Emma R. Dickison isn’t afraid.
The president of Home Helpers recognizes that the down economy scares some leaders into stagnancy. But she’s focused on proving the continued relevance of her company, which provides nonmedical, in-home companionship and personal care. She’s also grown her company in the process, adding 100 franchised units in 2008 alone.
“Now is not the time to be stagnant,” says Dickison, who also presides over Home Helper’s emergency response sister company, Direct Link. “Now is the time to make sure you stay relevant with your customer, your strategic plan, your employees.”
But tweaking her vision to adapt for economic pressures is only half the battle. She also has to update everyone to show that the company is keeping up.
“Communicating during this economy, both internally and externally, is key,” says Dickison, who oversees 700 franchise owners across both companies.
That communication keeps Home Helpers visible while giving each stakeholder a role to play in the company’s success.
Smart Business spoke to Dickison about breaking down your message for every audience.
Communicate the rules of the game. In the current economy, it’s more important than ever to make sure that you’re communicating at every possible turn to every stakeholder — whether that’s internally to your employees or externally to your vendors or your customers — so that they know who you are [and] what you’re about. Continuing to make sure that your customers know that you’re still relevant in this economy is key.
During our current climate, what is important is that each stakeholder knows what the overall goals and objectives are of the organization and how do they fit into it.
I use the analysis of a sports team. You don’t have players playing basketball that just go onto the court and never know what the rules are. They can’t win if they don’t know what the rules are. So it’s the same with any organization. All the parties need to know what the rules of the game are so that they know how they can be successful — that’s where your strategic plan comes in. And then make sure that each department understands how they fit into that strategic plan, what their goals and objectives are and how they’re going to execute against them.
Break down employees’ roles. We meet with our employees quarterly as an entire team. ... They get to hear from the management team a state of the union, where we are and where we’re going. Then beyond that, the management team meets every month, minimally, with their employees as a group and then with all of their direct reports so they can touch base to see where we are, how we’re doing, what’s the plan, and how it’s being communicated and what feedback we’re getting.
You’ll see in different departments there’s a visual aid of some sort to see how they’re tracking against their particular departmental goals and objectives. We have several areas where we post results of key metrics around the overall organization’s success. For instance, [in] our break room, we have a bulletin board that gets updated monthly. We have [one in] our copy area, which is a pretty high-traffic area. And then each department head reviews their results with their supervisor at least monthly one on one.
Some [managers] will choose to communicate the entire strategic plan as it is. Some will take components out of the plan and communicate to their team what their deliverables are against the plan. They break down those parts of the strategy into the tactics that their individual department will be responsible for and how it relates to the overall plan.
Reinforce through observation. We observe our employees every day in conversations between themselves as well as those conversations that they may be having with our franchisees, our vendors, etc. You can get a sense of the buy-in and the support by what you observe.
For instance, I sat in on a meeting a couple weeks ago with someone in our marketing department who was in a meeting with a potential vendor. As a part of that meeting, it was discussed very clearly what our overall mission was, what our objectives were with this vendor, what our expectations were.
In that conversation, they were 95 percent right on everything. Then there was an opportunity for us to go back and coach with that other 5 percent. If I’ve got an employee who can get 95 percent of the way there, I think we’re doing pretty good.
They missed an opportunity to provide some additional information. It was not pointed out in the room because that would have been highly unprofessional. You use your opportunities privately to say, ‘Hey, you did great with A, B and C, but you had an opportunity with D that you could have enhanced or bettered your position with.’ That’s usually all it takes.
Tailor the message to the audience. When you’re talking to the customer, it really is about them. It’s not about Home Helpers, for instance. Yes, they should understand who we are and what we do, but at the end of the day, it’s what is the benefit to the customer and how is what we do going to benefit them. While you may not advertise your strategic plan as such, you certainly use your mission and vision statements in all of your areas that are relevant to the client or the customer. You communicate that to them through your marketing materials so that they understand who you are, what you’re about and how your particular product or service is a benefit to them.
Certainly our vendors have a clear understanding of what our overall vision and mission statements are. They may not understand what our specific growth goals are in dollars, but they would understand, for instance, that we intend to bring on X number of new offices this year that they will support through whatever relationship we have with them as a vendor. ... They may not have clear insight to the overall strategic plan, but they would have insight to that part of it as it relates to them.
How to reach: Home Helpers, (800) 216-4196 or www.homehelpers.cc; Direct Link, (800) 216-4196 or www.directlink911.com
Journeys start with a map and a destination, but Dr. Tom Boat knows he’s not going anywhere until his foot hits the pedal.
His action-ready approach is changing the face of UC Physicians, a physicians group at the University of Cincinnati College of Medicine with 650 physicians and about 1,250 other employees.
The clinical faculty members at the college — where Boat also holds the title of executive associate dean for clinical programs — were operating under 16 specialty practices. Each was like its own corporation with separate accounting, marketing and other functions.
“Unless the clinical practice was better integrated and better coordinated in the future, it was unlikely that it was going to compete as effectively as it had in the past,” Boat says.
The previous leadership tried coordinating the departments twice before Boat’s July 2008 arrival but with no success.
To make it happen, the third time around would require a focus on execution, even if it meant taking smaller steps to find doses of success.
“We’re going to make sure that every step of the way, that step is a step forward and that people recognize it as progress,” Boat says.
