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Wednesday, 02 March 2011 13:25

How patience develops leaders

Lea Bailes saw great potential for Valerie Eaton to become a valuable leader at Guier Fence. The only person he needed to sell on developing this untapped talent was Valerie.

“She came into our organization as an associate doing material sales and not getting paid a whole lot to do that,” says Bailes, the 70-employee fence company’s president. “I saw a lot of potential in her to do a lot more than maybe she thought she was even capable of doing or that somebody would allow her to do. I started approaching her about changing roles.”

Bailes wanted Eaton to become involved with outside sales and residential sales, but she turned down his offer several times.

“One day, I guess something changed, and she came back and said, ‘Yes, I want to do it,’” Bailes says. “She ended up being our top residential salesperson for that year. After seeing her accelerate through that, we saw a whole different side of her. We saw this competitiveness and this drive come out.”

So what’s the key to discovering this kind of hidden talent in your organization?

It starts with a patient approach.

“You may see something and you may want something, but it may take time,” Bailes says. “You may be dealing with someone who has a totally different personality than you.”

If you see talent in one of your employees, you need to get that person to recognize it in themselves. You also need to see how committed they are to you and your company. So give the person a small challenge that takes him or her out of his or her comfort zone.

“Move their cheese a little bit and see how they respond,” Bailes says. “If they get upset and start throwing a fit, they’re probably not your most loyal employee. But if they move into the problem and move to what you’re trying to get them to do, they’re probably a very loyal employee.”

It may be as simple as just rearranging the person’s job responsibilities a bit or asking them to take on a small but important project. Whatever it is, the way you present it to the person can go a long way toward their acceptance of both that task and future assignments.

“The way I present it is, ‘This is the greatest area of need in the company; you have an opportunity to come in and be a hero and fulfill this need,’” Bailes says. “We try to portray it like they can ride in and save the day. Try to motivate them through the thought that they can do that. It’s not false. We’re not trying to trick them into doing anything. We really are trying to fill a need.”

If the person handles the project successfully, be vocal with your praise. But you need to go beyond a pat on the back to create true engagement. Show people how their effort helped your business.

“Appreciation motivates people, but so does a sense of getting a job done,” Bailes says. “Crossing something off a list or providing a certain result is something that really motivates people. Review the results with them. Tell them, ‘You did X, and this is exactly what you’ve accomplished, and you should be proud of that.’ Give them that feeling of accomplishment.”

Keep feeding the person challenges and increase the difficulty based on how well they perform.

“You have to be patient and look for those small daily changes,” Bailes says. “I’ve seen managers that weren’t patient and they just run good people off.”

It was through a patient approach that Bailes was able to groom Eaton into a leader who is now responsible for managing her own sales staff.

“Find someone who has an intense passion for what you’re doing and the company itself and then train them how to manage,” Bailes says. “Take the loyalty and instill the management skills.”

How to reach: Guier Fence, (888) 782-6508 or www.guierfence.com

Make your business interesting

Lea Bailes won’t try to convince you that his is the most exciting business in the world. But he will argue that Guier Fence is a lot more than just 70 employees who dig postholes in the ground.

“I struggled with this myself for a while dealing with telling people what my job was,” says Guier, the fence company’s president. “You have to figure out how to make what everybody is doing meaningful. For us, the meaning for what we do is we beautify people’s properties. We protect children and dogs. We keep people from falling into pools or falling off of balconies.”

If your employees feel a sense of purpose in their work, they’re more likely to stay loyal to your business.

“You have to look at it from a consumer perspective,” Bailes says. “There is a reason why someone is buying what we’re selling. If you start looking at your business too introspectively and you look at the day-to-day stuff that you grind through, we all have that. You have to get past all that and not get bogged down in what you don’t like and really look at it from the end perspective.”

Wednesday, 02 March 2011 11:41

Refocus on customer service

Mark Kirschner is in the moving business. When people need to go from Point A to Point B, he wants Wheaton Van Lines Inc. to be the company that gets them to their final destination as smoothly as possible.

So when the economy collapsed in 2008, it created a problem for Wheaton. Fewer people in the residential market were moving, and those who were often weren’t doing so by choice. And when you’ve just lost your house through a foreclosure, you’re probably not hiring a moving company to get you to your next place.

“So with that, cash flow decreased for our industry,” says Kirschner, the company’s CEO. “Not just Wheaton but the whole industry. So we had to find ways to be sure our agents were diversifying and finding new revenue streams.”

Kirschner believed in the service that the $160 million company provided to help families move and assist companies with corporate relocations. He knew that the company also specialized in government and military relocations, logistical services and special commodity shipments.

But he came to the conclusion that the company wasn’t doing enough to let potential customers know about the diversity of Wheaton’s offerings.

He began with a mandate to the company’s 120 employees and 250 agents across the nation who are affiliated with Wheaton. The message was simple: We’re going to work together to make sure everyone succeeds.

“We talked to everyone,” Kirschner says. “We enlarged our circle. We looked for new ways to reach our customers. We started to make a focus on the social media aspect of reaching out to our customers. We were trying to develop as many sales channels or sales windows as possible so the customers have access to us.”

Wheaton clearly had the wherewithal to diversify and keep the revenue coming in. The company just needed to do a better job of promoting itself and put more emphasis on the quality of service it provided and the advantages that service provided over the competition.

Sell your plan

Kirschner needed to galvanize his nationwide network of 250 agents behind this renewed commitment to quality and service so that Wheaton could sell that package to potential clients.

“We’re letting our service providers and agents know, ‘We’re going to make our brand more powerful through the service offerings we’re making available to you,’” Kirschner says.

He wanted to work with his agents to develop ways to provide even better customer service and address more of their needs. This wouldn’t be a plan that he would just force on people and tell them to go do it. It would have their fingerprints on it, too, giving them ownership in its outcome.

“Let people know that you’re open, that you care and that you want to hear what they have to say,” Kirschner says. “Let them know that you’re not afraid to fail or take chances and you’re not afraid for them to fail.”

His hope, however, was that through thorough discussions with his agency network, the company’s efforts would answer any questions and keep failure from being an issue.

“Usually, when we have a new proposal, we do a good job of stating, ‘What if this happens, what if this happens, and what if this happens? What happens if this doesn’t succeed? What are the ramifications? How much of a risk are we willing to take? Are we OK if we do this and fail?’” Kirschner says. “As long as you have those kinds of discussions and everyone’s voice is being heard and it’s not being ramrodded through, you’ll be OK.”

Kirschner made it a point to seek out those who he knew had resisted change or new ideas in the past. He wanted to know what they thought of the customer service that Wheaton provided.

“Every group is going to have some naysayers,” Kirschner says. “We’ll say, ‘Here’s a proposal. What do you think?’ If there’s a hole in it, they’ll find it. Address the resistance head on.”

You need to recognize the difference between someone who is trying to help you by pointing out concerns and someone who is just trying to be an obstacle to progress. The person who is trying to help can be a big asset to the selling of your plan.

“Are they there to resolve the problem or are they there to create a problem?” Kirschner says. “You’re going to know that by having face-to-face conversations with them. The most important thing is to look at it from their eyes, not your eyes. Find out why they are so passionately disagreeing with you.”

Fortunately, at Wheaton, most of Kirschner’s team jumped right on board with the effort to reel in more customers through its renewed focus on great service.

