effective in communicating a message, nothing beats one-on-one face time. That means you have to get out of your office and meet directly with employees.
With almost 5,000 employees, that is virtually impossible for Hanna to do, so you have to take advantage of every opportunity.
Every Monday, he travels to one of the Pennsylvania offices for a sales meeting, and every Tuesday he travels to Ohio for a sales meeting.
“You have to come up with ways that you communicate your message, communicate your goals, communicate your business philosophy, your business plan, and clearly you can do that by being very, very visible throughout your organization,” he says.
“I know different business leaders that have multiple locations around the country and around the world. One of the things they do is every time they go to a business operation, whether it’s 100 miles away or 1,000 miles away, they spend time either at a lunch or at a dinner with a different handpicked, cross section of their employees. They may not be people they work with every day or even work with once a year, but they try to spread that knowledge (on) a one-on-one basis.”
Getting out of the office and visiting employees can go a long way, especially when it comes to them being open with you.
“There are some people who run businesses and they never go on the shop floor,” he says “They never go to where the product is being made or where the sale’s happening. They sit in an ivory tower. They’re great at reading statements and great at organization structure and governance, and that doesn’t mean that they are bad, but I think those leaders that are very visible and open, people are more inclined to send an e-mail to or call on the phone.”
When Hanna is walking around, he keeps conversations on a business level, unless he knows someone personally.
“I’m not sure there is an icebreaker,” he says. “I like to talk about what they are working on, what they are doing and trying to get a little conversation in a business manner.
“I don’t come in and talk about, unless I know the person really well, I’m not going to talk about their kids or something.”
Hanna also treats employees with the same respect, no matter their position.
“You have to believe in your people,” he says. “Whether the person is the newest receptionist or the star salesperson, you’ve got to believe that they do matter to the success of your company.”
You also have to take that approach to your position. While you may be at the top of the company, you still need to stay grounded. You will get better ideas from employees and get more feedback that is honest if you stay humble.
“There are some people that have a better way of embracing people to open up and to have conversations, and the people feel that they can say something without retribution,” he says. “If the person is the leader and the perception of the people who work there is that, ‘He’s the boss or she’s the boss,’ I don’t think they are a leader.”
Taking the time to interact with employees can go a long way in helping your company succeed.
“Never forget the people that make your operation work and make the success of your business are the people that are there, whether it’s two people or 1,000,” he says. “So, find as many ways to keep communications with them on a regular basis.”
When Hanna’s firm was small, it was a lot easier to communicate and monitor if managers and employees understood messages. But as your organization gets bigger, you have to craft a consistent message so the meaning isn’t lost.
“There was a time I knew about every transaction that was going on here,” he says. “You do give up certain things along the way. You have to keep preaching the culture.”
As you grow, you have to build an organization that has a message and culture you believe in, and then communicate that down the line.
“You have to, No. 1, believe your management team has the total same philosophy and sense that you have to carry that message on and to relay that message and get that into everybody within the organization,” he says. “There was a time that I knew that it worked everywhere and everybody was rowing the same direction. That gets tougher to do — to make sure everyone is rowing in the same direction and has the same exact philosophy.”
You have to keep preaching the message and be consistent with your messages on how you do business.
“If you change the message too often, then I think people lose confidence in leadership and they lose confidence in the direction y
ou are going,” he says.
To stay on track with your message, find someone to monitor you. In Hanna’s case, his father and founder, Howard W. Hanna Jr. serves in that role. He will send Hanna or his sisters — Helen Hanna Casey, president, and Annie Hanna Cestra, executive vice president and chief operating officer — an e-mail every day, usually reminding them of something they are doing incorrectly.
“He gives critical information to us that is important,” he says. “It’s not negative because it’s usually right.”
You should look for someone with a stake in the success of your company and someone who can give you advice without getting their head chopped off. Also look for someone in a different age range and that is a different style of person than you.
“It would be almost impossible to have a peer friend, just to say, my attorney, who I pay a lot of my legal fees to — I’m going to tell him to keep me in check. That can be hard because they have a different type of relationship all of a sudden,” he says.
You can use your board of directors to serve in this role or use an outside consultant to help keep you in check.
