In 2008, Bruce Neil watched 68 percent of his revenue at The Doe Run Co. disappear thanks to a severe drop in the price of lead.
“We needed a very rapid and dramatic response,” says Neil, president and CEO at the natural resource mining company and lead producer. “We knew prices would come back up, but we didn’t know when. We decided this was going to be a long-term thing and a long-term recovery, and we would need a couple of years.”
Neil knew he was facing a tough battle for the future of his business. He also knew he couldn’t fight that battle by himself.
“The reality is, as the CEO, I’m not going to survive alone,” Neil says. “I’m not going to get through this alone. I’m not going to do this alone. I need every manager, every supervisor and every employee to realize that as a company and as individuals, we’re all going to have to make sacrifices.”
Neil did offer one edict to his people that he expected to be followed as decisions were made about Doe Run’s survival plan.
“If there are going to be reductions in the company, they have to be across the board and at all levels,” Neil says. “They cannot be in one area and not another. We’re all in this. The long-term strategy of the company is that we’re going to continue to operate each of these parts of our business, and we had to make sure that we did not end up with one part of our business that was in terrible shape to the advantage of the other. We said, ‘We’re all going to have to make some sacrifices here. We understand we can’t do everything we said we wanted to do in our planning.’”
Neil was confident that if the 1,400-employee company was going to come through this storm in good shape, there would need to be a heavy emphasis on finding solutions collaboratively.
Show you trust people
Neil was adamant that the majority of the key decisions that would be made about the future of Doe Run would be made with a lot of input from people at all levels of the business.
“The guidance was around, ‘This is the situation we’re in, this is our reality, and this is what we need to accomplish,’” Neil says. “So my guidance was around broader strokes. It was not on details. I really relied on people. What is the best plan? I didn’t say, ‘You need to have a lower production plan.’ I said, ‘You need to have a plan that is going to economically enable us to get through the next 24 months if things don’t change. If things get worse, we need to have the assurance that the plan you give us, all the people in the company can deliver on it. There’s no point in having a plan that you think I may want to hear. You’ve got to give me a plan that you will deliver on.’”
Neil and his people needed to find ways to reduce costs. About 85 of the company’s production ends up in lead acid batteries. Many of these batteries are used by the U.S. auto industry, which itself was taking a major hit in the recession.
So that’s where one of the first cutbacks was made. It was a decision that made sense and that’s what Neil wanted.
“What was happening in Detroit was having an immediate impact on the need for our products and our ability to generate revenue to survive,” Neil says. “We made the decision that we were not going to produce one pound of metal more than what the market would bear. So if it fell to whatever level, we were going to match our production plan or business plan to meet that demand and no more.”
Neil wanted his people to understand that he trusted them to make these important decisions. He had no desire to stroll out of his office and issue proclamations about how things were going to be done, nor did he think that was the best way to go.
“I had full confidence in people to come up with the solutions that would be needed,” Neil says. “I just absolutely couldn’t say, ‘You have to do your job this way.’ Everybody knows how to do their job better than I know how to do their job. No matter how much experience you have over the years in different parts of the business, that’s a reality. People who are on the job today can do it better than I ever could. All I can do is give people a vision that this is what we’re going to look like when we’re through this and ask them to achieve their goals and we’ll make it sustainable.”
If people struggled to come up with things to cut, Neil encouraged them to talk to people in other departments who were having more luck.
“People felt they were under a lot of stress because of the understanding that pricing had dropped so rapidly that everything was at risk,” Neil says. “They were aware that we were going to have to make job reductions and that people that they worked with were going to be off for a period of time or be laid off on a permanent basis.
“The guidance that people were given when they were struggling was examples of how people were solving this problem in other areas. Just try to make sure that people weren’t leaving any stone unturned. Everything was on the table. It’s supporting and encouraging and just making sure people understood that what I was saying, it was something I believed in.”
Offer a bit of hope
It probably did little to ease the pain of the people who were laid off, but Neil went ahead with planned pay increases for those who remained with Doe Run.
“We insisted we were going to keep the top quality of the competencies that we needed for the future,” Neil says. “We held onto those. We paid people the annual increase. We decided that these were based on performance and so we paid those. We deferred any kind of incentive payments or incentive programs. We said, ‘In this situation, we can’t afford this.’ But as we went through, we not only retained the key staff, but we actually continued to hire some really top caliber people because if we needed a skill, we hired it. We continued to build the people skills that we had in the company.”
Members of the executive management team did not receive a pay increase. But he felt the message had to be sent to the other employees that the company was not giving up on its future.
“The truth is, I did not know how it was going to work out,” Neil says. “That’s for sure. Having been through the rough edges before, I wanted it to work out in a way that would enable us to have the hopes and dreams of who we wanted to be in the future and retain that. My sense was it was a question of telling people there was no certainty here. We’re in a tough position. But on the other hand, we’re in a good position. I would talk about our strengths and that we’re going to do this together. To some extent it was team building. For people to believe in the team and be part of the team, they have to believe in the goal.”
Neil did not sugarcoat the future and was upfront about the challenges Doe Run would face. But he wanted people to have a reason to believe that if they worked hard, there was a good chance things would improve.
“You have to have the credibility that if you say this will happen and you don’t know if it will happen, you have to say, ‘This may not happen and these are the problems,’” Neil says. “‘But I believe if we do this together and we share this, we can accomplish it.’ You have to believe that. I don’t believe you can tell people something that you don’t believe in.”
Prepare for the future
Cutbacks weren’t the only thing Neil wanted help with as he led Doe Run through the recession. He wanted people engaged in steps that could help the company be more prepared to thrive when the economy began to improve again.
There was one piece of criteria offered at the beginning of this particular process.
“If it’s not going to completely pay for itself within the next year or 10 months, we’re not going to do this year,” Neil says. “It had to be a very quick return if we’re going to spend capital on it. We felt we needed capital to pay our operating costs.”
These projects would also need to be pulled off without any outside help or consultants as that would be an additional expense.
So the plan was to bring people in from all levels of the organization to present their ideas on how to help the business generate more revenue.
“We set up a structured prioritizing process where we involved not the executives, but we involved senior leaders in the company and we involved people representing all areas,” Neil says. “We had people present their projects to each other and present to a larger group.”
Some projects got a lot of support, while others did not get as much.
“What is the result of that?” Neil says. “People are more focused on the business returns for a project or an investment they want to make in their area because they have been through this process where if it didn’t meet a very tight business standard compared to someone else, than that other project would go ahead and not theirs. There was a better understanding on that and the planning process is stronger than it was before.”
It’s also a good lesson to people about the barriers that may frustrate them when it comes to getting things done in a business.
“When you make change, there are going to be barriers, whether it’s the culture of the company or people saying, ‘We never did it that way,’ or people don’t want to give up something,” Neil says.
If you’re soliciting input for this type of participation and you don’t feel like you’re getting much of a response, you may not be as empowering and collaborative as you think you are.
“If you don’t communicate the vision and you don’t talk to people regularly about how you are doing and what you need to do, then when you tell them something, it’s going to be as if it’s coming out of the blue,” Neil says. “People want to be listened to. They want to have their ideas listened to. They want you to hear their ideas. People are all interested in a dialogue on what you’re doing and what their company is doing. I don’t think it matters where you are in the company. You have an interest in that, you need to promote that.”
As 2009 ended and 2010 dawned, Doe Run began to see demand increase again. Profit sharing and 401(k) matches came back into play and the company found several new options to begin growing again.
“You have to be direct and honest and say, ‘We may not get out of this when we want,” Neil says. “We may not all be here when this is through. But we believe in our products, we believe in our ability to do this and all we have to do is work together and we’ll deliver it.’”
How to reach: The Doe Run Co., (314) 453-7100 or www.doerun.com
The Neil File
Born: Tofino, British Columbia, Canada. At the time it was outside an Air Force base on Vancouver Island. My dad was in the Royal Canadian Air Force and I was born right at the end of World War II.
Education: Queen’s University, Kingston, Ontario. I took metallurgical engineering.
What was your very first job?
It was a retail store. There had been a heavy rainfall and the basement of this store was flooded. My first job was to clean and take apart as much of the old electronics that existed in those days. My job was to take out the tubes in the flooded television sets and test which ones could work and could be sold and which ones couldn’t. Once that was cleaned, I ended up working for the owner of the store.
Who has been the biggest influence in your life?
