Jacob Lipa has a pretty great view from the 44th floor of Psomas’ headquarters in downtown Los Angeles, but that vantage point doesn’t necessarily lead to the best perspective.
So to increase his decision-making savvy, the president of the consulting engineering firm routinely exchanges information with his 800 employees through frequent office visits and open-ended dialogues.
“I keep telling my people here all the time, I really don’t expect them to behave responsibly without information,” Lipa says. “With information, we cannot but behave responsibly.”
The philosophy has been paying dividends at the consulting engineering firm, which specializes in the land development, water and transportation markets and posted 2007 revenue of $130 million.
Smart Business spoke with Lipa about how to share information with your employees while putting things in perspective by stressing the bigger picture.
Divulge information. Give them as much information, other than personal information, about the business as they can take.
When I think that somebody is really not trained enough to understand the information, then I stop and will try and train them to understand the information better. I was going over our entire income statement with the company. I went, ‘Here’s our net revenue. Does anybody know what net revenues are?’
First of all, there are no surprises. Secondly, everybody becomes part of the solution. It’s not only that I feel the responsibility to solve, but now I have 800 people that want to help me solve it. You get a lot of ideas, and one or two of them are better than yours.
Ask for information. We have regular dialogue meetings. We call them dialogues. In those meetings, I come with no agenda whatsoever. This is my opportunity to listen to them tell me what’s going on in their world. It’s really an ongoing dialogue where they provide me with information so that I can make better decisions.
We try to go at least on a monthly basis to each of these offices. When I do dialogues, it’s usually for five to 10 people. Whenever we visit an office just for other reasons — we don’t necessarily go to the office just for that — we just call the office manager and say, ‘How about a dialogue? Would you ask if anybody wants to meet with us for an hour to talk?’
It’s not the formal process, but we try not to miss any opportunity.
What you really hear is what your people really care about. Then you really can do some great stuff because now you know what the people really care about.
Show your vulnerability. (Don’t) worry about being vulnerable. I have no problem telling somebody, ‘I tried it. It didn’t come out right. Let’s find another way.’
Everything that I say and I do isn’t perfect, and, for that matter, not everything that they say or do is perfect. The idea here is to continually learn to do better and obviously not to break the bank and make stupid mistakes.
They are really giving you good ideas and good information and sometimes good critique and sometimes also stuff that you realize that you have not successfully communicated. You say something, and you know that you meant one thing, but a guy says, ‘Jacob, I hear this and this,’ and I say, ‘Wait a minute. I didn’t mean it that way.’
Now you know that many people in the company misunderstood you, and you have an opportunity to go and correct it.
Undergo a 360-degree evaluation. A 360 is a system where you ask people to comment on what you do — people that are above you, below you, who work with you.
We actually don’t force it. We recommend it. The best way is if (me) and my partner ask to have it done on us every year. Then, other people are all of a sudden looking at it and saying, ‘If they’re doing it and it’s helping them, why shouldn’t I try?’ For example, I managed an operation in the company, and I had some very strong feelings about what the operation committee should look like. In the 360, it’s been two or three years in a row that people are saying, ‘Jacob, we don’t think that the operation committee is the best thing for us.’ So I’m getting ready to get in front of the principals, and I said, ‘I heard it once, I heard it twice, I heard it again. Let’s get together and decide how do we change it to make it more beneficial for everybody.’
Focus on the big picture. You really need to believe in a larger vision. Yes, we can measure numbers and everything, but unless we really believe that there is something larger here, bigger here, then it does us no good.
Every time you get in front of your people, that theme needs to be part of the story. If you want to go into a new program, let’s say we want to expand the water market, well, why are we doing it? There are more people dying in the world for lack of water or contaminated water than any other thing around. It is such an important job to be able to deliver water and clean water.
All of a sudden, it’s not just about how efficiently you’re doing in terms of profit. All of a sudden, there is an emotional story about why it is so important that we are doing it well.
HOW TO REACH: Psomas, (213) 223-1400 or www.psomas.com
Despite what his business card says, Dale Moser views himself as just another customer service representative. That’s also how the president and chief operating officer of megabus.com views each of the company’s 150 employees.
“We can build the field, but that doesn’t mean they’re going to come,” he says. “We need to make sure we’re meeting the needs of the customer.”
To fulfill that promise, Moser regularly visits megabus.com departure sites to hear, face to face, the opinions and needs of his customers. The practice has helped push the 2006 start-up and subsidiary of Coach USA to 2007 revenue of approximately $15 million.
Smart Business spoke with Moser about how to stay in touch with your customers to help grow your business.
Q. How do you break into a new industry segment?
The key to that is making sure you know what your customers’ needs are. When you do that, you design it so that you’re no less than meeting those needs.
We’re out and about. We’re out in the field. We’re not just sitting in offices dreaming things up. We’re looking at what’s going on in the economy, what’s going on in our social cultures, in our environments, in our cities. You look at the potential to create a service that has the underlying plan to help with those issues.
I’d rather always under-commit and overdeliver. No one’s ever going to be upset with that. You commit to meet the expectations, and then you deliver where you think, in talking to customers, would make the difference and differentiate you from the other options they have.
There’s certain things that once they try it, those were the comfort zones that they say, ‘This is why I use you. I know once I buy a ticket, I’m guaranteed a seat. There’s no getting there, getting in line, finding out the bus is full, and I have to wait for the next bus, which could be three hours from now.’
Q. How do you stay in touch with customers?
I respond to a large majority of the e-mails that come in from customers: ideas, suggestions, recommendations. We do customer surveys on a quarterly basis by an independent firm. That information is used for us to reassess where we need to go.