“You have to listen to the people that are working directly with the customers on a day-to-day basis,” Kirschner says. “You have to have a dialogue where it’s open and they can come to you and have a two-way conversation about what are the needs of your customer.”

Don’t get too hung up on titles and territories and who is responsible for what when you’re having these kinds of discussions. If someone has a great idea, don’t spend a lot of time worrying about where it came from.

“Don’t pigeonhole anybody or put them in a silo,” Kirschner says. “Everybody has an equal voice at the table. And as the CEO, you speak last. Your job is to listen more than it is to talk. You just create that environment where it’s supportive.”

Don’t try to do it all

If you have a hard time gaining trust when you launch a new initiative, it could be because you try to do it all yourself. Kirschner made a concerted effort to constantly get other people involved in his plan to bolster customer service at Wheaton.

“You have to have the support team in place and peers in place to support the change,” Kirschner says. “You have to have transparency. I don’t think you can think about change if you don’t have that relationship or that trust that has to be there in order to implement the change.”

Delegation is one of the best ways to engender trust. Kirschner’s challenge was letting go of his duties from being CFO before he became CEO.

“I had to be able to delegate as quickly as possible,” Kirschner says.

But it doesn’t have to be that kind of delegation to be effective.

“Put simply, if somebody else is capable of doing it, let them do it,” Kirschner says. “They’ll have more time and they’ll do a better job at it. What it also does is develop an individual. People want to be challenged. As long as you surround yourself with the right people, they’ll rise to the challenge. You don’t want people bored in their positions. You want to continuously challenge them.”

Get to know the members of your management team so that you can figure out what buttons to push to get the most use out of them to help your plan succeed.

“Know what drives them,” Kirschner says. “Some individuals may be driven by security. They want a lot of information before they make a decision. Some individuals may be driven by personal rewards. Some may be driven by wanting a lot of change. You have to understand what drives each individual.”

These are the kind of details that help make your business better.

“What I enjoy about that is when I think we have it all figured out, we’ll ask our agents or service providers and they’re going to see things differently,” Kirschner says. “They’ll have a different perspective.”

Analyze your execution

The analysis doesn’t stop when you begin to implement your plan. If you don’t ever follow up or track the success of the execution of your plan, the benefits are going to be tough to realize.

Talk to your customers and see how your employees are faring in carrying out your company’s plan.

“We survey our customers after each and every move,” Kirschner says. “We send them what we call the customer service report. It allows the customer to measure our service from the moment we call them to the time we deliver their shipment. Once we have that, it allows us to get the analytics to determine our level of service as perceived by the customer and not by us. Once you have that, you can see where your strengths and weaknesses are.”

Make sure that you respond to any feedback that you get.

“We’ll call them,” Kirschner says. “That’s what has really surprised a lot of customers. When they didn’t give us the feedback we would have desired, we have a department that will walk through the process and see where we could have done better. You just have to stay in touch with them.”

In other words, if you’re going to have customer surveys, you have to follow up. You need to make those surveys worthwhile and put some effort into it in order to gather feedback from the process.

That’s true for any business, whether you’re helping customers move or you’re manufacturing widgets. You need to know what your customers’ experience is like if you’re going to continue to make that experience as good as possible.

“It’s not as important when you meet with them that you explain your offerings and what you’re doing as much as you look to understand their business,” Kirschner says.

In the moving business, you’re trying to understand what people go through when they are moving. But every customer has his or her own unique challenges and you need to find out what they are.

“What are their pain points? What are they going through?” he says. “You have to understand where they are coming from. What do they need? You just have to keep asking questions as to where they are. If you’re always going to focus on yourself, you’re not going to be successful. If you’re not aware of what’s going on in their industry, you’re going to put yourself at a disadvantage.”

Throughout 2010, Wheaton saw a number of new companies join its network and expand its reach. Kirschner credits the laser focus that his company has put on providing great customer service for that success.

“Any time you do have change that does occur, reflect back and determine why it was successful,” Kirschner says. “Any type of change is possible provided you have the right message and people understand it. As long as the decision is true to your mission statement and true to your customers, you’re ready to go.” <<

How to reach: Wheaton Van Lines Inc., (800) 248-4810 or www.wheatonworldwide.com

The Kirschner file

Mark Kirschner

CEO

Wheaton Van Lines Inc.

Born: Indianapolis

Education: Bachelor of science degree in accounting, Indiana University

What was your very first job?

Delivering the papers for the Indianapolis News. With an evening route, you knew you had to be on time to deliver the papers because they were expecting it. But you also knew if you smiled, you got a bigger tip.

Who has been the biggest influence on who you are today?

My father, Edward Kirschner. He taught me integrity and to be honest. He taught me early on, if you’re going to do a job, do it as best as you can to its highest level. He was a policeman and a very ethical person. He instilled that honesty and integrity to all of us at a very early age. If you do something wrong, admit it. If you make a mistake, own up to it. Give it your best every day.

What is the best advice anyone ever gave you?

My father told me, ‘You won’t know until you try.’ It was the way we were brought up. We were raised to be very independent and self-sufficient.

If you could have a conversation with anyone, whom would it be and why?

When you asked that, two people came to mind. One was my father. I’d have a conversation with my father on a lot of different things that are important to me. And Jesus Christ.

Wednesday, 02 March 2011 11:23

Energize employees around common goals

Mike Jackson was asked to bring some order to Adayana Inc. when he arrived nearly three years ago. The training outsourcing company had grown through numerous acquisitions, and the result was a cultural mishmash that left employees searching for an identity to latch on to.

“People wanted to have more rigor,” says Jackson, the 380-employee company’s president and CEO. “They wanted to understand how to do what we should be doing.”

Jackson began to work collaboratively with employees to develop a corporate framework that would provide everyone with a better sense of identity and purpose.

“I had some perceptions, but you can’t go only on perception,” Jackson says. “You need to validate. So I talked with some folks and just asked them how we could strengthen the company together.”

When you’re seeking feedback from employees, you need to make it personal.

“Don’t just talk with your employees or your leadership team or your direct reports about today’s business and what’s tactical and what’s on your plate,” Jackson says. “You have to ask them where they see both themselves and the company in three to five years. You have to do that regularly.”

If you don’t do this, you end up with the situation that faced Adayana: You have employees doing work without a clear idea of what it means or what it is leading them toward.

Jackson saw desire in his people and he saw energy to succeed. They just needed to know what their leaders wanted them to do to make that happen.

“If part of the aspirational vision for the company is to be a market leader, unpack what that means to individual behaviors,” Jackson says. “It’s about creating a tight linkage between the dreams of your employees and the aspirational vision for the company.”

Give employees a chance to contribute to how you’re going to accomplish your goal to become a market leader. Let them offer opinions on what needs to be done or what’s holding your company back from becoming a market leader.

“When you do that, you’re creating engagement, you’re building inclusion and you’re building ownership,” Jackson says. “‘The CEO is asking us to craft what we should be and what we should do.’ That’s powerful stuff. If you follow that activity with engaging others to actually build a tactical action plan to implement the strategy and initiatives that come from the senior leadership team, all of a sudden, you have a fully engaged team of employees who feel they are making a contribution to not only the what but the how. That’s where most employees live, anyway, in the how.”

It’s about putting an idea out there, such as becoming a market leader and letting your people play an important part in figuring out how to get there.

