Rose International has come a long way from its early days in 1993 when corporate headquarters were housed in the basement of Himanshu Bhatia and her husband’s home in Chesterfield.
“It was just me and him,” Bhatia says. “Starting yourself, you have to do everything and you have to do all the functions. Cold calling, selling, interviewing, bookkeeping and management — everything is on your own shoulders.”
Flash forward 18 years and Bhatia leads a 5,000-employee business that specializes in consulting and IT professional services with offices across the country and around the world. It’s a completely different world as she now has clients that include AT&T, Chevron, Verizon and the U.S. Army and U.S. Air Force.
But the principles of relentlessly pursuing growth and always providing opportunity to employees have remained the same through it all.
“The main thing is sharing the vision with all your people and then treating customers and employees both in an equally important way,” says Bhatia, the company’s co-founder and CEO. “If you offer the right opportunity, provide Rose to be a ladder for success for all the people coming in, if they see it as a place where they can grow as individuals and improve their careers, whether it’s the financial returns or their own personal satisfaction and growth, I think that’s very important.”
It hasn’t always been easy and Bhatia vividly remembers challenges such as the buildup to Y2K in 1999 and 2000, which turned out to be much ado about nothing. She remembers the bursting of the dot com bubble and the financial meltdown of just a few years back.
The key is sticking to what you believe in and never losing sight of your goals. Here are some of the principles that Bhatia has followed to help Rose International serve as a great opportunity for her employees to grow and prosper.
Deal with it
Do you ever feel stress in trying to lead your business? If you do, perhaps you need to see what Bhatia has to say. Because she doesn’t believe in it. Ever.
“I don’t think there is a reason for stress,” Bhatia says. “It’s just a matter of managing issues on a daily basis and dealing with it. As a leader, it’s a major responsibility on your shoulders to practice the behavior you want others to follow. So you cannot have outbursts like that. It would be totally irresponsible as a leader to do that. If you handle things in a calm manner, you’re encouraging that kind of culture in your company.”
It’s not Bhatia lives in a bubble or wears rose-colored glasses to work each day. She experiences challenges and hurdles at Rose International, just like the leader of any other business does.
Take the regular power outages that crop up at her company’s offices in New Dehli, India.
“The power goes for many hours and people aren’t able to log into the system,” Bhatia says.
Sounds like a big problem, right? Bhatia doesn’t sweat it.
“That’s the cost of doing business in India,” Bhatia says. “We handle issues on a daily basis. We have issues there where market wages are changing on a rapid basis. There are different issues there. Are we able to catch each one of them in an instant? No. We do our best.”
You can drive yourself crazy if you worry about every last thing that is happening in your business. But in the process, you’ll set a bad example for your people and create a sense of panic in your organization.
“If you want to grow your company, you cannot be everywhere all the time,” Bhatia says. “You have to put the right incentives and the right leadership, management and team structure in place. As big as we are now, we have all the processes and functions defined and delegated.”
If you’ve done a good job assigning responsibilities and putting good people in place to handle their job function, you should be able to handle problems that come up relatively smoothly. When you do need to step in, don’t make it bigger than it needs to be. Your goal should be to get to the root of the problem.
“It’s getting all the parties involved and having an open and calm discussion,” Bhatia says. “It’s really getting to the cause of the issue rather than the result.”
Now certainly, the challenge increases when Bhatia has a problem in New Dehli and she’s in St. Louis, literally on the other side of the world. But Bhatia says she takes the same approach to a problem there as she would at the corporate office.
“In today’s day and age with Internet and e-mail, I don’t know if it’s as much of a problem being connected with people in different cities and locations,” Bhatia says. “At a work level, you are always sharing information.”
And it’s that information that can be the key to maintaining connectivity, no matter the physical distance.
“The teams have their own sense of achievement and celebration and all that, but it’s definitely shared,” Bhatia says.
Get good people
You need to know what you’re looking for when you decide to hire new employees. Everybody wants to hire a good person who will blossom into a great contributor and take your company to the next level.
The truth is some of the clues to making a good hire are not that hard to decipher.
“People that have changed jobs many times, I would not pick those,” Bhatia says. “There obviously isn’t that much patience in that individual to try to make it work. That’s one trait. Look at the depth of experience within the company. If they’ve been able to grow into positions of more responsibility and take on additional responsibilities, that’s a very good sign. That’s a good trait to look for.”
These are things that can be easily gleaned from a resume. But that’s obviously only one part of the process. The questions you ask during the interview can also be revealing.
“Where do they see themselves in five years?” Bhatia says. “Then you know what kind of career ambition they have. What kind of growth do they anticipate for themselves? Does that align with what you have to offer?”
This gets into another important and sometimes overlooked aspect of the hiring process. You can’t just dwell on the opportunity you’re looking to slot this person into and how they will fit into your plans and make your company better.
“It has to be a good match for them to be happy here, as well,” Bhatia says. “It’s not just that we’re getting a good person. Will they be happy here? That’s important. If you hire them and they are not happy and you are, they are going to leave.”
The key to solving this potential hiccup is looking beyond the immediate need that you’re hiring for. If you have an immediate need, you want to make that a priority. But you should also begin thinking about where else this person might fit in your company.
“It really creates a lot of opportunity for our own employees because we don’t hire from the outside for senior positions,” Bhatia says. “We grow our people and if we see talent within, we promote from within for senior positions. That’s very exciting for our people.”
That’s where finding a good match becomes important. If you identify someone who is looking for growth opportunities, and you have growth opportunities to provide, chances are it will be a good fit.
“The growth is very exciting for all our employees because we promote from within so everybody is excited equally, whether they are in any of our 18 offices around the world,” Bhatia says. “They are equally excited about growth. Through all the discussions and meetings, it’s contagious. Believe it or not, people do get that energy.”
Don’t stop growing
Do you struggle to maintain energy and excitement in your work force? Maybe it’s because all you talk about is how tough it is out there and offer excuses as to why your business can’t compete in today’s market.
“Just wanting growth and not doing anything about it is not going to bring growth to your company,” Bhatia says. “I see a lot of companies and entrepreneurs that get to a comfort level and they don’t want to grow any further because it’s beyond their comfort zone. They don’t want to take any risks beyond their local market or put in the investment for future growth. Any time you want to grow, you have to invest heavily into it for the growth to come.”
Rose International operates largely on an IT system that was conceived in the company’s earliest days. It has continued to grow and improve over the years and that effort to keep making it better is part of what drives Bhatia and her employees.
“As we’ve grown, we keep developing it,” Bhatia says. “It’s quite a complex system, but it’s absolutely essential to our growth.”
You need to constantly have goals out there for your employees to pursue. It builds loyalty, motivation and excitement to keep them reaching further ahead.
“The personal growth of an individual has to be tied to the company’s success,” Bhatia says. “Once that connection is there, if the company does well, everybody in the company does well at a personal level. Once that is tied and that connection is there, people pay attention because it means their bottom line.”
So as you offer excuses about why your company can’t grow beyond where it’s at now, you deal one more blow to employee drive and enthusiasm. It’s also a message that you’re sending to your customers.
“As far as clients go, it’s very important to give them value and if they are trusting you and giving you the contract, it’s important that you fulfill and perform beyond expectations,” Bhatia says. “They want to see us handle more and more and help them in areas that they envision doing. Since they are familiar with us, they would rather do that next leap with us than with another outside company. It’s just good overall for us and everybody involved.
“Invest your profits back in the company to support growth. Hire the right individuals and research the market you want to grow into.”
Keep an eye on what’s happening in your market and share your findings with your people. Show them that you’re excited about where your business can go and that you’re excited to have your people go along for the ride.
“Keep up with the latest market trends to be able to streamline your own efforts in a way that is most progressive for you and your team,” Bhatia says. “Know the next trend that might be coming into your industry and keep up with it so you’re not caught flat-footed. … If you want to do it, I’m sure companies would find a way to do it.”
How to reach: Rose International, (636) 812-4000 or www.roseint.com
The Bhatia File
Himanshu Bhatia, Co-founder and CEO, Rose International
Born: New Dehli, India.