The one I like the best is I like to get out. I like to go to see a departure in Chicago, in Milwaukee, in Columbia, Missouri, and talk to the customers before they’re getting on the bus, and just get a feel for why they’re traveling today, why they selected us, what were they looking for, what would they like to see.
Q. How do you sift through that feedback?
You’re going to always get somebody who will give you the sky-is-falling kind of input. Then you’ll have somebody on this other parameter that makes it sound as if this is the greatest thing since canned soup.
You have to read between the lines and really get at what is the burning issue or the item that customers are really pleased with. If you start here and see similar concerns with multiple customers, then that becomes obviously a much higher concern and issue for you that you need to address quicker than one where somebody’s complaining about not enough legroom on the bus, and the gentleman’s 6 feet 5 inches.
Q. What is the benefit of face-to-face interaction with your customer base?
You really get the opportunity to hear from the customers firsthand.
When the rest of my staff, everything from a driver to a dispatcher who’s out on the street to even the next level middle-management, when they see and know I’m out and about and I’m doing that, they look at it and step back and go, ‘It’s important enough for him to take his time to come out and visit with these customers personally, then it must be important enough for us to do it.’
Q. What should executives know before engaging their customer bases?
In my opinion, we’re all pretty much customer service representatives. Without the customer, we don’t have a job. I’ll just go to them, I’ll give them my name, and I’ll say who I’m with so they know I’m affiliated with the company, but I don’t really tell the customers who I am from a position standpoint.
I never have a problem if anybody ever says anything [about it.] I’ll hand them a business card just for the purpose of allowing them to either phone me or e-mail me direct. I don’t just go and hand out every card I have. I would-n’t recommend that.
The other thing I do to certain passengers, I will say, ‘Please e-mail me. I’d love to hear how your experience was.’
That’s the true key to making sure that you really know what you need to do. You hear it from your employees, and I take a lot of input from them on recommendations and suggestions, but you also need to make sure that you get a balance of what the customers think, too.
HOW TO REACH: megabus.com, (877) 462-6342 or www.megabus.com
When Tiger Bitanga founded The Design People Inc. in 1999, the
CEO assumed he would be providing Web site and Internet marketing services to clients. What he didn’t anticipate was how much of his perspective he would share with clients in the process.
“Especially when it comes to new technology, clients come in with really unrealistic expectations,” he says. “I used to get clients that walked in and said, ‘I want to compete with eBay, and I’ve got a $10,000 budget.’”
Bitanga says managing such client expectations requires patience and diligent listening. By identifying the goals of clients and then working backward to achieve them, he’s grown his firm to 170 people.
Smart Business listened as Bitanga talked about how to become a better communicator by keeping your clients’ successes in mind.
Q. What are the keys to effective communication?
Even though you’ve heard the same thing a thousand times, you still have to remember to listen and to look for those little bits of information that are going to make this client different from previous ones or the next one. Once clients get a sense that you’re being honest and open, then suddenly, you just begin this whole collaborative process.
It’s suddenly not about the sale anymore. It’s about just being an authority and an expert, and them looking to you to provide that great advice. At that point, it’s just so much easier to get that client.
Q. How do you show clients you’re listening to them?
We do surveys all the time. A survey goes out to the client saying, ‘How was your experience?’ It’s a very quick thing that rates a number of areas 1 to 5. From there, after we launch the Web site and also when they call for support, we send out surveys.
It’s via e-mail. Then we also let them know that this is part of the process before they launch. That way, we actually get a good 90 percent of our clients who respond. Those one out of 10 clients who don’t respond, managers call them up.
Q. How do you word surveys so that you elicit such a high response rate?
No. 1, it’s got to be easy. Clients don’t want to fill out something that they can’t fill out in less than 30 seconds.
You should be asking questions that rate a person based on how they’re handled. The most important question is, ‘Did you succeed in what you wanted to do?’ That in itself will tell you whether the person working it did a good job or not. Did they feel there’s a sense of success there?
You can directly translate the comments into new products and services or improvements in processes.
Q. How often should executives communicate with their clients?
All the time. You have to do it all the time. You can’t get caught in this bubble where you’re constantly trying to innovate your products and services based on what you think is best.
That’s probably one of the biggest mistakes you can do. You have to innovate based on not what your competitors are doing or not on what you think needs to be done but on what your clients want.
Q. How can other executives become better communicators?
First off, you have to have the client’s success in mind. You can’t have your company in mind first or whatever thing you’re selling. Once you have the client’s success in mind, you have to talk to the client and figure out what their definition of the final successful result is. Then work backward from there.
The benefit is that suddenly you have raving fans in your clients. For example, we don’t cold call. We get most of our business because ... we get so many client referrals.
Once they feel that they’ve been given something that helps their business or generates leads, No. 1, they come back, and they want to upgrade a package. No. 2 is that they tell everybody around them, ‘Here’s how I became successful. Here’s how I generate more business.’ Suddenly, you get all these calls coming in.
Q. Is there anything else to remember when communicating with clients?
When people do a search for your company in Los Angeles or wherever it may be, they know that your Web site is basically stuff that you control. There are many, many other Web sites out there where customers are talking about your products and your practices and talking about your company and your services. You have to embrace that.
We’re in a new age where there are just so many other tools that people use to look at your company before they even call you. You have to take advantage of those tools.
You have to make an active campaign to get your customers to post testimonials.
HOW TO REACH: The Design People Inc., (800) 850-7707 or www.thedesignpeople.com
When dealt a royal opportunity, Andy Silberman used to fold.