“Consulting firms tend to be very good because they sort of come from a background of saying, ‘We’re going to tell you exactly what we think because that is what you hired us to do,’” he says. “Now, if the first time they tell you something and you take offense to it, well, they’re not going to last, and you’re not going to last.”
Having someone keep an eye on your leadership style and methods can also keep you from becoming ego-driven.
“People at the top of any organization can get very self-centered on their decision-making and then, when the decision isn’t working, be afraid to change that decision because they’d admit they made a mistake,” he says. “Then, they try to fix that mistake, which can’t be fixed, instead of turning back. If you don’t have anybody else to force you to change, you can get into a bad habit of letting your ego get involved in your decisions. Of course, usually when that happens, ultimately, if you do enough of that, you lose your leadership ability over those people who are supposed to be following you and listening to you because they have lost confidence.”
“Then, as the economic impact began to be felt more and more by our customers in terms of auto sales, steel and the other heavy industries and manufacturing that we provide service to — as their businesses were affected, obviously our businesses were affected,” says Alexander, president and CEO of $13.6 billion FirstEnergy Corp.
Instead of sitting idly by, Alexander took action. Priorities were examined, budgets were scrutinized and expenditures were cut. The end result was a reorganization that resulted in laying off 335 of the company’s management and support staff.
But even though some of the changes were drastic, Alexander hasn’t changed his leadership style.
Whether the company laid off employees, maintained its current status or experienced growth, Alexander would still make his rounds and communicate with employees.
“I’m really not changing my schedule,” he says. “I think it’s important for people to see as much of [the] senior executives as they can. The whole team has been stepping up to the plate and spending more time in the field. So, I’m planning on doing about the same as what I’ve done in the past.”
Because employees are so important, keeping them informed is vital no matter the status of the economy.
“It’s the same benefit that exists any other time,” he says. “In my mind, our most important assets are our human assets — our people. They are the ones that keep the lights on every single day for everyone. They are the ones that give us the resources to help in economic development throughout our service territory.
“Everybody understanding what the organization has to deal with, while not always pleasant, we are always far better off if we understand the issues that are being addressed.”
Here’s how Alexander relates to employees and communicates his message, even when times are tough.
Make the rounds
Alexander has thousands of employees spread across three states. The only way to really drive home any corporate message is to hit the road for one-on-one interaction with as many folks as possible.
He tries to spend about 40 to 50 days a year out in the field at more than 100 locations, meeting employees and communicating his vision.
“If you can get to as many big places, big shops, where there are multiple employees, we can get that message down through the organization, and that’s what’s key,” he says.
Alexander hits the major shops once a year, while visiting smaller line shops once every two years, eventually getting to everyone.
Because employees can sometimes be guarded when the boss is around, Alexander tries to make the visits as employee-friendly as possible. He doesn’t show up with prepared remarks or PowerPoint presentations. He shows up and talks to employees about safety, where the company is heading and how the company is going to reach its goals. Then, he opens it up for questions, which is especially important in tough economic times, because it gives employees a chance to get things off of their chests.
Oftentimes, Alexander gets questions that are site-specific, which are more appropriate for the local manager to handle. But, the questions and comments do give Alexander an overall sense of where the organization should be devoting more of its resources.
In addition, if you are out in the field enough and begin to build a relationship with your personnel, employees become more comfortable with you, and they can see your reaction when they tell you something.
“They can sense that things are changing,” he says. “Not that you can deal with everything. But that change allows them to feel more comfortable in terms of raising potential issues.”
Before Alexander goes on these visits, he will sit down with his communications team and they discuss what they’ve heard is on employees’ minds.
“If there are things we just don’t know about, they might ask me some questions just to get them in my head,” he says. “Basically, because they have a better feel for the organization on a day-to-day basis, they will pop some things to me that I ought to be thinking about.”
Recently, he’s faced questions about the restructuring, the economy and the overall state of the company.
Instead of dancing around the questions, he gives a straightforward answer, but he also admits when he doesn’t have the answers.