“You have to pass along that accountability and all the things that go with that,” Jackson says. “It’s about trusting people to pull it forward.”

Trust your people to carry some of the weight while you monitor their progress, break down barriers and offer assistance to help them achieve the big-picture goal. Show them that what they are doing is important.

“If I never ask how you are doing on progress toward that goal, you’re likely to believe that maybe it really wasn’t that important to begin with and it’s certainly not very important now,” Jackson says. “It’s the idea of creating feedback systems and making sure people are in the know about progress. If you don’t do that, you’re not going to empower anybody. You’re going to basically demotivate them because of inattention.”

Adayana has made progress toward becoming a market leader, evidenced by the growth in revenue from $20.8 million in fiscal 2007 to $44.2 million in fiscal 2009.

“There’s no magic. What there is,” Jackson says, “is execution.”

How to reach: Adayana Inc., (317) 415-0500 or www.adayana.com

Get moving

Mike Jackson could hear the clock ticking as he assessed what was happening at Adayana Inc. Employees were part of the plan, offering him their feedback, but they also were eager to see results.

“You, as a CEO, have to act quickly to deal with the things that are patently ineffective in your company,” says Jackson, the 380-employee training outsourcing company’s president and CEO. “Fix those. If you don’t do that, after a period of time, employees will run out of the hopeful energy that you might have brought to them in the first few days, weeks or months you were walking around asking them how things were and what you should do to improve the company. You have to act.”

That doesn’t mean you should panic and make rash decisions.

“I’m saying once you get to an 80 percent confidence level that this is the right thing to do, do it,” Jackson says. “You actually put together a set of, ‘Here are the things that need to be done on a department-by-department and division-by-division basis.’ Make that part of the accountability of the respective manager so that he or she is able to see that you mean business.”

Howard Wander likes to joke about his wife’s claim that he makes at least one wrong move every single day. He doesn’t question her opinion, and in fact, he is comfortable adding that his partners on the management committee at Fort Lauderdale-based Kelley Kronenberg feel the same way about him.

“I think that’s a sign of strength to be able to say that you’re wrong and admit that you’re wrong,” says Wander, one of the managing partners at the 140-employee law firm. “That’s a key essential to leadership. Nobody is right all the time.”

But it takes more than humility to succeed in today’s business world. Wander credits his ability to work with his management team and work through their collective mistakes for the firm’s growth over the years from two offices and seven lawyers to eight offices and more than 50 lawyers.

“Part of it is questioning each other,” Wander says. “We are all different, and we come from different backgrounds, and we approach things differently. But we have a shared vision of our future. Sometimes we think it’s a different road to get where we want to be and we don’t always agree on that, but we have that shared vision of what we want to obtain.”

The key to coming up with a good model, where you sometimes agree and sometimes disagree, but you ultimately get to the same place, is constant communication.

“If I have something that I don’t agree with with one of my partners that I think is important, I’ll contact him, and we’ll talk about it,” Wander says. “Communicate and get it off your chest. You can’t let things build up. That’s a recipe for disaster. We try to be very open with each other and talk things out, should there be a question.”

For instance, if you’re in a management team meeting and someone else on the team says something you don’t like, don’t just bury your disagreement.

“There are times I may call one of my other partners afterward and say, ‘Hey, you made that comment about something. Let’s talk about that a little bit,’” Wander says. “There are times I’ll say, ‘You know what, you were right. I was wrong.’ That’s the opportunity for growth.”

You need to make yourself available for these conversations to take place. For Wander, that means being available on his cell phone or at his home whenever someone needs to talk to him. It may not be convenient, but it comes with the responsibility of being the leader of your business.

“Someone asks me a question, they want it now,” Wander says. “They don’t want to hear about it two days from now.”

When you make yourself available and open your literal and figurative doors to your people and your clients, you encourage your employees to do the same.

“The important part is to have everybody on staff sharing that vision and sharing that passion that I have and that others have to attain that vision,” Wander says. “They are part of that team that is going to help make that vision occur.”

Wander says the reason the firm has been able to grow is that everyone is committed to finding solutions to problems quickly and effectively resolving differences so that business can move forward.

“I need those people to have the confidence in me and the other partners on the management committee that we’re making good decisions and we’re all on the same page and we’re all working toward something together,” Wander says.

How to reach: Kelley, Kronenberg, Gilmartin, Fichtel, Wander, Bamdas, Eskalyo & Dunbrack P.A., (561) 684-5956 or www.kelleykronenberg.com

Use your resources

Do you talk to your current employees when you’re looking to make a hire? If you don’t, you might be making a big mistake. Your staff can be a great resource for finding people who will be a great fit in your organization.

“I need my key people to find new key people,” says Howard Wander, one of the managing partners at the 140-employee Kelley Kronenberg. “They are recommending people to me who they know fit our image and fit our mindset of who would be a successful person in our firm. Occasionally, we do go out, but it’s hard because you don’t know who you are getting and if they are going to share the passion and vision of what you’re trying to attain. It starts with talking to your people and letting them bring people to you.”

One of the essential parts of any successful business is continuity. As people advance or leave your organizations, others need to be able to step up and fill their roles. When you’re working with your employees to find new people, that continuity is much easier to maintain.

“You’re only as good as the guy next to you or the support staff you have,” Wander says. “If there is a weak link next to you, the whole team falls.”

Charley Shin did have a moment when he wondered if Charley’s Grilled Subs was going to make it. It was actually a very long moment, one that lasted about 10 years, as he recalls.

“I underestimated the time and the cost of the growth that would take place,” Shin says. “I started out with a business plan that we would break even when we had about 20 stores. When we hit the 20 stores, we were still losing money.”

Shin kept revising his goal to finally become profitable for 30 stores, then 50 stores and then 70 stores. At each step, he was still losing money.

“It wasn’t until we had about 100 stores that we were breaking even and making some money,” Shin says. “It was over about a 10-year period. It was a very intense, grueling, excruciating 10 years.”

There was also the fact that his mother had let him borrow from her life savings to start this business. That only added to the stress Shin was feeling about his business.

“I wanted to give up,” Shin says. “I really did want to quit. But I come from a Christian background. I just knew this was something I have to do even though I wanted to quit.”

It’s that kind of persistence and commitment that helped Shin stick with it through the tough times and enabled him to finally reap the fruits of all his labor. Today, Charley’s has more than 400 units in 44 states and 15 countries around the world.

Shin says the key to getting through tough times, whether you’re just starting a business or trying to manage an established company through a challenge, is your mindset and the way you present yourself to your people.

“I don’t think I ever gave an indication that I was going to quit,” says Shin, the 5,500-employee company’s founder, president and CEO. “Think about the reason why you’re doing it. Each person may have a different reason.”

Shin’s reason was to build a successful business that provided a great product to customers and provided a great and fulfilling place to work for employees.

“We have people who are investing their life savings believing in us and believing that this concept will do well,” Shin says. “In order to fulfill our promise, we just have to continually invest within our infrastructure and with our personnel and increase our expertise. It was a really trying and difficult 10 years. But looking back, I don’t believe I’d be where I am without those 10 precious years that put us through the fire and gave us a ton of experience.”

Charley’s, which is legally known as GOSH Enterprises Inc., took in $220 million in 2009 revenue. That’s a long way from his take at that very first store on the campus of The Ohio State University back in 1986. As he has grown the company, Shin has learned how to find the right people and how to help them get through that inevitable first hurdle.