Education: School of Planning and Architecture, New Dehli, India; Master’s in information systems, University of Missouri-St. Louis.
What was your very first job?
I worked as an architect in New Dehli. I was 22. In India, people don’t do jobs until you’ve graduated. In IT, we’re building software systems, and it has different components that come together including the databases and the programs. In architecture, your building is actually a building, so there are many components that go toward that. You’re working with a development process that is essentially the same.
What is one of your biggest personal goals?
Having Rose be a truly global, large company with tens of thousands of employees.
What were you interested in when you were growing up?
I was interested in business and I was fascinated by the information and technology revolution. This isn’t college I’m talking about, because we had one computer for the whole college. Coming to the U.S. and going into that field was exciting.
Bhatia on growth: There are very small businesses that in their own way are successful at a small size. But in our industry and our space and our markets, where things are changing on a regular basis, it’s very important to be a certain size and to be bigger and be there for the next change and market that might come.
Mike O’Neill does not consider himself to be a micromanager. But when he sees people at Switch: Liberate Your Brand, who are, it doesn’t make him uncomfortable.
“Micromanagers are great if you can line that skill set up with a need that you have in your organization,” says O’Neill, partner and CEO at the 100-employee experiential marketing agency. “In our organization, the people who tend to be more micromanaging among us tend to end up in the execution side of our organization and at the project level, not at the management level. It doesn’t work.”
The lesson here is that you need to give people a chance to succeed and find their sweet spot in your organization. Sometimes the person you have at your disposal just needs to find the right place to apply their talents.
“There are people that are in this organization who are very good, but they are the kinds of people who just seem to be wired where they have to have their hands in everything,” O’Neill says.
“How we’ve handled that is that person manages the project managers because the project manager has to keep track of a tremendous amount of detail and be very organized and really does have to be involved in all aspects of a project. The trick is to line those folks up with a position in the company where that’s a plus and not a negative.”
Get more people involved in personnel decisions such as making hires and awarding promotions to help discover where a person’s talents can best be put to use.
“Anytime we’re hiring someone or considering a significant promotion where we are going to put them in a leadership position, we tend to have them talk to a lot of people,” O’Neill says. “We’re interviewing right now for someone in business development. I’ll guess and say that person has probably met with eight different people from Switch.”
Whether it’s you that is doing the hiring or promoting, or someone else in your company, that second or third opinion can be crucial to putting a person in the right spot.
“I’ve hired people that I was convinced when I hired them, ‘Oh my God, this guy or this girl is just going to be a rock star,’” O’Neill says. “And it turns out they weren’t. And then I’ve settled for people that turned out to be great. You have to recognize it’s sort of a ‘one plus one has to equal three’ situation. The one dynamic that you don’t know is what they are going to be like working here. They worked some place else, they did a great job and they have a great track record. But every organization is just a little bit different.”
If you bring someone in and it’s clear they aren’t working in their present position, and can’t really seem to find another position that fits them, you need to move them right back out.
“You demonstrate to people that you’re serious about it,” O’Neill says.
But before you take that drastic step, make sure you’ve given that person an honest chance to succeed. If your decision is based less on performance and more on a personality conflict between you and the individual, it could lead to problems down the road.
“You have to manage the personal chemistry part of it and the needs of the business and find the balance between the two,” O’Neill says. “If I’m here picking on someone I don’t like and making it personal and never taking them seriously because for some reason, I don’t like them, people are going to look at that and go, ‘Oh, well, that’s our culture here. You’re either in the in crowd or you’re not.’”
How to reach: Switch: Liberate Your Brand, (314) 206-7700 or www.liberateyourbrand.com
Think before you speak
Mike O’Neill likes to tell a story about Winston Churchill and a long speech the famous British politician once delivered.
“His handlers came up to him afterward and said, ‘Boy, that was a really long speech,’” says O’Neill, partner and CEO at Switch: Liberate Your Brand. “And he said, ‘Yeah, I’m sorry I didn’t have enough time to prepare a short one.’ He meant it takes time to really focus things down and make those choices about what’s most important to talk about.”
When you’re looking to get your people engaged in some aspect of your business, you need to think before you speak.
“You have to be selective,” says the leader of the 100-employee experiential marketing agency. “You can’t have 10 priorities. If you have 10 priorities, you have no priorities. We try to really hone stuff down and say, ‘Here’s what we really want you to know and remember.’ We usually do that at the beginning of the year and then we get together at least once a quarter to update people on how the year is going.”
Pick things you want to focus on and then keep people informed about what’s happening in those areas.
“You’ve got to be really explicit about your objectives,” O’Neill says. “It’s getting everybody in the company feeling like they are working for the same company and going in the same direction.”
Dan Smith has learned a lot from his father about how to be a better leader. But it’s not all business when they speak by phone several times a week.
“We’ll talk about everything,” says Smith, new president of Columbus operations for GSW Worldwide. “Fun things, sports things, a little bit of work but a nice balance.”
It’s a similar sense of balance that Smith infuses into the way he communicates as leader of the 350-employee health care advertising agency.
“He used to tell me if you’re spending as much time listening to something as you are communicating it, that’s how you’re going to learn and advance the organization and get a broader set of views,” Smith says.
Here’s how Smith has quickly meshed with employees in his new role.
What is your primary role as company president?
Represent the organization as to what its purposes are and the way it’s supposed to behave. You go to some of the responsibilities that the position holds, at least in our office, it’s to lead and develop an annual business plan and execute that. I do wake up each week, each month, each day thinking about how I’m going to contribute toward and then how our leadership team is going to contribute toward the annual plan we put in place to drive growth, to surprise and delight our existing clients and bring new clients to our organization. It starts to move toward where you’re trying to move toward impacting three or four really critical success factors that you think are really important for your agency to be successful based off the objectives you set for the year. It sounds simple. But the leader has to be one that is indirectly working and guiding the plan that is in place and doing it by example.
How do you put your stamp on the business?
It would be a mistake or almost a bit selfish for me to place a stamp or marker on the business just to change. The change that you put forward has to be purposeful. Not change for change sake, but change to do something that is positive for the organization. You have to look back to where we are. I don’t think GSW needs big changes right now. We had a very successful 2010. We need to grow from that and capitalize on where we are, but we’re coming from a position of strength. My initial view will be to continue to advance what’s already been a high-performing organization. Be consistent with the plan we have in place. My role will be to apply my time and focus the leadership against three or four key things and deliver against those. The change part of it has to come naturally.
How do you stay in touch with your people?
As we intensify around mobile and constant communication, there’s a greater push to be speaking and directing information. We’re not taking as much time as we could to listen and formulate great thoughts and directions. You see all the cars in the parking lot and you realize you have some deeper accountability to helping guide as a team everybody that comes to work every day. It’s important to communicate and explain to the broader employee base leadership changes, new and modified roles and responsibilities, as well as identify the organization’s priorities for the year. How you do that is really dependent on the size of the organization. Remain visible and accessible to the staff. The announcement is one vehicle that should be used. But it shouldn’t stop there. It’s just the beginning.
Size: About 350 employees
About Smith: I’m a Buckeye to the core, huge Ohio State fan. Columbus is home. I’ve raised two boys here, and they love it, and this is just a fantastic place to live. I love its location and what it has to offer. It’s kind of a hidden gem.
How to reach: (614) 848-4848
Tom Feeney did not agree with how employees were being treated at Safelite Group when he became president and CEO in July 2008. He was confident this mistreatment was one of the things holding the company back from achieving greatness.
Now to be clear, Feeney is not saying that employees were being abused or treated badly. But they weren’t a priority at the company and that was a problem.
“While we have been really good in the area of providing good customer service, we have done so at the expense of our people,” Feeney says. “We haven’t invested in our people. We asked ourselves the very strategic question: What are we focused on? Companies historically have to focus on one thing. They can’t focus on three things.”
The three things that you can choose to focus on as a company, in Feeney’s opinion, would be your employees, your customers or your stakeholders.
“When I looked at Safelite, we had never selected,” Feeney says. “We were doing things erratically and trying to serve all three masters.”