“Typically, when I go out in the field, I always have somebody from the communications group with me,” he says. “So, what they try to do then is accumulate that type of question so that we can either add it into an update or make sure we get the information back to the manager that can then communicate it to employees at that location.”
If it’s a broad enough type of question, Alexander might add it to the update that the company sends out to employees on a routine basis.
Having someone come with you who can keep track of questions and ideas will make the process much more effective.
“I was doing maybe two or three or four of these a day, and I couldn’t remember all the questions that are raised,” he says. “Unless somebody is keeping records that I can go back and evaluate afterwards, by the end of the day, I’m probably pretty tired. So, somebody is accumulating ‘OK, these are common issues or common threads that we’ve heard now in three or four different spots. Do we need to do something about it?’”
Explain the ‘why’
When Alexander first went out in the field as CEO, he got a sense from the line crews that the company’s fleet of vehicles needed to be replaced.
As a result, he set up teams of union and non-union employees and management to discuss what the new fleet would look like and what equipment they would need with it. After that, Alexander laid out a plan that the company would purchase a certain number of trucks over a certain number of years.
While the suggestions for the trucks had been incorporated into company plans, it was also important to let people know what was going on and why.
“Well, when I first told them we were going to do this, nobody saw a truck come into their line shop for a year because it takes a year to get them built.”
Alexander explained the trucks take some time to build, and they eventually began to flow in. Once employees saw that happen, they just wanted to know when the trucks would get to their department. Without an explanation of the process, employees will be left in the dark without answers.
“Now, when I go to the field, I am not hearing any questions about trucks anymore,” he says. “They saw the action, they understood, and they saw that their comments meant something, and that helped.”
While involving employees in the decision-making process is a great way to create buy-in, you also have to explain the reasons why something is or isn’t happening.
“It’s important for people to understand why they are doing things,” he says. “We spent a lot of time, not just saying, ‘This is what we have to do,’ but saying, ‘Not only is this what we have to do, but this is why we have to do it.’
“Sometimes, the answer is, ‘We have to do it this way because we just don’t h
ave enough money.’ But at least if you can sit down and explain it to them, they can understand that.”
Explaining the “why” also gives each person’s job a connection to a greater overall purpose in the company.
“All you can do is try to increase the level of communications so people can begin to connect how all these pieces and parts fit together,” he says. “Every job in this company is important. It all plays a role.”
When you motivate employees to give you input, you might be thrown many different ideas. Some of them may not fit the direction you want the company to go in, so you have to bring them back to the overall strategy of the company so they can get a sense of what you are trying to accomplish.
“I spend a lot of time with them on this because we make so many decisions,” he says. “At the end of the day, if the employees understand the direction you are trying to go in, it’s much easier for them to understand an action that you’ve taken and put it into context of where you are driving the organization.
“They might not agree with you, but they understand. That’s more important because they understand.”
It’s true that actions speak louder than words, but words still do play an important role.
“As you begin to lay out a strategy and you want your employees to buy in to it, they must see the implementation of it and they must understand how their role fits in it,” he says.
“If you are successful in those two components, you’ve gone a long way of engaging your employees. That’s really what you are trying to accomplish.”
How to reach: FirstEnergy Corp., (330) 384-5783 or
Jay Mandel and his company, Tri Star Metals LLC, had never worked with a public relations firm before, until he, along with other shareholders and external partner Hagener-Feinstahl, bought out the company’s three founding shareholders.
While no negative changes were made, Mandel and his team knew there would be some worries from employees at the company, which produces and distributes stainless steel and aluminum products. So they hired a PR firm, which, along with an outside consultant, helped in the transition by preparing Mandel and his team for questions they might be asked.
“Those were two incredibly valuable assets,” says Mandel, president of the $40 million company.
Smart Business spoke with Mandel about how to prepare employees for an acquisition.
Q. What lessons did you learn from the outside help?
Those of us who were deeply involved in the transaction, we had it in our head why we wanted to do this and the strengths. We really needed to be able to effectively communicate those ideas to everybody, whether it’s the people working on our shop floor, to the people in accounting, to our salespeople.
We really need to be able to explain to them what the benefits are so they could effectively communicate it, not only to themselves and their families but to our customers and our other suppliers.
