When George S. Dadas was looking to expand Insurance Partners Agency Inc.’s footprint across Northeast Ohio, he identified a number of promising potential acquisitions.
But when it came time to pull the trigger, the president’s decision was ultimately based on culture. “The key to merging two distinct cultures is to first understand the culture of the acquired company,” Dadas says. “I would not go forward with a company that had vastly different cultural differences. You cannot put a round peg into a square hole.”
In the precarious realm of mergers and acquisitions, a clash of cultures can turn any deal into a dud. To avoid such calamity, Dadas says it’s important to spend as much time evaluating the value structure and internal relationships of a potential acquisition as you do studying its strategic plan and 10-K.
To develop this understanding of culture before acquiring Lorain-based Humphrey & Cavagna Insurance Inc. earlier this year, Dadas spent as much time as possible with the company’s management team.
“Spend a lot of time with their key people,” he says. “You talk to them about every aspect of their business. You talk to them about employee issues, about customer issues, about how they present themselves in the marketplace. You get to know their whole history.”
Dadas also suggests reviewing the company’s brochures, promotional materials and especially its customer list.
“You know there’s that saying that birds of a feather flock together,” he says. “You can tell by the makeup of their customers whether there may be a fit or not.”
Once you’ve done your due diligence and signed off on the deal, that doesn’t mean it’s time to forget about culture. On the contrary, managing a successful cultural transition is often the most challenging aspect of any acquisition.
Dadas says one of the best ways to promote a smooth transition is to share your company’s culture with the acquired company with as much passion as you spent gauging theirs.
“We try to set regular times that I and people from my management team will actually spend a day or two a week in the acquired company ... just so we get to know them and they get to know us,” he says. “We share our stories and our history. We share with them our slogans. We share the mission statement with them. We want them to understand the whole company culture.”
In addition to taking some of his 54 employees to them, Dadas also brought the acquired employees to his own offices.
“We’ll have lunch and bring those folks into the office so they can meet their other coworkers from other offices and get to know everybody,” he says.
The company has also implemented a partner program to strengthen those relationships even further.
“When you take over a company, you’re instilling your computers, your automation, your systems and your procedures; it can be overwhelming,” Dadas says. “But if you partner people up one on one, they develop a good friendship, and they don’t have to feel like they have to go to a management person and look like an idiot because they’re not getting it.”
If you practice due diligence on the front end and follow through with as much effort during the transition, you greatly increase your chances for a successful acquisition.
“If you’re doing the right due diligence prior to an acquisition, you’re usually going to be better off because the things that attracted you to them bleed into your company — those new ideas, the new methodologies, the enthusiasm of the people that are looking for great opportunities,” Dadas says. “Those things are all very powerful.”
Reaching the resisters
In his quest to expand Insurance Partners Agency Inc.’s reach across Northeast Ohio, George S. Dadas has over-seen a number of acquisitions.
The company president’s insistence on due diligence during the targeting phase and that attentive follow-up takes place after the acquisition usually result in a smooth transition. Still, there have been a few resistant employees along the way.
“Yes, it happens,” he says. “It’s inevitable.”
To mitigate the negative effect of these resisters, Dadas offers the following suggestions.
- Confront the problem. “What we do is meet with that
person and talk to them about
our observations. We know
they’re struggling, maybe we
see that they’re struggling, or
maybe they don’t have the best
attitude. We’ll let them know
these things, and we’ll let them
know what we really need and
expect from them.”
- Give them time. “If they are really working at it, and you can
see that they’re making
progress, then I’ll keep the
string out a long time.”
- Don’t be afraid to pull the plug. “People need to know that
somebody that is not going to
cooperate, is not going to fit in
and is being destructive to themselves and maybe to others, isn’t
going to survive. If they’re interfering with the process and
interfering with other people’s
progress, then I’ll deal with it
HOW TO REACH: Insurance Partners Agency Inc., (800) 229-5266 or www.inspartners.com
For Tim Ochsenhirt, there’s more to running a business than the bottom line.
Just a few years ago, for example, the chairman and CEO of Roetzel & Andress fired a group of his best attorneys because they weren’t contributing to the firm’s team-based culture.
“We need people that are not only partners, but they actually conduct their lives like they’re a partner,” he says.
Although he does keep his eye on financials the firm posted 2007 revenue of $88 million Ochsenhirt is more concerned with fostering relationships among his 486 employees, and he and his wife have been traveling to each of the firm’s 10 offices to better understand the people who work at them.
“My wife and I are going around and staying at each office for around three weeks,” he says. “We actually live (in each city,) and I get up and go to work every day there.”
Smart Business spoke with Ochsenhirt about the importance of building relationships and how to fight through the gossip and egotism that often stand in their way.
Develop relationships. Humans and the relationships between and among humans are very important. When people know you better, they feel like they’re part of the mission.
I go out to lunch with a couple of the associates two to three throughout the given month that I’m there. Some of them I know. Some of them I don’t know.
I don’t sit there and talk to them about a case or a memo or something like that. I talk to them about their life, their aspirations, what they would like to do and how they’re finding the route so far.
What my wife and I do is, depending on how many associates there are in an office, we invite them to the house. They come to dinner, and I want them to bring their guest or their spouse or whatever the situation might be and meet my wife at the same time.
At that time, I don’t really expect any of us to talk about business. We just talk about whatever people talk about. You learn about people.
By having a relationship and having people know that you care about them and you understand them and you want their direction, it’s easier to affect your decisions, and it’s easier to get consensus behind your decision. It’s just more of a team effort like that.
Eradicate gossip. Just ask everybody to keep their doors open. There shouldn’t be all kinds of secrets around this place.
I say this knowing that some of these personnel issues can obviously be confidential. Personnel decisions are different than just talking about somebody. If you’re talking about them with a view toward making a decision, fine.
If your intention is to hurt feelings, you’re not allowed to talk at all. But if your intention is just to say something for the betterment of the firm that some people might not like, then go for it.