As a result, customer service wasn’t as good as it could be at the 10,000-employee auto glass repair company. Employees didn’t feel as attached and as valued to the company as they needed to in order to give their full commitment to their work. And stakeholders didn’t feel as connected to where the company was heading.
“We debated and concluded that it was our people that came first,” Feeney says. “Once you make a decision like that, it causes you to make changes in your strategy, changes in your direction and changes in your decision-making. We simply concluded that if our people truly came first, all of our investments had to be toward making our people feel good about working at Safelite.
“We had to train them, invest in them and give them more tools and evidence that people first really meant something. It wasn’t just words.”
You need to begin your quest for a more focused direction by asking yourself why you’re in business. Why did you launch the company you’re now leading? Why did you agree to become a CEO?
“Many people say, ‘I’m in business to make money,’” Feeney says. “Well, yes, of course, but that’s oversimplification. You make money because of the actions you take. You have actions to take because of those strategies you have in place. So it really starts with that very basic question: What am I in business for? Who are you serving? You’ve got to know where you’re trying to take the business.”
Feeney believed the vision at Safelite needed to focus on what was best for the people who worked there. He was confident the result of such a focus would be happier employees and more satisfied customers.
Make more connections
You need to make real connections with your people in order to get them to believe in you and believe that you care and value their role in your organization.
“It does start at that point with some words on paper and some visuals to help bring the words to life,” Feeney says. “But it’s much more important than that to take this vision down to the very lowest levels of the organization with passion, with believability, with credibility and with an explanation of how this fits them. What is their role in achieving this vision?”
As you think about vision, keep in mind that it’s not your employees’ responsibility to get inside your head and figure out what you want them to do.
“In fact, it’s our responsibility as leaders of the business to understand it from their perspective,” Feeney says.
In order to gain that perspective, you need to get out of your office and meet with people, employees on the front line and not the district manager or vice president who runs that particular office.
“I’m not sitting in a room and getting a presentation from the general manager,” Feeney says. “That’s the last thing I want to do. If I believe the leader sets the vision and must communicate the vision and must inspire others, I have to figure out how to connect with people on a personal level.”
Get out there and explain the changes you want to make, but allow just as much time for questions that employees are going to want to ask. You need to appreciate the impact of change on their world.
“As you go through a cultural transformation in your company, the reality is each person must go through a personal transformation,” Feeney says. “I have said publicly that in order for the company to achieve a cultural transformation, each of us has to change. What that means is the things you did yesterday to make you successful in the company are not going to be the things you do tomorrow that make you successful. You have to change. I put myself out there.”
Show them the work that you’re doing on your own skills and abilities as their leader and help them understand that you have work to do as well.
“I share examples of things I’ve done well and things I haven’t done well,” Feeney says. “So when I get a performance review or a 360 feedback or I participate in the same leadership development tools that we provide for all our management, I share my results. I put them right out there so people can see, ‘Holy crap, he ain’t perfect.’ I’m far from perfect. I’m on the same leadership journey of the leaders in our company.”
Value your people
You may think you’re the big cheese at your company. And if you’re on local commercials or advertisements or you frequent the banquet circuit in your community, you may have a pretty visible presence. But it’s your employees who have the greatest impact, good or bad, on the image of your business.
“Our customer service reps who answer the phones, they are the voice of our company to the customer,” Feeney says. “They are the first impression. When a customer calls on the phone and we answer the phone, immediately that customer has an impression of our company.”
The point is you need to value those people and give them a reason to be proud to be part of your company.
“If my phone rings and it’s an associate, I take that call,” Feeney says. “I don’t have a mechanism to filter this stuff. Some CEOs put mechanisms in place. I have an open-door policy. Anybody in my office can walk up and interrupt what I’m doing and I’ll talk to them. They know that. I’ll walk around and see them. You can’t say one thing and do another.”
Of course, it’s not just enough to say you have an open-door policy. If nobody comes through your door or if you scowl at people who do come through your door or forget what they told you 30 seconds after they leave your office, it doesn’t do any good.
“They have to respect you and feel that there is an openness to listen,” Feeney says. “That has to do with style and approachability and sincerity and follow up. If you hear things and if you listen and then you do nothing, you will stop being told things.”
Think about the way you present yourself to your people. Does it give off an air of approachability?
“If you walk in with a posse or you drive up in a stretch limousine and fly in on a company plane, you’re going to come off as a bit standoffish,” Feeney says.
You play a key role in the evolution of your culture and its ability to continue pushing forward.
“If they sense you’re moving right or left off the vision, it’s almost permission to stop believing and go the wrong way,” Feeney says. “You have to be true to that vision and the strategy and the path you’ve laid out for the journey.”
Here’s another important thing to keep in mind when reworking your culture: You have every right to expect some results from your efforts.
“When we put things in place to make our people better, I expect a return for that,” Feeney says. “We expect a return for that. Your people are your greatest asset. As you invest in them, you should expect them to do more. It’s not about productivity. It’s more about attitude. The term I used before is ‘qualitivity.’ You get quality and productivity, which is the best possible outcome. When people are really engaged about coming to work, and they know what their role is, and they know how they fit into the puzzle and what their job is and how important their job is to the ultimate prize of the company, it’s unbelievable what can get done.”
So once you’ve opened your arms and instituted systems for employees to share their concerns and ask questions, it’s OK to expect that their performance will get better.
“If you have an employee that’s been with you for 10 years and they were really successful in the old days, but they are just average today, you have an obligation as a leader to tell them that,” Feeney says. “Show them what they need to do to become above average again and provide them the tools to do it. But in the final analysis, it’s that individual’s responsibility to take action. If they don’t, you must upgrade talent.”
Cultures aren’t fixed or built in three easy steps. It requires a constant commitment by you to make adjustments when needed.
“It’s a constant drumbeat of sharing and communicating on a very frequent basis what’s gone right, what’s gone wrong and have we deviated from the long-term vision that we created,” Feeney says. “We’ve picked up the pace on communication. We’ve been more visible to our organization, meaning we go out to the field on a quite regular basis to hear from them. How are we doing? What’s going right? What’s going wrong? What can we be doing better? Make every leader responsible for the future and make sure they understand their roles in it. It’s easy to use the words. It’s hard to walk the talk.”
So don’t just talk about how your people are important. Take actions, and support actions, that reinforce that importance.
“My job is to role model the kind of behavior I want all our leaders to pursue,” Feeney says. “I’m constantly amazed and proud when I hear stories about somebody who did something. Maybe they took a risk and they sent someone on a weekend trip because they did something really well and they sent their family away and we paid for it. I love that. That says it’s permeating the organization.”
Feeney’s efforts have paid off financially as sales topped $1 billion for the first time in 2010, up 70 percent from 2007. But the work will continue to make sure the company gets even better.
“Leadership is a journey,” Feeney says. “You’re never done. It’s a work of progress that is never completed. It’s a work of art and the people who get to judge it are your employees and the customers you serve.”
How to reach: Safelite Group, (877) 800-2727 or www.safelite.com
The Feeney File
Tom Feeney, CEO, The Safelite Group
Born: New York City
Education: Bachelor’s degree in accounting, La Salle College (now La Salle University). I thought I was going to be a CPA and then a CFO. I took that path and then branched out.
What was your very first job?
Sweeping the floors at a music studio where I took music lessons. They needed someone to clean the floors. I played the trumpet. Our parents always encouraged us to be involved in music and sports.
What is the best advice you ever received?
I got some really good advice early on in my career. If you’re very serious about your career, you’ll be walking a tight rope most of your life. There will be days when you lean to the right. Maybe that’s your career. Then there will be days when you lean to your left. That’s your personal life. If you lean too far, you’ll lose your family or lose your career. It’s that balance you have to find.
Keep your family connected to your career and keep your career connected to your family. If you choose that path where your wife stays home, you have an obligation to keep her current.
What one person would you like to have talked to?
President Ronald Reagan. He was truly an inspirational leader. He led the country through a transformation and then the world. At the same time, he was a bit of a strange person. He didn’t seem to have a good family relationship.