And our management consultant, the other thing I think he really did was he did spend some time to sit down and say to us, ‘Here are some of the weaknesses each of the individual, key managers has and areas you need to work on.’
Q. What advice would you have on managing through an acquisition?
First and foremost, you need to spend time trying to anticipate what your employees’ needs and concerns are.
You really need to sit down and try to put yourself in their position, what are going to be their thoughts and concerns and how is it going to impact their life. It’s really easy for companies, when you do a transition like we have, to sit there, look at the big, macroeconomic benefits and look at the synergies and the strengths that it is going to bring to both companies. But it’s more important to sometimes also sit down and say, ‘OK, how is this going to impact our employees and what thoughts or concerns are going to come up for them as we go down this road?’
Q. What advice would you have on how to anticipate employee concerns during an acquisition?
Going outside your organization and sitting down with experts who have gone through these transactions before is definitely a positive.
The other thing is I think you get so busy closing the deal and meeting with the banks and the lawyers (you need) to spend some time with your employees. Sit down with them on a one-on-one or each department group basis and have an informal setting where you can really sit down and talk about thoughts and concerns in a very relaxed atmosphere.
Q. How do you set up a relaxed atmosphere?
A lot of our key managers and employees we went out to dinner one-on-one before the announcement was made and told them on a one-on-one dinner or lunch what was going on. In that environment, it’s relaxed. The person is getting a lot of attention, and we made sure to try to talk as little as possible and listen.
Q. How did you determine the employees you took out to dinner?
We based it on a couple of factors. We wanted to make sure the managers of each department were brought into the loop before we made the general announcement, so they could be prepped then to answer the questions and concerns of all of their people that work underneath them in each individual department.
We also looked at the people who had been here 10-plus years and really had a lot invested in Tri Star. We felt we owed them the special attention and more time because they have got a lot invested in this company and, therefore, they really should be included in the group and have a chance to bring out their thoughts and concerns. And that whole series of lunches and dinners brought out a lot of questions and concerns that we were then able to answer for the rest of the employees.
We started about a week and half before the announcement so that we had enough time to take out all the key managers and top salespeople. We made sure we did a dinner or lunch with each personal one. It was Dan (Buba, Tri Star’s CEO) and I at the dinner. Most of these dinners end up being two- to three-hour affairs because most of them were pretty shocked and then a lot of questions came up, and it also gave us an opportunity to explain to them why we saw this as a good opportunity.
How to reach: Tri Star Metals LLC, (800) 541-2294 or www.tristarmetals.com
Diane P. Holder wants more from her vision than to just create it, stick it on a shelf and then focus on the daily grind.
The president and CEO of UPMC Health Plan and president of the UPMC Insurance Services Division sees the vision as the company’s outlook on the future and as a creation that is constantly evolving. But, the creation of that needs to start with you, and as it evolves, others need to be involved, as well.
“Vision is something that your team helps to further,” says Holder, who oversees about 1,500 people at the company. “But I think the vision gets set at the top through boards and CEO levels. Then, your senior people — they help to shape it and evolve it over time. It’s a participatory process.”
In order to make it a process involving others, you need to articulate it simply so you can communicate it appropriately.
“You want to engage people in the process of actually understanding what it means,” she says. “It’s great to be at a 30,000-foot (level) in terms of where you want to go in the future and how are we going to get there. But, you need to be able to communicate that and engage people in that, and you then need to have strategies to actually employ it.”
Under Holder’s guidance and vision, the organization has grown from $2.3 billion in 2007 revenue to more than $2.8 billion in 2008 revenue. But vision isn’t the only thing you need to be successful.
Here are some other ideas Holder acts on to keep the company heading in the right direction.
Know your surroundings.
Market intelligence is important to help your organization succeed, so you have to have a clear sense of what is happening around you.
“It’s very important to talk to people in the industry,” she says. “You have your people or you, yourself, at meetings. Every company has a variety of vendors or people that they work with, that they partner with or that they purchase services from. They’re often excellent sources of bringing you feedback in terms of, ‘Here’s why somebody else is trying this that might not be in your immediate competitive market, but they certainly are doing things that are a little different.’