I would say the person that always gave me the best advice and best support was my father. I didn’t ever have a driving desire to be the CEO of a company. I’ve been fortunate to be given the opportunity. I’ve been fortunate to work with so many good, quality people.
What is the best advice anyone ever gave you?
When you graduate with an engineering degree, you believe that you’re going to be doing engineering, measuring, building and improving. There is some of that. But the reality today is what you and your business accomplish is accomplished through many people. So how you relate to people, how you talk to people, how you work with people is the most important part. And the best advice that I’ve been given is trust yourself, be open with your people and trust your judgment.
Andy Wexler is a man in search of the right mix. As founder and executive camp director at Pali Camp, he has often struggled to find the right balance for how quickly to grow the 221-employee camp operator.
“Sometimes I tried to grow very quickly before the business was ready and I put in a large management team and the business couldn’t support that, so I had to cut back,” Wexler says. “Other times, I grew too big without bringing in a management team, and we had growing pains.”
Wexler has found the most success when he has taken the time to work with his people and share his knowledge to help them become better leaders in the company. It puts them in a better position to handle whatever new responsibilities arise.
“Over the last five years, I’ve gone through showing them how to run each one of their businesses like their own business unit and have them basically take responsibility,” Wexler says. “So they’d not only be responsible for their revenue but their expenses, as well. It’s been a fantastic learning experience because every one of them now has ownership of their division. We have a cabinet meeting every week where everyone says if they are on goal and what their plan is for the week and then I let them do their thing.”
Reaching this stage of empowerment requires that you find strong people when you make hires.
“The first thing that I do is when we post a job, I’ll ask very specific questions,” Wexler says. “I want to make sure the person was meticulous enough to read the job description. It’s shocking. I’ll get 300 resumes and only maybe 15 to 20 percent actually read the job description. So at that point, out of 300 respondents, I’m down to 30 or 40.”
The candidates that make it through to this point are then judged on their cover letters.
“Did the person write a cover letter that was actually interesting to read?” Wexler says. “Did it look like they actually spent a little bit of time looking at whatever the position is? They could have asked pointed questions or they could have pretended that they were interested or maybe they really are interested. Once you get down to that, it’s probably about seven to eight people. Once I get there, I would see what their background is and see how long they have been at past positions.”
After whittling it down to a final four or five people, Wexler conducts in-depth interviews with each candidate to attempt to really get a good read on who is the best fit.
“The biggest thing at that point where people shoot themselves in the foot is if they complain about their last job,” Wexler says. “If someone just says, ‘I grew too big for the job’ and I call their employer and they say this was the best person they ever had, that’s the person I’m going to hire. If it’s a person who rips on their last job, they are just going to do the same thing for me.”
When you take this process seriously, what you end up with are people who believe in your vision and can walk with you to help your business grow. Then it’s all about you following through on your promise to let them grow as leaders.
“It’s all about motivation,” Wexler says. “If the manager is willing to put in more hours, then the employees will put in more hours. Education takes as long as it takes. If you really need to do something, as the manager, you can do it yourself and do the serious learning later on. If you really want people to learn and fish by themselves, however, that takes longer.”
How to reach: Pali Camp, (909) 867-5743 or www.paliadventures.com
Pick a direction
You need to figure out what kind of leader you’re going to be and stick to it. If you like to take on different leadership personas, you’re asking for trouble.
“You can’t micromanage some days and not on others,” says Andy Wexler, founder and executive camp director for Pali Camp. “Just like with parenting, kids are very comfortable with routine. It doesn’t matter how tough the rules are, if they’re consistent and they know what the rules are, they can live within the rules. An employee would be the same thing.”
So if you’ve tended to be a micromanager and suddenly, you look to ease up a bit, you’ll have to work hard to be convincing that you really want to change your ways.
“If you say, ‘I’m going to let you do this,’ they’re going to be shocked first of all,” Wexler says. “They’ll either freak out or they will really appreciate it. They probably won’t believe it. But your actions have to follow your words.”
If you find people have gotten too used to being micromanaged, it may be a case of that person not having the skill set to make decisions on their own. Give them a test of responsibility and see how they handle it.
“Let them go with it,” Wexler says. “It’s probably not the most vital business area, but it gives them a taste.”
Zorik Gordon thought he had a plan to help ReachLocal Inc. make a lot of money. Unfortunately, he had completely misread the market and now found himself urgently needing a new strategy.
His initial goal was to build a company that would help small- and medium-sized businesses tap into the vast potential of online advertising. He wanted to lure them away from the old marketing methods of reaching out to consumers through the Yellow Pages and newspapers.
“We knew that was a huge opportunity,” says Gordon, co-founder, president and CEO at ReachLocal. “We also knew that the Web is fragmented, so it’s going to be very difficult because you can spend on Google and Yahoo and Bing. Before you could just write one check and you were good.”
But Gordon felt his company, which now has 1,381 employees, had solved that problem by developing a platform that would allow businesses to more seamlessly move their marketing efforts online. He was confident these businesses would jump at the chance to use this new tool to get the word out about their products or services.
“Initially, we were just going to partner with Yellow Page companies and marketing firms and just kind of be a technology provider, but distribution was going to be handled by somebody else,” Gordon says. “That failed miserably.”
It turns out that these businesses did not jump at the chance. They didn’t really jump anywhere.
“That ended up being ReachLocal Golden Rule No. 1, which is local [small- and medium-sized businesses] will never self-service,” Gordon says.
Gordon could have gathered his management team, headed to the bar and cried in his beer about how things should have worked out or how all the data had pointed to his plan being the right way to go.
But Gordon says you won’t get too far in business if you crumble every time things don’t go according to your best-laid plans.
“You have to be comfortable with a little chaos,” Gordon says. “Your job is to take all that chaos and turn it into order. … We evolved and said, ‘We need to build our own feet-on-the-street sales force.’ We didn’t say we have no business. We said, ‘Well, we need to make it easy for them. We need to deal with the Yellow Page guys and newspaper guys and build our own sales force.’ So we evolved and found a way.”
Gordon built a global sales force that helped ReachLocal reach those customers and got them to use the company’s platform and in the process, drive new business. Revenue in 2010 was $291.7 million, up from $203.1 million in 2009.
Here’s how Gordon has been able to stay cool in these kinds of pressure-packed situations and continually adapt in a turbulent world that shows no signs of calming down.
Do you find it hard to keep up with the changes in your industry? When things don’t go as you had planned, does it seem like it takes forever to regain your footing? If you answered yes to both of these, you may have a problem.
“There are really only two states a company can be in,” Gordon says. “It’s either being disrupted or being a disruptor. The pace of change is not going to go away and unfortunately, it’s only going to get faster. It is paramount for the CEO to really spin the cycles and to constantly keep the company positioned where it’s not being disrupted and it’s in a position of being a disruptor.”
When ReachLocal had to adapt its strategy to pull marketers from offline to online, it could have created a lot of disruption in the hallways at corporate headquarters. But Gordon did not waver from his belief that his company could impact the market in a big way.
“Those types of situations are when you have to push forward the hardest as a CEO to regain that perspective,” Gordon says.
“It’s time to reassess and regain that clarity. It’s kind of like you put everything together in a nice box and it’s like molecules. They begin to dissipate in every different direction. When you get that feeling and when you feel that overwhelmed, it’s a signal that the vision and the clarity that you had is starting to fade.
“That’s when you really have to, as a CEO, be very cautious and careful and push the hardest to regain that clarity and assemble your team. Things get out of control much faster than they did. That’s the time to push the hardest. You can’t rest on your laurels. It used to be you had a strategy and there would be a clear two-, three- or four-year road map. There would be a few mulligans here or there, but things wouldn’t change so fast. But now things can upset themselves in six months time.”
Your response to sudden changes that affect your business will go a long way toward determining whether you come through the change in good shape or not. You have to give your employees reason to get excited about the opportunity that change presents rather than allow them to grow fearful of the new problems it could create.
“The conventional wisdom is to get bigger and become more conservative,” Gordon says. “It requires even more pushing from the CEO to retain that comfort with change and to embrace change. A lot of companies start to look at change as a negative. It’s for CEOs and senior managers to embrace change and be comfortable with it and to get their people to be excited about it.