Find the right people

Shin has interviewed a lot of people over the years to assess their ability to lead one of his franchise locations. He’s learned that you can learn a lot about the attributes and personality traits of an individual from your first impression.

“Most people do not come in with a disguise,” Shin says. “Even someone who comes in with that intent, after a while, it all becomes disclosed.”

In other words, don’t make an interview harder than it needs to be.

“Our interview usually lasts a whole hour,” Shin says. “As we sit in the room, we tend to have a pretty good gauge on what type of person that is. We’ll just ask questions as to their background. What you have done before? Tell me about your background and your family. Why are you here? How do you like to spend your time? Through asking those questions, we get a fairly good read on the person, and we can tell if they’re just looking for a get-rich-quick scheme or they are genuine and really a hardworking person.”

If the person is more interested in the financials than your values and philosophies in leading a business, that should definitely be a red flag.

But it’s not only this person’s skills and personality that you’re measuring. You should also be thinking about how this person would fit in your company and how he or she would handle leading one of your business units.

This becomes particularly important for Shin when he’s assessing someone’s ability to be a franchisee in his company.

“It’s their business, but they are not in business for themselves,” Shin says. “They are in business with our brand. They are an extension of our brand and they have to represent us. We have a fairly clear expectation of what it is that they need to do.”

When you have that expectation in mind at the start and know what a good candidate looks like, you’ll have a lot more success judging whether someone is right for your business.

“Don’t get blinded by money,” Shin says. “Don’t focus on growth at all. I really do believe the business will grow out of healthiness rather than growth per se. Pick the right people because the people are going to be 80 percent of what’s going to bring you success.”

So what if you get into a situation where you just can’t seem to find the right person to fill the position? Shin says resist the urge to just plug anyone in and wait it out.

“I would really focus on picking the right people even though there may be fewer of them,” says the man who waited 10 years for his business to really take off like he wanted it to. “I don’t want to be a leader where I look at everyone and say, ‘This is the way to go. Let’s go together.’ Each of them has their own job to do or their assignment to accomplish and that’s how we’re going to grow.”

You need someone who offers examples of projects they’ve led from the start and talks about how they overcame challenges to make that project a success. Otherwise, you’ll constantly have to be holding their hand.

“Our franchisee has to be a person who is committed to serve people,” Shin says. “They have to be outgoing and have a good nature about themselves. A very critical success criteria is people who are courageous and bold and who will step out of their comfort zone. If I believe the person has that quality of wanting to serve and is a bold and courageous type, that is really my person of choice.”

It’s a level of patience to find this type of person that has helped Shin successfully grow his business.

“I’m really upfront with them,” Shin says. “I tell them, ‘I think we have a great concept and we’re going to be successful. I don’t know that 100 percent, but we have a very good chance and God willing, we will be successful and we’ll all reap the benefit.’ That’s the underlying premise.”

Don’t focus on the details

When Shin is working with a new franchisee, the first thing he teaches them is not how to make a Philly Cheesesteak, an order of Cheddar, Ranch & Bacon Fries or a kiwi lemonade.

“That will come, but that is not the most important thing,” Shin says. “We want to teach them about why you are in business. I think a story works better than anything else. We just share how we do our daily business or our daily life. We tell them how we operate and how we work.”

You should be working with the leaders of your business units to develop their skills managing the people they’ll be hiring to lead.

If you’re worrying about whether the person can handle some aspect of what your business does, whether it’s making a sandwich or producing a part in the machine shop, you probably haven’t chosen the right person.

“What I need to do is start training the basics of my philosophy,” Shin says. “Why is it important to serve people? Why is it important to bring your employees in as part of the family? We just start teaching from there.”

You need to make sure this person can handle problems on his or her team. You also need to have confidence that this team will be led in a way similar to how you would do it if you were there running things on your own. It’s why you focus so much on the person and his or her personality in the interview process.

“That’s where the expectation really needs to come,” Shin says. “Without a clear set of guidelines of what it is they need to do and ... the jobs they need to perform, just the feeling of love and family doesn’t cut it.”

A leader’s skills at managing people are just as important, if not more important than his or her skill at whatever it is your company does.

“Facing a problem is just one of those things that makes a leader a leader,” Shin says.

Make sure you’ve communicated your expectations to the individual about all the job entails and given him or her an opportunity to express concerns or ask questions. If you’re having trouble with a leader at this stage, it’s probably another sign you made a bad choice.

“I don’t believe we can change a person,” Shin says. “They come as they are. I think I could have a great impact changing people, but I don’t want to fool myself. If they have certain traits, that’s the way they are going to be.”

Expect a few problems

Shin likes the leadership training program he has developed over the years for Charley’s. He takes the approach that training gradually is the best way to go.

“If we’re trying to download a lot of information in a short period of time, the brain only has so much capability for what it can absorb,” Shin says. “It will absorb a certain amount of data and the rest will just stray.”

Perhaps that explains why even great leaders typically have a few hiccups along the road to that greatness.

“Real expertise will not really come until they are fully spending lots of time at the store,” Shin says. “Then they start to get a better grasp. … People forget what they are taught in the training time. It’s not rare to see our team go into a franchise store to give them a shot in the arm.”

You’re fighting human nature and that’s a pretty tough opponent to defeat. Most people, especially the ones with the leadership gene, like to believe that they can do it on their own. It doesn’t really matter what the “it” is.

“Struggling franchisees typically think they can do something better than they are taught,” Shin says. “They are trying to find their way of solving the problem or they start to deviate from the protocol. When the systems are not fully utilized, a problem starts to crop up. I think it’s just human nature by some people.”

So how do you work through the problem quickly? Start out by sharing examples of how doing things the way they were taught lead to successful outcomes.

“They just have to see the standards and how much better the standard is,” Shin says.

And you just have to remain patient.

“I am here not for my own good only, but I’m here for the good of the person in front of me,” Shin says. “That has to be conveyed.”

How to reach: Charley’s Grilled Subs, (800) 437-8325 or www.charleys.com

The Shin file

Charley Shin

founder, president and CEO

Charley's Grilled Subs

Born: Seoul, South Korea.

Education: Business degree, The Ohio State University

What was your first job?

Washing dishes at a Japanese steakhouse when I was 14. It was good, but when I quit that job, I knew I didn’t want to be a dishwasher for the rest of my life. I didn’t want people to tell me what to do all day.

Whom do you admire most in business?

Truett Cathy, the founder of Chick-fil-A. He is a phenomenal businessman and such a strong, principle-driven man. I admire him a lot.

What’s the best advice anyone has ever given you?

Keep your books straight. There will be a lot of temptation because you deal with cash. Keep your books straight and just pay your taxes and everything will be OK.

How Charley’s Grilled Subs came to be: Charley was taking a family vacation when a missed exit brought him to South Philadelphia. His first encounter with a local delicacy, a Philly Cheesesteak, was love at first bite. Totally hooked, he brought his findings back home to Columbus and began testing recipes on his college buddies.

After perfecting the recipe, Charley’s fortune took another turn for the best. His mother let him borrow from her life savings to open the first Charley’s on The Ohio State University campus. The 450-square-foot, 16-seat restaurant featuring Philly steak subs, gourmet fries and natural lemonade was an instant hit.