“For example, technology is sort of a ubiquitous need across multiple, multiple industries. The way technology might be used in health care — maybe you’re manufacturing similar applications, similar tools, similar quality processes, and there’s a lot of things that overlap across industries. Some industries, on the whole, are further behind than other industries. So, sometimes you can look at completely different industries from your own, and say, ‘Hey, look at their 10-year trajectory. Look how they made those things happen.’ How does that apply to the industry you’re in?”
You also need to ask the right questions. For example, you want to ask, “What are some problems people are having, and what are the solutions?”
You need to apply those same questions to those outside your industry because someone in another industry could be developing a completely different product or solution.
“What people need to do is be experts in their own areas,” she says. “But they should also be reading and talking, being in meetings that are outside of their core capabilities or their core methods, to see what is actually coming in from the right and left flank or coming up behind.
“You can actually make sure that the way you are doing it is going to be the best solution for whatever that market is, because everybody is out there being market-driven and you have to really understand what the market wants and how do you provide that product or service that the market values.”
Improve every day
Being a successful organization requires knowing where you stand, setting goals to get better and then holding people accountable.
“If you are in a company like mine, it’s how creative can you be for employers or government when they are seeking health benefits arrangements,” she says. “How high-quality is your service? How do you think about your customers? Then how do evaluate them? How do you benchmark? I think that benchmarking is very important and also your own willingness to kick your own tires really hard and put in place — it sounds trite — but put in place true continuous quality improvement across every variable that you know builds toward that product initiation.”
You need to have data that you can measure and compare to find out how you compare to others in your industry.
“We try to take all the functional components within our organization and then we try to benchmark against what would be considered a best practice in the industry,” she says.
For example, if UPMC was measuring how its call center stacked up, it would look at all the industry benchmarks and compare those to goals, like how satisfied customers are or how quickly they are answering calls.
“We’ve had basically a dashboard we’ve developed looking inside the company at all the different pieces that we think are very important for us in terms of meeting our goals and objectives,” she says. “So we do internal monitoring so that we know that we are hitting our metrics or hitting our benchmarks. We adjust those benchmarks when we think that we could be a best-in-class or we could be better than best-in-class.”
But developing a dashboard and using data can’t just be done on a whim. You have to believe in it and drive home the point that you want to be a data-driven organization.
“You have to have a value proposition inside your company that says you are about setting the culture and you’re about setting the practices against a best-in-class methodology,” she says. “So you have to actually believe there is a reason to do that and to very specifically say, ‘OK, these are the goals in my company.
“Part of that is really the leadership believing that they should be a data-driven organization. Then they have to say, ‘Where in the spectrum do I want to fall? Is everything I’m doing something I want to achieve a best-in-class in. If I am, who’s on my benchmarking list? What are the entities that I want to be like or I want to be better than and how do I know I am?’”
You then need to delegate and depend on your team to present that information to you as well as other team members.
“It’s really a question of what kind of dashboard do you set up for yourself,” she says. “Any company and industry can do that in terms of what is it you are trying to accomplish and achieve. Our methodologies are really to have people who are charged in those areas to really produce data reports that we can see and then we share that with the senior team, so everybody else can see everybody else’s metrics to see if they’re collectively, as a set of companies, are we meeting them?”
Without the data and metrics and passion to be the best, you won’t be able to fully know where you stand.
“It has to do with establishing a culture of excellence, establishing a data-driven set of methodologies, and then being very disciplined about how you set that vision. How do you set those goals and then how do you execute on the strategies that will allow you to improve your performance.”
>Find good people
Leading a successful organization is not something any one person can do alone; you are going to need a good team.
Holder looks for different skill sets and capabilities that makes the whole greater than the sum of the parts. While talent is important, don’t solely focus on it because it might blind you to a candidate who is deficient in other areas, such as talking over everyone and stifling creativity.
“Part of what I look for in senior leaders is, I look for people who are deep and competent in their particular domain,” she says. “But I also look for people who actually feel that they are on a continuous learning process, that they’re interested in learning from others and capable of working and talking with and listening to other people who might approach the same problem quite differently.”