It’s not that the CEO of Suburban Mechanical Inc. lacked the ambition or savvy to cast his reel when the big fish began to bite; instead, he lacked the bait to catch them in the first place.
As an installer of heating and air systems, Suburban could grow only as fast as its oft-delayed and unpredictable cash flow would allow. While Silberman’s billings were on the rise, he couldn’t collect on invoices fast enough to take on that next large project or contract.
“I’m dealing with my 30-day accounts on the payable side, and I’m unfortunately dealing with builders who, through no fault of their own, are not often paying in 30 days and are taking longer,” he says. “It’s not them. It’s the bank draw; it’s their customer, etc.”
Silberman wasn’t willing to point fingers, but he also wasn’t content to leave his company’s fate to chance. Instead, he approached his conventional banker and began to take out traditional loans.
“I applied for a loan and the credit was fine and everything was good,” he says. “We got what we needed. But I also voiced concern about borrowing more than I needed ... to seize an opportunity as it came up from a customer. While I thought that was possible, we’d have interest payments and we’d have a liability that I was hoping there was an alternative to.”
That’s when his banker suggested a process called factoring.
Factoring is a way for a business to speed up its cash flow.
Instead of waiting for a customer to pay an invoice, a business sells its accounts receivable in return for an immediate cash advance based on a percentage of that invoice. The factor then collects on the invoice on behalf of the client and makes an additional payment to the business.
Though the process is a legitimate alternative to traditional lending, it can carry a stigma that is often associated with third-party collection services. Silberman says you can allay any concerns from vendors or customers by simply educating them about the process.
“It’s giving a little more detail to them about the workings of my business,” he says. “It brought about questions from my builder: ‘Is your company healthy? Is there something we need to know about?’ Then I would say, ‘No, absolutely not. This is an option that was presented to me. I had an opportunity to partner with (a factoring company) to take care of some cash flow issues,’ while I elbowed the guy I’m talking to and say, ‘You can relate to that, can’t you?’
“It’s no secret that however healthy, however large or small the company is, cash flow is always a concern. Your profit is one thing, but your cash flow is what you pay the bills with.”
After such conversations, Silberman says his customers left not only reassured but also with an itch to investigate the process for their own companies. At the same time, he was able to sit back and reap the unanticipated benefits of the collection aspect of the service.
“When you enter into a factoring program, you’re not only getting your cash flow boosted, you’re also utilizing the service of a professional on the collection side,” he says. “When you enter into an agreement with a customer you don’t know, it’s very beneficial to have the factoring company on your side because then they actually help with your customers’ credit investigation and the end collection, as well.”
If nothing else, factoring will finally give you the bait to catch those big fish, he says.
“It gives you the opportunity to, without going through the traditional loan process, to seize an opportunity that you might otherwise think you need a loan for,” Silberman says.
HOW TO REACH: Suburban Mechanical Inc., (800) 840-0402
Do you factor into factoring?
When Andy Silberman, CEO of Suburban Mechanical Inc., decided on factoring as an alternative to traditional loans, his banker pointed him in the direction of John Doucette, president of Liquid Capital of Northeast Ohio. He’s been providing the service to Cleveland- and Akron-area businesses for years, and he’s identified the following questions every executive should ask before seeking factoring.
Are you eligible for other financing? “This is intended as sort of a transitional financing solution,” Doucette says. “Obviously, you would have wanted to have looked at other alternatives first. Our typical customers or clients are businesses that don’t qualify for bank financing. That’s usually because they’re too new.
“The company hasn’t been in business for three years or they’ve got credit challenges of the business or of the owners of the business. That’s becoming more an issue in the recent months for obvious reasons.”
Do you need extra capital to grow your business? “Once you say, ‘I need capital to grow my business to cover operating costs, but I’m not getting paid quickly enough by my customers,’ then you can look at factoring as a way of accelerating that cash flow.”
Does your business model fit the service? “The question then gets down to, do you have a business model that fits that? Are you invoicing other businesses? Are you constrained by waiting to get paid? Do you have enough of a margin in those transactions for this to make sense?”
HOW TO REACH: Liquid Capital of Northeast Ohio, (440) 734-3321 or www.lcneo.com
In 1971, Mike Goadby’s western Australian rowing squad was chosen to represent his country at the Munich Olympics.
What does that achievement 37 years ago have to do with his athletic prowess today? Absolutely nothing.
As president of the North American division of Fisher & Paykel Appliances Ltd., Goadby uses that example to demonstrate how meaningless words are without action. You can claim to have done anything, he says, but unless you actually go out and perform today, you may as well keep your mouth shut.
It’s been decades since Goadby has rowed competitively as it turned out, only one member from his old squad actually moved on to the Summer Games, and it wasn’t him but that hasn’t stopped the leader from establishing himself as a successful team player. Since stepping into his role at Fisher & Paykel just over 10 years ago, he’s helped transform the appliance manufacturer’s humble, 10-person office into a thriving, 10-office network with more than 680 employees and fiscal 2007 revenue of $152 million.
Smart Business spoke with Goadby about how to foster teamwork with a good old-fashioned bake-off.
Don’t hesitate to take risks. Risk is all about being prepared to take it as you sit. If you’re not prepared to have a go on the sport field, don’t go out there. It’s the same in the business world.
If you make 10 decisions, and every one of them was wrong, you’ve made one good decision, which was to make some decisions. If you make no decisions, then that’s totally wrong because you didn’t have the balls to go out and make those 10 mistakes.
Create an open environment where people are not frightened to come to you with ideas. Be very clear that you’re not some godlike human being that can walk on water. Just because I’m the president doesn’t make me right; it just makes me the boss.