That takes work by everybody in your organization. That does not happen naturally, and it doesn’t happen just because I ask them to.
I might set a good example, but everybody’s got to do it. They just need a little encouragement to head in that direction.
Elicit ideas from the individual. As a rule, I don’t really like committees or committee decisions. I don’t think committees have the backbone to make a hard decision that individuals do.
Usually, when a committee meeting breaks up, the only thing I’m sure of is that the majority of the committee is going to like the decision. Whether or not it’s good for the organization, we’ll see.
I care about the best decision for the firm. Everybody’s got good ideas. Some are expected to have them. Some might not be expected to have them.
When you hear any, you’ve got to say, ‘Thank you,’ and if it’s a good idea, you do something about it.
If people feel that you have listened and considered it and that you’re doing something, it makes them feel better about themselves and their opinions. It encourages them to think about more things.
Pop overinflated egos. To me, the ego’s sort of like a coat. You put on this coat, and you ... act really important. If you think you need an ego to conduct those activities, fine.
Just when you get into this office, take that coat off. You do not wear that coat of ego around this office.
Cockiness and confidence are almost the same. The only thing separating them is the Grand Canyon. Sometimes, people do it because they think they should. It’s sort of a defense mechanism. It’s almost like you’re out in the jungle and you’ve got to act and look tough.
I tell people, ‘You don’t have to be omnipotent. You don’t have to know everything. You don’t have to do everything. You’re allowed to make mistakes. I don’t care about mistakes. We’re all allowed to make mistakes.’
When your ego gets involved, the biggest thing isn’t not making a mistake; it’s not admitting you’ve made a mistake.
Don’t sell your principles. I make some decisions based on money, but I make many decisions based on principles. It makes me sleep better at night.
You should know who you are and then act like who you are. Don’t let it be compromised all the time. You’ve got to stick by your guns.
Having principles also makes life easier because you know who and what you are. If your principles get eroded, pretty soon you’re not exactly sure what you are.
HOW TO REACH: Roetzel & Andress, (330) 376-2700 or www.ralaw.com
Steele Platt will never be successful. At least not by his standards, anyway.
Every time the founder and CEO of Yard House Restaurants LLC reaches another benchmark with his growing chain of upscale-casual eateries, he thinks back to the time when he lost it all.
“I’ve failed in the restaurant business and lost everything,” he says. “I went bankrupt and basically started my career over, coming back and opening the first Yard House with none of my money and then growing it into the company it is now.”
By staying sharp and avoiding complacency in his successes whether that’s what he would label them or not Platt has grown the 20-location restaurant group to include approximately 3,100 full- and part-time workers while posting 2007 revenue of $138 million.
Smart Business spoke with the leader about how to press your reset button and how to step back to get a better look at what’s happening under the hood.Press your reset button. When you start opening two or three or four restaurants, they’re busy and packed, and then you think you’re really successful. ‘I’m going to go play golf,’ and this and that. Everything’s working out great.
The minute I think I’m successful, that’s when I fail.
Instead, you take a different route. I figure the worst can happen every day. You mentally prepare yourself for that. You don’t lean back on your heels. You lean forward and be ready to look at what’s in front of you on a daily basis.
It all starts with your mind. If you can reset your mind every day to create a little bit more humble mind and less ego and more aggressive to success and do it on a daily basis until you retire, then you’re in a better spot. If you kind of relax and say, ‘Things are going great,’ human tendencies tend to relax, and you’re’ not looking for the details that have made you a success in the first place.Step off the pedestal. The first thing to hold (employees) accountable, you have to be honest. If you can’t, then it’s kind of hard to expect others to do it.
As much as we hold our employees accountable, they’re allowed to hold us accountable. It’s really like the hourly employees in our restaurants hold the managers accountable. It’s really like they’re the managers’ boss. If we hear a lot of employees start to chat and chatter about that manager, he gets called into the office. It’s not the other way around.
We’ve created e-mail access directly to the executives that an employee can access that only (we) read. It’s basically being able to connect to your front line and not putting yourself in a position of thinking you’re better or in a different class than them. You should get on their same level and be able to communicate with them.
Most of the employees appreciate that, but you still have friction between a lower-level employee and a CEO. It’s really how the CEO acts. Act humble and approachable and not so stiff and coat-and-tieish. If you can fit in with your employees, then it makes it that much easier for the company to be a whole company.See the forest for the trees. A CEO needs to stand back and not get so involved and watch the people that he has employed really do their jobs. A CEO needs to really look at what the CFO does and what the COO does.
Take a step back, and you’ve really got to let the engine run itself. The CEO shouldn’t be a part of the engine. He should just be the mechanic who oversees the engine, and then makes sure all the parts are working.
If you become one of those parts, then you can’t see the whole engine. The CEO really has to have that macro look.Hire similar apples. One bad apple ruins the barrel, (so) take the time to make sure the person coming in to the barrel is like all the other apples.
In the case of hiring somebody ... that person has to really be interviewed by three or four people. Look at their abilities to make sure they are who they say they are. Put them out on the floor and let them see if they can do what they say they can do.
It’s really having them interviewed by three or four people, going through an incubation period and then going from there.
Every once in awhile, you’re going to have somebody who just doesn’t fit, and you just have to be there in the beginning to say, ‘It’s not going to work out between us,’ and let them go. If you don’t, that’s going to create that cancer that might spread through the company to other areas.Filter communication through a gatekeeper.
Every 30 days, we have a leadership exchange where all our key people meet. They share all of their leadership skills to one another, and hopefully, the good stuff rubs off on people, and we expose the bad things and make the group as a whole better.
There’s a lot of communication [during those meetings]. We have a gatekeeper who’s the vice president. Anything that anybody wants to talk about [during the meetings] has to go through him.
From him, it goes out to everybody else. We don’t have messages just crossing each other. They have to go through a single line of communication that goes out to everybody. That’s kind of a filter.