Jean Birch finds it quite difficult to pick a favorite item on the menu at IHOP. Actually, that’s not really true. She just has a hard time staying loyal to one item as her favorite when there are so many tasty treats to choose from.
“It switches just about every week,” Birch says. “Last Saturday, I ordered the Cinn-A-Stacks pancake combo. It’s like the inside of the cinnamon roll rubbed all over your pancakes. I can’t get enough of those. Good stuff, man.”
Birch, the president of International House of Pancakes LLC, sees herself as the restaurant chain’s chief cheerleader. The company finished 2010 with 1,504 IHOP locations and expects to add as many as 65 new locations this year, with an additional 330 units planned over the next 19 years.
Birch loves to get out and visit as many restaurants as she can fit into her schedule, but she’s not just there for the pancakes. She wants employees to feel her energy and see her passion for the business. That often takes some effort as many employees find it hard to see past her title.
“People tend to drop more dishes when I’m around,” Birch says. “They’re on their best behavior and they want to make a good impression, but I don’t personally see myself as any different than when I was a bus girl in the restaurant or when I was a manager in the restaurant.”
IHOP is owned by DineEquity Inc., a 17,700-employee company which also owns Applebee’s Restaurants and took in $1.33 billion in 2010 revenue. Before she came to IHOP, Birch recalls those younger days and the visits she had from executives who weren’t there to enjoy a meal or exchange a few laughs with the hired help.
“They were looking for things to be wrong in the restaurant instead of trying to find things that were working well and that we were proud of,” Birch says. “I have plenty of people in my organization that can tell people how to improve their business and what they can do to be better.”
Birch says her job is to break down any barriers that exist between her and her people, establish a rapport with them and get them as excited as she is about being part of the IHOP brand.
Show you care
One of the challenges Birch faces in building passion and energy is that IHOP is a franchise operation. Franchises thrive on consistency, and with the wrong approach, that commitment to doing it a particular way can restrain passion and create robots.
It’s up to you take the right approach.
“In a franchise community, you don’t just make a decision and send the word out,” Birch says. “In a franchise community, you want to engage the franchisees and make sure you fully understand their perspective on a particular issue. Enroll them in wanting to solve the problem in a meaningful way. It’s a lot more about vision and understanding what the big brand is all about, collaborating on how to solve particular issues and fundamentally we get where we need to go.”
You need to make sure people understand your brand and the things that you stand for and the vision that guides your business. That is a key to having a successful franchise operation.
“Without strong vision and leadership at the top, franchisees will tend to move in different directions as they see the world from their perspective,” Birch says. “These little decisions, if not tied to a cohesive strategy can get your brand off track very quickly. It becomes a different IHOP in L.A. than you have in Nebraska than you have in Boston, which undermines the strength of the brand overall.”
But just because you have a brand, you don’t have to, nor should you dictate every step and every action that your people take. You need to provide outlets for their skill and creativity to be unleashed and put to use on the job.
“We want their creative energy, but we want it channeled into the areas that are going to do the most good for our business,” Birch says.
Birch takes it upon herself to get out of the office as much as she can to provide opportunities for employees to feel more connected to her and to the brand.
“You have to have a lot of self-awareness,” Birch says. “The biggest thing you can do is listen. Ask an open-ended question and then listen. Tell me about your restaurant. Tell me your story. How did you get started at IHOP? Clearly, those are questions they know the answer to. This isn’t a trick question like, ‘What was your labor percent last week? What market share do you have here?’ This isn’t trying to trick anyone. Just tell me your story about why you’re involved in this business. What’s on your mind? What are you most proud of in your restaurant? You get people talking about those kinds of things and pretty soon, you’re just two people having a conversation.”
Show people that you’re not just there to dig up dirt and find excuses to complain, but to get them even more engaged in what your company is doing. Take a supportive and encouraging tone and you’ll garner a lot more loyalty.
“It’s not as hard as you think,” Birch says. “These folks are relying on myself and the team to do a good job of leading this brand and creating opportunities for them today and tomorrow. I don’t take it lightly.”
Put the work in
When you communicate with your people, you need to be aware of how they process information and which modes of communicating work and which ones don’t work. That’s going to be key to establishing the healthy rapport you’re seeking.
“We all have our way that we hear things or like to communicate,” Birch says. “It’s probably far more important that we understand how those who work for us want to hear things and want to communicate. It’s not about my dominant style. It’s more about what that individual who works for me needs. So how do I explain it in a way that makes sense for them?”
It’s a valuable lesson to learn ? the idea that you can’t just think about yourself and your own personal needs when you’re pondering the next step for your business.
“It’s not about the leader’s needs,” Birch says. “It’s about the subordinate’s needs and how they are going to work through this problem.”
You’ve got to put in the work to come up with solution that you and your team can execute. It’s not a solution you’re likely to find sitting behind your desk.
“You go to the people who do the work, the people who are in it every day that get a multitude of perspectives,” Birch says.
“From the dish washer to the franchise owner to the franchise business consultant to the people at the support center. If you talk to the right people, the real issues come to the surface. And the solutions to those issues, although never easy, they’re not as hard as they sound when you’re trying to do everything locked in an office by yourself. The people have the solutions if you can just uncover them and bring them to the surface.”
And when you engage people and show them that you care about their opinions and demonstrate that you need them to succeed and grow your business, you’ll have taken another step toward earning their loyalty.
“As a mid-level leader, I was confident I had all the damn answers,” Birch says. “I was ready to go off and just go do it and make sure everybody followed in line and I was just brilliant. Follow me and off we go. The more I’ve grown as a leader and the higher up I’ve gone, the more I’ve realized you don’t have to have all the answers. In fact, it’s probably better if you don’t start with all the answers.”
Stay in touch
If you find that you’re not getting a lot of ideas from your people, that’s not a good sign for you, for your business or for the two-way flow of communication in your business.
“If I stop getting a lot of good ideas from franchisees, I get a little worried that they are starting to withdraw and distance themselves from the brand overall,” Birch says.
Getting ideas requires more than just a drop-in by you at a distant location away from the corporate office. You need additional personnel who can fill in the gaps and provide a regular outlet for ideas on how to make your business even better.
“We have field-based franchise consultants that work day in, day out with our franchisees,” Birch says. “They are a collector of ideas for us. We have regular meetings with our franchisees, both formal and informal, which is consistently a two-way dialogue. Here’s what we’re doing and here’s where we’re going. This is what the consumer is involved in. These are the great things on the horizon for our brand that we’re getting ready to go. Then we open it up to, ‘What’s on your mind? What do you think we should be working on? What are some ideas we can save money on?’ We get a tremendous amount of really good input. When you start to do a number of those, you see patterns.”
One thing to keep in mind as you’re implementing methods to gather feedback is that in most companies, you’re not trying to solve matters of national security.
“It’s not like we have to go figure out a nuclear physics problem,” Birch says. “We’re in the restaurant business. Sometimes we have to remind ourselves that it’s just that simple. Great food. Great service. Great place. Do that over and over and over again and you’re going to have a pretty good restaurant company.”
Birch says it takes special people to learn to manage their creativity and apply it to a business where they can’t do whatever they want to.
“The biggest challenge in leading IHOP would probably have to be this unique opportunity to be the leader of some really independent-minded entrepreneurs,” Birch says. “They are very involved, very active, very bright individuals that are running their businesses every day and have a very strong entrepreneurial spirit. But they have chosen to align their efforts with a proven brand and proven formula for success, which is what IHOP and franchising is all about.”
You just need to make sure you’re staying in touch, showing your passion and constantly engaging them in the effort to make your brand better. Don’t waste their talents. Find a way to harness them.
“As you look at this compared to other leadership situations, you really have to think through the fact that they are the leaders in their businesses and they are bringing so much value to the table day in and day out,” Birch says. “You can’t just command and control.”
