Brooke Bates

Friday, 26 March 2010 20:00

Riding shotgun

Most CEOs talk about bringing their employees on board or getting them on the bus. But if you listen to Lisa J. Stevens, her lingo is more suited to the company she’s called home for 20 years.

Her goal is getting everyone on the stagecoach — which is appropriate, considering she’s talking about Wells Fargo & Co. and its acquisition of Wachovia Corp. The merger, which was finalized Dec. 31, 2008, makes the country’s most extensive financial services distribution, with 10,400 stores and 12,000 ATMs.

As executive vice president and president of the California community bank, Stevens is in charge of the state’s more than 1,000 banking stores, 3,200 ATMs and 21,000 team members — the company’s largest retail banking market and the state’s largest retail banking network.

On that scale, getting each piece pointed in the same direction wasn’t easy. But Wells Fargo’s vision — helping customers succeed financially by providing great service — guided her.

“When you wake up in the morning and you know exactly what your vision is and what you need to accomplish, it makes it a lot easier to communicate with team members how we’re going to get there and what we need to do,” she says.

She also had the benefit of melding two culturally similar companies.

“We’re very focused on helping our communities to be successful,” says Stevens, who chaired Wells Fargo’s Bay Area Community Support Campaign in 2008, which raised a record-setting $6.6 million to benefit local nonprofits. “And all of a sudden, Wachovia came into the picture and into some of the markets. We were starting to see their bankers showing up at events, their bankers interacting with community leaders and their people out volunteering. It was a mutual respect — yes, a competitor, but a competitor that you respect.”

With that common ground, she could focus on optimizing horsepower to propel her region smoothly through the merger — which will include consolidating about 122 stores in California. She relied on constant communication and employee engagement to drive through the change and come out stronger on the other side.

“Diversity of opinion, of perspective is so powerful,” Stevens says. “It’s an injection, for the Wells Fargo team members, of new ideas, and it’s a platform for the Wachovia team members to know that they can succeed because the cultures are so similar.

“One of the strengths we have is that we know that the diversity of opinion is a huge advantage for us. The fact that we’ve got a bunch of people that may have been doing something differently just creates opportunities for us to continue to get better.”

Stay focused

Change is always difficult, and when you’re talking about one of the biggest bank acquisitions in history, that difficulty is magnified. So Stevens definitely knows how easy it is to get carried away with the change.

But don’t.

“You could end up having a full two-, three-, four-, five-hour meeting that was all focused on conversion and the things that need to happen,” Stevens says. “You have to be very disciplined in making sure that you spend a percentage of time just talking about the regular day-to-day business of running the organization.”

So while she updated employees on changes, she kept emphasizing the focus on the customers and that team members are the key to delivering service. It’s like looking at everything through a pair of glasses with one lens zoomed in on the merger and the other focused on your vision. That balance should manifest in every conversation you have.

“Quite frankly, things change all the time in terms of the environment and different things we have to focus on,” Stevens says. “Part of the job is being able to multitask and not get stuck on one area but really be able to look at the broad picture of what’s going on out in the field: What are we doing? What am I doing to support my team to help them be successful?”

It takes consistent communication to remind employees what you’re trying to accomplish as well as constant curiosity to learn how they’re doing.

“When you’re a senior executive, a couple of days of not communicating may seem like a short time, but if you’re the team member that’s going through the merger, it can seem like a lifetime,” Stevens says. “In the absence of communication, people will assume things and often think the worst because of uncertainty.”

Because you’re trying to align everyone, that message must be inclusive — whether you’re bringing together two companies or two departments.

That means you can’t make assumptions about what employees know. For example, when the media started reporting the Wells Fargo-Wachovia merger, it painted Wells Fargo as the cross-selling force and pegged Wachovia as the strong service provider. But that didn’t mean the acquired employees weren’t good at cross selling, so Stevens had to avoid that stereotype when she spoke.

Similarly, stop yourself from using lingo or acronyms that may be familiar to some employees but confusing — and therefore divisive — for others.

That consistent, inclusive communication will reinforce your goal and keep employees committed to it.

“Every time I go into a conversation with team members, we always start with talking about our vision,” Stevens says. “That’s where you start. If you can start there, it’s really easy to make sure that you can get the commitment out of people. Anyone will commit to something when they feel like they’re part of something that’s greater than themselves, when they feel like they’re contributing.”

Share best practices

While your job is to keep everyone rallied around the same end result, the way you’re going to get there might change. Through involvement in four major Wells Fargo acquisitions, Stevens found the best way to stay on the right path through all the twists and turns.

She lets employees take the reins.

“You have to have healthy debate, and you create it by everyone walking in the room trusting each other, knowing that you all want the same thing,” Stevens says. “You have to start with a platform of everyone believing in the same thing that you’re trying to accomplish. And if you’ve done that, then it makes it a safe environment to be able to debate.”

One of the first things Stevens did when she stepped into her position in December 2008 was bring together groups from both companies to share best practices. With the goal of leveraging strengths from both sides, she asked what they were doing that worked — and just as importantly — what didn’t.

“There has to be a certain degree of humility by the acquiring organization to be able to say, ‘We know that we can learn from the other organization,’” says Stevens, who maintained a level playing field by giving both sides equal sharing time. “Bring your curiosity to the table and make sure that when you set up the meetings that you have ground rules about, ‘We want you asking questions. We want you staying engaged with each other.’”

Consensus won’t be immediate. But to Stevens, that’s the beauty of it.

“We don’t want

to always agree. That’s when you get in trouble,” she says. “The power of us having different opinions, the power of us coming from different places, different backgrounds, different perspectives is incredible.”

The key to facilitating debate is reminding everyone you’re working toward a common goal and each opinion is an ingredient in the pot.

“Debate, disagreement — it’s all very good, but you have to master the ability to facilitate that we have to come to an outcome and we’re all on the same team,” Stevens says. “The competition is the other financial institutions; it’s not between Wells Fargo and Wachovia. How can we together be better? When you know that you’re all coming from the same intentions, it makes it really safe to have those disagreements.”

But getting employees comfortable about sharing and accepting ideas goes deeper than setting ground rules and expectations. At Wells Fargo, it’s ingrained in the culture.

“You have to foster an environment that says, ‘I will recognize you and appreciate you when you look for how to be better from other people,’” says Stevens, who gives employees plenty of opportunities to learn from each other.

Watch for those opportunities when you visit other locations and observe employees who excel or struggle. If Stevens notices a team member struggling in a certain area, she’ll set up a phone call or meeting with a colleague who’s doing well.

“When someone is struggling, they may be [too] embarrassed to ask for help,” she says. “So it’s my responsibility as a leader to reach out and say, ‘Hey, I have some ideas that might work for you.’”

On the other hand, if she notices someone getting great results, she’ll share it with the entire team. That included a two-day power-sharing session where she brought together several high-performing employees to share everything they did in certain areas, such as customer service or needs assessment. She sent the results to everyone as “the best of the best.”

To help employees explore each other’s ideas, she uses the learn-own-do process: Approach others’ ideas with curiosity to learn what they’re doing and how, figure out how to tailor it for your piece of the business, and then see it through.

“No matter how good you are and how well you’re performing, there’s always something you can learn from someone else,” Stevens says. “My mom always said you should always either be learning something or teaching something when you’re interacting with people.”

Get commitment

Some leaders head into acquisitions with the ax raised to cut subpar people, processes and programs. Stevens put the weapon down to focus on bringing those things together for better results — even announcing no jobs would be cut.

Instead of worrying which idea was best, she empowered employees to decide for themselves.

“It’s really important that there are certain guidelines and standards that we have across the entire footprint of the organization,” she says. “So you have to make sure that you have the right principles and visions and values in place. But you have to let people locally be able to run their locations.”

Maybe it makes sense to have a customer greeter at a busy store in San Francisco. But that might not work at a low-transaction location. You don’t always know, so you have to rely on feedback from people on the front line — that is, the employees who will be affected by the change.