HOW TO REACH:Yard House Restaurants LLC, (949) 727-0959 or www.yardhouse.com
Clint Jones says it’s easy to keep everyone on the same page when your payroll is only 30 employees deep. That was certainly the case at Norvax Inc., an online health insurance technology provider he co-founded in 2001. But when he doubled his team to facilitate revenue growth from $700,069 to $11 million between 2003 and 2006, the task became a tad more difficult.
“Once we passed that 30-person head count, we weren’t doing the best job of informing everybody in the company what was going on all the time,” says Jones, who also serves as CEO. To re-establish those faltering lines of communication, he began to hold monthly company-wide meetings, resulting in a team of 70 employees who are informed, focused and contributing to the company’s continued success.
Smart Business spoke with Jones about how to encourage internal communication.
Q. What are two things an executive can do to prompt growth?
Innovation and listening to your clients. We get a lot of product ideas and solution ideas around requests and needs from our clients.
Usually, what we find is if we do a survey or we go out in the field and spend time with key clients, we’re going to uncover areas of growth and new, innovative ideas that we can develop into revenue-generating opportunities.
Just keeping your eyes open and your ears listening to customer needs can be very beneficial.
Q. How do you foster innovation?
If every idea that came across my desk I shot down, ultimately our employees are going to become less innovative, less creative, and the company is going to lose some spice there. I’d rather see somebody come to me and potentially even make a mistake by trying to be innovative as opposed to being not innovative and not creative.
Q. What is one of the biggest challenges associated with growth?
Outside of the market itself, one of the biggest challenges is understanding how important internal communication is. The more you can inform your employees, the more you can inform your management team, the better off you are and the better decision-making that’s going to happen.
People are very open to information. They’re really excited hearing about what we’re doing and how we’ve been doing the past month and what our big initiatives are this month.
The best information is the upfront and honest information. If there’s an issue we’ve got to tell people, we’re going to be the first to let them know. It shows integrity and that we’re looking out to do the right thing, no matter what it is.
Q. How else can you encourage internal communication?
Once you get over the 30-person mark, you tend to lose touch with every single employee. It’s a challenge for the leadership to have a relationship with every single employee.
One thing we’ve started doing more often is having company meetings where a lot of their voices are heard. We’re talking about our strategic direction, challenges we’re seeing on the marketplace, opportunities we’re seeing on the marketplace, and just giving employees a lot of information to help foster the environment and culture we want to create. Even if they’re 15 minutes and it’s an update about what happened in prior months and what you’re focused on this month, you’d be surprised how employees react to that.
Have an open forum and allow questions and have the understanding that no question is a stupid question. Chances are if you have that question, nine other people in the room do, as well. We try to encourage that behavior and let them ask the questions they want to ask.
It really helps certain employees that are maybe outside of certain situations understand what other members of the company are going through. Maybe they have good ideas about a solution around an issue that we’re facing or one of our departments is facing.
A lot of employee interaction and great ideas come out of those sessions.
Q. How do you encourage everyone to participate?
That’s been a challenge. We’ve set up a suggestion box where an employee that may be more introverted and doesn’t want to speak up can write a question or write a suggestion that goes to the upper level in management. A lot of those have been great.
We do understand that certain people aren’t comfortable speaking in front of a large audience. We definitely value their input, as well, and want to hear what they have to say. That’s been more of a confidential way to do so.
What we’ve done is we’ve kind of set up a more confidential suggestions box. An employee does not have to put their name on the question or the suggestion or the issue.
HOW TO REACH: Norvax Inc., (866) 466-7829 or www.norvax.com
After taking the customer into her office and letting her vent, Durr eventually got the information she needed to assess the problem. The patron, it turns out, had actually closed the account in question during a previous visit and was ultimately very apologetic.
To quell such customer service meltdowns, Durr says you must avoid rash action and give patrons a chance to express their frustrations before suggesting solutions.
The philosophy is paying dividends at Valley Savings. The bank recently celebrated its 85th anniversary and reported total assets of $109 million.
Smart Business spoke with Durr about how to wake up from a customer service nightmare and how the 24-hour rule can prevent you from making bad decisions.
Listen to customers. I might be listening to a customer, and they are 25 percent of the way through their story, and I’m already thinking, ‘I know where we should go with this.’
The thing you need to tell yourself is, ‘Now, I’m going to be a good listener. I’m going to listen all the way through until the customer is done, and then we’re going to determine a course of action.’
Sometimes, there is a course of action, and sometimes, there’s not. A customer may be speaking to something that isn’t going to change. Just the fact that they can feel like their opinion has been heard is satisfying.
Do what you say you’re going to do. If you say, ‘Let me investigate that; I’ll call you back,’ you call them back. Or, if I have certain policies and procedures that I have implemented that I ask my employees to follow, I’m going to follow them, too.
Everybody’s watching when I’m confronted with a situation or just having a pleasant conversation with a customer whatever that looks like. So be mindful. If you’re trying to implement good customer service as a CEO, you have to be mindful that everybody’s taking notes of how you’re conducting yourself on a daily basis.
We might have a customer who is in the lobby, and they’re difficult to deal with or they’re frustrated. Everyone’s becoming frustrated. I’m not uncomfortable to go up there myself to talk to the customer. I like doing that because it shows the employees and the customer the value I personally put on customer service.
You’ve got to walk the line. If you’re going to put certain parameters out there for your employees to follow, as a leader, if you can’t follow them yourself, it’s not a very inspiring message.
[The benefit is] your employees have a sense of pride and see your responsibility and commitment and so do the customers. What happens with the customers is the greatest of all word-of-mouth. It’s encouragement to their friends and family to consider you for their needs.
Interact one on one. Sometimes, when people are in a group setting, they aren’t comfortable offering up their views. People think, ‘My opinion doesn’t matter,’ or, ‘I’m going to look like a wet blanket.’
They may have a very important view or a point, but they feel like the train’s already left the station so they can’t bring up a roadblock or an issue because they won’t look like a team player.
One on one, they’re more comfortable giving their vantage point from whatever particular part of the business they run. It’s sitting down with them one on one, so they feel like they can express their views.