How to reach: International House of Pancakes LLC, (818) 240-6055 or www.ihop.com
The Birch File
Jean Birch, President, International House of Pancakes LLC
Born: Boone, Iowa
Education: Bachelor’s degree, double major in economics and oriental studies, University of Arizona; MBA, Southern Methodist University
Who has had the biggest influence on you? I had a very strong mentor in one of my previous jobs. Aylwin Lewis. I worked for him at Pizza Hut and he was a tremendous mentor and role model. He told me what I needed to hear, not what I wanted to hear. I worked for him for about two and a half years. He mentored me for about 10 years.
It was mid career when I was at Pizza Hut as a district manager. He told me how the organization saw me, how I could be more effective, what I did right, what I did wrong and more importantly, because of the roles he created around me, he stretched me far more and far faster than I ever would have gone on my own.
Birch on looking in the mirror: I think it’s from “Good to Great,” the concept of the mirror in the window. The idea is, when something goes wrong, a good leader should first look in the mirror. What did I do that caused this not to go right? Did I not communicate well? Did I not research the project well enough? Did I not communicate effectively? When things go well, you should look out the window to your team and congratulate them for the great work that they did. That piece of advice has done more for helping me frame the best ways to get the most out of folks than any other piece of advice that I’ve had.
Thomas J. Neri was facing two problems when he took over as president and CEO at Lawson Products Inc. First, he had a work force that had lost its desire to be innovative and wasn’t feeling any pressure to rediscover its passion. But that paled in comparison to the second problem, which was the fact that his company was being targeted by the federal government for improper selling practices.
It was under those inauspicious circumstances that Neri began his tenure at the top of Lawson, an industrial distributor of maintenance and repair supplies. The tricky part for Neri was that despite a seemingly obvious major problem, he still had to convince some people in the organization that changes were needed.
“The biggest challenge was building that burning bridge for the organization to say, ‘Look, we’re not as good as we thought we were and we have to change,’” Neri says.
“How do we get back to being what we need to be? How do we convince our customers that we are going to be a valuable and reliable partner? So you had the culture change. You have working through this legal issue. The other side is looking at what sort of people we were going to need to run this organization going forward.”
It wasn’t going to be an easy fix at the company, which now has 1,010 employees and 1,200 independent field sales agents. Neri needed to clean house on the senior management team and find people who could be more aggressive about growth, but do it in a way that would avoid any future entanglements with the federal government.
“We had to be very honest with ourselves and with our employees and our agents and, to some degree, our customers and our vendors that we weren’t as good as we thought we were and we were going to be much better,” Neri says.
You might be surprised to learn that as he began his effort to lead Lawson Products through this storm, Neri says he didn’t really feel fear.
“At the end of the day, you just have to say, ‘I’m open to changes,’” Neri says. “‘I’m open to opinions. I’m open to being entirely wrong.’ But what you hope to find is a compass heading that is the right way. It’s not going to be the exact map because it never is. Once you’re comfortable with the compass heading, you just have to charge ahead with it. The worst that happens is you get fired.”
Build your case
Neri did have to make wholesale changes on the senior management team, but the firings were not the first thing he did upon taking the helm at Lawson.
“There were a number of people that I was not sure if they would make it or not or would buy in to the vision,” Neri says. “So we didn’t make a lot of initial changes in the first six months in personnel. But once we got the story out as to what the burning platform was and where we had to go with it, it became fairly clear that we had to change people out if we were going to get there.”
When you’re dealing with a crisis, you need to approach it with patience and honesty.
“As we began to make some of these changes, we simply told the organization, ‘Not everyone is going to have a job when we’re done with this. We don’t know who will and who won’t,’” Neri says. “But what we did say is we’re going to provide training for everybody for some of these new positions and we’re going to pick the best that we can.”
As Neri began to talk about the areas in which the company had lost its way over the years, he bolstered his words with financial data.
“You use some very basic financial measures and performance measures as it relates to customer service,” Neri says. “Most of those are fairly easy to get. So the story came out pretty clear that at least in comparison to our competitors, we weren’t performing very well.”
He also reached out to customers and got some feedback from them about their perceptions of Lawson Products.
“The results came back and were pretty stunning for all of us in the organization, even those of us who were only here a short while,” Neri says. “A lot of our in-house perceptions were certainly not what the customer thought of us. When we thought we gave great customer service, it came back, ‘Well, it was OK,’ but it certainly was no better than other people. So as you start feeding them real data and real information, then you start applying day-to-day world things that they do, they start to see that we don’t measure up and some of the things that we do inside don’t seem to make a lot of sense.”
The lesson here is that when you’re trying to make an argument, you need to build a case and gather information and data that supports your cause. Then ask the people you’re presenting to, if they have concerns, to make their case as to why they think you’re wrong.
“We held a lot of employee and department meetings or a lot of different meetings with larger groups and small groups and began to lay the case out for them in relatively straight-forward terms,” Neri says. “We were pretty open in listening to what they had to say. We would lay out a problem or an issue and say, ‘OK, we believe this is right solution. You tell us why it isn’t the right solution and if it isn’t, tell us how you’re going to correct it.’ That first step is convincing them there is a problem, but the second step was going to them and having them help us tailor-make some of those solutions.”
Find people in the company who can help you make the case for those solutions that you support.
“I tried to find people who had been with the company for quite some time and were influencers throughout the company,” Neri says. “Even though they may not necessarily have agreed with all the changes, what I did was spend quite a bit of time with them convincing them that they can be a big part of it.”
It’s OK to seek out help if that help can make it easier for you to get things done.
“I tried to find four or five of those influencers who can make the case for me and had a lot more validity with the older organization because they knew them better,” Neri says. “When you talk about honesty, it takes quite a long time to get people to trust you. Until you get that trust built up, you need some other people in the organization to do that for you.”
When you’ve made that effort, look at where things stand and then plot your next step.
“There was a large cadre that said, ‘We don’t believe we’re as bad as we are,’” Neri says. “We don’t see the need for change and we don’t like the change you’re talking about.’ The old analogy is, ‘The train is leaving the station. Either get on or step off.’”
Manage the message
As you begin to roll out the next step, your plan for recovering from a crisis, you need to put a great deal of thought into how it will be presented and how it will be received by your employees.
“It really starts with our director of communications,” Neri says. “Part of this is making sure your messages are the same messages and you’re not contradicting each other. Part of it was putting a calendar together and saying, ‘OK, here are the messages we need to get out and here is the information or feedback we want to get back from them.’ So a calendar was laid out, and I would spend a great deal of time on the content, especially on the town halls. I would spend a lot of time going over the communication and what the presentations were and who is giving the presentations.”
You need to talk about the actual rolling out of information and the logistics involved in doing so, in addition to the meat of your plan.
“What’s the rollout look like for the next six months?” Neri says. “What are you going to be saying to the organization? How does that tie into the corporate initiatives? Then as we get closer, what are we going to roll out next month?”
You need someone in place who can help you manage your message. It’s critical that this is someone who you’re willing to listen to and abide by, even if you don’t always agree with them.
“You’ve got to really organize how messages get out and how you get feedback,” Neri says. “You do want someone who is adept at being able to work with you for about a month or two and can begin to understand your style. Someone who can understand that how I give a speech is different than how someone else gives a speech and that my writing style looks like this.
“They have to feel that same freedom to be able to say, ‘Yeah, I know you like to say it that way. But it really comes across badly. I really would like you to try it this way.’ It really becomes a symbiotic relationship. You’ve got to have confidence in each other and trust each other’s opinions.”
What you’re trying to do is create a picture of what it’s all going to look like when you’re finished with your plan.
“It doesn’t have to be that solid of a picture, but it has to give people an idea of where this is heading to,” Neri says. “My style is to say, ‘Here are the guts of what it is. Now I need your help in reshaping that and changing the face of it a little bit.’ You do have to give them some sense of what it’s going to be like out there.
“Just as importantly, what is going to be my role in this? Why is it going to be a benefit to me if you make these changes? What do I get out of this from a working perspective or a career environment perspective? You have to do both of those in tandem. People aren’t really sold until they understand how it impacts them.”
To help in this process, Neri transitioned his human resources department into an employee advocacy department.