To keep up with customer demand, Charley began franchising in 1991. Locations began popping up all over the world, including mall food courts, strip centers, airports, and even Army and Air Force bases. The company now has more than 400 locations around the world.

Tuesday, 01 March 2011 13:11

Don't roll over; control expenses

Al Bell saw the future for Moochie & Co,. and it looked quite promising. It was 2008 and the pet supply retailer was about to close a transaction with a private equity firm that would have made available significant growth capital.

And then suddenly, the opportunity was gone.

“Due to the stock market and economic conditions, they walked away,” says Bell, the 102-employee company’s CEO. “They put us in a difficult situation with our lender.”

At the time, Bell was part-owner of the business. He owned 35 percent, a partner owned 35 percent and seven other investors owned the remaining 30 percent. Bell knew his business had growth potential, so he made a bold move to basically go it alone. He felt it was the best path to realize the potential he saw.

“I’m a strong believer in the company and our niche in retail and the growth of the pet industry,” Bell says. “That led me to essentially acquire full ownership of the company, renegotiate our store leases and really focus on cutting expenses.”

Expense reduction was critical. Bell wanted to take things back to square one and be a whole lot more careful about how money was being spent.

“Instead of accepting the historical expense model as a given, we built our expense structure from the ground up and really challenged and explored every expense,” Bell says. “We also asked the entire organization to accept the challenge and bring forward their best ideas, and we acted upon the better ones.”

When looking at expenses, you need to separate fixed costs from variable costs.

“We looked at every variable expense and we said, ‘Is there a way to control that?’” Bell says. “In our case, we’re looking at the percentage of revenue spent on a given expense at a particular store. So if utilities were excessive at a given store, you went in and tried to discover why that was and if there were opportunities to reduce it.”

You also need to get your employees involved to make any initiative effective.

“I very clearly set out specific objectives for the company, one of which was expense reduction,” Bell says. “It was a detailed review of the full-year profit and loss statement on a unit-by-unit basis and then a line-by-line basis. You begin to decide what are truly variable expenses that can be attacked as compared to fixed expenses that you have to accept.”

Bell did not hold back when explaining the importance of this investigation into expenses.

“One of the rallying cries I shared with the group is, ‘You may have bigger jobs at some point in your life, but you’ll never have a more important job than you have right now. We’re talking about the survival and potential success of a small company of which you are an integral part,’” Bell says. “I believe the team really embraced the opportunity to play a vital role.”

The result of Bell’s effort was a new business model that everyone at Moochie & Co. strongly believed in.

“We started with very modest revenue increase expectations and then examined every expense line carefully,” Bell says. “As the leader of the business, it fell to me to make the difficult decisions.”

The tough choice was two stores in Detroit had unacceptable occupancy costs and needed to be closed. But that proved to be only a bump in the road as the company soon was in a position to begin growing again as the economy began to recover.

The company had gone from 10 stores to eight, but it now has 12 stores and 20 Mini-Moochies at pet boarding resorts and veterinary clinics.

“Our major expenses have been brought down to affordable levels, and we have a culture within the company of challenging every expense and trying to reduce every dollar spent,” Bell says.

How to reach: Moochie & Co., (877) 666-2443 or www.moochieandco.com

Find your leaders

Al Bell wanted to reduce expenses at Moochie & Co., so he needed to find out who was ready to march with him on his quest.

“I’ve always believed in management that you need to articulate the goals, share as much information as is reasonably possible and then listen and be receptive to suggestions,” says Bell, CEO at the pet supply retailer. “It is a process that allows you to really learn who is with you and who is not.”

When you are open about a plan and forthcoming with details, you’ll be able to see who is buying in to the plan and who isn’t interested.

“Be brief, be clear and be consistent,” Bell says of your communication strategy. “You ask a lot of questions and give encouraging responses when people contribute.”

When you’re having a meeting, give people a clear sense about what it’s going to be about.

“We actually prepared and promoted the meeting for two months prior and gave people topics and an agenda and really tried to set the tone that it was going to be participatory and not a monologue,” Bell says.

Tuesday, 22 February 2011 15:05

Be patient

This is a cautionary tale about the danger of going to market with a product before you’re truly ready to handle the crush of consumer demand. It may sound like a dream come true in these tough economic times, but it was nearly too much for Ron Vigdor and his 70 employees.

It all began about four years ago when concern was growing about Bisphenol A, also known as BPA. The presence of this substance in plastics was creating concern among young parents who worried that their babies may be exposed to it. So Vigdor developed a line of products that were guaranteed not to contain any BPA.

The response was overwhelming.

“We saw a tremendous spike and upsurge in demand for our product,” says Vigdor, founder, president and CEO of BornFree Inc. “So much so, that we probably had to work 13 to 15 hours a day literally manufacturing the product and flying it internationally to the United States for next-day delivery.”

When you have a product that everybody wants, you have a choice to make: Spend what you need to in order to meet the demand or wait until you’re sure you’re ready to handle it. The problem, of course, is the demand may not be there anymore if you decide to wait.

“You have to do more or less a cost analysis of what it’s going to cost you versus what kind of market share or gain you’re going to receive,” Vigdor says. “We spent millions of dollars getting the product to the shelves.”

Vigdor was confident that revenue would make up for the costs incurred in the beginning.

“Our manufacturing capability was roughly 1/10 of our current manufacturing capability,” Vigdor says. “Everything was exponentially anywhere from two times to 10 times the demand or needs we originally envisioned in our business plan. At the end of the day, it was a smart decision. Financially, I don’t know if it was the smartest decision, because we had to spend so much money.”

The decision to try to meet the demand created a high level of stress for Vigdor and his employees for a period of about six to eight months.

“We had to make sure we could try to please as many retailers as possible,” Vigdor says. “And try to gain as much market share. When you don’t have enough supply and great demand, that’s probably the most amount of stress anyone could have trying to combat that.”

Vigdor was able to work through the stress and meet demand, but there were risks involved. And that’s the choice you have to make when faced with the same situation.

“Do you come out and release a product when you have 50 but demand is 250?” Vigdor says. “Or, I can manufacture 250, but the product is 95 percent great and not 100 percent great. Do you go to market with that? You should always go to market when your product is 110 percent. You always want to be on top of it, and you always want to make sure you have the best product available.”

Vigdor’s advice, despite his success, is to take the patient approach.

“Don’t come out to market before you’re ready,” Vigdor says. “You’ll just end up with egg on your face. If you’re not ready, it won’t do as well as you want. If you have a great product but your manufacturing is not able to ramp up to scale, you’re going to upset some customers because you can only deliver to a handful of customers.”

How to reach: BornFree Inc., (877) 999-2676 or www.newbornfree.com

Keep your cool

Ron Vigdor thought he deserved one deal and his buyer did not feel that way. At one of the most stressful times of Vigdor’s life, the result was not good.

“I exploded,” says Vigdor, founder, president and CEO at BornFree Inc. “I stuck my foot in my mouth. I said, ‘You’re only the stepping stool for me getting bigger and better.’ That did not go well with the buyer.”

You need to recognize those times when your patience is thin and you’re prone to losing your cool, says the leader of the 70-employee company.

“If you are in a position in which you believe you are going to be confrontational, even if you think the customer is wrong, the best thing to do is step away from the actual problem,” Vigdor says. “Give it some time and rethink it.”

If you do lose your temper in front of your people, use it as a lesson to show them that you’re not perfect either.