CEOs should approach the individual or make a forum [to engage in one-on-one interaction]. It depends on the size of the business. At large businesses, they make themselves available by saying, ‘If you ever want to have 15 minutes with me, or whatever that looks like, you can make an appointment with my secretary,’ or, ‘Here’s a little suggestion box, and I welcome dialogue with you.’
At a smaller one, the CEO has to approach individuals and let them know that their opinion is valued. By working with them and building a consensus, it definitely makes the outcome successful. It helps with the ultimate group decision.
When I’ve had leaders come ask my opinion, it makes me feel like I’m valued and that my opinion matters. I could be totally off base, but because I’m not privy to some of the information that maybe that leader is, having that conversation helps me understand why decisions are made.
Give yourself time to make good decisions. We have a little thing here called the 24-hour rule. The scenario is, you’re presented with a problem, and your natural tendency is, ‘I’m going in to fix this right now.’ But if you don’t fix it properly, you’re going to make the problem worse.
So let’s give it 24 hours here. Let’s assess the situation. We’re going to respond to the situation, but we’re going to give ourselves some time to make sure that we address the problem in the appropriate fashion. Give it a 24-hour rule, and get some weigh-in from your team.
[It leads to] a better resolution. If you’re reactionary, sometimes you create three more problems. If you give it a little bit of time, you may prevent making the problem worse.
HOW TO REACH: Valley Savings Bank, (330) 923-0454 or www.valleysavingsbank.com
His first day on the job, Steve Wolfe’s welcoming committee consisted of a single labor attorney. He knew things were going badly at Indiana Regional Medical Center before accepting the role of president and CEO market share was falling, patient satisfaction was abysmal, and there was a daunting communication gap between management and employees but he didn’t expect to be confronted with such adversity as he stepped in the door.
“It was clearly their plan before somebody could get in and establish trust that they wanted to get right back to the second vote,” he says of a second attempt at unionization, the first of which had failed by a few votes the previous year. “We really just made a plea to give us a chance, (but) we lost a close vote and the union was formed.”
What really concerned Wolfe was the looming threat of a strike. A fiercely adversarial culture, when combined with national rallying calls for the whole nursing industry, led to a heated meeting that would inevitably decide whether or not the health care provider’s employees would hit the picket lines. But Wolfe was able to convince labor representatives not to strike.
“I think everybody was prepared for a strike, but fortunately, we were able to avert it,” he says.
Having avoided near disaster and finally getting a chance to catch his breath, the leader and former pharmacy director sought to cure the medical center of its own toxic culture. He devoted his first 100 days to the task, familiarizing himself with the nonprofit institution, identifying major areas in need of improvement, and then choosing benchmarks to help track and measure progress.
Nearly a decade later, Indiana Regional Medical Center has posted fiscal 2007 revenue of $107 million up from $54 million in fiscal 1999 and has been named the best to place work in Pennsylvania twice.
Here’s how Wolfe transformed the culture from one on the verge of a strike to one of the best in the state.
Identify problems by listening
After enduring unionization and teetering on the threshold of a strike, many executives would have blindly taken action to address the hospital’s many ills.
Wolfe took a decidedly different approach. “In my first 100 days on the job, I really didn’t come in to impart any wisdom on the organization,” he says. “I came in to listen, and I did.”
That action or rather, the lack thereof may seem a bit backward to those more familiar with a take-charge style of leadership. Wolfe says that in such a tumultuous situation, it’s better to slow down and assess your surroundings rather than make rash decisions to change them.
“We were trying to understand the circumstances that we had, why that was occurring, what we needed to do to make ourselves better, what our goals should be, our weaknesses and strengths,” he says. “It was a chance to understand some of those things better.”
Wolfe says that the best way to uncover those issues is to meet with employees and other stakeholders one by one. It’s not a matter of walking the halls and eavesdropping on private conversations or asking direct reports to infiltrate different departments. If you really want to understand a given problem, you must set aside time to speak with the people it affects and just listen.
“I really did have a lot of formal meetings set down,” he says. “Especially when you’re starting out, people generally appreciate the fact that you would take the time to set a meeting to really hear from them.”
This process may seem daunting at first. Meeting with hundreds of people and hearing hundreds of complaints and hundreds of opinions over the course of 100 days isn’t going to be easy. Wolfe says to stay the course and never delegate the task to your management team. The best feedback comes straight from the source.
“I really was a bit of a lone ranger as far as just hearing what people were saying,” he says. “I didn’t want to have it filtered or screened from the team. That’s no disrespect from them. They’re good people. But you need to hear it unfiltered for the first bit.”
Wolfe says by personally sitting through so many one-on-one meetings, it’s much easier to identify the major themes that continually float to the top of the conversation.
“I wish I could tell you there was more science to it,” he says. “When you talk to that many people, and you keep hearing the same top 10, 15 things, I really had no shadow of a doubt as far as what the major things were.”
That’s not to say the task is easy. Those themes only made themselves apparent after countless sessions of diligent focus and concentration. But if you’re willing to put in that effort and listen to hundreds of people vent their frustrations, Wolfe says the benefits are certainly worth it.
“It was intense going out and listening to all the stakeholders, whether it was physicians, employees, managers, [the] senior team, the board or the community,” he says. “If I would take another job, I would do the same thing for the first 100 days again. It came back in spades.”
Wolfe wasn’t just getting feedback in his first 100 days. He was also gaining trust.
He says in any turnaround, trust is the single most important thing. Before you even think about addressing any issue, you must first show your constituents your devotion to the company and the culture.
“You have to establish trust and integrity,” Wolfe says. “You can have the best strategic plans and operational plans in the world, but if people don’t believe the trust and the integrity, then nobody’s going to follow.”
By setting aside time to meet with employees, Wolfe says you’ll not only gain their trust, but you’ll have a much easier time setting goals to address areas of concern. After all, the goals you set are in direct response to the issues that stakeholders addressed during your initial assessment.