“That position had a dual reporting relationship to myself and the chief operating officer,” Neri says. “I made it clear one of the responsibilities of HR is to be an employee advocate and to do outreach programs to make sure that people are being talked to.”
As you move into the execution stage of your plan, make sure your employees have a major goal that helps tie all their efforts together. At Lawson, this goal was helping the customer.
“We went into a lot of explanation as to what that really meant at every level,” Neri says. “If you worked in the warehouse and you were lifting boxes or sorting things, we made it very clear to you how important that job was and how it translates into customer service.”
Keep in touch with your direct reports and encourage them to do the same on down the line as to the progress your people are making in their jobs.
“I will sit with the managers every once in a while and say, ‘How do you think Scott is doing?’” Neri says. “Is he meeting all the goals that we have? Are we pushing him along strong enough? Are we giving him the training?’ Based upon the conversation with those individuals, I’ll know whether they are having those conversations with those people.”
As Lawson entered 2011, Neri’s efforts were showing results. Net sales increased from $301.8 million in 2009 to $316.8 million in 2010. The federal investigation resulted in a $30 million penalty in 2008 that was paid over three years.
Neri is confident better days are ahead and are the result of a changed corporate mindset.
“Your jobs are very important, but what’s more important is who you are and how you go about that job and your attitude that you carry with it,” Neri says. “I’m a big believer that attitude is far more important than the technical skills.”
How to reach: Lawson Products Inc., (847) 827-9666 or www.lawsonproducts.com
The Neri File
Thomas J. Neri, President and CEO, Lawson Products Inc.
Education: Bachelor of science degree in accounting, University of Illinois at Urbana-Champaign
What was your very first job?
I was a paperboy for either the Daily News or the [Chicago] Tribune. What I learned was I really didn’t want to do that because my dad was not going to get up at 3 in the morning to help me wrap papers.
Who has had the biggest influence on you as a leader?
Sam McKeel. Sam had been publisher at the Philadelphia Inquirer for a long, long time. He retired and he came to the Sun-Times in 1989 or 1990. He taught me that the most important thing about leadership is who you are — not skill set, not who you know, not the technique. Being a leader is really about being a people person and understanding how you can achieve things through other people. You’re very limited in what you can achieve yourself. He just taught me a lot of good lessons.
What one person would you like to meet from all of history and why?
Winston Churchill. The thing that fascinates me is that he had such a checkered career. He was someone born with a silver spoon. He failed miserably during World War I. He failed in a number of different areas. He was out of favor politically for 30 years.
When World War II started, they brought him back in, and he was probably the strongest voice of freedom in resisting the Nazi party. After the war, he was shuffled off again. It would be fascinating to talk to someone who had seen the bottom and seen the top several times and always managed to move forward in his life.
Michael B. Kennedy Jr. was wondering what was taking so long to get a computer rendering completed at KAI Design & Build. He stopped by the desk of the guy who was working on the project and asked what the delay was.
“He said, ‘I’ve been working on this for 25 hours over the past month,” says Kennedy, the 97-employee firm’s president. “If I had this software, I could have been done in five hours.’ A quick ROI in my mind and I said, ‘How much is the software that you need?’ and he said, ‘It’s $1,000, and they said they didn’t have it in the plan.’ You’re a $100-an-hour person and you just said you’re spending 25 hours. That’s $2,000.”
The situation drove home Kennedy’s strong belief in staying in touch with his people to collaboratively come up with the best way to manage a business.
“You really have to get out there and talk to your people,” Kennedy says. “Ask them, ‘Do you have what you need to do your job?’ It’s going to make your business more profitable and your people happier. There’s no way as president I can know what that person is doing in their cubicle to make their job more efficient. Unless you go around and talk to them and implement their ideas, you’ll never know.”
When Kennedy stepped in as president at the design and build firm in June 2008, he assumed the leadership role that his father had held since founding the firm 30 years earlier. He felt he had to prove himself worthy of being the leader.
“My position was to build that trust first,” Kennedy says. “I heard everybody out and asked them if they all had the tools to do their job. I do that with everybody from a lower staff member to an executive. Do you have the tools to do your job? Is there a way you can more efficiently do your job and how can I help you? Instead of a dictatorship, it’s an entitlement. I wanted people to feel like I had an open ear and they could trust me. Then I had to perform.”
That, of course, is the key. Anyone can go out and ask for feedback. It’s what you do with it that makes the difference.
“The difference is when you write it in a plan and put it on a shelf versus coming up with your missions, goals and strategies,” Kennedy says. “Those are the three boxes of a business plan. You’ve got your mission, you’ve got your goals and you’ve got your strategies. Then it sits on the shelf. How do you drive that down to the lowest level of your company? That’s where you need to write the initiatives to implement your strategies. Then you need measurable objectives that you measure yourself on yearly, monthly and weekly in your reports.”
Again, it’s the next step that is key. You need to have those conversations with people to see what they need in order to help you achieve your goals. When everyone is involved, you don’t have the disagreement over the need for software that Kennedy had to deal with. Everybody is on the same page.
“The last thing that is the most difficult thing once you get your initiatives and objectives in is getting the individual objectives at every level,” Kennedy says. “How does the receptionist and the assistant, what are their individual objectives to help us on the overall objective? It’s getting all those driven down.
“Everybody at every level has to understand, ‘Well, how do I contribute to that? How am I measured against that?’” Kennedy says. “We started rewriting those objectives and metrics into their yearly evaluation so they know what’s expected of them and how they contribute to this business plan.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Michael B. Kennedy Jr. makes sure everyone at KAI Design & Build has a copy of the company’s business plans when those plans are presented. But it doesn’t end at that meeting.
“Each manager, through people’s evaluations, would talk to them individually on how they fit into that role and what we needed them to do,” says Kennedy, president at the 97-employee firm. “Then with the formation of committees, you put the vision out there and have committees in place that meet quarterly or monthly so they can have the buy-in of the plan and take ownership of it. You don’t want to just drive it down their throat. You want input and you want them to take some ownership of it. You explain the theory and concepts and why it makes sense and then you have them buy into it and own it.”
If you find that people that tend to be waiting on you to move forward with plans you thought you had communicated, you clearly didn’t make them feel like they actually owned their role.
“Or they don’t feel like they can make a mistake,” Kennedy says. “Depending on your business, maybe you don’t want them to be allowed to make a mistake. Or you need to define what level they can make decisions without asking you.”
How to reach: KAI Design & Build, (314) 241-8188 or www.kai-db.com
Jeffrey S. Davis and his team at Perficient Inc. were not ready for the bursting of the dot-com bubble back in 2001. Despite the warning signs, tough decisions were put off and fingers were crossed that the seemingly inevitable recession wouldn’t turn out as bad as everyone feared.
“We waited too long to really respond to it,” says Davis, who was COO at the IT consulting firm at the time. “We knew what we were going to have to do in terms of layoffs was going to be very unpleasant. So we had a lot of noise among the executives and senior managers in the company. Some people were saying, ‘That’s disaster. If we lay off anybody at all, everybody else will quit, and we won’t have a business left.’ Or people said, ‘That’s not what I’m here for. I refuse to lay anybody off.’”
Davis and his team were in denial.
“People didn’t want to believe it after things had gone so well, especially for the prior couple of years,” Davis says. “From 1999 to 2001, it had just been a phenomenal year for the tech industry. It was hard for people to accept that it was over and over really rather quickly. Denial is exactly the right word.”
Perficient took a pretty big hit like a lot of businesses, but eventually did what it had to do in order to survive and the lessons that Davis learned through that difficult time stuck with him. And those enduring lessons proved to be crucial when the economy began to plummet again in late 2007.
“It was amazing to me the kind of repeat that we had,” says Davis, currently the president and CEO at the 1,015-employee company. “We had the same type of people, salespeople, saying, ‘Oh, we just have to sell our way out of this.’ All the same things were playing over again.”
Fortunately for Perficient, which took in $215 million in 2010 revenue, Davis and his colleagues on the senior management team knew they couldn’t afford to wait around and hope for the best.
“We were able to tune that out and move the business along with what we needed to do,” Davis says.