“People are excited when they understand. If they understand it’s not just change for change sake, but it’s change that creates more opportunity for them and more opportunity to progress their careers and their jobs, they’ll be on board. It’s keeping that DNA of change is good. That’s where the opportunity for real growth comes from, with innovation and change and moving forward. It gets harder and that’s why you see big companies really struggle with being able to deal with much more nimble, less legacy start-ups that end up eating their lunch.”
Lead with confidence
When you’re embarking on a new project, you need to have a pretty clear idea of where that project is going to lead your business. It will put you in the best position to deal with the unexpected hurdles that always come into play.
“Things are won or lost before they get started,” Gordon says. “You go into meetings with an extremely strong perspective on where you want to take the business.”
Gordon had an idea about how to make ReachLocal a success. When that idea had to be changed, it surprised him, but it didn’t cause him to lose any confidence that his company could reach the end goal of building a successful business.
“When we started, we were going to be a self-service platform,” Gordon says. “We were going to recruit individuals on a commission basis to help us build our business. We ended up being a full-service, suited product that has a feet-on-the-street sales force. That’s the complete opposite from where we thought we were going to start with. We got there because we were constantly evolving and we saw the signals that the market was sending us and where things were working and we kind of followed that momentum. That’s a constant process.”
When you have confidence in yourself and you know where you stand on a project, it gives you confidence to listen to others with an open mind. You can hear their ideas and rationally think about how they might help or hinder your project instead of worrying whether they are going to make you look bad by showing that they know more than you do.
“So it isn’t a brainstorming session,” Gordon says. “It really is a stake in the ground. Here’s where I think we should be going and here’s what we’re seeing. It should be a lot of presentations and a lot of input from other people, having a pretty good idea of where the outcome should be, but allowing for that serendipitousness that can happen. If it’s too serendipitous and too much of a brainstorming session, you came into it without enough planning.
“There are companies where their strategy is a failed strategy and it’s just a complete free for all. ‘Hey guys, we need a new strategy.’ In the regular, ordinary course, as you reassess, you need to come in with a pretty clear sense that as the CEO, you’ve done your homework and you’ve prepared. You have a pretty strong sense of where you need to be going and you’re going to spend those days either solidifying that or opening it up for additive ideas or even changing course.”
That confidence will also enable you to tap into the potential that is out there in your people and get them engaged in helping your company implement its plan.
“It really is very important to be able to not only have the right opportunity but to be able to explain it and position it and make it tangible enough to really attract people to get with the cause,” Gordon says. “You recruit people to join and help go after this very large vision.”
You need to make sure that you’re constantly moving toward an understood outcome or destination. As discussions take place, it’s your job to keep everyone on the right path and make sure they don’t get distracted by things that don’t relate.
“The more focused your company is, the more that you can consolidate and focus your business on a few things, the better off you are,” Gordon says. “Companies that end up doing way too many things don’t end up doing any of them well. Multitasking is not a great company trait. Clearly there are things that need to happen, but I really believe the job of a CEO is to pick those things that are the biggest needle movers.”
Gordon had an idea of what ReachLocal could achieve, despite the problem with how it would be done. It was his job to keep everyone on track toward that goal, while at the same time listening and adapting the plan based on the input from the others who were involved.
“It’s one of the most rewarding things when you get this comfortable feeling that there is a real clear vision and real clear perspective and real clear road map,” Gordon says. “It’s the job of everyone in the company to execute that as well as possible. Those are the good feelings. When you come out of that process, having that clarity gives you peace of mind. You have gone through that process and you now have a way that machine can function efficiently.”
Try to think of it like you’re telling a story. Your job is to present a narrative that explains where you’ve been, where you’re going and how you’re going to get from one place to the other.
“Effective CEOs are able to constantly have a very strong perspective on where they are going and be able to articulate that in a way that everybody can understand,” Gordon says. “Those types of companies have a sense of purpose. That’s a skill set where if you were to go and find the great CEOs across the years, I think it’s something they or their managers were able to possess. It’s being able to articulate a vision and being transparent around that vision.”
Your people need that focus to keep them on track toward the final objective.
“If people have an understanding of where the business is going and why, that’s what gets people to really understand their purpose and their role to play in the organization,” Gordon says. “That’s the job of the CEO, to constantly be the person who steers the ship and is writing the story and getting everybody aligned with it.”
How to reach: ReachLocal Inc., (866) 500-1692 or www.reachlocal.com
The Gordon File
Education: Gordon attended dental school, but, as he says, “everyone including my professors and patients felt it would be safer if I left to pursue my business entrepreneurship.”
People Gordon admires: People like Steve Jobs and Jeff Bezos, the true technology innovators that continuously keep the world moving forward.
Gordon on communication: At a certain point, there are too many messages and that tends to get lost. It really is going back to that clear, simple vision that gets propagated. Picking that one thing to push. You can get a few things propagated and it boils down to getting that clarity of vision and purpose that you want to push. Then it’s pushing that through the tools that you have and being consistent with that all the way through. A lot of mistakes happen when there is too much information getting pushed to people and it just gets drowned out. If you pick the right set of things to go after, there’s a chance you can be pretty successful communicating that.
Gordon on stressful situations: In those moments, it’s when the CEO and management team has to fight the hardest. Spend more time on strategy and really understanding. A lot of that was goes away with having clarity and perspective about how things are going to play out and what you should be doing and how you could benefit as opposed to being affected by this. Spend more time on strategy so you get clearer perspective.
The best solution is being able to find, recruit and attract top talent from top to bottom. That’s what make businesses scalable. I’m not the world’s greatest management guru or CEO. But what I’ve been able to do is attract extremely talented people to this opportunity who understand where this business is going and what their opportunity is and run their departments in a very entrepreneurial way. We’ve been able to scale and grow very quickly. It’s really about perspective and people that is the key.
Do you think about what your employees want to hear from you when you speak to them? Or do you worry more about what you want to say? You need to be conscious of both, but sometimes it’s easy to get so consumed with your own message that you lose sight of your audience. What are they supposed to do with your remarks? How should they respond to what you say? What if they have questions and feel uncomfortable approaching you? What should they do then?
In the past few months, Smart Business has spoken with several leaders about this very issue. Check some of their thoughts and see why they believe communicating is about more than putting your words on paper and reciting them for your employees.
“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.”
-- Jean Birch, president, IHOP
“I can’t necessarily get all my employees to follow me unless I get out there and inspire them. If you’re not communicating with them, they are expending energy every day and they are expending it in different directions. … The job of a leader is to harness all of that energy and get it to move in unison like a flock of birds or a school of fish.”
-- Adam Coffey, president and CEO, WASH Multifamily Laundry Systems LLC
“You win the hearts and minds of the people. Not because of charisma or because of empty rhetoric. But because you have a substantive idea that makes sense and they see your optimism and they see your excitement.”
-- Mel Elias, president and CEO, The Coffee Bean & Tea Leaf
Summary: Think before you speak; Harness employee energy; Develop your idea
Jeff Sharfstein was about as frightened as he has ever been in his life. As he considered the grim future facing the company his father and grandfather had worked so hard to build, he feared he was watching the business crumble before his eyes.
“Here my father had built this incredible business over all these years and in a period of a year and a half, I was successful in completely turning the direction of the business in a terrible direction,” says Sharfstein, CEO at The Strive Group.
The 550-employee corrugated box manufacturer was launched in 1968 and fared pretty well for almost 30 years. By 1997, Sharfstein’s father had had enough and Jeff and his brother Doug assumed control. But shortly thereafter, the trouble began.
First, Strive Group’s largest customer filed for bankruptcy, resulting in a large and unplanned expense. At the same time, Internet auctions for commodity businesses, such as corrugated boxes, began to gain in popularity and sales began to drop.
“What we needed to do was figure out a way to bring additional revenue into the business,” Sharfstein says. “We had all these hard assets on the floor, meaning equipment. We asked ourselves what else this equipment was capable of doing other than producing corrugated packaging.”
It turned out that this equipment could produce temporary point-of-purchase displays that consumer-oriented businesses love to use to promote their products.
“Little did I know at the time how much of a different skill set was needed to make that transition and that transformation successful,” Sharfstein says. “It was a long, hard struggle on top of which, it was going in a direction that I did not have a tremendous amount of familiarity with.”
Sharfstein couldn’t shake the fear of ruining all that his father had built, but he couldn’t let that show with his people. He had to prove to them that as their leader, he would pull the business through.