“Teaching humility shows all people that you are human other than just being a tough CEO who says it’s my way or the highway,” Vigdor says. “It allows you to have a more personable connection with your employees as well as your vendors and manufacturers.”

Tuesday, 22 February 2011 14:50

Sowing the seeds

Walter Yager could see what was happening, and he knew he had to stop it. He was becoming a micromanager, a behavioral change that was hurting what he and his business partner, Jose Sanchez, had built at Alpine Fresh Inc.

“There was a specific instance where I got into a disagreement with one of the sales staff over a particular sale and I realized, ‘You know what, that’s not my role,” says Yager, the 4,000-employee fruit and vegetable grower’s co-founder and CEO. “That’s not what I’m here for. I need to take a step back.’”

Yager removed himself from “The Situation Room,” the 3,000-square-foot nerve center that housed most of the key leaders at Alpine Fresh. He was then promptly reminded that there was a good reason why he had hired these people to fill key positions in the company.

“I find they handle 90 percent of the things just as good as if I were there dealing with it myself,” Yager says. “The other 10 percent, they walk it over to me and we’ll discuss it. As a CEO, you have to be really careful not to micromanage because it really limits your ability to grow. It kind of stifles you and you’re also stifling the people you’ve hired to help you grow.”

Yager had rediscovered the value of his people. They help keep him up to date on the status of his farming locations across the globe. They help him gauge the potential benefits and risks of new opportunities that may come about. And they help him prepare for the unexpected challenges that are always looming when you’re in the agricultural business.

Yager needed to build solid channels of communication so that his top leaders would be ready for all of these things and not playing catch-up or asking a lot of questions because they hadn’t been kept in the loop.

Here are some of the ways he cleared these channels to help Alpine Fresh always be ready for the next challenge.

Set the tone

Asparagus is one of four items that Alpine Fresh is known for selling, along with berries, grape tomatoes and mangoes. When a change was made several years ago to the sanitary requirements to import products into the United States, asparagus was affected and Alpine Fresh had to respond.

“There were different vital sanitary requirements to import the product that significantly affected the quality,” Yager says. “It was a big disruption at the time. It was being able to adapt to that change and being able to decide what logistics you were going to use to sell a quality product. We had to make some quick changes to adapt and survive and thrive in that market.”

Whether you like it or not, you’re a role model for your people. Your employees and those on your leadership team look to you for cues on how to act and how to respond to things that happen in your business.

“If you show patience and don’t panic, everybody around you will have the same feeling,” Yager says. “If the leader panics and is erratic, then the people around you are going to get nervous. What I try to communicate is that there is a solution to every problem.”

Yager has grown used to dealing with sudden changes and being forced into a position where he has to respond quickly. But that doesn’t mean it’s always easy.

“We’re dealing with perishable commodities,” Yager says. “Your factors are changing almost minute by minute. You may have a vision of how you want things to go, and all of a sudden, it changes because climates are changing in certain areas of the world or demand curves change or political situations change. It’s difficult when at any given moment, I know what my vision is, but it can change. Trying to offer a stable vision is the most difficult part.”

The key for you is to reinforce a can-do spirit. Encourage and recognize those individuals who offer solutions to problems over those who are content to wait for you to provide a solution. Give those people a real chance to be part of the solution and to feel like they can truly make a difference for your business.

“I tend to talk more to people that are part of the solution,” Yager says. “They are problem solvers on their own and that tells me they are thinking on their own and I value their judgment. They are not afraid to make a decision. They are not afraid to think.”

Again, it’s your reaction to a problem that will go a long way toward determining how your employees respond to it. Of course, there may be times where you don’t even need to respond at all.

“What type of problem is it?” Yager says. “Is it a spot problem or is it a systemic problem? If it’s a spot problem, then I would expect it to already be fixed and be done with it. If it’s a systemic problem, I would look at what we’re doing wrong that is causing this problem.”

Maybe, in the case of the asparagus situation, you haven’t done anything wrong. Whether that’s true or even if it is a problem that you caused, you need to keep your cool.

“There isn’t a problem that can’t be solved,” Yager says. “We just have to think about it and think it through and we’ll find the solution for it. There is nothing, short of the sun not shining, that is going to put an end to our existence. We just have to keep thinking and keep adapting.”

Engage through goals

Yager is not a big believer in burning the midnight oil to get the job done. Rather than praise an employee for doing so, he would more likely wonder why the employee wasn’t able to complete the task during regular work hours.

One of the ways you can help employees prioritize their workload is to give them a means to set and pursue goals. It provides a venue to discuss what they are doing and gives them a chance to feel like they’re making progress in their work.

“What we’re trying to inspire out of them is the thought process and how they view themselves and how they view their role in the company,” Yager says.

One of the keys to making the goal-setting process work is to make sure the goals are able to be objectively measured.

“We’re trying to get more eco-friendly with paperwork reduction,” Yager says. “So one of the goals for somebody is we want to have it where all the documents are electronic. We need to get an electronic scanning system so we can scan everything and reduce the amount of paperwork. So that was one of their major goals.

“It has to be something that you can objectively measure whether they did it or didn’t do it. You don’t want it to be subjective, because then it’s going to be a gray area and they’re going to argue that they did it and you may argue that they didn’t do it. Make sure that they keep it objective.”

Employees should have someone to meet with and review the goals they’ve come up with. It’s not that you’re trying to censor their goals. You’re just trying to make sure they are helping both the employee and the company.

“The supervisor will review it, and depending on the employee, I’ll review some of them,” Yager says. “There might be a little back and forth where I get back to them and say, ‘Listen, this one is good. This one isn’t good. We need to look at something a little different.’ It may take a month before you come to a consensus.”

Make sure both the supervisor and the employee get a copy of the goals. Monitor the goals throughout the year to check on the employee’s progress toward achieving them.

“At the end of the year, we’ll whip it out and say, ‘Hey, you did it or you didn’t do it,’” Yager says. “The key is you have to be objective. It can’t be, ‘I want to increase sales.’ It could be, if I was one of the salesmen, ‘I want to get X customer to start contracting one of the items that he is not currently buying.’ It has to be something that anybody can measure objectively.

“You really find how people view themselves in the company and how lost some people are and how focused other people are. By doing that, you’re helping them to get focused on what you want them to do. But it’s coming from them, so they’re clear on what they want to do.”

Yager believes there is also benefit in giving employees personal goals to pursue through their work.

“A friend of mine in the industry, he told me about a book that he wrote,” Yager says. “The gist of it was that it was a cleaning company with a tremendous turnover problem. You can imagine a cleaning company. People don’t want to be in the cleaning business for the rest of their lives. So they hired this business guru to figure out how to prevent people from leaving. To make a long story short, they went in and they interviewed the employees and they set this program: ‘What were the employees goals and dreams? What did they want to do in life?’

“Obviously, you have to be realistic. My dream in life is to have a G5 and a 100-foot yacht, but I have to be realistic. You try to get them to have a realistic goal. How can we as a company help you achieve it? It’s a personal goal. It’s not a company goal. I want to get a new car in a year. I want to be able to buy a house. Whatever it is they want to do, you set out a plan. This is how we’re going to help you achieve your goal. As a consequence of that, their turnover rate went to zero because everybody felt better about where they stood and where they were headed in life.”

One of the results of this goal-setting process at Alpine Fresh has been a clearer identity of purpose for employees.