“The ivory tower can make a lot of decisions about what they think is right,” Stevens says. “But unless you get down into the trenches and you’re with the people, you’re never really going to know what they need and they’re never going to tell you because they’re going to think you just want to hear what you want to hear versus telling you the truth.”

Only after you get affirmative feedback should you implement changes. Even then, it’s sometimes trial and error.

“You need to be able to test and learn,” Stevens says. “You need to be able to try something that you’ve never tried before and see if it works.”

She uses control groups. If Wachovia had a great method for delivering customer service, she’d try it in a small district of 20 stores to see if the process would work as successfully for Wells Fargo. During the trial, whoever suggested the idea can serve as a coach to help work out kinks.

The final step is crucial.

“You have to be able to balance diversity of opinion and great debate with, ‘OK, now we’ve got to come up with a plan and we’ve got to all commit to it,’” Stevens says.

When you engage employees throughout the process, that commitment comes fairly naturally. You just have to make sure it’s there.

“It’s a lot easier for people to commit to something when they know they’ve been part of the discussion,” she says. “So even if I don’t get my way, I know I was heard and I know I probably had some influence on what the final decision is.”

Stevens continues to hold employees accountable with constant reminders of how far they’ve come and where they’re headed next. By exalting the importance of opinion-sharing and constant communication along the way, she keeps the stagecoach rolling smoothly.

“It’s been quick for us to come together and to help each other be successful — faster than I think anyone ever expected,” she says. “I am convinced that we do not need consultants to help our organization to be more successful; we just need to look to one another, to the different things that are working throughout the organization because there’s just so many great ideas out there.”

How to reach: Wells Fargo & Co., (213) 253-7777 or

Tuesday, 23 February 2010 19:00

Mission critical

J. Patrick “Pat” Gallagher Jr., doesn’t like meatballs. But he’s not talking about pasta-complementing Italian cuisine. He’s referring to some quirky advice his father, John P. Gallagher, used for hiring at the family-owned Arthur J. Gallagher & Co.: Avoid “magnetic meatballism.”

“He said, ‘Every meatball has a magnetic force, and they tend to attract another meatball — who then has doubled the magnetic force — who tends to attract more meatballs,’” says the third-generation Gallagher, now serving as chairman, president and CEO. “‘If you’re not careful, before you know it, you’re surrounded with meatballs.’”

Most leaders know how important it is to bring in employees who fit with the company, but it’s especially important in a business like insurance brokerage and risk consulting where people are the business — or where, as the old adage goes, the inventory rides down the elevator every night.

Because he depends on employees, the way they act is crucial. What good is filling the bus with the right people if you don’t build a culture to keep the bus grounded?

“Culture is not like a policy,” he says. “You can’t read it, you can’t touch it, can’t see it. But you can feel it, and it is the reason that people are joining the organizations they’re in — that undefined or untouchable thing that is the quality that attracts people.”

Gallagher’s culture has been successful in finding almost 10,000 employees who fit the mission of the $1.7 billion company.

“If you’re setting out on a journey with a destiny in mind, if you don’t have the right tools and you don’t have the right people, you’re not going to get there,” he says. “People make the difference, and so everything starts from the perspective of ‘Do you have the people on your team that can, in fact, carry out the mission?’”

Here’s how Gallagher gets the right people on his team to drive his company forward.

Develop employees

It started when John Gallagher brought in a couple of men who otherwise would have worked construction. In the 40 years since, the company has honed its internship program to recruit employees who prove their fit through trial. Now, several former Gallagher interns hold management positions in the company — including Pat Gallagher.

One way to find employees who fit is to grow your own.

“We’re not just selling them on joining Gallagher,” he says. “We’re assessing whether or not they have the skills and qualities that would make them successful in our company.”

To be able to make that kind of assessment in an interview, your line of questioning needs to be tough — not so aggressive you’re shouting students out of the room but straightforward enough you’re getting them to open up and explain themselves. In other words, just like you’d be interviewing any other candidate.

“We want people that can communicate well,” Gallagher says. “We grill them. These kids come in and they have four or five interviews that are not softballs. These are senior successful people interviewing hard to see whether or not the kids can stand up to the questioning.”

For example, Gallagher reaps levels of assessment from answers to even the most basic questions, such as why students selected the school they’re attending or the major they’re pursuing, what achievements they’re proud of and which teams they’ve participated in. Then there are the questions more directly related to the job, such as why are you applying, what do you know about the company and what are your goals?

Regardless of what they say, you’re learning about their communication skills and getting glimpses into their personality.

“All that adds together to this elusive thing, which is a personality style fit,” says Gallagher, who uses several managers to conduct interviews and round out the opinion of who fits and who doesn’t.

Unlike hiring someone into a specific position, internships are an opportunity to give your temporary employees a glimpse into all aspects of your business. Gallagher’s 150 annual interns, who come in before their junior year and — if they cut it — get invited back the next year, rotate around the company to lend help and learn through hands-on involvement.

Giving them responsibilities, even if it’s just participating in meetings, is how you turn an internship into a trial for future employment.

“After that first summer, they’re graded every single week: Did they show up on time? Were they groomed properly? Were they respectful? Had they done the studying that they were asked to do before the meeting? Were they able to participate in the meeting? Did they ask good questions after the meeting?” he says, leading to the ultimate question of whether the internship would translate into employment.

But he realized interns who were nervous about the transition were leaving.

“When we went out and interviewed some that had left us, we found that the reason that they thought they had to move on was that they just didn’t know what was next at Gallagher or who to talk to,” Gallagher says.

When Gallagher started working, he had both his father and his uncle, Robert E. Gallagher, to help him find his footing. Remembering their advice and assistance helped him develop the EDGE program, which provides mentors and training courses to assimilate new employees.

“Once we’ve hired them, then we’ve got a whole program that essentially says, ‘Now how do we help you get into this career and be successful like those that you look up to?’” he says.

Ask for sponsor volunteers in the office or department for which the intern will be working, explaining they’ll be expected to help the new employee develop goals and self-evaluate their performance, providing encouragement and support along the way.

“I was lucky enough that I had mentors — we call them sponsors now — that I just enjoyed being around and sucking the knowledge out of their brain, asking them to help me,” Gallagher says. “And that’s what you do for these young people.”

Communicate your culture

You don’t always have the advantage of molding your employees from the ground up. If you’re growing as aggressively as Arthur J. Gallagher & Co., many employees may come in through acquisitions where a certain culture is already ingrained.

When you don’t have years to test employees against your culture, you have to articulate it clearly instead.

“People say, ‘Why do you think you have a different culture?’ and I’ll say, ‘Because, frankly, we believe we do,’” Gallagher says.

He estimates that 99 percent of his due diligence focuses on culture. Finding that match starts with the people and, more specifically, their principles. Gallagher looks at how they do business, which includes both employee and client relationships, as well as the opportunities they provide for training and developing employees.

But culture is a two-way street, so you also have to paint an accurate picture of your culture to the acquired company. To make it dig estible, distill it into small, actionable pieces. Gallagher uses The Gallagher Way, a list of values from professional excellence and mutual respect to trust and empathy.

“They’ll typically come here to our home office. We share (The Gallagher Way) with them and say, ‘These are the 25 tenets as to how we want to run our business. I hope that you agree with those: morality, integrity, ethical behavior, commitment to client and commitment to the development of employees,’” he says. “We’ll talk about that stuff very openly with them.”

Part of that discussion is explaining why your culture matters, not just reading it off of the due diligence script.

“We’re constantly emphasizing the fact that we believe our culture is a strategic advantage because we’re a people business,” Gallagher says. “Don’t get me wrong; this is a competitive world. This isn’t soft and namby-pamby at Gallagher. We work very hard so it’s a huge emphasis on teamwork and openness.”

To help illustrate your environment, offer real-life examples of your values in action. To show the company is the open society it claims to be, where everyone is equally important, Gallagher tells about the decision to freeze the pension plan three years ago.