“I elected to go to one of the largest consumer products companies that
purchased this type of product and that was Procter and Gamble,” Sharfstein says. “I figured if I could sell Procter and Gamble on this value proposition, that would be fantastic validation and would really set our organization on a new path.”
When you’re trying to drive business for your company, or trying to save it from disaster, you need to keep your people posted about what you’re doing and don’t keep them in the dark. Engage them in your effort to find solutions and then make those solutions work.
“We call them courageous conversations,” Sharfstein says. “You have to be willing to have courageous conversations with folks. Having very direct conversations saying, ‘Hey, I just need to let you know what I see. This is where I need your help. If you can do this, it will work out great. If not, it’s probably not the best place for you at this company.’”
Hopefully you’ll find you have a wealth of support to join you in your quest, but you may find otherwise.
“There were a number of long-term employees I needed to have conversations with and let go because they did not sit well with the new vision and direction of the business,” Sharfstein says. “If you have people constantly saying it’s not going to work or if they are constantly looking for the negative instead of what’s in the best interest of the business, you have to cut that cancer out.”
Fortunately for Sharfstein, Procter and Gamble worked like a charm and built desperately needed momentum for Strive.
“That really helped change the course of our business,” Sharfstein says. “Today, our largest customers are all these huge consumer products companies.”
Looking back, Sharfstein says he wishes he had been even more transparent than he was.
“You may not have all the answers,” Sharfstein says. “Be very open-minded and willing to bring in people from the outside who have had experiences before and have successfully navigated through them.”
How to reach: The Strive Group, (312) 880-4620 or www.strivegroup.com
Don’t hold back
When you’re business is in trouble, you often turn to lenders for help. After all, they have money and you probably need cash pretty bad. Jeff Sharfstein says you need to go to them with your books wide open.
“They were my lifeline,” says Sharfstein, CEO at The Strive Group, a 550-employee corrugated box and sign company. “Communicating to them anything and everything that I thought was possible and was happening was critical. I needed to give them the confidence that they could count on me giving them every piece of information I possibly had for the long-term viability of the business.”
You need to give people who can help you, whether it’s lenders, customers or your own employees, you need to give them a reason to believe that helping you will be worth it in the end.
“I had a vision and whether it was going to succeed or not, I didn’t know,” Sharfstein says. “But I had a very clear path in my mind as to what that looked like. And as I communicated along the way, it was critical that people came along.”
When Robert M. Korzenski took over as president and CEO of Solo Cup Co., the $1.6 billion food service product maker had a bit of a problem.
It had been two years since Solo had acquired SF Holdings and its well-known Sweetheart brand of cups, plates and other single-use food service products.
“The outlook for that combination was a great opportunity and one that could change the way the market was being serviced by taking two brands and putting them together to ultimately serve a much broader and larger customer base,” Korzenski says.
Unfortunately, the integration was not going as well as everyone had hoped.
“Part of what I had to try to understand and look at was what caused two companies of similar size and nature in the same industry with similar product lines and so forth, what caused them to be at the point that they were two years into the integration,” Korzenski says.
What Korzenski discovered was that these two companies that seemed to be so similar were actually pretty different.
While Solo had always been a family-owned business, Sweetheart had gone through multiple transitions over the years. The two companies took very different views on the external world and the task of financing their operations.
“Those were two cultures that were clashing as they came together in 2004 through the period that I came in in 2006,” Korzenski says. “It was like we took a blanket off what was happening in the company to say these are all the problems. I certainly single-handedly am not smart enough to figure these all out by myself. And even the executive management team and all the talent and energy that is brought to the party isn’t capable of figuring these out themselves. We need all 7,000 employees in the organization helping us figure out how to do it better.”
Speak with clarity
One of the first things that became clear to Korzenski was that Solo Cup Co. had a lack of leadership. This shortcoming, combined with the lack of a clear identity that had come about through the joining of two conflicting cultures had created a lot of confusion for employees and customers alike.
“Whatever communication or whatever strategic plan existed, it was usually owned by outside consultants, outsiders to the company,” Korzenski says. “It wasn’t developed and owned by that leadership team at the time. It’s my belief that if you don’t own it and you don’t help develop it, you can’t execute it the same way as if you did own it and you did develop it.
“As I looked at the landscape at the time, you could clearly see they were internally focused and that there were confusing signals to the employee base about what was important and what we were trying to accomplish. More importantly, there were confusing signals to the marketplace about who we were and what we were trying to do.”
Korzenski needed to move quickly, because the company was bleeding cash and had a lot of debt, which put Solo Cup in a very precarious financial situation. There wasn’t a lot of time to get things turned around.
“One of my objectives was to bring in place strong people, a strong leadership team that could help right the ship and put it back on track,” Korzenski says.
Korzenski revamped the management team, bringing in people who he felt could make an immediate difference and deliver a clear message about what Solo Cup Co. was doing. It was both simple and desperately needed.
“Truthful and honest and open communication,” Korzenski says. “That’s what people want. People can’t solve problems if you don’t give them all the facts. People won’t want to solve problems or won’t jump on board if they believe you are misleading them and people will quickly begin to not follow you if they suspect that the company is really doing something else and communicating another story.”
Korzenski needed his new management team to step up and help him deliver this message. It would be a lot more meaningful if he wasn’t the only one talking. It also wouldn’t hurt if they did a little listening too. The key was for both Korzenski and his team to be approachable.
“It absolutely can’t only be me,” Korzenski says. “The executive team, which is seven other members that report directly to me, the team understands that my expectation is you listen carefully to what you’re hearing and what people are telling you so you can then translate that into what do we do in response to those situations that are unfolding.
“It really is about your own approachability and about how often you are out visiting not only with your customers, but with your employees and about how well you listen. Sometimes you come in and because of the position, people may be a bit intimidated and might not be as open and honest with their dialogue. But if you listen carefully, everyone is usually telling you what they are really feeling. You just have to listen to it.”
If you personally don’t feel comfortable being part of that communication effort to your people, lean more heavily on your team to fill in those gaps or find a way that falls more into your comfort zone.
“You may never be a speaker that can stand in front of 7,000 employees and address the group,” Korzenski says. “But if you can do that with smaller groups and more intimate settings where you feel more comfortable, use that. … It may not all look the same. It will be different. But everyone has that skill. If you have to do it five employees at a time, then that’s what you have to do.”
Korzenski and his team didn’t just hold meetings, they got out and visited factories and tried to canvas the company communicating with employees.
“It’s really making a strong effort to not only get everybody to hear what you’re saying, but making sure what you’re telling them, they can clearly understand, they can clearly believe in and that everyone is listening to the same message,” Korzenski says. “So it really is about getting to the factories, getting to the facilities and getting out with our sales people.
“Every action, every leadership move and every form of communication through the executive management team through every level of this company must be done in an honest and accurate way. Then people will believe and follow. Short of that, it won’t happen.”
Keep it going
Korzenski began to see the fruits of his and his management team’s labor through 2007 and into 2008.
“Our employees really signed on to what was happening and really started to get engaged in getting the company to new levels and new areas we expected to get to many years before that,” Korzenski says. “Our customers started to believe in us again. Our outside constituents, our suppliers and our board all started to believe that the company was moving in the right direction.”
Debt was reduced. Sales improved and so did cash flow. Then the economy tanked and demand, which was typically very reliable in the industry of plastic cups, plates and the like, took a big hit.
The loyalty that Korzenski and his team had earned in the first couple years was being put to the test.
“They were saying, ‘Look, you’ve been entrusted with a company that has a 75-year heritage,” Korzenski says. “It has one of the strongest brands in the industry. Don’t screw it up.”
The need to keep people informed and involved was even more important now than it had been before.
“I believe in the absolute expectation that all people will participate in a discussion and that we’ll reach consensus,” Korzenski says. “I don’t believe that an autocratic style is the way to win an organization’s heart and soul to move it forward.”
When you experience an obstacle in your path to achieving a goal, you can’t throw in the towel and give up. You also can’t be so loyal to your plan that you don’t recognize the need to adjust.
“You can set the target and you can set the end state, but if you don’t adjust along the way and you blindly follow that end game without halftime adjustments,” Korzenski says. “That will lead to failure as well. So it’s important to put that stake out there, put an end opportunity in front of the work force and in front of our customers as well so they understand where we’re going. But then it’s having the ability to change that, whether it be subtly or pretty significantly.”
But whether you’re adjusting or staying the course, remain accessible.