When sitting down with someone you are thinking about hiring, remember that his or her knowledge is important, but it isn’t the be-all, end-all.
“Knowing their area of expertise is necessary but not sufficient to be a leader,” she says. “You have to know your stuff, but you also have to be able to take in what others are offering and be open to a creative process that allows you to do it differently the next time.”
Because Holder wants people she hires to have an open mind, she takes the same approach to finding people. If she comes across someone who looks interesting and could be an asset, she will bring that person in for an interview, even if she doesn’t have a position open.
“Sometimes I hire for talent as opposed to hire for a specific position,” she says. “You can’t do that a lot, but you should certainly, in my opinion, be open to it.”
Expand your pool of where you find candidates, or if you use a headhunter, challenge the headhunter to think outside the box in terms of who gets brought to the table.
For example, if you only hire people with years of professional experience in your industry, you could be missing out on a valuable employee.
“Sometimes you take a chance on a young person (who doesn’t) have a great track record but they sure do seem bright and energetic,” she says. “They’ve got a fire in their belly, and they’re really excited about what they are doing.
“It’s important to hire for attitude and energy and passion. The people that I’m the most interested in being surrounded with and spending my day with are the people who, when they get up in the morning, they are excited about what they are doing, and they want to do more of it.”
How to reach: UPMC Health Plan and UPMC Insurance Services Division, (888) 876-2756 or www.upmchealthplan.com
Chris Montague says that to create a clear vision, you have to prioritize, really understand what the important activities are and stay focused on those.
If you don’t, the vision can easily become so complex and involved that the execution of it would become difficult to manage, says Montague, managing partner of Plante & Moran PLLC’s Chicagoland offices, which posted 2008 revenue of about $25 million.
“If you, at the outset, lay that groundwork, you have the opportunity to stay focused,” he says.Smart Business spoke with Montague about how to create a vision to move your company forward.
Q. How did you create your vision?
It would have been a combination of the leaders of the practice here in Chicago along with several of the firmwide leadership group. It would have been a series of meetings where we would have started with growth objectives, focusing on the industries and services we feel we really bring a unique solution to and that are well aligned with the Chicago market.
Then we matched that up against resource needs, which, in our case, is typically people, and then laid out a plan on how to both grow the practice and attract and retain people over that five-year period.
Then, that plan and not all but many of the key initiatives would have been shared with the staff in the office so they have a clear idea of where we are headed.
It would not be things that we don’t want to share with them; it would be things that we think aren’t really all that meaningful to the direction and the larger objectives. It’s important to keep it simple and straightforward. It’s just making sure we are focused on the most important activities. There’s a real talent to being able to condense your message and your vision to the bare bones.
Q. How do you communicate your vision and make sure the employees understand it?
We have a very clear goal of doubling in size in the next five years. We have created a vision around that objective of what we’ll look like in five years, including what our strategies and key initiatives will be.
That vision includes both quantitative metrics and also some qualitative goals that we think are important to our firm and our firm’s success and our firm’s culture.
That vision and those major initiatives had been shared with the entire team, all 150 people. We keep that vision and those initiatives in front of the team through our annual planning process where, each year, we are going to establish goals and objectives that are aligned with the vision. Then we review that plan and results on a very regular basis with the members of the team.
Q. How do you keep the vision simple?
You need to understand your organization’s strengths. Wherever possible, you need to align your vision with the things you do well or with those things you think you can get good at in a very reasonable amount of time. Then, execute against those.
The other thing is, you need to be realistic in your assessment of your organization and the market. You need to be realistic in your assessment of your resources and then what you can accomplish.
Q. How do you monitor the vision?
I think being appropriately hands-on. Being engaged with your team throughout the day, throughout the week, continuing to share the vision and then understanding what is going on to make sure it’s in alignment with what you are trying to accomplish.
Being accessible to employees and staff at all levels is important, and being responsive. When someone comes to you for help or looking for assistance in one of these activities, you are responsive and available.
Maybe another way to say it is consistency in terms of message, consistency in terms of availability, and consistency in terms of follow-up and monitoring.