“Everybody has ‘hollerin’ rights.’ People call me and tell me that we’re making mistakes all the time,” he says. “A branch manager sent me an e-mail and said very simply, ‘I think you’re a good leader. I think you’ve been good for our company, but this is the dumbest decision you ever made.’

“And I wrote back and said, ‘Thanks for your input. I feel pleased that you feel confident that you can say that to me, but we’re freezing the pension plan.’ So it’s a very important part of what we do: We talk about it, emphasize it, work on it, and we train to it.”

Those stories shouldn’t stop after employees come on board. Communicating your culture is an ongoing process, and the key is shaking up how you deliver the message. For example, Gallagher celebrated the 25th anniversary of The Gallagher Way’s creation last year with posters around the office, internal magazine articles, audio vignettes where different employees spoke about the values via e-mail and even a cookbook that emphasized the values between contributed recipes.

But that’s only part of the communication.

“More importantly, you communicate it every day in your behaviors,” Gallagher says. “You just have to live it. I don’t have a magic way to tell you, ‘Come in at 6 in the morning; it will all work itself out.’ That’s not how it works. You’ve got to emphasize it, live it, tell people that’s what it’s all about and let them see you.

“People tend to watch the leader, not listen. So you just have to be someone that actually really does that stuff, and you have to surround yourself with people that believe in it and do it, as well.”

Keep employees on track

Gallagher knows he’s being successful, culturally speaking, if he travels to other locations and new employees tell him they’ve had an overwhelming response of people wanting to help them.

“As long as I can travel around and find out that people are listening to the message of how we want to operate and that that is, in fact, how we’re operating, even in very difficult times, it resonates with folks,” he says.

Because culture is intangible, it’s not always easy to know if employees are aligned. You just have to pay attention to all of the clues.

“Sometimes you ask them. You watch their behaviors,” Gallagher says. “Those that don’t get it, don’t like it, don’t believe in it tend to get pushed out. It’s like being in an organization in college; when so-and-so just didn’t seem to fit, they tend to stop coming. And that’s actually OK.”

But if people don’t weed themselves out, they can drag down the company. Have an evaluation process in place to fuel a performance-driven culture and monitor commitment to your values.

“People love to get a fair review and know that they have a good opportunity,” he says. “That’s probably my biggest piece of advice is make sure your people get good reviews, make sure they’re honest and open and direct and beneficial.”

Let the employee initiate the conversation with a self-evaluation of their progress toward the goals you set together last year. Review everyone against their role in helping achieve business objectives as well as the values they exhibited in the process.

“Was their attitude good? Were they a good teammate? Did they exhibit the qualities that we say are part of our culture?” Gallagher asks. “If you get somebody that [didn’t exhibit the right qualities, you] say, ‘You did a great job; you’re just a pain in the ass in the office.’

“You say, ‘Look, you’re cranky all the time. It just doesn’t work around here. These are my levels of expectation. I need to see improvement in the next quarter. I don’t want you to be here unhappy. If you’re unhappy, go someplace else.’”

That straightforward coaching approach to improve those who are willing keeps employees on track with your culture. If they see that it’s important enough for you to monitor and correct, they’ll know it’s important enough to do.

“People don’t leave jobs that often for pay. The truth is people leave businesses because they don’t feel cared about,” Gallagher says. “So if you’ve got good people on the bus, care about them, mentor them, promote them and then pay them. Give them a chance to have participation in the success of the company. Describe the mission over and over and over again and why it’s going to be fun to accomplish it.”

How to reach: Arthur J. Gallagher & Co., (630) 773-3800 or

Tuesday, 26 January 2010 19:00

Seubert & Associates develop employees

You’d never guess the median age at Seubert & Associates is 48. The 80 employees there — like the one who went skydiving for his 90th birthday — act much younger. Even President Brian Long donned a guitar on his 39th birthday and has been rocking with his band, Midlife Crisis, ever since.

“Although our median age suggests we’re middle-aged, we do believe that continued education keeps you young,” says Long, who led the insurance agency to 2008 revenue of $12.5 million. “I think the way to keep a mind sharp is to be looking at constant and never-ending improvement.”

Smart Business spoke to Long about encouraging employee development.

Q. How do you make your company flexible for development?

We do not have a pyramid org chart. Certainly, you have areas where somebody would report. A pyramid suggests that … if everybody wants to grow within that organization, that some are going to have to leave just because there aren’t that many seats at the top.

Our org chart is what we call a circular org chart. The inception date of [a customer’s] insurance policy is the start of our service timeline. As president of the company, I might have something to do with the service on that account. Everybody has their piece. So if somebody has a claim, it goes to our claims operation. When we’re approaching a renewal, it would need to go to our marketing people to solicit additional insurance quotes, etc., so we can come back to (the) inception date of the policy.

None of us are wired [for a pyramid] so we do profiles on all of our people, including me. I don’t have the perfect profile for president of an insurance agency. I have some areas that I might be good in, some that I might be lacking in. The superstructure allows us all to be somewhat palatable teammates. If I’m lacking in some area, another teammate needs to feel open enough that they can approach me. That it’s not a top-down management structure. That they can say, ‘Hey, partner, you’re weak here,’ and kick me in the tail.

Q. How do you create an environment that encourages development?

In addition to having a café at every location where we have healthy food, we have a gymnasium at one location. We have personal trainers that come in. So we’re saying you should be working harder on yourself than you do on your job. We try and practice what we preach.

We do ergonomic studies, as far as how our workstations should be laid out. We usually like to remodel about every four or five years, just because of the way our systems tend to change. So we just redid our commercial insurance division. Their workflow changed, so we had them sit down with an architect and build out the workflow.

So it helps to have a nice physical environment with pretty furniture and nice surroundings, but the biggest thing about your environment comes from inside you. So you can be sitting in wonderland, but if your attitude is, ‘Life sucks,’ you’re going to get what you expect.

I like the philosophy that Disney has — where you’re not employees, you’re cast members. Even though you’re having problems at home and your kid’s giving you issues, you shouldn’t [have] a lousy attitude. You’re playing the part of the happiest person in the world during that day.

Unfortunately, people don’t separate what happens at home versus work, which is why you need to start saying, ‘All right, the home is what matters first. If that ain’t going well, sometimes work can be your panacea.’

Q. How do you develop employees?

Our entire review process is set up on individual goals. They’re not all done at the same time. Jan. 1 is when everybody does reviews. How much thought can you get in if you’re going to review 30 people in one month? We do every six months from their date-of-hire so they are the only one that has a review on that time frame.

It’s an employee self-prep form broken into simple sections: What were my accomplishments? What would I have done differently? And then: What would you like to see different from your supervisor?

So they’re really going to share with me, ‘Here’s what I’ve done the last six months.’ How does that line up with what you’re going to do in the next six months?

You try and make goals that are definable, quantifiable. So [if] it’s ‘to learn more about insurance,’ that isn’t going to really tell me too much. If somebody says, ‘I want to get a Certified Insurance Counselor designation within this time period,’ we’ll break that goal down. So if it’s a 10-point professional designation, we might say, ‘All right, how many parts are we going to get done in the next six months?’ The review process, which becomes a self-review, helps [facilitate] personal development.

We [also] have what we call self-enhancement plans. We dedicate $1,000 per head if somebody wants to do something to improve. They need to do a one-on-one interview with me.

We started our healthy workplace initiative five years ago. I was very concerned that it would come across like most wellness programs — which means you give people a pedometer, they wear it for two weeks and then they get bored with it. A lot of people, that isn’t where they get self-actualization.

So I’ve said, ‘Anything that you want to do — if you’ve ever decided you want to learn another language, take a pottery class, take dance. — we will bonus you money to improve yourself. So we want you to practice what we preach, which is work harder on yourself than you do on your job.’