“My assistant knows that any customer that calls, whether it’s a hot dog stand down the street or Starbucks, she finds me wherever I am and I speak directly to that customer about any issue they may be facing with the company,” Korzenski says. “I expect that of every member of the leadership team as well. I think those are the critical pieces to being successful and then taking that information and turning it into results for the company.”
Continue to evolve
When the economy began to turn in 2009 and 2010, it was time to unleash the next phase of Solo Cup’s evolution. A new campaign slogan for employees, “Think Like a Customer,” was unveiled to indicate that the company had solved many of its internal issues and that it was now time to really focus on being a great brand again for customers.
“What it was intended to do was take this new company and say, ‘If every single employee in this company started to think like they were the customer, what would you do differently?” Korzenski says. “How would you act differently? What would you do in your daily lives so that the customer could visibly see a different Solo Cup?’”
The idea was to reinforce the notion that things would continue to change and employees needed to stay tuned in to so they could always be providing the best product and service possible.
“You want them to be able to depend on Solo to be the company that they can come to for their changing needs and for what they need to solve their solutions,” Korzenski says. “If you have an employee base that thinks that way, that thinks like a customer, then they bring that expertise. We know that listening to what the customers’ needs are in this changing environment is going to be critically important to our success going forward.”
How to reach: Solo Cup Co., (877) 765-6669 or www.solocup.com
The Korzenski File
History of Solo Cup Co.: The company was founded in Chicago 1936 by Leo J. Hulseman as Paper Container Manufacturing Co. It changed to its present name in 1946. The company has 10 North American manufacturing facilities and six state-of-the-art distribution centers, with additional manufacturing and distribution in Central America and Europe. The company is an exporter to more than 70 countries and has a broad product line encompassing many materials: paper, plastic, foam, post-consumer recycled content, annually renewable materials and compostable materials.
Innovations in single-use tableware that reflect the common culture:
1936 Paper cone cup
1946 Solo Cup
1950s 2-piece wax-lined cold cups
1960s Cozy Cup and reusable plastic holder
1970s 2-color, red Party Cup
1980s Traveler hot cup lid
1990s Clear, plastic PET cup
2004 Solo Grips product line
2004 FDA-approved post-consumer fiber hot cup
2008 Bare by Solo line of eco-forward single-use tableware
2009 Solo Squared
Korzenski on delivering a message: It really goes back to something that I did as an intern through one of my summer jobs. I was given an assignment and I was asked to give that assignment to the executive team. I launched into the solution within the first 30 seconds. One of the members of the team took me aside and said, ‘Part of what you have to do is you have to polish this up a little bit. You have to make sure everybody understands the work and the effort that you put into it.’ So take your time to talk about what it is you’re doing.
You can’t blame Tim Jahnke for feeling a bit like the wrong man in the wrong place at the wrong time as the new president and CEO at Elkay Manufacturing Co. He was taking over a construction product manufacturer that had experienced double-digit growth every year from 2001 to 2006.
Two million new homes went up in 2006, and it looked like Elkay was positioned for more of the same in the years ahead. Then Jahnke arrived in late 2007 as the company’s new man in charge and everything began to fall apart.
It wasn’t Jahnke’s fault. Many factors led to the global recession that socked economies and businesses around the world beginning in late 2007. But that didn’t make it any easier for him as he searched for answers to keep Elkay from going under.
“It’s not just that we went from a really good market to a challenging market,” Jahnke says. “It was the speed at which it happened that created such an emotional and terrifying set of consequences within our market.
“All the numbers just changed so dramatically and the market shifted so fast that you couldn’t run down the hill fast enough as a company. You couldn’t cut fast enough, you couldn’t close enough factories, and you couldn’t do all the things that needed to be done to cut costs.”
Jahnke knew people were scared, and he knew they were looking to him for answers. But he also knew that if the company was to be saved, it wouldn’t be done solely through his leadership and decision-making. He would need all of his employees to play a part in finding ways to help Elkay stay on its feet and to continue to be a viable option for customers.
“If there is a bit of good news to the dramatic speed that the market was changing, it was that it got everybody bought in pretty fast,” Jahnke says of the initial response he got at the now 3,775-employee company. “It didn’t take long for people to understand that you couldn’t just modify what we did. We had to change what we did.”
Demonstrate your resolve
Jahnke began the effort to turn around Elkay by issuing a challenge to every employee. He wanted the employees to begin looking at ways to make the company stronger, better and more efficient in the work that they did.
“We had to look at everything we did,” Jahnke says. “Not just how many people we had and how many factories and all this sort of thing. But really look at every procedure, every process, every method that we used for those many years in running our business. I had to believe it wasn’t just going to happen from me above telling people that they needed to do things differently. We needed to start looking at things in a very mechanical way.”
Jahnke had no desire to just make a series of desperate sweeping changes that would demonstrate action but produce no results. He wanted to get to the heart of the matter with his people and see what could be done to make Elkay a better company.
“I remember having a conversation when we were talking about customer service, which is such a critical area,” Jahnke says. “I said, ‘Who is the best person we have in the entire company?’ Everybody looked around and said, ‘Laurie Goldman,’ who at the time was customer service manager for our cabinet division. I said, ‘We need to get her involved in this team.’ When that got said, everybody looked around and said, ‘Wow, he’s serious. I really do have to ante up my best people.’ We did that pretty much across the board.”
Jahnke wanted his senior management team to bring forward talented people with ideas to improve functions. He made it clear that he wasn’t going to stand in the way of their efforts to make changes.
“I could voice my opinion on how we had to make change, but these were folks who were inside the organization working every single day in these areas and generating new ideas,” Jahnke says.
He found leaders for each key area in the business and then an overall leader who would coordinate the team’s efforts. That leader was not going to be Jahnke.
“It’s important that it not just be from the top,” he says. “It started to create some understanding in the middle of the organization.”
Jahnke would get reports about what was happening with the team and the team leader would report directly to him. But it would serve as another indicator that he wasn’t going to micromanage the process to remake Elkay.
“You’ve got these people who make a difference way beyond the job or the job title that they carry,” Jahnke says. “In our case, we took it very seriously. This team got things started. It wasn’t necessarily important that they got everything done. But they started to send the message through the organization that we were very serious about adapting and changing to the world as it was changing around us.”
You need other people in your company, people that are viewed as leaders in your organization, to be on board with you and to support your plan of action.
“You have to have your key leaders, functional leaders or divisional leaders participate and get involved,” Jahnke says. “If they’re not part of it, they’ll fight it until the last breath of implementation.”
Jahnke said despite his best efforts, he still faced some opposition from a few at the management level.
“There were more than a few conversations that had to become pretty aggressive,” Jahnke says. “You will participate, you will give up your key people, or you will listen to the recommendations of some of these teams. They were generating ideas that were going to cause us to do things differently.”
They needed to know that Jahnke was completely supportive of their ideas.
Get on the same page
As the team began to assess Elkay’s ways of doing business, it quickly discovered a key flaw: Elkay was not nearly as close to its customers as it needed to be.
“During that period of time of growth from 2001 to 2006, we really focused on getting the product out the door,” Jahnke says. “Orders came in so fast that the whole concentration of running the business was, ‘How do you get it out the door?’ What ended up happening was we became very internally focused. What was best for us? How do we manufacture it easier? How do we take that order from our perspective in a way that makes it easier for us?
“We really stopped looking from the perspective of the customer and the end user and the consumers of our products and what they wanted. It made it easier for us, but in some ways, it made it more difficult for our customers.”
As team members dug deeper, they found that the way Elkay was doing things wasn’t really easy for anybody, customer or the company itself.
“We had three distinct product divisions: Our cabinet division, our plumbing division and our countertop division,” Jahnke says. “Each of the divisions had multiple manufacturing facilities. We had separate sales teams, separate finance teams. Everything was done very separately. Then within each of our facilities, they were allowed to pretty much do what they want. Everybody purchased at each manufacturing site pretty much on their own what they needed from local suppliers. It really created complexity in our business that we didn’t need.”
Awareness of these problems filtered throughout the company not because they were announced by Jahnke, but because teams of their peers had brought the problems to the surface.
“When people saw we were doing things in so many different ways, they said, ‘That doesn’t make any sense,” Jahnke says. “We should be doing this the same way. It got buy-in from all levels of the organization in a more rapid way than if it was just pushed from above.”