Make a list
The first thing Davis did this time around, and the first thing you should do when you sense that trouble is ahead, is make a list.
“I would start making a list of every area where I can cut costs as quickly as I can,” Davis says. “It is fairly complicated, especially when you’re talking about taking people out of the business. Any kind of resource you have in the business, theoretically, you needed. Otherwise you shouldn’t have had it. And that happens too. When find yourself in these situations, you start to realize, ‘Gosh, why were we doing that anyway?’ So you start making that list with, ‘Here are the things we can impact immediately.’”
Davis suggests making your list in three tiers to account for the range of severity you might be about to experience.
“Here’s the not-so-bad recession list,” Davis says. “Here’s the pretty bad recession list, and here’s the Armageddon list. We were prepared in phases to go through each of those if we had to.”
This list can’t be something that you do yourself while locked alone in your office. You need to get your colleagues on the management team and your department heads involved from the beginning.
“I wanted to make sure people bought into it and as unpleasant as it is, this is where we are and this is what we have to do,” Davis says. “While none of us liked it, we all agree it’s the right thing for the company and ultimately, it’s the right thing for those folks who are left behind. So it was definitely a collaborative effort and not a mandate.”
Davis had each manager and department leader come up with percentages of cost reductions and dollar figures. It’s not your job to identify specific individuals to let go. Let your people who work with them on a regular basis and know their strengths and weaknesses make those decisions.
“They are closer to it than I am,” Davis says. “I hope they have the right answers because it’s going to be difficult for me to come up with given that I’m a couple steps removed. You’ve got to rely on your folks, hold them accountable but also rely on them to make the right decision.”
You can acknowledge that these are decisions that no one likes to make without falling into tired clichés.
“Just be upfront and honest,” Davis says. “This sucks, but here’s where we’re at. I’m not going to candy coat it for you. Here’s what we have to do. For the people I mentioned and I would even extend it to your 17 general managers, our executive team is about 21 people, I would treat everybody on the team like that. They wouldn’t be in those positions if I felt like a conversation like that was going to be send them into a tailspin.”
You can also offer your hope that the worst doesn’t happen and that the draconian cuts you’re talking about won’t have to be made. But if you don’t plan for the worst and the worst happens, your stress is going to be a whole lot worse. So you need to maintain a sense of urgency.
“I never had anybody that was that much of a holdout,” Davis says. “But if I did, I would say, ‘If you’re not going to do it, I’ll do it for you.’ Usually when you offer something like that, they tend to take it more seriously. Because the last thing they want is for you to be making the decisions for them.”
Help people grow
Unfortunately for Davis, he did have instances where people came back to him and hadn’t come up with enough to cut out of their part of the budget. The claim was that there were too many things they couldn’t afford to live without.
“It’s a process of education and less of a negotiation,” Davis says. “It’s not really a negotiation when we know who the winner is going to be and that’s me.”
If your people have a hard time even drawing up a list of possible cuts, try being a mentor to them rather than a tyrant.
“With those people, it’s more of a process of, ‘Let me walk through it with you.’ Make it more of a mentoring exercise. ‘Let’s go through it together. Here’s why this function is no longer going to be necessary or here’s why you’re not going to need this many of that particular title or function in the scenario we’re talking about.’”
You can also encourage people to look beyond just getting rid of employees to reduce costs.
“Those are some of the things that don’t immediately strike the person serving in the trenches wrestling with this,” Davis says. “To your point, maybe they are hung up on the people side of it. And they aren’t even thinking about the fact that, ‘Hey, we’ve got that extra conference area over here that some other tenant has been wanting for two years. Let’s get rid of it.’”
Whether it’s offering alternatives or just encouragement, you need to remove the fear your leaders may have about making important decisions. Show that you trust them to make big decisions in the best interest of the business.
“You’ve chosen this person for this job,” Davis says. “They are either your person or they are not. If they’re not, you should do them a favor and get rid of them. If they are, you should support them. People are motivated knowing they have a boss who believes in them. I can’t think of a better way to be motivated myself than knowing my board has confidence and believes in me and believes in where I’m taking the company.”
If people do make mistakes in the cutback process, try to remember that you’ve made plenty of mistakes yourself.
“At this level, if you’re still trying to manage people, there’s something wrong,” Davis says. “You’re not doing your job correctly or you’ve got the wrong people. But your business is not going to grow. You’re not going to reach your potential either if you’re still trying to do everybody else’s job for them.”
You’re not going to have a team of leaders that feels like it’s marching forward together if you become a micromanager. You need to buy in to them and they need to buy in to you and you need to trust each other.
“If you’ve got that buy-in, they’re going to work really hard,” Davis says. “They really believe in their heart of hearts this is what needs to happen not just because you told them so, but because they understand that it really does need to happen. They’re going to work very hard to make it happen.”
Davis has been two through major recessions at Perficient and he has seen the cultural damage they can cause. So when cuts need to be made, he suggests you try to get it right the first time.
“Honestly, as cold as it sounds, the right thing to do for the business is to go down as deep as you can,” Davis says. “If that’s more than necessary, that’s unfortunate. But that’s better than having to make four cuts. That continual cut, cut, cut just kills morale. In the service business, those are your assets. That’s what you care about and that just kills it.”
Once the announcements have been made and those who are being let go have been notified, you need to move quickly to refocus everyone’s energy. Show people that this isn’t the first step toward going out of business.
“Try to give some concrete evidence that you’re taking action,” Davis says. “When the chips are down and they’re kind of down anyway, they want to know that you’re doing something. You’re not just sitting around waiting for the economy to get better.”
Davis took advantage of a declining market and made some investments that the company might not otherwise have made.
“We’re trying to gain share, so frankly, we did some experiments,” Davis says. “It allowed us to try some things that we might have been a little more reticent to try if we weren’t working so hard to turn things around.
“We invested and built organically a health care business unit that is focused on that industry. Before we did that, it was already part of our business, but in 2008, it was probably about 15 percent of our revenue. It’s 25 percent today. From 2009 to 2010, we added $12 million in revenue in the health care industry.”
You can’t promise people that you’ll never have to make cuts again. But you need to reassure them that the company is moving ahead.
“Let’s all get back to work,” Davis says. “It’s unfortunate, and we’ll miss our colleagues, but we’ve still got a job to do. For your own sake and the benefit of your family and yourself, we need to keep slugging it out every day. Let’s move on and keep moving it forward. That’s the speech I would give.”
Davis says it’s the need to work with his people and help them continue to grow that helped him weather the storm at Perficient a little bit better the second time around.
“I’m pleased to say we never got more than even halfway through the second list of cuts and never even had to get to third list,” Davis says of the three cutback scenarios that were considered.
He added that he continues to grow as a leader and learn the value of empowering others.
“I’m a better motivator of people that I was 10 years ago and I hope I get better every day,” Davis says. “That’s the most important thing as a leader is motivating. It’s making sure you have the right people around you, of course, but motivating them and not managing them.”
How to reach: Perficient Inc., (314) 529-3600 or www.perficient.com
The Davis File
Jeffrey S. Davis
President and CEO
Born: Tulsa, Okla.
Education: Bachelor’s of science in electrical engineering, University of Missouri-Columbia; MBA, Washington University in St. Louis
What was your first job?
I ran a newspaper route when I was 10 for the St. Louis Post-Dispatch. I collected my pay, and I got a checking account and for 1975, I was making pretty good money for a 10-year-old kid.
Who has been the biggest influence on you and why?
My dad, James. There are a number of things [he taught me], and they are all an offshoot of the same thing. He had an incredibly high level of integrity.
What’s the best advice you ever received?
My mother used to always say, ‘Your sins will find you out.’ I think the best thing I ever learned in my life that I’ve tried to always apply is to do the right thing. I was like any other kid. I was probably about 15 when I finally figured out I can’t lie my way out of trouble. Some kids probably learn younger than that, but I was 15. That was a life lesson that stuck with me.
Who would you like to meet, and what would you want to ask that person?