How to reach: Seubert & Associates, (412) 734-4900 or

Tuesday, 26 January 2010 19:00

Business as usual

Jeff Margolis knows his place. As the CEO of a public company, he learned that leaders belong below employees, customers and shareholders on the totem pole.

So his priorities were already aligned when he took The TriZetto Group Inc. private — it was just more of the same philosophy.

“You’ve got to put yourself last,” says Margolis, who founded the health care IT solutions provider in 1997 and has served as chairman and CEO ever since. “You have to put your shareholders’, your employees’ and your customers’ needs ahead of your own.”

Ironically, putting constituents’ needs ahead of yours means getting out in front of them.

“When you’re going through change, you need to have a very strong vision of the company that gets communicated [and the] ability to express that in the context each of your different constituencies will understand,” he says.

For TriZetto, that vision was to optimize benefits and care for consumers by providing integrated health care management solutions. Although the half-billion-dollar company was doing well, the board decided — in light of the economic climate — to consider unsolicited bids.

Ultimately, that led to Apax Partners’ acquisition of TriZetto in August 2008. And that meant that Margolis had to keep communicating what the vision meant and how the company was progressing toward it.

He created a master work plan to guide every aspect of that communication, including what messages needed to be delivered to whom, by whom, how and when. He had to develop relevant messages for each constituency and make sure they were rolled out. To maintain consistency, every key message was vetted through Margolis, his head of human capital management and his chief legal officer.

“What we then did was continuously communicated that messaging to our customers on a business-as-normal basis,” he says. “It’s important not to deviate from a business-as-usual basis when you’re undergoing a change of control.

“Basically, you are doing almost all the same things you’re doing when you’re running the business as usual, except you’re better at pointing out what business as usual means,” Margolis says. “Ironically, it becomes more important in times of change to emphasize what is normal and what’s going on on a regular basis.”

Here’s how Margolis broke down his message to maintain business as usual during a change.

Keep employees focused

After the acquisition was announced in April 2008, Margolis and his leaders toured TriZetto locations across the country to share the vision with the company’s 2,000 employees. They gave presentations about the strategies and initiatives that would carry the company toward its goals.

“It’s important for the employees to see that we’re not waiting around till some magical day when the transaction closes to get on with life,” Margolis says. “It is business as usual, and for the average employee, things aren’t going to change much.”

Of course, the employees’ first reaction is to worry that things will change. Give them opportunities to share concerns and ask questions.

After each presentation, TriZetto’s human capital management team distributed surveys to gather additional questions and concerns that didn’t come out in the forum. They posted those questions, along with the answers, on the intranet as part of an online publication devoted to the transition.

“Interestingly, a lot of the questions in these situations tend to be about employee benefits: What’s going to happen to my salary, to my health care, to our 401(k)?” Margolis says. “So it’s natural for the human resource area of the company to manage this employee communications link.”

To move past employees’ “me” issues, Margolis appeases their fears by focusing them on the task at hand.

“It’s important to create a robust enough agenda of things that have to be done so that people don’t really have time for excess nervousness or excess energy,” Margolis says.

He did that by laying out clear goals as precisely as possible — down to the dollars of new software that employees had to sell, the number of deals they had to close and how much they had to improve customer service.

These goals were nothing new to them.

“I’m helping them understand that the same things that would make us successful when we’re not changing ownership are the same things that will make us successful when we are,” Margolis says. “If they keep promoting our business and promoting our offerings to these customers, then that’s the pathway to the least amount of disruption. If they spend a lot of energy thinking about things that they can’t control, then that raises the probability that we’re going to mess up with our customers.”

From dealing with new owners to adjusting to a new governance structure, chances are you’ll see more day-to-day changes than the employees will. Margolis found that by reminding employees of his busy schedule, he put the big picture into perspective and kept them focused on their duties.

“When you let them know a little bit about what’s going on in your life as a leader, it helps because they’re going, ‘OK, we’ll do our job. You do yours,’” he says.

Beyond sharing what you’re doing, you should also share what you’re seeing from your position. Be honest about smooth stretches ahead as well as obstacles.

“You have to balance your confident expression about what the company can accomplish with the realities of whatever might be going on in the marketplace,” Margolis says.

For him, that balance is in the details. More specifically, it’s in the words he chooses when he crafts messages. If you want to build trust, you shouldn’t promise more than you can deliver.

“You have to be careful not to speak in absolutes that nobody believes anyway, using words like always and never or promising people that you’ll be here forever,” says Margolis, who is conscious of keeping his credibility intact. “But you can say, ‘It is my genuine desire to be part of the company going forward. It is my expectation that you will join me on this journey.’”

TriZetto’s transaction closed near the onset of the recession. With such a tumultuous backdrop, being blunt about possibilities is crucial. Margolis was frank about what might happen if employees didn’t meet goals during the transition. So he presented a backup plan — lowering the company’s expense structure — in tandem with their goals.

“Make sure you talk to the employees like adults, not like children. Don’t sugarcoat the potential things that could happen,” he says. “[Have a] very adult, business conversation, as opposed to doing something like, ‘Well, if we all believe and if we all have faith, then I’m sure everything’s going to be all right.”

Walk in your customers’ shoes

Margolis realized that TriZetto only existed because of its customers in the first place. So there was no question about how much attention to give them during the change.

His focus on customers started behind the scenes, a s he used customer needs as a mantra to keep employees motivated during the transition. He also used employees to vet customer messaging.

“When it comes to customers, you have to be, first and foremost, honest about any changes that could impact them,” Margolis says. “You need to think about what their biggest fears or concerns might be.”

To help him think through those concerns, Margolis brought his management team and key customer-facing employees together. After they expressed their personal concerns about the transaction, he immediately pulled them into the customers’ shoes.

“You say, ‘Now, let’s focus on what’s really important: our customers,’” he says. “‘Let’s think about how they’re going to react to the news of a change of control. Let’s go through product line by product line, offer by offer.’”

That focused approach gets the team thinking about the different types of customers you serve and the varying reactions they might have.

Of course, the real feedback comes directly from the customers instead of being channeled through employees. Hopefully, those channels can predict questions that will pop up, but you can’t avoid an active approach to customer communication.

Margolis brought in a few key customers for focus groups, but those have to be planned and timed carefully during an acquisition that takes the company private. Obviously, you have to follow the laws that restrict who you can talk to and what you can share. Margolis, for example, had to squeeze his focus groups into a weekend prior to the public announcement.

The same questions you ask in the focus groups should carry on after the announcement. Margolis assigned executives to key customers. Within the first two days after the announcement, the executives called their customers to take temperatures and garner feedback.

“Once the announcement was made publicly, then we worked with customers on the messaging further, saying, ‘What are your concerns? What do you want to know?’” says Margolis, who also encouraged customers to point out gaps in TriZetto’s communication.

Next, equip employees to do the same kind of outreach with the rest of your customer base. Margolis used online webinars to train his sales team, emphasizing points that employees should cover and including frequently asked questions to help them prepare their message. Plus, they can hop back onto the intranet whenever they need additional instruction.

Because you probably won’t think of everything, encourage employees to add new questions to that database as they talk with customers.

To gauge customers from a different perspective, you may also want to employ a third party. TriZetto hired independent surveyors to call customers before and after the transaction to see how loyalty scores were impacted.

While a lot of time and effort goes into customer communication, you don’t want to overdo it. Staying in touch frequently through your employees as well as a third party should help you gauge whether customers are feeling overwhelmed with information.

“You don’t want to make too big a deal of it,” Margolis says. “If we were to announce that we were discontinuing a major software product, that would be a much more profound impact on a customer than announcing that we were going private. They would actually have to do something different in their business going forward, whereas the change of control, you’re really notifying them and helping them understand the value thesis of this new ownership regime.”

Explain your reasoning

When someone purchases all of the shares in your company, your shareholders are really the ones at stake. You’re working on their behalf, so it’s your responsibility to not only derive the best deal for them but also to keep them apprised of the entire process.