But this process entails more than just getting buy-in. For a goal to mean anything, Wolfe says you must have some way to measure your progress toward it. Many companies resort to in-house surveys and metrics for evaluation. The management team at Indiana Regional instead opted for a third-party consultant for two reasons.
First, outside companies are better suited to devote resources to track every aspect of performance. In an abstract area like patient care, for example, they can measure countless variables that give employees a better picture of their performance.
“They actually give you a priority index,” Wolfe says. “The biggest variables that are impacting the patients’ perceptions, for example, may be communication by the nurse, explanation by the doctor, etc.”
Secondly, third-party companies can often give you a better picture of how your performance matches against others in the same industry.
“They benchmark you in a percentile ranking with peers,” he says. “If I’m working on a nursing floor or a medical or surgical floor or whatever, I get a score, and that’s translated into other medical or surgical or nursing units across the country.”
Wolfe says you should share these scores regularly in meetings. If you want employees to work to make your company a better place, they need to know where they stand and what they have to shoot for. When Indiana Regional’s constituents first saw how the hospital stacked up against the competition, for example, it was a rather eye-opening experience.
“When we first started doing that, our scores were not good,” he says. “With 100 percent being the best you could do, some of our scores were like 12th percentile, 17th percentile, 22nd percentile. It was a real eye-opener. Until that point, I don’t think people realized that so many other people were doing a better job.”
Wolfe didn’t let those numbers discourage him. Instead, he set benchmarks atop every industry percentile they were measuring.
“We were not going to stand for being in the bottom quartile of some national database on any monitor,” he says. “There was a real key decision point for everybody when we started picking what our goal was going to be. We picked the top (10 percent). There was a lot of pushback that, that was an unrealistic goal, and we could really dishearten troops with an unrealistic goal. We stood firm, and we said, ‘We could do just as well as anybody else in the United States of America, and we’re going to shoot for the top decile.’”
To combat resistance when setting benchmarks, Wolfe says to continuously communicate your goal. There will be a lot of repetition at first, but as soon as you see signs of improvement, celebrate those achievements to raise morale and boost confidence.
“It’s the old analogy of a rocket using most of its fuel to get the first whatever feet off the ground. It can be slow in the beginning, and it can be tough, and it can be frustrating, but once you break through with a victory or two, it can get contagious,” he says.
After rough goings in the first few months, Wolfe continued to push toward the goals until emergency room patient satisfaction suddenly skyrocketed into the 90th percentile.
“It was just a total breakthrough,” he says. “That was the thing that we could talk about. It was being able to have a win, and then building on those successes.”
And build they did. After championing that first victory, Wolfe and his staff continued to ride that momentum and have since found themselves perched atop the 90th percentile of nearly every area they set out to measure.
He says it’s easy to get complacent amid such success, so you must constantly set new benchmarks.
“Without the benchmarks, it’s almost impossible to shoot for peak performance,” he says. “You are always going to have the argument or the pushback that we’re doing a good job already, or you don’t know what you should be shooting for.”
To fight that pushback, Wolfe has now set an even higher benchmark for his 1,200 employees: The Malcolm Baldrige National Quality Award.
“There could be a temptation to think that you’ve done what you needed to do and perhaps it was time to coast to rest,” he says. “I think the Baldrige was the thing that we needed to keep focusing on. It keeps calling you to a higher level.”
No matter the state of your company, be it on the verge of strike or at the head of the industry, Wolfe says it’s important to aim higher. If you’re willing to invest time to gain trust and identify major shortcomings, improvement shouldn’t be far behind.
“Sometimes, people are in a situation where they don’t think it could ever be dramatically different or better than what it was,” he says. “We want to be an encouragement for people out there that it can be better. It really does boil down to trust, identifying the brutal facts, setting that target and then measuring yourself. Once you’ve had the breakthroughs, then people then realize that they can do it.”
HOW TO REACH: Indiana Regional Medical Center, (724) 357-7000 or www.indianahospital.org
When Shelley Pierce Stronczer left a large, national law firm to start her own enterprise, she knew it wasn’t going to be easy. Yes, she was gaining autonomy, but she was also losing access to the innumerable resources available at the corporate behemoth.
“The challenge was to provide employers the kind of quality legal services they received from me while I was at the large firm,” she says. Or, to put it more succinctly, “to make more out of less.”
To do that, Stronczer enlisted the help of an executive coach.
“I have a long-standing client who has used an executive coach for years, and I was impressed with the results that, that client got,” she says. “I wanted to achieve those results in my own new business ... so I sought out executive coaching.”
Executive coaches are facilitators who work with senior-level executives to foster growth and development. Although the duration of training varies depending on the client, most coaches spend six months helping executives become more self-aware and implement constructive habits into their daily management practices.
Before you turn inward to analyze your own behavior, though, Stronczer says you should first turn outward to vet potential coaching candidates.
“When you look for an executive coach, you’re going to need to look for someone who’s got experience, not only as an executive coach but also in the world,” she says. “My executive coach had experience in law firms and in corporations.
That’s really valuable in an executive coach someone who can understand your structure and those folks who you’re trying to serve.”
You should also determine what you want out of the experience before going into it. Stronczer, for example, wanted to better identify her strengths and the strengths of her fellow attorneys to run a more efficient firm.
It wasn’t simply her way or the highway, though. When you first begin working with your coach, she says, you must also discuss what the process can actually do for you. Goals that were unrealistic when you began may evolve into more realistic goals as you and your coach identify your strengths and weakness as an executive.
Once your goals are set, coaches will typically spend the first three months helping you become more aware of your communication style, learning style and strengths through regular correspondence. During the last three months, sessions become far less frequent as you begin to apply what you’ve learned.
To make the most out of the experience no matter what stage of the training process you’re in, Stronczer says to make it a priority.
“You’ve got to be committed,” she says. “If you just spend a little session with your coach and you say, ‘I’m done for the week on that,’ it’s not going to help. You’ve got to exercise it.”