President Ronald Reagan. How did he manage to muster up as much charisma as he did in the face of a bunch of crappy stuff and a bunch of naysayers? How did he always manage to hold his head up and do the right thing and convey that in an amazingly charismatic way? He connected with people at all levels and from all walks of life in this country. He did a better job of that than any president in my lifetime.
Rob Meck likes to push people to see how they respond. When he arrived at Premiere Credit of North America LLC, that’s exactly what he set out to do.
“I came on board in July 2009 and was cast with the challenge of transitioning a mature, but small entrepreneurial accounts receivable management firm into a leading national accounts receivable management firm with the ability to grow both immediately and rapidly,” Meck says.
He began meeting with company leaders to gauge who could work well under the pressure of pursuing growth.
“Too many managers, especially during the turmoil we were going through, and it’s such a huge transition, automatically retreated and didn’t want to take a lot of risk,” says Meck, the 400-employee company’s president and CEO.
He wanted people who could step out of their comfort zone and grow with the business. So he engaged them in strategic projects that contained a certain element of risk and working side by side and made an assessment of their abilities.
“I try to be a mentor with all of them and one of the things I do with them is try to roll up my sleeves with them and work on projects,” Meck says. “I really had to pick who the keepers were, and we had a lot of people we wanted to maintain. We put those people in specific areas that we really wanted to build on, strong people that had loyalty to the company and adherence to our values. We also recognized there were a lot of people who weren’t going to stay.”
Testing people doesn’t have to be throwing them in the deep end to see if they can swim. Work with them closely to discover their talents and abilities. Make it clear that mistakes are OK, as long they are made in the pursuit of progress.
“Reaffirm with them that the failure of you trying something and taking that risk isn’t career ending,” Meck says. “You can learn from that mistake. You’re not going to get punished for trying something that was an educated risk. … In a competitive world, if you don’t take some risk, you’re never going to be the top-ranked performer in your industry.”
The fear of taking risks is what holds back many entrepreneurial businesses.
“A lot of them struggle with the fact that building the infrastructure is a fairly significant expense of non-revenue generating, nonprofit making individuals,” Meck says. “If you’re going to invest into it and do it right, it costs money and it could affect earnings.”
Meck was willing to take some of those risks and he found other leaders who also thrived under pressure. But there were some who didn’t fit his mold and that led to his move to bring more than 30 new managers from 20 competing companies to Premiere Credit.
“Bad turnover is when you lose one of your top performing, most compliant, loyal and dedicated employees,” Meck says. “Good turnover is when you lose some of your lower performing people who don’t buy into your values. We knew that if we did not adhere tightly to our core values and have everyone buy into them, the company would not be as strong as it could be.”
The ability to make those tough decisions and take a few chances along the way is often the difference between a company that grows and one that plateaus.
“A lot of entrepreneurs really have loyalty to the people who made them successful,” Meck says. “It’s hard to keep them on the payroll and hire someone else who has that higher skill set and still maintain your financial business model.”
Meck is confident the steps taken thus far have Premiere on a path to growth.
“Our performance on every one of our clients has improved dramatically in the last year with people buying in to our new cultural values,” Meck says.
Catch your breath
Rob Meck moved quickly to make changes at Premiere Credit of North America LLC. So quickly, in fact, that he had to institute daily wrap-up meetings to keep track of it all.
“I was afraid we were losing track of all that we were doing,” says Meck, president and CEO at the 400-employee accounts receivable management firm. “So I set up executive debriefs at 5:30 every night for the top four executives for what was hopefully 15 or 30 minutes max. It was just a brain dump of everything that happened today.”
Maybe you don’t need a meeting every day. But Meck says it’s crucial that you make sure everybody is running forward at the same pace.
“As fast as we were moving, within a day, we could have had two executives taking different projects that were in opposition to each other,” Meck says. “It also served as a team-building exercise. It was a great way to end the day so that we all knew we were on each other’s team.”
Even though the pace has slowed a bit, the meetings continue.
“It helps communication,” Meck says. “It’s such an important part of the communication every day with our senior management team.”
HOW TO REACH: Premiere Credit of North America LLC, (888) 403-1637 or www.premierecredit.com
Bob Grote knew what the next morning was going to bring and it was eating him up inside. The recession had taken a toll on business at J.E. Grote Co. Inc. and now he had no choice but to lay off employees.
Or so he thought.
“I went into a restaurant, a little watering hole where I sometimes have a bite to eat,” says Grote, president at the 170-employee food slicing equipment manufacturer. “A guy I kind of half know came up to me and said, ‘Man, you look depressed.’ I said, ‘Yeah, I am. I think I’m going to have to lay some people off.’ He poked me in the chest and said, ‘Come on Bob, you can do better than that. You don’t have to do what everybody else does. Be creative.’”
Grote began to ponder what this casual acquaintance had just said to him and the wheels began to turn in his head.
“A good portion of our staff, be it engineering or in the shop itself, is really dedicated to the manufacturing of new equipment,” Grote says. “So when your equipment dries up, you have nothing for a lot of people to do. I came in and said, ‘What if I force vacation and go down to a four-day workweek for everybody in new equipment?’ You’re going to take vacation in the first half of the year until you run out of vacation. It doesn’t help my cash flow, but it reallocates my resources to later in the year.”
The response from his management team was shock.
“They all kind of looked at me like, ‘What?’” Grote says. “I got challenged by them saying, ‘Are we just wimping out? Are we just afraid to make the right decision because we’re fortunate to have the cash flow to support doing this? Are we just delaying the inevitable?’”
Grote had pondered those same questions. He decided it was worth the risk to try something a little different.
“Leaders truly underestimate the cost of retraining,” Grote says. “In an environment of unemployment, you can hire really quick and you can hire really good people. But at least in my business, because this is very customized work, it’s hard for a guy to contribute in some of these areas for a minimum of six months, sometimes up to a year. As I look at it, I’ve got to hang on to that core muscle.”
One of the land mines Grote had to navigate around was, “How do you do something that only inflicts pain on one segment of your work force?”
“I went to the departments that were going to be affected and spent a lot of time talking to them and trying to get them to complain and be OK with complaining to me,” Grote says. “I was constantly focusing on the future and reminding them that this is what it is. What’s paying our bills right now, guys, is all these parts and all this stuff that these other guys are doing. You want us to pay our bills so we can keep you around, too.”
Grote also spent time with those who weren’t being forced into February vacations.
“I reminded people that you better look busy,” Grote says. “I know you’re busy, but you better look that way.”
So the vacations were taken, and while there were a few nervous moments, business did begin to pick up in the summer, and Grote’s plan ended up working out.
“There was fear every day,” Grote says. “I ultimately have to answer to the shareholders of the company. I look foolish and wasteful if it doesn’t work out. But if you’re truly a leader at that point and you’re in that position to make that decision, if you think about what’s going to happen to you at that point, maybe you shouldn’t be the leader.”
Take time to listen
Bob Grote could have shoved his idea to avoid layoffs at J.E. Grote Co. Inc. down everyone’s throat and ignored the concerns of his management team. But he knew that wouldn’t do much for his stock as their leader.
“If you have a past experience of going back and changing your mind because they have a logical reason why you shouldn’t do your idea and you’re not just being stubborn, they will talk to you and explain their reasoning,” says Grote, president at the food slicing equipment manufacturer.
He wanted to hear their feedback because he himself had fear that maybe it wasn’t the right thing to do.
“I’ll either say, ‘Maybe you’re right, let’s go back and explore this,’ or, ‘I still think I want to do it this way, and I’m going to do it, but I see where you’re coming from,’” Grote says.
Either way, you show yourself to be open-minded when you make the effort to listen.
Unfortunately for Grote, he faced the same dilemma again in early 2010.
“My mantra was, ‘If this keeps up, I can’t do that again guys,’” Grote says. “Fortunately, it turned a lot quicker.”
Grote adds that his confidence in foreseeing the future in today’s world is pretty much gone.
“I don’t believe anything until I’ve got the contract with dripping ink on it and the smell of money in my office before I believe an order is here,” Grote says.
HOW TO REACH: J.E. Grote Co. Inc., (888) 534-7683 or www.grotecompany.com