“They had a completely different concern, which is: Was the value of the company and the process we were undertaking being maximized?” Margolis says. “We had to make sure that we were talking about and highlighting the value of the company. … You have to be very honest and straightforward about how the company is performing, about the market conditions you’re facing and about the actual process to create value for shareholders.”

First, shareholders are going to wonder why — why are you being acquired, why did you choose the private equity firm that you did, and, above all, why now?

Be prepared to share the thought processes, discussions and research that went into the decision. Margolis explained that the board began looking into unsolicited bids. Then, after brainstorming what potential acquirers might look like, the board went through both bankers and personal contacts to vet a mix of financial and strategic buyers.

He also told shareholders about the value presentations management made to interested bidders — after the fact, of course, because those happened unbeknownst to investors, employees or customers.

Shareholders will also wonder if they got a fair deal in the transaction. TriZetto’s investors received $22 per share, which represented a 29 percent premium over the 30 calendar day average of the closing stock price. The board worked with an investment banker to derive the maximum value. But in order to prove that you sealed a good deal, just explain the whole process that led up to it. It should speak for itself.

“What you need to explain to the shareholders then is how is this process conducted, about how many organizations did you talk to, why did we think now was a good time to entertain these offers, why did we think that $22 a share is a fair value for the company,” Margolis says.

Unlike your other constituencies, many shareholders will say goodbye after the transaction. So the best you can do is end on good terms. Margolis and his vice president of investor relations wrote personal letters to major shareholders and analysts after the deal closed.

“I thanked them for their support over the years,” he says. “I let them know that I looked forward to encountering them again in the marketplace, perhaps at some future time, and hoped that they were very satisfied with the outstanding outcome in terms of the value we created for them as shareholders.”

How to reach: The TriZetto Group Inc., (800) 569-1222 or

Tuesday, 26 January 2010 19:00

Building a sanctuary

Aaron Chernow is trying to make his company like a refuge from economic woes.

“There’s so much negative data and spin out there and it’s so available to everyone now,” says the CEO of Resource Technologies Corp. “It seems like that whole sky-is-falling mentality is so pungent out there.”

And Chernow knows how easy it would be to give in to a cut-and-brace philosophy. But he wants to turn that pressure into something positive. He’s doing it by focusing on the staffing firm’s core values, keeping his 250 employees in the know and watching his own stress levels.

“You really need to focus on creating an environment that is light, that provides sort of a sanctuary for people to come in,” says Chernow, who led the company to 2008 revenue of $32 million.

Smart Business spoke to Chernow about keeping your employees’ spirits high when the economy is weighing down.

Find a focus. When you enter into tough times or you increase the expectations on your work force, you need to increase the presence of what makes your organization special. So for us, it’s a focus around our core values.

[Our employees’] expectations for their success are always through the roof. In tough times, it’s hard to manage that: ‘The effort that I put in last year is not getting me the results this year.’ Our way around that is focusing elsewhere to help them find their self-value. So we celebrate the small wins at work; we celebrate the big wins at work. We also celebrate their commitment outside of work. That seems to create a really positive, energetic, authentic culture.

We created a communication group about nine months ago. This was a group of eight people that had tenure but also displayed the core values. We talked about ways to protect our culture. They thought that the focus on the individual employees was really important.

There was a suggestion to put a video together of all the things that people do — not only within the organization but externally — that drives their passion for excellence. We put a two-minute video together that had five clips, sort of a day in the life of our employees and some of the special things that our employees do outside of work that relates to our core values.

We shared the video with all of our internal employees and then they decided that we should send it to our clients. So we’ve celebrated what makes people special, both during the workday but also when they come home from work, whether it’s coaching their son’s soccer team to taking care of their elderly parents [or] to donating their time for Meals on Wheels to managing having six children.

Keep in touch. Just the simple act of communicating with people and giving them honest and frequent communication on where we are as a company [makes them] feel like they have a better sense of control over something that they may not have control over. It was important for us to hold a lot of companywide meetings and provide them the facts as we knew it. That gave insight into how we were going to handle it.

Sometimes the facts were not what they wanted to hear, but at least they knew that we were authentic, not giving them just the good facts and holding back the bad facts. The only thing that you can do when you don’t know what’s going to happen is speak honestly and openly and not promise anything that you can’t deliver.

We relayed to them where we stood revenuewise, where we stood on our relationships with our core clients, the information that we were receiving out of them. Every organization has a different balance depending on what their employees are used to hearing. If our employees were never used to hearing information or financial results or where we stood with respect to our clients, if this was the first time, it would be overwhelming.

When you communicate with people as much as we do on a one-on-one basis, you get the feeling when people are stressed out and they’re in need of some sort of [activity.] We have our critical numbers that we run our business on. Everyone is attuned to those critical numbers; they’re published on a weekly basis. So when those successes are slow to happen, we notice that people get tight. The banter also quiets down. When you don’t hear the banter, either they’re working really, really hard or maybe they’re pressing too tight or they’re too stressed out.

Keep your stress in check. Our executive team consistently utilizes one another to evaluate our strengths and our weaknesses. We put a personal priority plan together on a quarterly basis for each other, in which we focus on one of the areas that we would like to strengthen. It acts as a support group in making sure that we’re focused on those things that we want to get better on.

As a leader, I did not want to let my weaknesses become the company’s weaknesses. And so I promised myself that I would listen 10 times more than I did the previous year. I thought that if I truly listened, I would really understand where people stood and where the market stood. That is an opportunity for you to learn but also, probably more importantly, for the people to feel comfortable in their own decisions and their own opinions.

And I also quit golf. For most type-A people, golf is the perfect hobby to flex your desire to conquer something. I have never conquered the game of golf. Every time I got on the golf course, it was not relaxing at all. In fact, it created more anxiety that I couldn’t relax. So I hung up my clubs, and I spent my free time with activities that I could actually start and finish and that provided me a sense of accomplishment.

Weaknesses are accentuated when you put pressure on a person. Don’t let your weaknesses lead the organization, especially in bad times.

How to reach: Resource Technologies Corp., (800) 521-2478 or

Steve Wilson can’t lead without followers. So if you ask him to share his leadership secrets, the answer has nothing to do with him.

“The key is the people you surround yourself with,” says the chairman and CEO of LCNB Corp., the holding company for LCNB National Bank and Dakin Insurance Agency Inc. “My biggest job is to put round pegs in round holes — in other words, to get people in a position where they can succeed.”

Wilson starts with a thorough hiring process to identify which pegs will make the best fit at the company, which had $42.8 million in gross revenue and $650 million in assets at the end of 2008.

Then he keeps communication flowing, both to track progress and gather input. Along the way, he offers development opportunities to keep his 250 employees keen.

“The success of your organization is 100 percent directly related to your people,” Wilson says. “So if you’re not being successful, you probably have a people problem.”

Smart Business spoke to Wilson about building a business with the right people.

Hire for a fit. I look for people not necessarily trained in what I want them to do. I look for quality people that are enthused about doing a good job, learning, having a lot of pride in what they do. If I had two people, one that was enthusiastic and excited about working, versus a person that was well-trained at the task I was hiring for, I would hire the former person 100 percent of the time.

I try to talk to [candidates] multiple times, and I try to see them in more than one setting. Just having them come to my office and sit and talk would not be enough. I want to give them a tour of our facility and watch how they interact with other people. I want to see how much they care about different aspects of what we do. I want to watch their eyes and their smile, and I can sense when they’re excited about something.

You look if they care about other people. Are they self-centered and constantly bringing the conversation around to selling themselves? Or are they genuinely concerned about the goals of the organization, the people they meet?

If the most important thing is the people you surround yourself with, take plenty of time with that. Don’t short-change that process. Just like somebody you would meet at a picnic, just naturally if you spend some time with somebody, you begin to understand their character and their motivation.