At the same time, the experience should never become overwhelming. The process doesn’t require a huge extracurricular commitment of time, Stronczer says. Instead, it’s something you incorporate into your daily routine and thus is “surprisingly not as much outof-pocket time as you’d think.”
When it’s all said and done, executive coaching is less a measure of time and more a measure of progress. By diligently implementing the lessons you’ve learned, the benefits you reap should far exceed the hours you sacrifice.
“Through coaching, I’ve been more effective at understanding my strengths and how my staff and I can both effectively interact with each other to provide that kind of quality legal advice and litigation defense to our clients in the way they deserve and want,” Stronczer says.
“It really doesn’t matter what your industry is. Executive coaching is very valuable tool to give you the advantage to be the best at whatever you are.”
HOW TO REACH: Pierce Stronczer Law LLC, (440) 526-2211 or www.discoverpslaw.com
In order to succeed, a relationship with an executive coach must be built on trust.
So when Shelley Pierce Stronczer, founding member, Pierce Stronczer Law LLC, was looking for someone to guide her experience, she turned to Vivian Kist, chief learning officer and senior executive coach at Baker & Daboll LLC, an executive coaching firm.
This was not the first time the pair had teamed up; they had worked together years ago at another firm and had already established a healthy rapport.
Not everyone will be fortunate enough to have that established relationship to draw on. So to help choose the coach that best complements you and your goals, Kist says you need to speak with a number of candidates and not just settle on the first option you come across.
To find an executive coach who meets your needs:
- Look for experience. “The coach should have had some experience or expertise in supporting and helping others,” Kist says.
- Make sure the potential coach understands your goals. “There should be some discussion around what you’re trying to achieve,” Kist says. “Does the coach appear to understand that to a level that you feel you can work with them?”
- Go with your gut. “The third thing is just really a personality connection,” she says. “When we interview people, usually they and we know fairly quickly I’d say within the first half hour of talking to them whether this is really going to work or not.”
HOW TO REACH: Baker & Daboll LLC, (513) 339-1007 or www.bakerdaboll.com
Instead of giving employees room to perform, she suffocated the medical financial solutions organization with regulations that created fear and anxiety.
“She was going to put cameras in to watch and make sure that everyone was working,” Beans says.
It was then that the founder, president and CEO realized that he had to let her go and develop a set of core values that would guide his work force toward growth. Following those values, Beans and his 103 employees have pushed the company to 2007 revenue of $9.4 million, up from $6.4 million the previous year.
Smart Business spoke with Beans about how to identify and implement values that reinforce your vision and inspire success.
Q. How do you create core values?
I said [to my management team], ‘Look around, and name the person that, to you, describes Rising.’ They threw some names on the board.
Then I said, ‘Give me every adjective to describe them of why you think they are the ideal employee.’ They start naming those, and you get a huge list of things.
Then, I pulled up our marketing materials. ‘What recurring themes are we branding to our clients? We’ve got to deliver what we promise.’ I wanted to make sure that what we’re saying to our clients was exactly what we’re hiring for and delivering on.
The final exercise that I’ve found the most enlightening, I said, ‘Name a time that I blew up or I reacted strongly. It might have been something really minor that you didn’t know why I made a big deal. It may have been some minor thing that may have even made us money, and I was ticked off or annoyed.’
I made them write up those situations. Literally, a pattern came out of it. These are the things that are critical to the executive. Somewhere in that minor blow up is a core value.
It has nothing to do with making money or losing money. You have to be able to follow a core value even if it loses you money.
Q. What should a leader remember when implementing core values?
Most CEOs are intelligent people, and they hate repetition. They just think that everyone else thinks the way they do. You just have to repeat yourself ad nauseum.
Every single all-hands-on meeting, I start with the core values. Every single managers meeting, I start with the core values. We’ve posted them at everyone’s desk.
All the conversations that you’ve had about it have only been with a small group of your core people. They haven’t been with your front-line staff. They need to go through the same initiation process where their mind instantly fires and knows how to behave.
You’re going to have to repeat yourself to the point where you almost I consider myself a caricature at this point. It’s comical. It’s not high-brain activity. The high-brain activity was coming up with the core values.
Q. How do you hold people accountable for those values?
Every single [employee] review, you rate the core values 1 through 5 and say how they did at them.
Every single meeting for the front-line staff, I draw someone’s name from a hat. I make them get up. I make them recite the core values. I make them tell one thing they enjoy about the core values, and I give them a hundred-dollar bill on the spot if they succeed.
As part of our orientation, they have to get up in front of the other new employees, and they have to recite the core values before they graduate orientation.
Q. What’s the benefit of establishing strong core values?
Getting the core values out there allows the employees to really know what’s expected of them. It eliminates that cigarette smoke, watercooler gossip and fear. They can actually focus on, ‘I know what to do to be successful. I’m not going to get slapped on the wrist for doing something wrong because I follow all the core values.’
From the company perspective, most executives trust their own decisions. They started the company because they knew they were doing something better than what was out there. But you haven’t really done anything if you can’t get others to execute according to your vision. Having the core values allows you to set the behavior pattern that is you and is what your vision was.
For the executives themselves, I do spend more time repeating myself, but I spend a lot less time with the ‘he said, she said’ or micromanagement or HR issues. The time that I waste on repeating my message is freed up fivefold because I don’t have any people coming here to gossip about other employees anymore.
At the beginning, it takes a lot of energy, but once it gains momentum, it really doesn’t take that much time.
HOW TO REACH: Rising Medical Solutions Inc., (877) 747-4644 or www.risingms.com
Although some egos might collapse under this arrangement, Tifft says it’s the savviest way to manage in business. Leaders can’t know everything, she says, and when they approach a gap in their knowledge, where better to turn than a bevy of skilled, in-house resources?
At CRM, Tifft has approximately 200 such resources at her disposal, which she has used to push 2007 revenue to more than $17 million.
Smart Business spoke with Tifft about how to tap into the potential of your staff members by supporting their decisions, learning from your mistakes and establishing a culture of trust.