Jahnke tried to reinforce the idea that there could only be one “best” way to perform a particular task. Things such as sales practices, financial decision making and the ordering of supplies needed to be more uniform.
“There can’t be six best ways to do the same thing,” Jahnke says. “We started identifying ways we could take out waste in our own processes and systems to become easier to do business with. It was not only a message from me that we needed to do things differently, these were individuals who had been with the company for many years. They were experts in their own field and their own areas of responsibility.”
Jahnke wasn’t looking to create drones who would eradicate the character and uniqueness that separates selling countertops, cabinets and plumbing. But in the areas where tasks are pretty standard, it would be much easier all the way around if more systems were uniform.
The key is creating teams that can help you take a deep look at your business and then not getting in their way when they take that look and come back to you with their observations.
“They have to trust you,” Jahnke says. “Many times I use the phrase, ‘People do business with people that they like, trust and then ultimately respect.’ That goes whether you’re a customer, a supplier or an employee. For example, initially with an employee, if they like you, they’ll come to work for you. They like what they hear and they like what they see and you’re at that level. After a while, they are starting to trust you because you’re doing the things you said. They start to develop a trust level with you. Then ultimately, they develop respect because they see the results and they see the impact on them and that you have their concerns at heart also and they develop that respect.
“You could apply that mindset to customers, suppliers, employees, everybody. If people who lead realize that it is all about getting people to trust and respect you, that doesn’t mean telling them what they want to hear all the time. It doesn’t mean that everything is always going to be great. If they really trust what you’re saying and respect what you’re trying to accomplish and you get everybody pulling in the same direction, it makes the journey a lot easier.”
Jahnke rewarded the trust of his employees by taking their suggestions to heart about the problems that existed at Elkay and the hurdles it was creating in building solid relationships with customers.
“You have to sit in front of folks and let them ask you questions and make sure you that you don’t either ridicule or be negative toward the people who ask you the questions that are the most important ones,” Jahnke says. “Those are invariably the toughest ones to answer. You have to reward the folks for asking. Create an environment where they understand that you’re willing to not just stand in front, but answer the questions and take the heat.”
Jahnke earned even more trust when the changes to create better task alignment and customer service procedures at Elkay led to positive growth in 2010 and a projection for growth in 2011.
He believes one of the keys to his success was convincing employees that the enemy they were facing was not the sales team or the finance team or anybody else at Elkay.
“We got people looking at things and seeing that the enemy is not within our walls,” Jahnke says. “The enemy is outside. The enemy is a declining market, high unemployment and falling house prices. Those types of things. We had to take action.”
How to reach: Elkay Manufacturing Co., (630) 574-8484 or www.elkay.com
The Jahnke File
Born: Green Bay, Wis.
Education: Bachelor’s degree in business administration, University of Wisconsin Oshkosh
What was your very first job?
I took care of a Little League field when I was 13 years old. I put the bases out and drew the lines out on the field and then umpired the games. It was the best job I ever had. I love sports and being involved in anything sports is a lot of fun. But it taught me lots of things.
I had to deal with the coaches, and they weren’t always that nice to the umpire. And I had to deal with the parents. It gave me a level of self-confidence that you normally don’t have when you’re 13. Sometimes you had to turn around and look at a parent and say, ‘Be quiet.’ When you’re 13 years old and you’re talking to a parent, that’s not the easiest thing to do.
Who has been the most influential person on you?
My dad. I think a lot of people say that, but my dad just passed away a few months ago, so it comes to mind real fast and the work ethic that he showed me every single day growing up. He didn’t rule with an iron fist. He was demanding of me, but that combination of knowing that he loved me every day and at the same time he had expectations of me that needed to be met, that helps create the balance you have to have in life. Having expectations doesn’t mean that you don’t care for a person. Being able to share both frustration and at the same time, caring, is important whether you’re a CEO or a dad or a husband or a member of a community.
William J. Abbott was concerned that Crown Media Holdings Inc. had lost its way. The company, which operates and distributes Hallmark Channel to more than 87 million television subscribers, didn’t seem to have a clear path that it was following to achieve success nor did it have a clear idea of what success looked like.
“We would come up with all kinds of different reasons to pursue an endeavor that might not necessarily enhance that singular focus,” says Abbott, the company’s president and CEO. “The biggest challenge I faced was getting everybody on the same page in terms of what our corporate objectives really are. Especially in the entertainment industry, that can be challenging and difficult in that different entertainment companies sometimes have different focuses and different points of view on what’s really important.”
Abbott wasn’t new to Crown Media. He had spent nine years running ad sales and this experience had provided a window into how the different parts that made up the 170-employee company functioned.
“Previous regimes were always focused on the bottom line,” Abbott says. “I just think that the path to profitability and the path to success were pursued differently and with a different vision. For example, producing volume as opposed to being more targeted in terms of what we produce would be an example of a strategic difference.”
Abbott wanted to change that. His goal was to instill a strategy and a sense of purpose to let everyone know what they were doing and why they were doing it.
“It’s delivering a hard-line business approach to a bottom-line driven emphasis,” Abbott says. “If it doesn’t deliver something for the bottom line, our point of view now is it doesn’t make sense for the business.”
See who fits
Before he could begin plotting this new strategic focus for Crown Media, Abbott had to look at the people who worked for him and determine if they were a good fit.
“The first thing you have to determine is that you have the right team in place that is willing to buy in to a new set of strategies and is willing to pursue things a little bit differently,” Abbott says. “It’s an analysis of the team that you have and ensuring you have the right people on board.”
Abbott knew things about a lot of the people on his team from his experience at the company. But he had to set that aside and gather input as to how they would fit into this new initiative.
“That’s probably a 100-day process of really learning exactly where they have been, what their framework for decision-making is and what they draw on from their experience in terms of how they approach their day to day,” Abbott says. “You don’t want to make snap judgments around looking at someone’s resume and deciding they don’t have the right experience to get where you want to get to. It’s living through the day to day for three to four months. That’s what you need to do to get a sense of their thought process.”
You’re looking at relationships and how people function with each other rather than just trying to appraise the skills of an individual.
“It’s seeing what their relationships are like with other team members and people in their group and in their departments,” Abbott says. “The story is told pretty quickly that way versus any kind of evaluation or fact finding that I would do. It’s through their interaction with others that ultimately tells the tale and the respect or lack of respect they have with other leaders.”
Your observations should not be gathered by planting yourself in someone’s office and watching people work.
“That’s the last thing you want to do,” Abbott says. “The evaluations you make really don’t come through wandering around and talking to people. That creates way too amped up of an environment where it becomes an us-versus-them mentality where everybody is fearful when you walk in their office.”
You’re not trying to size them up on an individual basis, which is often where that pressure comes from. You also shouldn’t necessarily be worried about how they respond to you. It’s the way they interact with others, and with their direct supervisors, that will tell you what you need to know.
“It’s the respect they have in the marketplace, their knowledge overall in the business and their ability to function as the leaders in the organization that are much more important than any one or two questions that you might ask them when they are having a bad day or just got off the phone with somebody else,” Abbott says. “I’m not a big believer in how conversations go in the hallway at 5 o’clock at night or 9 in the morning. It’s a much bigger landscape that you need to look at.”
Talk to your people and gather impressions about how they function as part of a team. Ask about others too and see what you learn.
“Who could say, ‘I’m willing to sacrifice my own personal objectives for what I believe is a philosophy or strategy that results in a good product,’” Abbott says. “It’s having that candid, honest conversation that will begin to help you make that determination about who can get there and who will have more trouble.”
Explain what you’re doing
Abbott learned that he did need to make some personnel moves at Crown Media to get the company on the course he believed it needed to be on. Those changes can be tricky to make as you want to do it without rocking the foundation too much for those who aren’t leaving.
“I don’t know that there is a way you can do it without creating some questions and some sense of trepidation,” Abbott says. “It’s a vigilant communication to the employee group of how well they are doing and how much they are valued. Be as present as possible and as visible as possible and try to reassure people, even on a one-on-one basis, that they are valued and very good at what they do and that they have a bright future in the organization.”
You can’t make the moves and then expect to instantly move on as if the changes had never been made.
“To make changes and not really give a very strong explanation as to why and leaving people in the dark and questioning … is very poisonous,” Abbott says. “You need to overcommunicate and be very clear and as approachable as you can possibly be. At the end of the day, everybody is a human being and they have families and responsibilities and hopefully they work to live and don’t live to work. You’re dealing with peoples’ livelihoods. You want to be sensitive to that fact.