Keep communicating. It normally starts with, ‘Hi, how are you? What’s going on?’ And then you bore down to specifics if there’s a specific that needs to be talked about. Maybe I’m going with the objective of questioning why they’re not reaching a certain goal. Or maybe I had no real agenda but I sense there’s something on their mind. Maybe it’s a five-minute conversation about the weather and you move on because you can tell nothing else is on their mind. Or maybe what you thought was going to be a five-minute conversation turns into an hour conversation.

You’ve got to explore it with them. Even if you disagree with them, you’ve got to show them the respect. You can’t just say, ‘That’s a stupid idea.’ If you think they’re on the wrong track, you have to take the time to explain to them why, while it might be a good idea in some instances, it doesn’t work here. Then to gently guide them back, not to get angry because they brought something up or not to brush something off and ignore it. If it was important to that person enough to bring it up, you better spend the time to explore it with them.

You’ve got to establish that trust. When someone has a concern, you can’t listen to it and not get back to them. You need to get back to them, even if you’re getting back to them to tell them that whatever they’re concerned about can’t be changed. You’re at least communicating with them.

Offer improvement opportunities. You can’t avoid the negative. But you don’t criticize the person; you criticize the performance. So don’t go in and say, ‘Wow, you’re terrible. You do a really lousy job.’ You go in and say, ‘I know you’re working really hard, but we’re just not getting it done. What do you think is happening here?’

Provide opportunities and let them fill gaps and do classes where they think they need training. For example, we pay 100 percent of tuition and books for any banking course that our employees want to take.

And then we have a tuition reimbursement program. We say to people, ‘If you don’t have an associate’s degree, you should be working on one. If you have an associate’s and you don’t have a bachelor’s degree, you should be working on one. If you have a bachelor’s and you don’t have a master’s, you should be working on one.’

We pay 50 percent of tuition and books on any course that a person needs to take to gain a degree. We want that degree to be related to work, but once we approve that they’re going for a degree, then we’ll pay for basket-weaving if they need that as an elective to get that degree.

I talk about those educational benefits every time I go to an office for training or any other reason. If I have a group of employees together, one of the things I always talk about is, ‘We’re going to grow, we’re going to prosper. We need you to do more tomorrow than you’re doing today. Please, please, please take advantage of our educational benefits.’

I have to have patience. If they’re good at what they do and I’m encouraging them to do more and they don’t want to do more, I’m foolish not to be patient and let them just be a good teller if that’s what they want to do. So you lead a horse to water but you can’t make them drink — [that] doesn’t mean they’re not a good horse.

How to reach: LCNB Corp., (513) 932-1414 or

Wednesday, 25 November 2009 19:00

Reaching out

If employees aren’t happy, Stephen E. Walters isn’t happy. He knows an isolated drop in productivity can impact his entire law firm. So why shouldn’t the firm help struggling employees?

That’s why Reminger Co. LPA established an Employee Assistance Program in 2001. The management realized some of its 335 employees faced problems that the standard benefits package couldn’t alleviate.

“When you’ve got personal issues that are affecting you, they affect your ability to do your job and it shows,” says Walters, the managing partner. “So you reach out and say, ‘What’s going on? We know when things are going well, you’re going to be great.’”

First, you have to establish trust so employees will feel comfortable opening up. It starts in small ways, such as simply saying hello when you pass someone in the hall, and gradually grows into longer conversations.

“The reason you say hello to somebody and you see how they’re doing and you treat everybody like you would want to be treated is … so they gain trust that this is someone who actually cares about other human beings,” Walters says.

You’ll also get to know employees through that interaction, providing the backdrop you’ll need to identify if they fall off track.

“You’ll see someone who has an established pattern of work change,” Walters says. “You look at attendance, attitude, quality of work, which are the indicators of how happy or motivated your people are.”

When you notice drop-offs in those areas, pull the employee aside. Because it may take multiple conversations to uncover the real problem, you should entrust the program to someone who has time to devote. Walters relies on his director of human resources.

Try to offer internal resources when possible. For example, Walters might direct an employee with financial hardships to a financial expert at Reminger who can help coordinate their bills or set a budget. The firm may even pay off an employee’s debt and work out a repayment plan.

But you won’t always have the resources, so you may have to refer employees elsewhere. If it’s a medical or substance abuse issue, for example, you need to recommend professional assistance.

But there is a catch — and it will help you gauge how much you can offer.

“Make sure that if you are helping someone, you know they have the ability to pay you back,” Walters says. “You don’t want to just say, ‘Here is a gift.’ You want to say, ‘We’re going to help you, but we also expect some things from you, as well.’”

Your program shouldn’t be built on handouts. Establish the employee’s end of the deal upfront, whether they’ll be making payments for a bill the company footed, bringing you copies of their credit report or letting you check in with their AA sponsor.

Thinking ahead to that follow-up will help you decide how much time, money and effort to invest in each case. You’d be able to offer more help to an employee with a few thousand in debt than one with hundreds of thousands.

“The point where you say how much is too much is when you know that they’ll never ever have the ability to give back to you what you’re giving to them,” Walters says.

It would be a mistake to help everyone to the extent he or she requests, especially if the same employee is coming to you with the same problem multiple times. The challenge is discerning who you can help and who will be the most successful when they recover.

“One, you want people to do a good job,” Walters says. “Two, you want to retain good people. But the third and most important is you want to treat other people well, and if you can help them out, it’s great.”

How to reach: Reminger Co. LPA, (216) 687-1311 or

Making contact

Before you can help an employee, you have to know the problem. So Diane Giorgi, the director of human resources at Reminger Co. LPA and the head of its Employee Assistance Program, has to be a good listener.

Here’s Giorgi’s advice for establishing open communication:

  • “When somebody walks in your office, you’ve got to put your pen down. Look up at that person and really establish eye contact. Invite them in to sit down. Make your office inviting. Always have a very pleasant demeanor so that people are not afraid to approach you. Half the battle is getting them in.”
  • “You really cannot have a tone of judgment about you. We all come to the table with preconceived notions, so you really have to clear those out. You have to remind yourself that people come from all walks of life, even if you have to leave little quotes around your office or constantly do reading about how people overcome crisis situations and difficulties.”
  • “You have to limit the contact to within the hours of the workday. It’s easy to let this get away from you. It’s easy to give them your home number and say, ‘Call me on the weekend if you need me.’ You can’t do that, because it’s too much then.”
Wednesday, 25 November 2009 19:00

The Long-Stanton Group gets everyone on board

Daniel B. Cunningham wears several hats in his role.

In his owner hat, for example, he sets the vision for The Long-Stanton Group. He communicates that to his 210 employees, but they can’t really change his direction.

However, they do have a say in how they’ll get there. So when Cunningham switches to his CEO hat, the strategic discussion is on.

“Strategic plans, to be successful, have to become part of the culture of your company,” says Cunningham, who serves as president and CEO of the metal stamping company and as president of its counterpart in China, Long-Stanton & Lee.

But for the strategy to infiltrate the culture, Cunningham knows he has to get all of his employees on board. That takes a lot of communication and open, healthy debate across the companies, which had combined sales of about $20 million in 2008.

“You’ve got to have buy-in,” he says. “Once you have buy-in, then you can turn the knob up or down.”

Smart Business spoke with Cunningham about encouraging buy-in from your employees.

Encourage disagreement. You make a safe environment during your strategic planning process. You make it safe for people to disagree. You explain upfront that the purpose of the strategic planning process is to get alignment and commitment within top leadership of the company. You explain that before you even go on the strategic planning process.

You have to lead by example. The top executive in the room must show leadership by not snapping at people and not allowing other people to act disrespectfully.

The No. 1 job of the top leader is to say, ‘Gee, Mary, what do you think about this?’ and bring people in. It’s a fine line because it’s not consensus management, but yet it’s not military, top-down, do it my way or the highway. You do a lot of circle back arounds, where [you say,] ‘Mary, I know you said purple with pink polka dots. It looks like it’s going to be green. First of all, does that make some sense to you? Can you support this?’