“People are working toward their goals,” Yager says. “They are not working toward them every day, but you have a year.”

The benefit of giving employees goals to pursue has been most clearly evident at the middle level of the company.

“At the top level, people are at the top level for a reason,” Yager says. “At the midlevel, they have a better understanding of what their role is in the company. Those are the people that can make a difference. A great quarterback needs linemen to protect him. Those are the people doing that for you.”

How to reach: Alpine Fresh Inc., (800) 292-8777 or www.alpinefresh.com

The Yager file

Walter Yager

Co-founder and CEO

Alpine Fresh Inc.

Born: San Francisco, Calif.

Education: Bachelor degree, finance, University of Florida

Who has been the most influential person in your life?

Jesus Christ. He’s a guiding light in trying to do the right thing. Our director of sales is John Lyons. Years ago, when he was with us, we were relatively new, and we were having some logistical issues. He came to me and he said, ‘We have a problem. We don’t have any product, and I don’t know what to tell the customer. What should I tell the customer?’ And I said, ‘Tell them the truth.’ He looked at me like I was talking Chinese. ‘What do you mean? In business, you tell the truth?’ (Jesus is) just a guiding principle to try to do the best we can and try to be as truthful as we can in what we’re doing.

What’s the best advice anyone has ever given you?

One of our first bankers who we went to get financing from to work on this project, he said there will always be another deal of a lifetime.

We argued that there wasn’t and that this was the deal we had to do. Of course, we did it and lost money at it. Usually, when you lose money is when you learn your best lessons. You tend to not listen when things are going well. We didn’t learn it right then and there. It may be a deal of a lifetime that you pass up on. But there will always be another one.

Tuesday, 22 February 2011 14:33

Plan green

Jerome Webber approached the effort to green the vehicle fleet at AT&T Inc. just as he would any other business initiative.

“You have to learn before you leap,” says Webber, vice president of fleet operations in St. Louis for the Dallas-based telecommunications company. “If you have a simple fleet and all it is is several hundred passenger cars, then it’s probably pretty simple. But for most of the large commercial fleets, most of them have a somewhat diverse fleet that spans across the nation. Learn what works best for your fleet.”

AT&T began with a pilot project in 2008, placing about 100 alternative fuel vehicles in different departments and different locations across the company. The effort gained some traction and received a commitment from Chairman, President and CEO Randall Stephenson to spend about $565 million over the next 10 years to green the rest of the company’s fleet of nearly 76,000 vehicles.

“The commitment came from the top,” Webber says. “We did our work making sure our key stakeholders understood the success of the pilot we did in 2008.”

The lesson is that even with a project that attracts attention like an effort to go green, you have to take a methodical approach and look at how to properly and successfully incorporate it into your organization.

“It’s good to have some guiding principles,” Webber says. “Understand what it is that you are trying to do. Whatever it is you’re trying to do, you need to make sure you stay on task with driving your activities toward that particular set of guiding principles.”

Take the time to talk to your people and study the numbers so that you can come up with a plan that everybody feels good about and addresses any concerns that may exist.

“Give them a, ‘What’s in it for me?’” Webber says. “We have to make sure we connect the dots for them. How does this work for them? What impact does it have for them? We spend some time always making sure we educate them as to the effect it has on the overall business of AT&T.”

For AT&T, Webber focused on the savings that could be accrued through better fuel efficiency.

“A lot of the technologies we’re deploying have anywhere from a 30 percent to 50 percent impact on their operating costs,” Webber says. “That’s huge for a lot of these department heads that want to understand what does it do for them other than just say, ‘AT&T is greening their fleet.’”

But he also used the program to encourage employees in the company to alter the way they drive when they’re out on the road.

“We kicked off in 2008 a national anti-idling program that basically says, ‘Don’t idle,’” Webber says. “Employees that hear those kinds of things and see that a company of our size and stature is taking those kinds of steps to ensure that we are doing the right things from the standpoint of sustainability, they buy in to that.”

It’s OK to toot your own horn and talk about the good things that your company is doing when that helps boost your image with the general public.

“Customers want to know that they are dealing with a responsible and conscientious company,” Webber says. “When our vehicles are riding up and down the street, they are moving billboards. There’s a lot of people that get a chance to see that.”

In order to take advantage of these opportunities, you need to start with a plan.

“Just make sure people understand what you’re doing, what it’s about and how you’re going about it,” Webber says. “Your employees are one of your greatest assets to make this happen.”

How to reach: AT&T Inc., www.att.com

Find a plan that fits you

You can make a difference in the environment even if your business does not have a fleet of thousands of vehicles taking the road each day. That’s the message from Jason Mathers, project manager for the Environmental Defense Fund, a nonprofit organization that helps businesses find solutions to environmental challenges.

“Anything an employee is doing for the company on behalf of the company, the emissions associated with that are part of the environmental footprint,” Mathers says. “Just because you’re not able to easily track something doesn’t mean it doesn’t exist.”

Figure out what impact your company does have in terms of the number of vehicles you put on the road and how much they are used. Encourage your employees to be better drivers by not speeding, idling or hauling unnecessary weight in their vehicles.

“You’re talking about vehicle efficiency and routing, driver behavior and all of these things that have a very significant return on investment,” Mathers says.

If you do have fleets, look at the vehicles you have and whether a more fuel-efficient model could do the same job.

“If you can take a modest step over your entire fleet, that can add up to a significant impact,” Mathers says.

Tuesday, 22 February 2011 14:13

Style points

Ralph Scozzafava had just walked off the plane, but he already knew Furniture Brands International Inc. had a safety problem at one of its factories in Mississippi.

“The guy that picked me up at the airport had some dried blood on his pants from one of our key associates on the production line that had just cut their finger and been brought to the hospital,” Scozzafava says.

Unfortunately, safety wasn’t the only concern for Furniture Brands when Scozzafava arrived in early 2008.

“We were low on cash and we had a pretty big debt balance and really some liquidity questions and concerns,” says Scozzafava, the company’s chairman and CEO. “We also had declining margins and increasing administrative costs to the point where our operating margins were approaching zero and ended up negative very quickly. There were a lot of things happening at the same time, all taking us to a very difficult place.”

But before he could address any of those concerns, he had to get people in the company to realize that there was, in fact, a problem that needed to be addressed. The furniture retailer has 6,500 employees in the United States and 2,000 more employees abroad.

“A lot of folks just thought, ‘Hey, we’re going through a bit of a rough patch,’” Scozzafava says. “If we don’t tell people where we are, in a lot of cases, they just don’t know. So it’s informing. We have a problem here. It’s an issue. We have to change, and we have to change intelligently and quickly.”

It was time for Scozzafava to start talking and get everyone moving on the changes that needed to be made.

Start a dialogue

One of Scozzafava’s most pressing concerns, in addition to making the company safer for employees, was that he needed to generate some cash for Furniture Brands. The company was losing a lot of money.

“We had over $300 million in debt, we had $27 million in cash, and we were losing money on the operating line,” Scozzafava says. “You don’t last long with a business of our scale if you’re doing that. So the big thing for us was to generate cash.”

In this type of situation, you can’t just go to your people and say, ‘Hey, we need to generate more cash.’ You need to show them what they can do as an individual or as a group to help you solve your problem.

“If they don’t have line of sight, ‘What do I need to do to help?’ you’re not going to get the full engagement that you really want to get,” Scozzafava says.