Q. How do you identify your strengths?
Leaders need to be involved in client service. The leadership throughout our firm and I would be included in that still have client responsibilities.
That allows us to stay in touch with what our clients are looking for, what we need to be doing in terms of service delivery, what we need to be doing in terms of value proposition.
That gives you the opportunity to identify and understand what your strengths are.
The other side of it is in knowing your internal resources. So I have the opportunity to interact in those client service situations with staff and other partners.
Just by having an active role in client service, a leader then gets to have an … understanding of how people are performing and where maybe we need additional resources or where we think we can leverage those we already have.
How to reach: Plante & Moran PLLC’s Chicagoland offices, (312) 899-4460 or www.plantemoran.com
When Timothy P. Ryan came aboard Eckert Seamans Cherin & Mellott LLC as CEO more than three years ago, the company’s culture was already set.
“It is a culture where profits are not king, where lifestyle matters, where compassion and family orientation is very much a part of our business,” Ryan says.
While he did not have to implement the culture at the $125 million firm, he still faces the challenge of keeping it going while not screwing it up along the way.
Ryan has to make sure he has the right people in the right leadership positions to influence the company’s 600 employees and the culture they work in. A key component of that culture is being honest and transparent with everyone, and he can’t do it alone. He has to make sure that he has the right people in the right positions so that everyone is communicating the way he would and that they are also listening to what people are saying.
Practicing these two strategies may sound like a lot of time to spend on something that has nothing to do with your bottom line, but it can have a benefit to your company.
“We have a very low attrition rate here,” he says. “Attrition is horrid in the law business. You establish relationships with clients at all levels, be it secretarial, associate, partner, and that attrition is very disruptive. There are learning curve problems as well as friendship relationship issues.”
A positive culture may also stop a valuable employee from jumping to another company for a little more money.
“Our employees know that they may well be able to get a job for 2 percent more, but they elect not to because of the culture that we’ve been able to perpetuate in this firm,” he says. “The clients are the ultimate beneficiaries of that because we don’t have high turnover. They don’t get new lawyers assigned to their matters every other week.”
Here’s how Ryan carries on his company’s corporate culture by putting the right people in the right positions and listening to input.
Find and monitor the right fit
You need to realize that not everyone should be told the same message the same way.
“Where people stand is often a function of where they sit, and you need to understand that,” he says. “That secretaries or paralegals or equity members may view life a little differently. What I’ve tried to do is reach out and infect all of those people with the positive culture of the firm and get them moving in the direction that we want them to get moving. You cannot have a homogeneous message going across the lines. It takes a lot of time and a lot of effort to reach out to the various constituencies within the organization.”
Because Ryan believes a company’s culture comes from the top, it’s imperative for him to have the right people in charge below him delivering those messages. He needs people in leadership roles who share his vision and his passion and can distribute it down through the ranks.
“We manage through a multipoint system where we have heads of divisions, heads of practice groups and heads of offices,” he says.
When assigning someone to a leadership roll, you may be tempted to look for people who have excelled at their current position in the company. Keep in mind that just because someone excels at one part of your business, doesn’t mean he or she will thrive at a different part.
“Often, you don’t know someone’s strengths or weakness until you put them in there,” he says.
That’s why Ryan has to monitor his decisions and keep in touch with the people being led.
“I continue to spend a tremendous amount of time talking with the people within the offices — staff and lawyers within the practice groups, within the divisions — understanding if the leadership there is effective. If it isn’t, we either fix it or make a change.”
In Ryan’s case, he may have taken someone who was a great trial lawyer and then puts that person in a leadership position, only to find it wasn’t working. While a change needs to be made, you don’t want to write off the person completely.
“We certainly don’t want to cut off that resource if they’re a good lawyer,” he says. “What we try to do then is if they are not real good at interacting with management or (managing people), what we try to do is diminish that portion of it.”
One thing Ryan looks for to find out who is being an effective group leader is by looking at the head count of a practice group, and then listening to what people are saying. If people are leaving that group, it could mean the leader is not doing well or is not exemplifying the culture the way he or she should be.