Generally they’ll say, ‘Yes. It’s not how I would do it, but I will do it and I won’t complain about it.’ Sometimes you have to say, ‘Well, I don’t totally agree with that, but I can see the point. I will do everything I can to make it successful.’

In extreme cases, if somebody says, ‘I just don’t see it. I’m not happy,’ they would have to part company with the company. If they don’t believe in the strategy, they’re going to be miserable and they’re not going to be successful. You have to be prepared for that.

What is not acceptable is that once people commit to something, in six months, they’ll say, ‘Well, I wanted to do it this way. That’s why it’s not working.’ You can’t do that. No, no, no, no. That’s against the rules. So we need to make people comfortable now to disagree, because once we get rolling, this is the way that we’ll depend on people to do it.

Communicate constantly for buy-in. As you’re developing a strategic plan, you’re constantly thinking: How are my employees going to react to this? Because you want employees to buy in to this, too. The communication of the strategic plan is always done by the P&L manager for a particular area of the business. As they’re developing the strategic plan, you’ll hear them say, ‘That might work in this area, but it won’t work in my area unless we do this.’ By the time we have the strategic plan done, there might even be some initial discussions with some of the employees that we think might object.

There’s communication of what the plan is, all the time knowing that buy-in is important. You spread it out over time. In other words, you don’t [say,] ‘OK, here’s our PowerPoint strategic process. I’ll send it to you in the mail.’ The strategic process takes about eight to 10 weeks every year, and in between those meetings, that’s when you’re talking to your subordinates. There needs to be a soak time because the strategic plan is dealing at the cultural level. You’ve got to bring it up and bring it up.

All of our P&L managers see all of our employees on a weekly basis. It’s already been dialogued: ‘What do you think of this? Do you think we can get these machines moved over here so we can make a sale here to improve the delivery?’ So by the time you do a formal presentation, employees are already 80 percent up to speed because they’re going to be involved in implementation.

Gauge buy-in. [Some employees] have the results and also are in line with the [strategy.] Those are your superstars. Those are the ones you just guard and you nurture. They’re high performers. [Other employees] are not quite getting results but they believe in the company. Those are very good employees and you can usually coach them to get the results.

When you have someone that believes in your [strategy], they’re excited. They’re literally bright-eyed and bushy-tailed. They come to see you and say, ‘I didn’t get the results this time, but here’s why and I’m going to really work hard. Maybe we need to tweak this a bit, but I believe we can get there.’ It’s your responsibility now, but I might suggest you work on this. Then, of course, measure it.

[Other employees] are not getting results and they don’t believe in your company. Those are going to have to say bye-bye. That’s usually pretty clear. Usually they’re pretty sour people. It’s the ones that kind of hang away from everybody else. It’s not just being unsocial; it’s more maybe a snappy, caustic remark. There’s no sense of working together.

How to reach: The Long-Stanton Group, (513) 849-3959 or

Wednesday, 25 November 2009 19:00

Phillip Cox improves goals at Cox Financial Corp

Phillip R. Cox is so insatiable when it comes to achieving goals, it makes his employees hungry to achieve more, too.

The president and CEO of Cox Financial Corp. has an unshakable desire to improve. He sets goals that constantly push his limits.

“Don’t get too comfortable with what you’ve already done,” he says. “With satisfaction comes complacency. We’re testing ourselves by setting goals to improve what we’re already doing.”

Besides stretching himself to grow in his role at the financial planning firm, Cox also has opportunities for improvement on several boards. He serves as chairman of the board for Cincinnati Bell Inc. and as a director for Duke Energy Inc., Diebold Inc., The Timken Co., Touchstone Mutual Funds and The Long-Stanton Group.

“I’m surrounded by the sense of accountability and the fact that continuous improvement is necessary,” he says. “It almost becomes a way of life.”

Cox’s multiple efforts to improve himself and his company inspire his employees to do the same. In 2008, they earned combined commission around $110 million.

Still, he keeps pushing them to do even better, keeping them accountable with multiple checkpoints.

“The person who says, ‘I don’t need improvement; I’m already there,’ is going to end up losing,” he says. “We’re not losers. We have to acknowledge that we can do better, that we want to.”

Let employees set goals

The drive to improve a company starts with employees. So Cox’s first step is helping them set challenging, relevant goals.

Instead of jumping straight to how they’ll benefit the company, the goal-setting process must start with the employees. First, ask what they want in their personal lives. Cox even examines their motivators further by having them rate certain achievements, such as prestige, money, power, self-esteem and helping others.

If goals originate from those personal priorities and then spiral outward, commitment is automatic.

“I can’t make the goals for them or they’re artificial,” Cox says. “It starts with what they have said is important to them and questions, more importantly, why is it important?”

Only after you understand the why can you ask how they’ll meet their goals and begin tying personal aspirations to performance targets. For example, an employee might say money is important and he would like to earn $150,000 this year. First, try to uncover why that’s important and why he is setting the goal there. If you know he wants to buy a new house, for example, you can motivate him with reminders of that aspiration.

Next, you address how employees can reach that goal through their job, again posing the question to them first. They’ve already bought in to the end goal because they initiated it. Now it’s just a matter of agreeing on the path they’ll take to achieve it.

Cox takes a chain-link approach by asking employees to specify each step of the way, down to the number of calls they must make, the number of appointments they should set up from those calls, the number of sales they need to land at those appointments and the average amount they will receive from each sale.

When goals are broken down into such specific steps, you will have built-in checkpoints for the future. It will be easier to pinpoint where employees fall off track. If they’re making enough calls and setting enough appointments but still falling short, for example, you know to provide additional sales training.

When you work backward from their ultimate aspiration, they will see how those steps are necessary. If instead you handed them a list of tasks to achieve, that connection might get lost.

“People have to see that the best way for them to manifest their personal goals is for the organization to manifest it,” Cox says. “You’ve got to [say,] ‘This is what you want for your life. Now here’s the vehicle with which to do it.’”

Your job is to keep that vehicle pointed in the right direction: forward. You should provide the push employees need to set challenging goals by reminding them to consider what they want.

“They try to do the thing that’s more palatable to them as opposed to the thing that will get the job done,” Cox says. “That is where the candor comes in. It always comes back to, ‘This is what you said you wanted. Are you willing to pay the price to do that?’”

Surround employees with accountability

Once you shake hands on an agreed goal, you’ve also sealed the accountability partnership. Surround employees with checkpoints and motivation to keep them tracking forward.

Cox’s board experience paints a picture of what accountability looks like in the strictest form, serving as an extreme example for his employees. Each quarter, they see his public accountability in action through the reports he must file and the analysts he must answer to.

“It’s too bad we don’t all live our lives like that, where every quarter the whole world has its spotlight on you,” he says. “It says, ‘You said you would do this. You didn’t. Why didn’t you do that? What are you going to do about it?’”

Even though Cox Financial is a private company, Cox doesn’t let his employees off the hook so easily. Besides encouraging them to enlist co-workers and family members as their personal accountability partners, he holds them publicly accountable — at least in the office. He posts everyone’s results for comparison, which often triggers self-correction.

“People are motivated by discomfort,” he says. “They have to be uncomfortable enough about where they are to want to make a change.”

Cox feels that same pressure on his boards as he constantly measures himself against other leaders who are going after similar goals for their companies.

“You watch how other very talented, smart people — often with greater resources — fumble and fail. That buoys me to say, ‘Jeez, we are doing some things right,’” he says. “You also watch them succeed and you learn from what they do.”

He wants to create a similar environment where his employees can be motivated by and learn from each other. To build that, you have to do more than simply promote accountability. You must also empower employees to take their progress into their own hands.

All you have to do is remind employees that they set the goal in the first place because they wanted it.

“People have to motivate themselves,” Cox says. “I can only be the reminder of that motivation and the reminder of the accountability for them living up to what they said they were going to do. That’s where the motivation takes place: ‘Are you really committed to what you said you’re going to do? Are you a man or woman of your word?’”