Communicate in the kitchen.When I’m in a room, there is no rank. It’s not, ‘What does the president want to hear? I’ll get into trouble if I say something else.’
I’m all about saying, ‘Look, I’m here as an employee as you are, and I need to know what is really happening, not what you think I need to know.’ Try to foster that culture on an ongoing basis.
We do that by having social events. We do cooking sessions here in our kitchens where we encourage our staff to do a monthly bake-off.
You get teams of people who are formed together as groups from the office. They go out into our kitchen and create some superb afternoon tea piece, which could be ice cream or could be a meat dish. The rest of the staff come in and sample it at 3 o’clock. Then we have a judging panel at the end of it to decide whose was the best delight.
(It makes them) feel as though they’re a part of the company. They participate in something during work hours that’s social, that I’m there, and that they laugh and joke about. They lighten up the environment so that the people become more familiar with me and are able to communicate with me very, very freely about their feelings.
That’s a great way of breaking down barriers, where people sort of enjoy the camaraderie of the moment and also the fact that you’re there and in an apron getting dirty.
Get out on the front lines. The internal people are just as important as the external people. If you don’t know them and work with them, alongside them, how can you ever know whether you’re failing them or not delivering what you promise?
Get out and work with the people. It’s not about telling them that this is what I could do. It’s about showing others that this is what I do, do. That’s a fundamental difference.
I’ve heard a lot people tell me how wonderful they were on the sport field. I used to be a rower. I was chosen for the Olympic games but back in 1971. Who gives a rat these days? It’s all about demonstrating to the people that you’re as good as what you say.
In corporate life, we’ve all got bottom lines to look at, but basically what I’m about is saying, ‘Look. I’m never going to ask you to do something that I wouldn’t or I haven’t already done, including cleaning out restrooms, including driving forklifts and unloading trucks.’ Sure, there are long hours to put in, but you’ve got to recognize them and be there with them. You can’t ask the people to do things if you don’t lead from the front.
Deliver on your promises. Over-promising and underdelivering seems to be a part of one’s culture these days. Staff [members] lose respect and desire to want to perform because you don’t deliver what you say you would.
Day one, I came out here and said, ‘Listen, this is a great company from Down Under, but look at this tin shed over here. This is what we’re working out of. When we get better, we’ll get a nicer office. When we’re able to afford better health conditions, I will give them to you.’ Fortunately, everything I’ve ever said to them, I’ve been able to deliver.
Constantly reviewing your own work practices is really what you’ve got to do. If you’ve made a statement to the staff of what you’re going to do, you’ve got to measure your own performance. It’s not about just measuring their performance.
HOW TO REACH: Fisher & Paykel Appliances Ltd., (888) 936-7872 or www.fisherpaykel.com
Mary Leslie is always amused when someone points to the stagnant economy as an argument against change. If you hit rough waters, she says, you would be foolish not to alter course and steer toward a clear horizon.
As president of the Los Angeles Business Council, Leslie tries to convey as much when advocating for area business leaders on key issues that impact their companies and communities. On the issue of sustainability, for example, she argues that companies that embrace environmentally friendly practices can cut operating costs, attract business and encourage a healthy lifestyle among employees.
But you’re not going to get everyone on board just by laying out the benefits of change. And sometimes, you just have to let employees go, a lesson that Leslie has learned throughout her professional career, which includes positions as deputy mayor of Los Angeles and deputy director of the U.S. Small Business Administration.
Smart Business spoke with the versatile businesswoman about how to reap the benefits of sustainability and how to get resisters to buy in through training.
Embrace sustainability. It’s a competitive advantage now to embrace sustainability as a concept. You can either choose competitively to embrace this phenomena and the reality of limited resources, or you can choose to ignore it, and then it will be forced upon you.
The first thing is always education. We’ve gone to academia the major universities and institutions. We partnered with the companies that were already doing it. Then we went to government. Where are the leaders in government on these issues?
Between academia, your colleagues who have to be knowledgeable and government, you can pretty much find all your answers
Second, you talk to your employees. Figure out if this is of value to your employees.
Then, you start looking at all the things you do all the things you control: procurement practices, transportation issues, telecommuting, work-related issues.
[If you practice sustainability], you have happy employees and potentially healthier employees. A lot of research has shown in sick buildings buildings where there are fumes coming from the carpet that are toxic people who are sensitive and highly allergic get sick.
The second [benefit] is a lot of employees like the feeling of being part of a solution. If you engage in recycling and doing things that are more sustainable to the environment overall, you have civic pride. You feel like you’re bettering your community.
Also, we know now from a marketing promotional standpoint that it has become an important criterion to a lot of consumers and other businesses.
To many major municipalities, you’re viewed as a better citizen if you have a thoughtful policy and commitment to sustainability.
The other reason, if you own buildings, is that you’ll actually be more efficient and reduce your costs. There’s a bottom line to this also; you’ll save money.
Offer training to resisters. The people who don’t want to change resent it, and you get push-back.
Listen to what the perceived issue or problem is. Try to figure out if that’s right or not or if there’s any credibility to the argument.
There might be some legitimacy to it. If there’s legitimacy to it, often you might slow the way you implement something. But in the end, once you make a commitment, you’ve got to do it. You have to accept that you won’t change some people’s minds. You keep some people, you lose others, and you get some new people. It’s the great cycle.
One of the most legitimate reasons for resistance to change within any business is potentially the fear that the person can’t do whatever you’re asking them to do. Nine times out of 10, if you dig down, the reasons somebody’s resisting you is that they have a fear that they don’t think they can do it.