“Sometimes the secretaries know a whole lot more of what’s going on and are more willing to talk to you about it than some of the lawyers,” he says. “They’ll tell you the people are often acting erratic, they’re heavy-handed, they’re not being very good or very kind. It clues you in on where there is a problem.”
While it may be hard to pull someone out of a position that you thought he or she was great for, it’s something you have to do as soon as you have the information you need.
“Make the change,” Ryan says. “Do not hesitate. Make a decision on the best data possible, have that decision monitored by the best people possible, and then modify the decision accordingly. I am a firm believer that you don’t make a decision and walk away from it particularly when your capital is human because people evolve. They get stretched and tested, and people have different strengths and weaknesses. You constantly have to monitor it.”
Listen to input
You may feel you need to get buy-in for a message, a change or anything else that may need employee support. But Ryan sees it a different way.
“I’m a big proponent of getting input but not merely buy-in,” he says. “I think somewhere along the line, managers have thought it acceptable to get approval or buy-in for a decision. I think it’s far more important to actually get input from people at all levels that either help you make the best decision possible, or if the decision has already been made, to modify it according to the input you are getting.”
To create a culture where you receive constructive input from employees, you can’t retaliate when someone gives negative feedback.
“You have to create a situation where people’s input is valued and there is no fear of retribution,” he says. “Here, the culture is one of civility and respect where people can disagree without being disagreeable. That’s a big part of our culture — that it’s respect above all, it’s professionalism above all. We don’t retaliate; we want the input.”
Explaining the rationale behind a decision can also open doors for people who might want to give feedback.
“(It’s) not just talking with them, but actually taking their input in the environment where they know we have been open in the past and they trust us, and they respect the process,” he says. “The process has taken their input as part of the decision-making and that they respect the decision-makers even if they disagree somewhat with the decision.”
input on the front end of a decision isn’t enough. You need to keep your antennae up and listen to feedback after the decision has been made just in case any changes need to be made.
Years ago, the company decided to switch health care providers for economic reasons.
Ryan and those who work with the benefits within the company started to get a slew of complaints about the change. They heard how hard it was for a doctor to accept it, how distracted the benefits people became and how demoralized the staff had become because of the change. So, instead of ignoring the complaints and focusing on the economic reasons for the switch, the company took action. After about 18 months, Ryan and his team decided they would reverse the decision.
If there wasn’t a culture of open, honest communication, things could have festered a lot more and the situation could have become worse. Since the employees felt comfortable communicating and the leadership listened, the problem was solved.
“Nothing makes (employees) happier than to be part of the decision-making process and part of the monitoring process afterward,” he says. “I think leaders sometimes make a mistake by making a decision and moving on. You need to make a decision and monitor it.”
Though Ryan focuses more on getting input, buy-in is needed for success, and that is why getting the input is so important.
“It’s key to it,” he says. “People will adopt it as their own. It’s no longer me trying to convince lawyers, particularly, that I’m right when they are skeptical by nature. If I can make them part of the process, and it’s partly their decision, it A, improves it — it’s a better decision usually. And it’s joint. It’s community at that point.”
Of course, not everyone will buy in to your decision. In fact, you might even have an employee who is against everything that is proposed. Ryan has run in to a few employees like this, but he doesn’t ignore them. Instead, he will address them separately and listen to what they have to say.
“There is two parts of it, I guess,” he says. “I try to understand if there is a good faith disagreement over a decision or over strategy. If so, I need to understand why and determine if the decision needs to be modified to accommodate the legitimate concern or to improve the process or the output of the decision.
“If I am really confronted with the flamethrower who … brings more heat than light ... I need to move around them, essentially, so they don’t distract the management team. You often will find those people will isolate themselves. They will be standing alone shouting into the wind.
“We often will just tell them we moved on and this is the decision, and we explain the rationale to them and we basically move on.”
Explaining the rationale behind a decision is key for a more open and collaborative culture.
“What they need to do is explain in very understandable terms to whatever constituencies the rationale for why decisions were made,” he says. “(Employees) don’t need to hear about it from a newspaper, they don’t need to hear about it from the grapevine, they need to hear about it not just from the CEO but from the firm’s leadership — why decisions are being made, and be very open about that and get out in front of it.”