Support your employees’ decisions. Even if you don’t agree with decisions, you have to let them make decisions unless you know the decision is going to be harmful to them or the company.
Sometimes, I would not have done something a certain way, but because it’s important to them and they want to do it a certain way, I let them. Nine times out of 10, it’s a better method. You have to stand by them and support them.
It used to be that people were incentivized by money. Today, it’s a mixture. It’s financial and the fact that they feel important that they’re a value added to the company. With our managers, the biggest thing for them is, they’ll say, ‘On that day, when I made those decisions, you supported me. I felt like I made a difference and what I had to say mattered.’
Don’t give out all the answers. We learn from mistakes, or we learn by trial and error, or we learned because we made a good decision and it worked.
I have a director who needed help in a certain area. She sends me an e-mail and says, ‘Do you have any advice for me?’ I can tell her exactly how to do it, but that doesn’t help me. It helps me if she can learn to do it on her own, so I give her advice and advise her so that she can think and create her own decision, which will be different than the one I had, but it will work for her.
It’s important for them to find their own way. If I make the decisions for them, they’re not moving forward. They’re standing still.
Learn from your mistakes. You can’t grow if you don’t learn from your failures or your successes.
We just finished a very large project, and we all had lessons learned. Everybody submits their ‘lessons learned,’ and then we sit down and talk about it. We call it a ‘lessons-learned’ culture.
We all discuss, ‘Here’s what happened to me, and how could we not have that happen again next time?’ We have a discussion group of any way we can come about having a better way to do that next time so we don’t have that same ‘lesson learned.’ Nobody wants to go through the same mistake twice.
We can’t afford to make a mistake, but we’re human, and we make mistakes. The difference is that we have a culture where a mistake is brought out on the table.
You have to do that diplomatically. I wouldn’t recommend just saying, ‘OK everybody, come in here with your failures.’ Some folks will say, ‘I’m going to hide them. I don’t want them to know my failures because that will make me look bad.’
Elicit honest participation by establishing trust. I always come forward and say, ‘Here are the mistakes that I made during this process, and here’s what I think I can do better.’ In that environment, it has to be an open forum, and everybody’s on equal footing.
What happens in that room is progress. We don’t bring that up later on an evaluation and say, ‘Well, Johnny, on such-and-such a day, you said you made these mistakes.’
We receive a great deal of benefit from it because there’s an open forum where we trust one another to bring forward our mistakes. That’s the biggest benefit, that we don’t do it again. We don’t have to keep repeating the same mistake and getting aggravated by it. We’re able to overcome and move on.
Walk through the muck. When things are difficult, don’t stop communication. You cannot sit back and hope it goes away. Walk right through it. Address it head on.
If there’s a swamp, and there’s a lot of muck in the middle, and you need to get to the other side, you must walk through the swamp. That’s what I tell our staff all the time: ‘We’re walking through the muck because that’s the only way to make it to the other side.’
In those cases, you have to increase everything you’ve done. Increase communication. Put a lot of resources if there’s an issue or a problem, and tackle it. That says to the customer or the employees that we’re listening, and we’re trying to do something, and we haven’t turned the phones off and turned the computers off to try to stop communication.
HOW TO REACH: Clinical Research Management Inc., (330) 278-2343 or www.clinicalrm.com
When Jim Hill was surveying one of numerous industrial zones in China for a client, the road came to an abrupt end beneath him. One minute, he and a driver were traversing a concrete byway, and the next, the beaten path gave way to the natural landscape. Though the former marathon runner was used to treading over surfaces of all sorts, this deviation left him unnerved.
“Driver, is this OK?” he asked nervously, and the navigator offered his assurances until they arrived at their destination just a few miles later.
Since that time, Jim Hill has grown much more comfortable traveling across any expanse while establishing Benesch, Friedlander, Coplan & Aronoff LLP’s foreign presence in Asia. As partner and executive chairman of the Cleveland-based business law firm, he’s had to adapt while following clients who are looking to tap into the expanding market overseas.
But after founding a Shanghai office for Benesch and helping a number of other companies do the same, Hill warns that the thriving Chinese economy does not necessarily translate into a guarantee of success for every business.
“What people come to find is that there will always be an expanding economy in China,” he says. “But it’s not the answer for everything.”
At Benesch, the four-attorney Shanghai office is certainly not the sole contributor of corporate growth, but it has emerged as one of the answers to that question of success. The firm’s annual revenue in 2005 — the same year the group applied for its Chinese legal license — was $46 million. Two years and a number of contacts and clients later, revenue jumped to $61 million.
To determine whether or not overseas expansion might produce such results for your company, Hill says to practice due diligence on the front end. By assembling a group of advisers, assessing the opportunity and setting your itinerary before you even buy a plane ticket, the experience should go much more smoothly — even if the road suddenly ends beneath you.
Before Benesch had established its presence abroad, Hill watched as some clients embarked on a hasty junket to familiarize themselves with China and vet the possibility of their own expansion.
“They looked at some factories, they talked to some people who could potentially distribute their product, they came back, and they didn’t have any idea what to do,” he says. “They were doing it in a very ad hoc way.”
Those clients’ experiences are by no means the exception. The decision to expand into foreign territory is, well, foreign territory for a lot of companies. It’s not something you can simply read up on or assign an internal task force to accomplish. If you’re serious about finding success in China’s relationship-driven culture, you need to tap into the expertise of experienced business leaders who have already been there.
Or, as Hill puts it: “Before you even think about it, you’ve got to assemble a team of advisers.”
Finding savvy guides can certainly be challenging, so start simple. Talk to those around you and ask for their advice.
“You should be talking to people you know in the business community who have a presence in China,” Hill says. “You should find out from them how they’ve gone about doing this.”
You don’t necessarily have to seek guidance from leaders at very similar businesses. Your competitors might be hesitant to share their experiences, after all. Instead, look to complementary industries for advice. Ask your vendors, peers and trusted confidants. Your golf partners may not have expanded their companies abroad, but they may be able to point you toward someone who has.