I’m a big believer in training people or retraining people so that you’re not asking them to do something that they can’t do.
Start with the goal. ‘This is the goal. We all agree on the goal.’ If they don’t agree on the goal, then you’ve got a problem. But assuming that we all agree on the goal, you figure out who’s going to have the aptitude toward that, and then you empower them to do it.
If they start getting frustrated and they still can’t do it, then we try to retrain and move people to positions where they can do well. Once you’ve exhausted all of those things, then you help the person move on.
Find like-minded employees. You want to attract people that value the same things that you do. That’s important.
Part of it is the way you present the job. In the interview process, talk about what the goals and objectives of the organization are and see the response you get.
I always ask the question, ‘Why do you want to work here?’ You learn a lot (about) what their long-term objectives are.
If you say one of the qualifications is you have to have some enthusiasm and passion for the purpose of the organization, I think that’s fair. You’re not just hiring a skill. Hiring a skill is important, but you can teach a skill. You need an attitude. That’s got to be a good 50 percent of it or more.
The benefit of that is that you have people who will do what it takes to get things done and work cooperatively in a team.
HOW TO REACH: Los Angeles Business Council, (310) 226-7460 or www.labusinesscouncil.org
For many executives, the golf course is a sacred escape from the stresses of corporate life. For Don Padgett III, the golf course is corporate life.
Not that the Akron native minds. As executive director of the World Golf Championships Bridgestone Invitational at Firestone Country Club, Padgett enjoys the work as much as a fairway junkie enjoys an afternoon on the back nine. It’s just that his time on the links is a bit more chaotic than that of your average foursome.
“We have approximately 80,000 people that come out to the course during [tournament] week,” says Padgett, whose father served as Firestone Country Club’s general manager for more than two decades. “Add to that 75 of the world’s best golfers, and there’s always things that you’re looking for on the radar screen.”
To ensure that the event goes as smoothly as Tiger Woods’ swing, Padgett never hesitates to step back and reassess a situation, ensuring that he makes the best possible decisions while managing four full-time employees and 1,000 volunteers.
Smart Business spoke with Padgett about how a to-do list can give you extra clarity in times of chaos and how to get everyone on the same page.
Step back and prioritize. You have to constantly prioritize what needs to be done and what the most important thing is to knock out. [It’s being able to] roll with the punches and then being able to wait to hit on a curveball.
They’re not always fast balls. You’re going to get some curve-balls and some changeups, and you’ve got to learn to be flexible and adjust.
Just always make sure you take time to take a step back and look at things. Take some time in the morning and sit down and just make a [to-do] list, and look at that rather than just jumping right in and going at it with your nose to the grindstone. Take that five or 10 minutes.
I always look at it and say, ‘Here’s what I’ve got to get done for the day. Here’s what I’d like to get done for the week.’ That changes on a daily basis, but I usually start my day out like that. We always have a Monday morning meeting, and we go over it there, as well.
We do an annual calendar. There are things that you do each year that you can put on that annual calendar. When we look at that each week, sometimes it might vary a little bit, but then you know you have that on your tickler list to do either that week or that month, and you make sure that everything gets knocked out and falls into place.
It helps you to stay on top of things. Nothing gets overlooked if you take a couple steps back.
Get all the information you can before making big decisions. You’ve got to make timely decisions, but you’ve got to be methodical at times, too.
You’ve always got to think, ‘Is this something that I can make the call on my own, or do I need to consult my staff and involve them so I don’t paint them into a corner?’ If it’s something in their specific area, I usually consult with them before I give a timely answer 100 percent back to somebody.
If there’s something or some detail that you didn’t quite consider or weren’t fully aware of the impact that it might have, you wouldn’t want to make a rash decision and then not have thought about the whole complexity of the issue.
Trust your employees. If I give somebody something on Monday, they’ll usually come back to me and let me know their progress on it. If it’s not completed, we usually address it the next Monday, and they tell me where they are and when they think it will be done.
You’ve just got to rely on them to come back to you. When you have good people and reliable people, usually when I send something off to them, I put almost all of the responsibility for getting that done with them. It’s not as top-of-mind to me because I know that they’re going to follow up and either get it done, or if they’re having issues getting it done, they’ll come back to me and we’ll work through it.
It helps a lot when they know that you have confidence in them that they’re going to do a good job.
Get everyone on the same page. You very much got to make sure you have a strong staff and that you’re all on the same page. We always have Monday morning staff meetings to let everybody know what everybody’s working on.
We look at what everybody on the team has on their plate. Although many tasks would obviously fall in certain areas for that staff, a lot of times in that Monday meeting, if that person, for whatever reason that particular time of year is inundated, we figure out as a team how we’re going to get that accomplished.
It’s crucial that (we) are all on the same page and disseminating that information to the volunteers. We do a quarterly newsletter throughout the year, and we do a daily newsletter throughout the event.
People like to know what’s going on, and they like the inside track. They like to be in the middle of everything. Let them know the interesting tidbits and what’s going on with everything. Make them feel like the essential part of the event that they are.
HOW TO REACH: World Golf Championships Bridgestone Invitational, (877) 942-4849 or www.worldgolfchampionships.com
Rocco Di Lillo leans forward in a booth at a bustling east-side eatery, regaling his lunch party with the story of the Spartans’ stand at the Greek pass of Thermopylae. The narrative wasn’t prompted intentionally. The seasoned businessman was originally asked a question about company culture. But Di Lillo who has successfully founded or led seven companies in the past 30 years, several of which exceeded $100 million in revenue says that while you may forget exact words, you’ll always remember a good story.