“Not only does it make sense from a business perspective to have an environment where people flourish and like coming to work, but also from a personal perspective. If you’re going to run an organization that has integrity and have people who thrive personally, that’s just the right thing to do. There is a responsibility of leadership to put people in the right places and try as best as you can to ensure their confidence levels are high with what they are doing and that they can feel good about the job they do when they go home at night.”
Get the ball rolling
Abbott did not wait until he had made his personnel moves to begin formulating a plan to create better strategic alignment at Crown Media.
“When I took over, I knew exactly where I wanted to go,” Abbott says. “So I didn’t have to spend a lot of time fact finding or searching for what a strategy might be to make it successful. We were able to roll something out pretty quickly.”
You need something to present to people that shows you’ve done your homework on these big changes you’ve been talking about. But at the same time, you have to show people that they have an opportunity to influence the changes that are going to be made.
“Judging what makes successful television is in the eye of the beholder,” Abbott says. “Through the course of conversations, there will always be that type of creative tension which I think is good and I think it just needs to be solved through talking it through. At the end of the day, hearing what makes the most sense for the brand and for the business is what the ultimate gold star is in terms of making that decision. We view everything through that lens, which makes the decision-making a lot easier than it would be if we were just trying to evaluate something for art’s sake.”
With that in mind, Abbott called on his department leaders to meet with their people in groups to have more intimate conversations about what was happening at Crown Media.
“We don’t put everybody together in one big town-hall meeting, but we have smaller town-hall meetings,” Abbott says. “Communicating that message on a level where you have as few people in the room as practically possible is a strategy that is important. If you’re in an organization that’s too big, it’s absolutely incumbent on the leaders of the divisions to really be the messengers and deliver the news and the new strategy in a compelling and coherent way.”
If you’ve made good personnel decisions, the plan should begin to come together fairly quickly. But there is, of course, no sure thing in business or in any aspect of life.
“At some point, you’ve done the best you can,” Abbott says. “There is a level where you have to have confidence. There is a point in any senior management team’s development and evolution where you make decisions and then you just have to believe in your vision and relentlessly pursue it and make it work. But there is no such thing as a sure thing. You have to have that confidence and a little dash of hope as well.”
The successful execution of these steps is in large part based on your ability to be honest with yourself about your abilities and those of your people. If you’re unwilling to make the tough personnel moves when they need to be made, you’ll have a tough time moving your business forward.
“You have the wrong people in place and you’ve got to make changes,” Abbott says. “There’s no room, at least here in our organization, for people who at the end of the day can’t walk away and learn how to have meetings where they are productive and there is the proper amount of respect given. People need to be mindful that they have colleagues as well who are working for the common good. I’ve been on some of those teams, so I understand what that dynamic is like. It’s not a fun place to work and it’s certainly not a productive place, because you don’t have the type of dialogue necessary to move the business forward. It’s the leader’s responsibility to make sure the team is restructured so that it’s part of the culture.”
The numbers at Crown Media are trending upwards. Revenue grew to $287.3 million in 2010, up from $279.6 million in 2009.
“It’s really that consistent buy-in that we’re all singing off the same song sheet,” Abbott says. “We all really have in our minds where we want to be, not only this year, but in three to five years. Historically at our company, that hasn’t always been the case.”
Fair or not, the burden on making the tough call that sometimes has to be made to grow your business rests with you.
“Ultimately the leader is accountable and the leader needs to make changes so that he or she brings in the right people where that environment doesn’t exist,” Abbott says. “So yeah, ultimately the fault with the leaders. But individuals are responsible for their behavior and it’s a plague on both of their houses at the end of the day if the organization continues to operate in that kind of manner.”
How to reach: Crown Media Holdings Inc., (818) 755-2400 or hallmarkchannel.com
The Abbott File
Born: Manhasset, N.Y.
Education: English and political science major, College of the Holy Cross, Worcester, Mass.
What was your very first job?
Maintaining tennis courts at a country club. They were Har-Tru (clay) courts so they had to be swept and various things had to be done on the courts that aren’t typical of your typical tennis courts.
What is one of the biggest misconceptions people have about the TV business?
Why shows stay on the air and why they get cancelled. There is a definite bottom-line formula that determines the success of a show and the genre, and that isn’t always necessarily understood.
Do you have a favorite TV show?
In terms of quality and star appeal, the Hallmark Hall of Fame over 60 plus years has been a franchise that needs no introduction to the vast majority of Americans. It has served a vital purpose in the television landscape for a very long time. It continues to endure and do very well.
What is the best advice anyone has ever given you?
Work hard and be prepared. It sounds pretty basic, but preparation is so key to your success or lack thereof. Every day when you wake up in the morning, you decide whether you’re going to be successful that day or you’re not just by the nature of what you decide to do. Being empowered like that and knowing that it is a choice is very good advice.
Bob Ketterer didn’t expect to get a lot of support from his board at HDA Inc. for his decision to give employees a pay raise in 2010. Board members were still a bit skittish about the slow pace of recovery from the global recession.
“I didn’t even want to bring up this 3 percent increase I gave across the board,” says Ketterer, president and CEO at the 1,695-employee book and magazine distributor. “I just did it because I didn’t have to get their approval. I didn’t give myself a raise because that is a board resolution. You say, ‘Well, why would you do that when you lost money last year?’ I’m anticipating that this will be a better year for us and I’ll make up for it.”
Optimism definitely has its place in Ketterer’s leadership arsenal, even if it has to be a little more cautious.
“Business is about risk,” Ketterer says. “A lot of people will say, ‘OK, it’s a tough time. I’m not going to risk anymore.’ That’s a mistake. I think maybe you have to pull in your horns a little bit, but you still better be prepared to gamble a little bit because you’ll be stymied and run over by your competitors if you don’t.
“My board of directors, they said, ‘We shouldn’t do this, and we shouldn’t do that.’ I said, ‘Wait a minute. We’re still in the business of managing risk.’ Every CEO has to do that. I’m not going to shut down operations and sit back as long as there is something I can do.”
Ketterer has led his company from $11 million in 2000 revenue to $257 million in 2009 by learning to bob, weave and adapt to the market. The business began by selling residential blueprints through magazines and catalogs and grew to become a seller of custom-made books in the home improvement sector.
Just as the market continues to evolve, Ketterer says so will his leadership style. What won’t change is his desire to turn problems and challenges into opportunities.
“It’s a mental attitude that has to be constantly reinforced that things will get better,” Ketterer says. “If you handle the business to a point where you can survive, and unfortunately, some guys aren’t going to make it, but if you structure it so that you can get through these tough times, the times will be better.”
Here are some of the key principles Ketterer follows in leading HDA that keep the company driving forward as a competitive force in its sector.
You may be tempted to hole up in your office when the times turn tough so you don’t have to face your employees and reveal your frustration about the latest batch of bad news.
That’s a big mistake.
“You don’t want to be paralyzed,” Ketterer says. “You want to be honest with your folks. That’s not to say you have to tell them everything that’s pending because half the things I find that I worry about, it’s gone tomorrow. I’ll worry about something else tomorrow. But you do have to give a sense to your people of what is happening in the business.”
You also have to give them a reason to believe that there is something out there worth fighting for and worth exerting their energy for.
“You don’t want to kid them,” Ketterer says. “Any sunshine that you have out there that you can substantiate, make sure they understand that. We might see this information and we’re not sharing it with our people. There’s always sunshine someplace. Even if you don’t have anything other than what you hear on the nightly news about oil prices coming down, you have to continue to communicate. If you don’t say anything to your people, that’s a scary thing.”
It doesn’t have to be news that you’re sharing. You can also try empathy.
“We looked at special situations like where a person is driving so much,” Ketterer says. “They had been with us for a number of years and had proven themselves, so we allowed them to work at home more than we did in the past. Some of the lower-level hourly folks, we looked at gas cards.”
In addition to delivering a positive message and showing empathy, you also may need to step up and combat negativity that may be festering with your employees.
“I had someone tell me the other day that housing starts, because this was a good and very profitable part of our business selling house plans, he said, ‘We’ll never see that again,’” Ketterer says. ‘He’s a senior guy in the organization and a smart guy. I said, ‘No, let’s look at the past 50 years of housing starts.’ What you find is that there were housing starts a lot higher than we had back in 2007 when the bubble burst.”