Help employees reach goals

Although employees are responsible for setting and meeting their own goals, your support can make a big difference. You’ll help them more by setting an example and offering subtle pointers than by dragging them in the direction you want them to go.

If they’re falling off track, the solution must start with them — as in every other step of the employee-centered process.

“You ask them first because they’re the responsible

party,” Cox says. “Trying to solve problems of other people is the wrong way. Before you say, ‘Let me help you do this,’ you’ve got to see what they’re willing to do to help themselves.”

First, remind employees that they said their goal was important for a reason. Ask if that really is still important or if it needs to be modified. Also investigate whether something else is going on to keep them from achieving it.

You should be more like a guide than a dictator. So even if you’ve observed their inadequacies, you’ve got to give them the first shot at improving their performance.

“You can observe all you want and tell people what’s wrong, but until they believe and buy in, you’re going to have a difficult time changing them,” Cox says.

Realize that it’s often hard for people to admit weaknesses, so it may take some coaxing. That’s where your example can set the pace.

“The first way to improve is to acknowledge that we need improvement,” Cox says. “I will always say I need improvement in several areas and I’m working on it so they will get a sense that … it’s OK to seek and need and want help. But you can’t say, ‘I’m not good,’ and just leave it there. You get better at it.”

To show your support for the second half of the equation, you can walk the path toward improvement alongside them.

“You do the same things you ask them to do in training,” Cox says.

And he does.

During cold call training, for example, he’ll grab a telephone and a list of unfamiliar names and start dialing. Not only will employees learn from your approach, but the simple fact that you refuse to watch from the sidelines will both encourage them and gain their respect.

“I make it clear [that] I don’t like this. Particularly at this stage in my career when I don’t have to do it, it’s even more difficult,” Cox says. “But I’m going to give what I command so that I can command what I will.”

Tie it all together

Each employee’s progress toward a goal should fuel the company’s overall improvement. Although that usually happens naturally, you have to keep the relationship in check.

Obviously, an employee’s financial goals will directly affect the company’s cash flow, making a connection between the individual and the team clear. But even abstract goals, like improving communication skills, tie into the overall company’s growth.

“You can’t not improve the team when you improve yourself,” Cox says.

For example, a baseball player will hone his batting skills independently with additional practice. But when he hits a home run at a game, the reward isn’t solely his own. Because he’s part of a team, his improvement is inherently a contribution to the other players.

“Even in being self-serving, if you serve yourself well, you will serve the organization of which you’re a part,” Cox says. “Motivation has to contain a certain amount of self-interest.”

That’s why goal setting shouldn’t start with a heavy-handed fiat of what’s best for the company. It’s easier to start with each employee’s internal motivators than to force yours on all of your employees. Their internal drivers will propel them further and faster than your mandate — and will automatically reap broader benefits, as well.

But you do have a problem if someone’s self-interest becomes paramount. For Cox’s domino effect philosophy to be true, others have to actually benefit. Personal motives become cancerous if — instead of serving as an example and encouraging co-workers to improve — employees boast about their achievements and demean others.

Cox keeps an eye on this by simply walking around the office and watching employees interact. You know there’s a broken link when other employees shy away from the top performers instead of asking them for advice.

If you give employees recognition that’s relevant to them, they’ll be less likely to demand it from others egotistically. That may range from a simple thank you to a night on the town. Cox personalizes recognition by pulling from the priorities each employee built their goals on in the first place.

“Everybody should be treated individually and in a special way,” he says. “It’s about really reading that person at the first discussion when you say, ‘What motivates you most?’”

By setting an example in your own search for improvement and building several layers of accountability, you create an environment where employees feel compelled to challenge themselves. When each employee strives to improve — even when their goals start with personal motives — the whole company will benefit.

“It’s like Lily Tomlin says: We’re all in this together alone,” Cox says. “At the end of the day, each of us are responsible for ourselves. And when we do that … all of us are the better for it.”

How to reach: Cox Financial Corp., (800) 481-0996 or

Friday, 25 September 2009 20:00

Remaining relevant

Phil Alexander is putting his company to the rubber band test.

The founder, president and CEO wants BrandMuscle Inc. to be flexible enough to adapt to this economy but ever-ready to snap back into shape with the core of the company intact.

First, Alexander and his 100 employees — about 20 of which were added to the marketing agency in the first half of 2009 — have to realize that brand consistency doesn’t mean brand rigidity.

To keep your brand relevant, you have to adapt to external shifts. But first, you have to recognize what you should and shouldn’t change.

“What you cannot change is self-evident, and that is what the core product, the core principles of your business are,” Alexander says. “What you can change is your approach to it and messages that are more relevant today.”

It’s important to realize that your core is not determined by taglines, logos or even offerings. As long as those reflect the same principles, you can alter them.

But gauging what’s relevant in this economy isn’t your call to make. Only your customers can tell you that, so stay aware of their changing needs and preferences.

Focus your resources on getting input from existing customers. They already have a relationship with you as well as background and insight about you and your services.

While getting customer feedback is always important, it’s crucial to be more proactive about it now. Your customers may be dealing with dwindling resources, and without reminders of your increasing value and relevance, you may end up an expendable expense.

“They want that confidence that you are, in fact, looking to expand your offerings and that they actually are a partner with you,” Alexander says. “You want them to feel comfortable and excited about the fact that, ‘It’s tough to pay the bill to these guys, but I better stick in there because they’ve got some great stuff coming.’”

BrandMuscle Inc. sends annual surveys to clients with a consistent set of questions, asking first about their usage of the product and secondly how it could be improved. The key to these surveys, regardless of your questions, is clarifying how you’ll use the input.

“You can never commit to saying, ‘I’m going to do all of this that you are asking me to do,’” Alexander says. “That’s why you go to them on a proactive basis. Rather than wait for them to say, ‘Can you give this to me?’ go in and say, ‘I’m evaluating our services and our offerings, and I’m going to do this with all of our clients. I can’t guarantee we’ll do all of them, but down the road we’re looking at what we can offer.’”

If a majority of customers express interest in similar services, you have to weigh it against your core offering.

If a new idea matches the core of your company, the easiest way to achieve flexibility is to make local adaptations for different markets. Based on surveys as well as sales statistics, determine the customer demographics and interests in each region. Use those patterns to modify local offerings or communications. For example, locations of chain restaurants might add local dishes to the menu or run special deals during a big event in town.

When you’re determining how to adapt to changing customer preferences, your first question should be whether you’d make the same changes despite the economy.

“You do have to keep an eye both on today and on the future,” Alexander says. “So you do have to picture what it’s going to be like when you come out of this downturn. It certainly is a juggling act. You’re trying to bring cash in today but you’re trying not to destroy the future, particularly the brand.”

Keeping it consistent

Imagine if the Golden Arches weren’t gold, or if the Nike Swoosh took on a new shape. Obviously, inconsistency is a nightmare for marketing people like Phil Alexander.

But the founder, president and CEO of BrandMuscle Inc. sleeps soundly because he depends on his brand guardian, a single source who reviews the brand imagery that leaves the marketing agency.

“One of the keys for branding is to have an authoritative repository of brand guidelines somewhere in the organization,” Alexander says. “You really have to have some kind of an audit trail to maintain it because everybody could go crazy.”

Usually, the guardian is your existing head of marketing, whether that’s your advertising manager or vice president of sales and marketing. Charge that person with establishing and communicating the visual brand guidelines.

“You do want to stay consistent in terms of the look of the brand,” Alexander says. “You also have to have brand guidelines that are flexible enough to allow collaboration.”

So the brand guardian distributes rules regarding which fonts and colors to use when employees display the brand. They should also distribute templates for PowerPoint presentations, business cards and other materials.

But those rules shouldn’t be rigid. Employees should be able to work together with the brand guardian to find the best way to use the components for their particular message.

“The brand has to be consistent, but the message has to be tailored,” Alexander says.

How to reach: BrandMuscle Inc., (866) 464-4342 or