“There’s only one way to get into Greece if you’re an army, and that’s through this pass called the Thermopylae,” he says while drawing an invisible pass on the white table cloth with his finger. “The Greeks knew that, and they kept stationed there a troop of 300 Spartans their best soldiers.
“They wake up one morning, and there are 10,000 Persians at the gate of Thermopylae. When the Greeks saw them there, they did two things. One, they sent a guy back for reinforcements. The second is, they made a pact that they would hold the pass until the reinforcements came.
“At the end of four days, all 300 Spartans died, but in the process, 3,000 Persians were killed,” he says, tapping the table with his hand for emphasis.
“The king of Persia stands in the pass, now able to get into Greece, and an adviser tells him, ‘There are 8,000 Spartans in the country of Greece,’ so the king turns, and he leaves.”
Di Lillo pauses and leans back with a satisfied smile and wide, bespectacled gaze. He’s been telling this story to employees for nearly 30 years, and he’s learned not to divulge its correlating moral without letting the details sink in first.
“My definition of a great company culture is when everyone is looking for ways to serve the customer better using their creativity, competency and skills, and accepting ownership for the success of the endeavor,” he continues. “When you do that, then 300 can beat 500, 1,000 or 10,000.”
Since he founded his first company, City Visitor Inc., in 1980, Di Lillo has sought out the best employees Spartans, as he often calls them to take on the corporate armies in whichever industry he finds himself. Before taking the company public and selling it, he led his team to impressive market share in the travel industry at Corporate Lodgings Inc., which provides fully furnished apartments and town houses for traveling or relocated executives. Years later, he helped turn PCX Holdings LLC into the largest manufacturer of electrical mechanical gear for the new construction industry as chairman. Most recently, he’s made a claim in the alternative energy industry with Advanced Hydro Solutions LLC, a developer of hydro-electric facilities.
As varied as these endeavors are, Di Lillo says the one constant has always been his people.
“There’s nothing more magical than a team where people are having fun, making a contribution, making a difference and succeeding at being the best,” he says. “And yet, there are some people who own businesses who don’t recognize the magic of that.”
Di Lillo says too many leaders skimp on the hiring process. If you want team members who will take a stand and give their all for a common goal, then you’ve got to give your all to find them.
In 1980, not long after graduating college, Di Lillo sat at a desk to write his first employment advertisement. City Visitor Inc., a publisher of in-room visitor’s guides and specialty travel publications, had really taken off, and the founder needed someone to deliver the magazine to 145 hotels throughout Northeast Ohio.
For inspiration, he started flipping through the employment section of a local newspaper. What he found were monotonous blurbs detailing requirements and responsibilities.
“None of them seemed to appeal to anything to me,” he says. “They were just boring and not exciting.”
Instead of mirroring those ads, Di Lillo reflected upon those characteristics he wanted in the future employee.
“I said, ‘What do I want in the delivery person for this company?’” he says. “I started to write down ‘friendly, dependable, courteous and knowledgeable of the area.’ I made a big circle around them, and I put ‘postman.’ At that time in my life, the postman was dependable, always friendly and courteous.
“I ran an ad that said, ‘Looking for a part-time delivery person,’ and I described the characteristics. Then I put, ‘Ideal opportunity for retired postman.’ I think I had 26 responses, and I had a postman do this for the first 10 years.”
When writing an employment ad, Di Lillo says to clarify what you want in a candidate. Don’t just list the job’s requirements and responsibilities. If you want a certain personality to fill the role, then ask for it.
“I would be less afraid to talk about the soft issues,” he says. “We say, ‘We’re looking for people who want to be part of a winning team and will join us in the effort with hard work and camaraderie to excel in what we do.’ Would those be things that you would like to have? If that’s what you want, why wouldn’t you ask for that?”
In other words, focus on the characteristics of the person whom you want to fill the job and not the characteristics of the job itself.
“In the hiring process, most companies just start listing what the job is about,” he says. “If you find something that says ‘editor’ or ‘salesperson,’ you don’t have to say too much more about that. Applicants already know what that means.”
Skill sets should never be the sole criterion for a potential candidate’s eligibility. Di Lillo says you can always increase an employee’s expertise through training. Behavior, on the other hand, is a completely different story.
“It’s really three components to what people can bring to the table,” he says. “They have their character, they have their experience, and they have their behaviors. I can do something about the experience. I can teach a salesperson or a secretary to answer a phone, but I can’t really impact your character, and it’s hard to change your behaviors.”
When you write ads that emphasize character, not only are you targeting candidates who have the desired attributes, but you are also screening for people who value those all-important “soft issues.”
“You don’t have to be a fisherman to know if you want wall-eye, if you want pike or if you want trout, you have to use different bait,” Di Lillo says. “They all bite and nibble on the things that are important to them. I decided I wanted people with character, with strong beliefs, good work ethics, and had good values and belief systems. I wrote that and spoke about those issues.
“Now, if I wrote an ad like everybody else did in the paper, that means I could get whatever was out there. But I wanted to find a way to have a selection process. I wrote ads that appealed to the characteristics that were important to build a great organization, and it worked.”
Di Lillo says that writing a great employment ad does take some time. It’s not a matter of churning out whatever pops into your head. But if you reflect upon the attributes that will best serve your company and culture, the hour you devote on the front end will be offset by the years of a great team member’s service in the long run.
“I guess people try to do it, but I don’t know if they take enough time,” he says. “They just think you put any ad in the paper and magically the right people will show up. They forget what’s important, and they focus on what’s busy. Take time to understand, analyze and invest in that process.”