If your initial queries have all come back cold, Hill suggests looking toward investment firms for advice.
“There are several groups in this country — private equity groups are one classification — that specialize in investing in companies either here or in China,” Hill says. “If I were going to (expand) tomorrow, and I knew nothing about it whatsoever, (I would) talk to those companies and find out who they’ve used as advisers. Some of them may be very high-end, and you may not want to use their advisers, but they can lead you to other advisers as kind of a trail.”
Hill says no matter where you look, don’t rely on self-proclaimed experts.
“Don’t get on the Internet and start looking at people who claim that they’re experts on sourcing or manufacturing or who claim that they have a great relationship with the mayor of this industrial zone,” he says. “The likelihood of that being accurate is probably not that great.”
Your adviser team shouldn’t just comprise outside counsel either. As with any initiative, you need internal support, as well. Look for enthusiastic employees who have a genuine interest in the opportunity.
“It requires a serious commitment,” Hill says, adding that if he were to evaluate the firm’s 300 employees for consideration today, he would seek people who were passionate, committed and who he could allow to spend the time to get the project done right.
Whoever you choose, he says to just make sure that they want to be included in the first place.
“You can’t force people to do stuff,” Hill says. “Anytime you want somebody to start a business initiative, and you pick somebody to lead the initiative who’s not passionate about it, it’s a recipe for failure.”
Assess the opportunity
Hill remembers reading news magazines that touted China as an inevitable stop on the journey toward economic vitality.
“People were saying, ‘Everybody’s going to go over to China,’” he says.
That was five years ago.
Today, while Hill says those predictions weren’t flat-out wrong, he says they weren’t completely true either. The argument for overseas expansion cannot be made based on generalities and must instead be assessed on a case-by-case basis.
If your case in the debate rests solely on labor, for example, then Hill says to save your breath.
“If you’re thinking about going into China as a business, and the only reason you’re going over there is because you think it’s less expensive labor, that’s a mistake,” he says.
While foreign labor is relatively inexpensive when compared domestically, a number of logistical problems have arisen — lack of shipping containers, bottlenecked seaports, to name a few — that can more than offset the savings you’d reap from cheaper wages.
Instead of focusing on labor, Hill points to a number of other areas in which you and your team of advisers should concentrate assessment.
“First of all, part of it’s driven by your competition,” he says. “You should say, ‘What is my competition doing?’”
Hill says that while strategic planning should never be confined within the footprints of your competitors, the movement of that executive down the street is typically a good indicator of the feasibility of expansion abroad.
Once you survey your neighbors, Hill says to look internally and evaluate whether or not you can sell to the overseas market yourself.
“China’s a huge market,” he says. “With approximately 1.3 billion consumers, there’s a lot of potential market share to go around if you’re offering a product or service of value.”
In some cases, selling to the market simply means following your existing customers into that market. The executive team at Benesch, for example, didn’t establish an office in Shanghai just for the sake of establishing a foreign office. It did so only after observing the expansion of a number of clients in the late ’80s and early ’90s.
Ignore such movement, and Hill says you’re going to be met with an uncomfortable ultimatum from your customer base: “You’re either going to come over here, or we’re going to use somebody over here.”
Hill says the key to avoiding this quandary is communication. Keep track of your clients and partners. If they’ve made plans to expand abroad or if they’re simply talking about it, odds are you’re going to want to explore the option, as well.
Ultimately, though, the decision to establish a presence overseas may come down to dollars and cents.
“Can you drive down the cost?” Hill says. “You have to look at your own needs to supply your customer, where your customer is and how quickly you have to supply them. Can you do some manufacturing in China and ship it back here and assemble it? Is it something you can ship on the water? Is it something that you’re shipping air? All those things are a consideration.”
Establish an itinerary
Don’t let reports of frenetic wheelings and dealings in the Asian market fool you. When you cross the Atlantic, Hill says things have a way of slowing down. Meetings suddenly last twice as long. A 30-minute commute suddenly takes an hour or an hour and an half or two hours. And lunch suddenly becomes an all-afternoon affair.
Whatever the reasons for this deceleration in the time continuum — Hill cites cultural custom and overwhelmed infrastructure — the important thing is to plan accordingly. With so little time to spare, it’s imperative to devise your schedule before you even buy your plane ticket.
“You need to really be organized in your thought process before you go over there,” Hill says. “You need to have sat with your advisers and a team in your own business and have thought about what you’re trying to accomplish, who you should be meeting with, what meetings you need to set up in advance.”
If you run a law firm, for example, and are looking to establish a beachhead office, set up meetings with leaders of similarly sized firms in China to discuss options in various regions. If you’re looking to build a factory, review logistics before deciding what industrial zones to tour.
“What’s the highway system like?” Hill says. “What’s the rail system like? What incentives can the local industrial give you if you build in their industrial zone?”
Obviously, such planning doesn’t guarantee definitive results. You may have eight meetings with contacts in numerous office buildings in Shanghai, only to find that your business is better suited for the political climate in Beijing.
The point is, have a solid plan ahead of time.
“Never go over there on an ad hoc basis,” Hill says. “That’s a huge mistake. You should do some of that homework first.”
In a similar vein, you can’t expect to get everything done in your first trip.
“This isn’t just one quick trip,” he says. “It’s not seven days and you’re coming back.”
Overseas expansion is a long and tedious affair. The process isn’t about finding the quick solution. It’s about finding the best solution. If you practice due diligence on the front end and ask for directions before you begin the journey, you should be able to avoid a lot of the obstacles along the way.
“When people are over there and come back and say, ‘I don’t know where to get started,’ the fact is that they should have had a better road map before they went over there of what they wanted to get done,” Hill says. “That’s a matter of meeting with people who are very experienced in doing business in China and doing that work, so when you go over there, your time is very well spent.”
HOW TO REACH: Benesch, Friedlander, Coplan & Aronoff LLP, (216) 363-4500 or www.bfca.com