Ketterer’s point was that doomsday scenarios don’t help anyone and are often not completely true. You need to continue to be the voice of hope for your people.
“Certain things will change,” Ketterer says. “How many people are going to use e-readers? Does that mean books are going to go away? No. I know books aren’t going to go away.”
Fear can be a contagious and corrosive thing in your business. It’s up to you to dig deep and find real and substantial reasons why it’s worth continuing to push forward and then share those reasons with your people.
“I tell them, ‘We lost the Michaels account, but at the same time, we’re gaining this here and we’re seeing a positive coming up at Lowes with the how-to books,” Ketterer says. “Even Warren Buffett told his NetJet folks, ‘Guys, you better hunker down and wait this one through, because there’s not going to be a lot of guys wanting to fly private jets in the next couple years.’ There’s probably not a lot they could do, but I’ve seen that they have come up with other programs that are attractive to some people. You just have to keep looking for anything and everything you can do to improve your situation. It’s easier said than done, but you have to.”
Do you ever feel like you’re a teacher checking up on who did their homework when you step into the conference room? It can be a necessary step to ensure that your leadership team is doing what needs to be done to keep your business going.
“As you go around and you’re meeting with your people, are they prepared?” Ketterer says. “Have they taken the time to be prepared for this meeting? If you have metrics in place, look at those metrics. If you don’t have the metrics, at least have them report on their successes. If they can’t report on any successes, you know you have a problem there.”
Maybe you have a team of people who are self-starters and require no pushing to get things done. Maybe your leaders are procrastinators who constantly need a kick in the butt. The point is, you need to have a sense for what they are working on and what they are getting accomplished.
“If they are constantly giving you excuses why this isn’t getting done or that isn’t getting done, you almost sense it because their peers will give you a look like, ‘Oh, Joe didn’t get it done again this month,’” Ketterer says.
Take the time to get out and see what your people are working on.
“Walking the office is so important,” Ketterer says. “Just stopping and asking, ‘What’s going on? Give me a rundown.’ Where you can, be more fluid and check it out and see what’s happening. Just walking around and talking to your folks without a prepared agenda, you’ll find out all kinds of things.”
There is a danger, of course, in just relying on your observations and questions to get a read on your business. Your best course is to combine those observations with some type of measuring tool, whatever that may be.
“When you don’t have all the metrics in place, it’s difficult,” Ketterer says. “We have a lot of district managers with our field force. We have something like 28. There were a number of ones who we thought were rising stars.”
It turned out they were a lot better at talking about getting work done rather than actually getting that work done.
“You want to have good measuring tools so you’re not just rewarding the guys who talk a good story,” Ketterer says. “You can’t be buffaloed. I had a guy before who I thought was doing a great job and I found out he was stealing from me. He was selling product on the side. All I can say is, if you don’t have metrics, it’s a tougher thing. So get the metrics. Get something you can use.”
Share the burden
When Ketterer meets with his leadership team, he does not demand a seat at the head of the table. Maybe it’s a small gesture, but it helps reinforce the idea that he’s not the only one who makes HDA go.
“Even though I’m the president and CEO, I can sit at the table and let other people run the meetings,” Ketterer says. “It’s important they be given an opportunity to shine and show other folks what they can do. I do reserve the right to make the final decision, but I only exercise that right if I have some burning desire to exercise it. I just don’t think it’s that often that I feel I have to.”
Ketterer recalls a situation a few months back when the company was looking to hire a high-level position.
“We were down to two candidates,” Ketterer says. “It was my vice presidents and I that were making the decision. So it was five of us and the HR director. Five voted one way, I voted the other way. I went with their suggestion. It was after I agreed and thought about that evening that I said, ‘Now I guess you’ve got the right people. You trust them enough to go against your gut feeling.’”
The sharing of the leadership burden with others becomes even more critical when you’re going through a tough time. If you run yourself into the ground trying to do it all without anyone else’s help, or by trying to impose your will in every direction, you’re not going to be any good to anyone.
You need to keep your people engaged in the fight so that they feel part of it all and know that they play a key role in helping your business succeed.
“All of us, we can’t take this pressure day in and day out,” Ketterer says. “Take care of yourself. If you love to run, run. Don’t give it up because you feel you have to work 80 hours a week. Take the time off, a couple days, to relax. If you don’t, it’s just like when they say on the airplane when you’re sitting next to a child to put the oxygen mask on your face first and then put it on your child. Otherwise, you’re no good to anybody. That’s the same thing. All those things that can help your mental attitude are critical.”
How to reach: HDA Inc., (314) 770-2222 or www.hdainc.com
The Ketterer File
Born: Breese, Ill.
Education: Bachelor of arts in chemistry, Saint Louis University; bachelor’s degrees in biology and architectural engineering, University of Illinois
How did you find your career path?
My father was a surgeon and he wanted me to follow in his footsteps, so that’s why I went down the chemistry route, but I hated it. I finally told him I wanted to go into architecture. I built things as a kid and that’s how I got in the home plans business. [For example,] I took a glove box in my old car and I converted it into a refrigerator. I got eight cans of soda and put them in there and they would be so cold you could barely touch them. It wasn’t soda, of course. I was 18 years old. It was beer, and it made ice cubes, too.
Ketterer on his childhood: I was flying when I was 14. I got kicked out of school for three days because I was buzzing the high school when I was a sophomore. They saw the numbers on the plane and the FAA called up my Dad and said, ‘Dr. Ketterer, what are you doing buzzing the high school?’ He said, ‘I’m not, but I can tell you I know who did, and we’ll take care of it right away.’ Those are the kinds of things that are not uncommon for entrepreneurs, to be distracted about so many things and be inquisitive.
Who would you most like to meet?
President Obama. Every day I’m more impressed with that man. He has a lot to teach us. Coming up from essentially nothing to where he is to how he conducts himself. He’s a true gentleman. I’d just like to know how he was able to accomplish what he has with very little to begin with.
Linda Henman has helped a lot of CEOs over the past 30 years. But in 2006 when she was asked to help another one, this time at a $1.5 billion publicly traded company in St. Louis, she felt like something was missing in her tutelage.
“I remember wishing I had a book I could hand him that explained all about being a CEO that no one had taught him,” says Henman, an executive coach and author. “What does a brand new CEO have to know that no one has taught that person in any other job?”
Henman took the most important of those missing pieces and put them into “Landing in the Executive Chair: How to Excel in the Hot Seat.”
What is the biggest thing a CEO needs to know?
When you’re the CEO, the people who report to you have to be excellent. They can’t be above average or pretty good. They have to be excellent and exceptional. If they’re not, nothing else is going to work.
What is your advice on making sure you have excellent people?
Look at the aptitude of the person. The ways I encourage people to evaluate aptitude are first of all, ask whether or not this person can make unfamiliar decisions. Then ask yourself if this person can learn quickly. And third, ask yourself does this person understand how to make sense of the numbers?
What has surprised you most in working with CEOs?
So many people are running companies who lack strong analytical ability. So often it doesn’t show up until the person gets promoted to the C-suite. But then it does show up and people don’t understand what to do with it. They just understand the person is not executing. They don’t understand why.
How do you get through that?
You just cannot expect every day to be a good day. That’s unrealistic. When you have thousands of people counting on you and there are so many locations and so many products and services that you offer, something is going to go wrong somewhere every day. You just have to learn to put that in perspective and roll with the punches. You have to realize you have to have good people to handle those kinds of things so you can keep constantly focused on the big picture.
How helpful is your book for CEOs who aren’t new to the job?
Two of the most important chapters for experienced CEOs will be the strategy chapter and the succession planning chapter. I tell people I help leaders tie talent and strategy together. That’s the key. If you get those two things right, the rest of it seems to take care of itself. But the experienced CEO often will not realize the role he or she should play in planning succession and tying that to what you want to do for the long range or the next three to five years. The two of them have to go together, talent and strategy.
Is it because they can’t look past today?
That’s a big part of it. The other part of it is that they are so busy running the business, they forget one of their primary responsibilities is to build the bench. So they just don’t take the time to do it. I’ve never heard a direct report to anybody say, ‘I get more feedback than I want.’ Those words have never been spoken. But continuously I hear, ‘I wish my boss would let me know what he or she is thinking. I just don’t know.’
How to reach: Henman Performance Group, (636) 537-3774 or www.henmanperformancegroup.com