Hire by committee
A flustered waitress is buzzing from table to table as the lunch-hour crowd bulges to peak capacity. When she approaches the corner booth and hands Di Lillo his entree, he asks her to “please pass the salt and pepper” with an air of sincerity that throws her slightly off guard. She smiles, nods politely and passes him the shakers from the far opposite end of the sizeable table. “Thank you so much,” he offers with a pleasant stare of acknowledgement. She smiles again, replies with a “You’re welcome,” and turns back into the fray.
In the hiring process, Di Lillo says a simple “Thank you” can make all the difference. He places so much emphasis on the pleasantry that he’ll actually turn down candidates who don’t offer it after their first one-on-one interview.
“If someone interviews with me, I say, ‘I’m not going to ask you for a decision,’” Di Lillo says. “‘I want you to take this application home. If you have an interest in taking the next step, you need to send this back. If you don’t, it was really nice meeting you.’ If they send it back without a thank-you note, they never hear from me. That was one of the tests. Either they weren’t aware of a simple courtesy or they were lazy, and I didn’t want either one of those two people on the team.”
For those that do respond favorably, the next phase of Di Lillo’s hiring process is a group interview.
“I’ve always wondered how (arranged marriages) actually worked,” Di Lillo says. “They’d say, ‘Here’s a person you don’t know, and now, you’re going to be married.’ That seems like a tough deal. But, in a way, when we’re hiring people, oftentimes, that’s what we do inside a company. A lot of people will hire somebody and say, ‘Here’s a new team member. You’re going to work with that person.’ If the work environment is important, it seems to make good sense to let your people participate in the hiring process.”
Di Lillo says a group interview is one of the best ways for potential candidates to vet your company’s culture. It also gives your current employees a sense of ownership and responsibility and leads to valuable feedback and insight that you might overlook in the initial interview.
“When they come back, they typically will interview with a team of five to six people,” he says. “The team members all get really involved in that. They have such great intuition about what the character of the person is. It also gives the interviewee an opportunity to ask somebody outside of the leader, who is going to be somewhat biased or too optimistic, [about something] that the team members have a better opportunity to clarify.”
When choosing who will participate in the interview, Di Lillo says to choose the team members who would be working alongside the candidate if he or she was hired. That’s typically as easy as picking within departmental lines. In the process, leave yourself out of the proceedings. Your absence will lead to a more revealing discussion.
“Don’t participate in that interview portion of the hiring process,” he says. “They’re with the individual team members and get to ask, ‘What’s it really like here? This guy over here told me that everybody works well together, there’s a culture of excellence, blah, blah, blah. What do you say?’”
Di Lillo says if any of your team members say no to that candidate progressing in the hiring process, then you’ve got to respect that feedback. If you truly want buy-in and the best employees, the whole team has to sign off on that individual before they advance any further. This may slow things down at times, but he says it’s necessary when hiring. If you really want team members who will give their all while working toward a common goal, then you can’t just accept everyone who turns in an application.
“If you get good quality [people] in, you have a better chance to succeed,” Di Lillo says. “No good leader ever wants to fire people or let them go. If you do a good job of screening, qualifying and identifying, then you won’t do as much of the firing. That’s a person who could be with you for 25 years. Choose wisely."
The hardest thing Adam Singer had to do in the early days of his company was to fire employees who were giving 150 percent.
It’s not that the founder, chairman and CEO of IPC The Hospitalist Co. Inc. didn’t appreciate their passion. On the contrary, he admired those employees who wore the brand proudly on their shirts and practically lived at the office. But when it came down to it, no amount of passion could compensate for inadequate skill sets.
Today, when Singer adds to the 800 employees who work at the nation’s leading private practice hospitalist company, he looks for candidates who are overqualified for the position he’s hiring for. By doing so, he never has to let a passionate worker go due to a lack of skills, and he has developed a steady reserve of talent that has helped push the company’s 2007 revenue to $190 million.
Smart Business spoke with Singer about why you should overhire and how to slow down when making decisions in times of chaos.
Overhire. Always look to over-hire. Always look to find someone who you think is overqualified for the job that you’re hiring for. Don’t settle for, ‘Well, I think he can do it if he had this or that. I know he’s missing X, Y and Z, but I think he can get the job done.’ When you get to that kind of decision point, you’re probably making a mistake.
When you’re young and you have a young, entrepreneurial business, you get people who are really passionate, but you end up burning right through them. You want to get someone who can do this in his sleep and then do more. In a growing business, there’ll always be more for them to do, and you want them to expand whatever your idea is into something more.
You end up with a vastly better product or service and a much more exciting place to work. That filters down all the way through the organization.
Make dissenters wear different hats. [When creating a vision], bring an open mind and bring dissent into the room. What sometimes happens is you get frustrated when you get someone who just doesn’t believe your story. It’s frustrating, and it can kind of drag the group down. If you properly manage that naysayer, it can actually stimulate you to have a much better idea at the end.
You can’t allow them to suck all the air out of the room. Many times, what I’ll do in those kinds of scenarios is I’ll change everyone’s hats. I’ll make the dissenter argue for an idea that they might have been against, and I’ll have someone who is for the idea be against it. That becomes a really interesting process in the vision creation. It really changes your mind when you’re forced to argue for something when you’re against it and vice versa.
It really does stop someone from sucking the air out of the room because they’re no longer arguing against it.
Get negative with yes-men. You have to be educated about what the space is that you’re in. If it’s not you as the CEO, then it’s your team. Get unvarnished, nonyes-men feedback about what’s really going on.
[To weed out yes-men,] you could interview for that and reference that before you hire someone, but ultimately, you won’t know for sure until they’re here.