In other words, spare the corporate lingo and Wall Street clichés when you’re speaking to your employees.

“Use words you would use with your family,” Scozzafava says. “Relate some interesting stories. Try to make things sticky if you can. The state of the union address as told with your best formal English doesn’t help. If you use every business cliché in the book, you’re not sincere. If they feel like you’re not sincere, if it feels packaged, they’re not going to listen. It’s not going to be compelling.”

Scozzafava needed to get his employees engaged in coming up with a solution for the company’s cash concerns.

“I tell our folks, ‘I’m going to tell you everything I can as fully and clearly as I can as many times as I need to so you fully understand,’” Scozzafava says. “And then I’m going to ask lots of questions so you can do the same with me. If you have that kind of dialogue, there’s really nothing up anybody’s sleeve.”

It has to be a dialogue, meaning two-way communication, and the best way to achieve that is to get out of your office.

“You’ve got to penetrate the organization,” Scozzafava says. “My direct reports will feed me info that is good, informative and interesting. But if I want to know about the supply chain, I’m going to go down on the factory floor and talk to a lot of people. If I want to know how our retail stores are doing, I’m going to go to retail and I’m going to ask a lot of questions and visit 10 stores.”

And if you want to know about a possible safety concern, you’re going to go visit one of your factories.

“I went on the factory floor and saw what we were doing and how we were operating the equipment and I knew we had a safety problem,” Scozzafava says.

Scozzafava discovered that multiple factors were leading to the cash issues. Safety problems were caused by improper use of equipment and were affecting product quality. This was affecting the margins and ultimately leading to the problem with the cash.

It’s the kind of information that you can only get when you approach your research with an open mind.

“The temptation is I want to bucket things,” Scozzafava says. “I’ve been doing this for 30 years and I’ve observed a situation and the knee-jerk reaction is to say, ‘Oh, that’s just like …’ and name a situation, something you’ve gone through before. When you do that, sometimes you miss it all together. Most of the time, you get it close, but you miss the nuance and you really can’t get a good clear assessment.”

Create accountability

As you begin to generate dialogue and ideas to make your company better, you need to create accountability to make sure that the ideas are investigated and implemented if they turn out to be viable.

Safety was one of Scozzafava’s biggest worries with his business.

“What are the safety ideas?” Scozzafava says. “We’ll put them on a bulletin board. Those ideas have initials next to them. Who gave us the idea? They have a date of when we’re going to evaluate it and get it solved and when we’re going to implement it.”

An idea was raised to install sewing tables in one of the factories that could be raised or lowered to help eliminate repetitive motion injuries.

“When are we getting the tables in?” Scozzafava says. “When is it getting installed? When is it finished? It’s about the idea, evaluating the idea and putting people in place who are accountable. Put their names next to the task and then finish the job.”

When you create ideas or metrics for employees to live by, they need to be ideas that are objective in nature like the sewing tables.

“There are certain things that you can measure very well,” Scozzafava says. “Those are very data-oriented things that you should use as the core of what you measure. The things that become matters of opinion, if you make that a focal point of what you’re doing and lots of people give their points of view, you’re going to struggle. Cut-and-dried measures are always the best.”

Work with each department on what it specializes in and help the department come up with measurable goals that help the company.

“So for example, 2008, we’re here to generate cash,” Scozzafava says. “But we’re also going to work on building our brands, and that’s the work the marketing people will do. We’re also going to work on getting more efficient in our factories. That’s the work the supply chain people will do. You can go down the road. The finance team has to centralize finance and accounting and accounts receivable and accounts payable and credit. That’s the work they have to do. So there’s the singular big goal we’re all working on and then there are pieces within the company that individual groups do to make us better.”

You have to keep pushing the importance of initiatives and making sure accountability is part of all of them.

“You think you’re saying it enough, because you’re thinking about it all the time and you’re talking to your direct reports or your executive team about the same subject all the time,” Scozzafava says. “So that repetition is something you just assume is going through the organization. And it’s not. One of the things I’ve learned is you have to tell them, you have to tell them again, you have to tell them what you told them, you have to ask if they understand it, tell them again, have them repeat it, quiz them.”

So if you think you’ve delivered your message enough after all that, you might want to do it just one more time to be sure.

Show appreciation

When you ask employees to help make your company better and they step up and do just that, you need to show them that you appreciate their efforts. By doing so, you increase the odds that others will follow their lead.

“Good people want to do well,” Scozzafava says. “They want to be part of a winning team. If they see their peers somewhere else within the company performing very well and being recognized and rewarded for that performance, they typically not only want to mirror that, they want to do better. If you get the right people and treat them right and tell them what they need to do and listen to the ideas they have, it’s powerful.”

You can show your appreciation in a number of ways. There are the gift cards and cash bonuses that all employees are grateful to receive. But your ability to show appreciation and gratitude can also go a long way toward helping your business be successful.

“When you have the title, until they meet you, there is always going to be some kind of trepidation,” Scozzafava says. “People want to get it right or they want to make a good impression. If they see you as a regular person, if you get information and you do something positive with it and you’re not looking around trying to zap somebody or catch somebody, pretty soon they understand what your intention is. If it’s a positive intent, they’re going to share more and more with you.”

Scozzafava’s ability to get people to buy in to his effort to turn things around at Furniture Brands is showing some signs of success. While net sales dropped from $1.7 billion in 2008 to $1.2 billion in 2009, the steady loss of cash seems to have been stopped. And safety on the job is better than it’s ever been before.

“It all goes back to the build, win, deliver, grow strategy,” Scozzafava says. “[Employees] know that’s what has taken us from losing $400 million in 2008 to losing over $100 million in 2009 to making money through the first three quarters of [2010]. They know if we stick to that strategy, if we’re aggressive and prudent about how we change, differentiate and do things better, we’re making the problem go away.”

The key is to stay focused on helping your employees help you.

“If you expend your energy and feel spent, you’re probably not doing enough within the organization to drive the kind of morale and camaraderie and high-performance culture you want to create,” Scozzafava says.

How to reach: Furniture Brands International Inc., (314) 863-1100 or www.furniturebrands.com

The Scozzafava file

Ralph Scozzafava

Chairman and CEO

Furniture Brands International Inc.

Born: Danbury, Conn.

What was your first job?

I worked for my dad; he was in the refrigeration business. One guy, one truck. Probably from age 6 to 7, I knew all the tools in the toolbox. I could wire things, run pipes, weld, I could do a lot of stuff. I haven’t done it recently. But give me the stuff, I’m sure it would come back.

What is the best advice you’ve ever received?

Hard work and common sense. My uncle said if you can just master those two things, you’ll be successful in anything. He was an entrepreneur who did very well and had no education and those were the two pieces.

If you could sit down with anyone in the world, past or present, who would it be and why?

I’d like to have dinner with my dad.

Scozzafava on public speaking: I’m real big on bullet points. I’ll have slides without many words on them. I may have a little scrap of paper in my hand that may have 6 or 7 thought starters on it. Each message that I’m trying to get across, I try to have an accompanying story.

I try to make it engaging. I draw people out of the audience a lot. I’ll call people by name and I’ll ask them to stand up and talk about things so that the message is what I’m going to call multi-medium. Part of it’s on the screen, part of it’s in a video, part of it’s a story from Ralph, part of it’s a story from the audience. You have a lot of different stimuli coming at you.