It’s very easy to get satisfied when everyone’s saying you’re right. A CEO should not get comfortable with that.
Just like I did in the meetings to make people switch roles, if I have a yes-man in my midst, I’ll ask them, ‘What part of what I said is wrong?’ That can stop a yes-man in his tracks. If they come back with nothing, then you know you’ve got a problem. You need to stop them from doing that or let them go.
Set aside time to seek feedback. Make sure you have complete domain knowledge. You’re constantly looking to get feedback in whatever form you can, whether it’s direct survey through your customers or whether it’s your people who are out in the field.
We have business development and practice managers throughout the country. Every one of them reports back one observation a week to me every Friday on what they saw in the field. It allows me to get a quick glimpse of everything going on. You can start to see trends that way.
In a very short time, I can get a good feel or anticipation for what is going on. Again, that could be what the customer wants or what my company needs. That’s a technique I use to stay on top of what’s going on.
Slow down. Make decisions a little slower. When you’re younger and you have less experience, you make decisions sometimes when the heat is on and there are emotions attached to it and you may not have all the facts yet. Sometimes when things don’t make sense, you’re better off doing nothing at all.
If I could advise (a younger version of myself), I’d say, ‘That doesn’t make sense. Why don’t you wait another day and think about it again and see if it looks different tomorrow?’
A lot of problems sometimes just go away if you don’t do anything. If you just slow yourself down sometimes, you’re better off.
HOW TO REACH: IPC The Hospitalist Co. Inc., (888) 447-2362 or www.ipcm.com
Edward Mirzabegian may be a perfectionist, but he doesn’t let that slow him down. On the contrary, the CEO of Antelope Valley Hospital was once chastised for going too fast.
Years ago, a former employer had to remind him that he could-n’t expect perfection from those around him if he didn’t take the time to set forth clear expectations in an articulate manner.
Mirzabegian has since adopted a charismatic style of face-to-face communication to get the most out of the health care provider’s 2,100 employees. By sharing the organization’s goals in person, he says, you’re much more likely to get buy-in and shed light on the little things that only like-minded perfectionists may notice at first.
Since Mirzabegian took over as CEO last June, he’s helping Antelope Valley Hospital continue its upward revenue trend, as it posted 2007 revenue of $251 million, up from $243 million the previous year.
Smart Business spoke with Mirzabegian about how to make yourself visible when communicating, even if you’re not physically present.
Articulate your expectations face to face. The first thing you have to do is make sure that people around you have your expectations. You have to let them know your vision and ideas and where you’re coming from. They have to be really given the goals and given the direction. They have to know who you are, how you think and where you’re going.
What works best is [communicating those expectations] face to face. A lot of companies that are very big corporations usually do it with memos and directives and all that. But honestly, in order to really know who you are and understand your direction, face-to-face [communication] is the best. It can be one on one or you and a group of them.
I go around the hospital in a lot of staff meetings, also. Once a month, I go to staff meetings to just let them know where we are going, who I am and what my expectations are from that particular group.
You can get their buy-in more with face-to-face. Why? You can see their body gestures. You can see their facial gestures and animation. That will give you feedback if they’re on the same page with you or no. If they’re not, you can sell them [on your ideas] more. If you sell them by memo, you don’t know when they read the memo what their reactions are.
Make yourself visible. Executives should be visible as much as possible. Visibility improves trust.
If you are an executive or a CEO of a bigger company and you have five branches in different states, you can’t be there all the time, but just being visible [to some extent] helps you to gain trust and understanding and helps things move overall.
Pictures do wonders, also. I do a lot of small flyers where we communicate our goals, and we communicate our accomplishments within the organization. Having a picture there with your message, it improves that letter. They know who you are, and if they see you in the hallway, they know, ‘OK, there’s the guy whose picture is on that particular newsletter.’
So if it’s not totally possible to be visible in person, pictures and videos and all that will help. For instance, if we have a town-hall meeting with a very important message that we want to send, we have meetings at 7 in the morning and 10 a.m. and lunch and 3 o’clock and 8 o’clock. But sometimes, people
who work at night will not see the message. Sometimes, we will video all of these meetings, and we just [set up a television and continue to replay it] in their break room, and people will see and hear the message. Using media is the best way if you can’t be physically visible.
Stir up competition. The status quo is a killer in any organization. I don’t care how successful that organization is. If you just keep it the status quo, that organization, in the long run, will fail.
Competition is a good way to keep people on their toes. Competition is good if everybody competes against the competition, which is outside. That ultimately is going to make or break the organization.
Benchmarking is the best tool. You always have to benchmark yourself with competition, good or bad. You always want to know where you’re standing. Communicating that benchmark, regardless of whether it’s good or bad, is an excellent tool to boost people’s energy and to push them to the right direction.
A lot of people really respond to that. Nobody wants to be a loser. When you show the benchmark, when you look at similar organizations and what they’re doing, that creates a little bit of competition and makes people’s temperatures go higher.
Use incentives to motivate. Stirring up that competition is not the only way. Rewards are very important.
Just like you have to deal with mediocrity, you have to acknowledge the good work, also. You have to acknowledge the people. You have to reward people.
This reward can be a pat on the back or a present or recognition. Sometimes, you just mention somebody’s name in your speeches, in your writing and in your memos. That goes a long way.
When you incentivize people and they reach their goals and you reward them, it always makes the employee happy. The happier they are, the better they work.
If you really emphasize those rewards as a group, it works even better. A group of people can get together as a team and really work for a mutual goal.
HOW TO REACH: Antelope Valley Hospital, (661) 949-5000 or www.avhospital.org