Of course, he first had to learn about the company’s starting point. As initiation, he charged managers with outlining the current processes and adding their opinions of what was and wasn’t working.
“I had to get to know the programs and understand what their strengths and challenges were and begin to work with the system at the level that it was at, rather than coming in and saying, ‘I know exactly what to do,’” Boat says. “So tailoring the change process to the situation is really important.”
But then, Boat focused his attention on getting the company where it needed to go. Along the way, data served as his GPS, showing where the company had been and where it was headed. Most importantly, he used it to show that change was indeed manifesting.
“I think that execution in this process is really, in the end, what makes the difference,” he says. “You can evaluate all you want. You can plan all you want. But if you don’t execute on that plan and do it in a successful way, then it probably is going to be a failure.”
Gauge who’s ready for change
You can’t predict every step of your change process, but you at least have to know where to start.
Since the integration idea had already seen two unsuccessful runs at UC Physicians, Boat came on board facing a skeptical faculty. To prove the plan and himself as the new leader, he knew he had to start small. And those first steps also had to be fruitful.
“As you’re talking about change, it really is important to make sure that the first change steps are successful,” he says. “You have to pick and choose carefully. If you take on the really hard stuff right at the beginning and aren’t sure you’re going to be successful, it’s pretty risky. Make sure that your first steps are doable and successful.”
To identify the low-hanging fruit with the highest potential for success, look at who will be implementing the change. At UC Physicians, those were the clinical department administrators, and Boat decided where to start the process by judging their reactions to each suggested change.
“It was a matter of saying to them, ‘Here’s what we think we can do. What do you think?’” Boat says.
He presented the hard facts to the administrators, using monthly scorecards that UC Physicians started publishing before the transformation even began. This data measured things like days in accounts payable and number of rejections. Your managers’ questions, hesitations or excitement about improving the current data is the first measurement of their readiness to change.
But you need to look beyond what they say and examine what they can do.
“You can change the entire practice, but change happens department by department and program by program within,” he says. “And so one of the things that we’re continually assessing is: Do the departments individually have management capability to effect change and to sustain change? The change has got to be durable as well as achievable in the first place.”
Boat expects his change leaders to be able to set and achieve goals and to ignite their employees. For the first piece of that, you can look at their past performance, the previous goals they’ve set and met and their ability to deal with other changes. Continue to monitor that as you charge them with increasingly larger changes.
To measure managers’ motivational skills, go straight to their employees. Boat looks for what he calls “the turbulence factor” in each department.
“One level of turbulence is that the faculty are unsettled, that they’re not getting straight answers, that they really don’t understand the process,” says Boat, who stays in touch with rank-and-file employees to gauge how communication trickles down through managers. “Another level would be discontent and a fair amount of movement in terms of employees within the department.”
Obviously, if employees are flooding out of certain departments, you should see red flags. But Boat also arranges periodic checks, like meetings between his management team and each department as well as town-hall meetings, to catch the less-obvious signals and see where the most misunderstanding lies.
If you’re staying in touch with employees on all levels, you should see which departments are informed and motivated — in other words, ready for change — and which ones are reluctant and unsure.
“The idea is to, as broadly as possible, explain the process and give people a chance to ask questions and to answer those questions,” he says.
After identifying your change leaders, you need to set the proper pace. If you look at the change process as a journey, you’ll understand that you have to be flexible and pace yourself. What started as a one-year goal at UC Physicians, for example, now spreads two or three years into the horizon.
Sure, some changes got fairly solid consensus right away, and those were easier to execute quickly. For example, the process of credentialing physicians — which includes establishing their qualifications at various sites — was fairly repetitive, not to mention costly and time-consuming, across each department. Most of the leaders agreed that it could be simplified by centralization. So that change was relatively easy to make.
“There are certain things that you can just do by declaration or fiat,” Boat says. “And there are certain things that you have to do by piloting it and picking an area that’s ready for change and has the leadership in place to ensure that that change is really going to be successful.”
Choosing those areas is a combination of two things: Your evaluation of which managers are poised to drive change and a clear plan of what the change will be.
“It comes down to confidence, and confidence is a mixture of this sense that you know how to do it, rather than you have to figure out how to do it and test it, and … the readiness of the programs,” Boat says. “So if everybody is saying, ‘Yeah, we’ve got to do that,’ you can probably push it through fairly quickly. If people are saying, ‘Eh, I don’t know if that’s going to work,’ then taking the more incremental approach is probably the best thing to do.&
For example, a handful of the departments had honed effective billing and collecting processes, but others were struggling to get on board. So Boat centralized the six departments with more polished systems into one revenue cycle management process. He knew that pushing everyone onto a new financial platform before they were ready could quickly damage the bottom line.
Piloting programs can also serve as a trial run if you’re not entirely sure how the change will look. Using your manager evaluations, start with the departments that seem poised for change. Establish checkpoints upfront so you can track the progress of the pilots.
“Executing on the plan really means that you have to have firm endpoints and you have to have timelines to achieve those endpoints,” Boat says.
Work with experts on each subject in your company to establish reasonable, achievable goals. When you’re piloting an idea as a trial, though, it’s especially important that each step shows obvious progress.
Measure the results constantly against those goals. That requires honesty with the rest of the company, especially when there’s no success to communicate.
“It’s being bold enough to say, ‘We’re going to do this, but we’re also going to be on top of whether it’s achieving what we want or not. And if it isn’t, we’re going to back up and we’re going to take another run at it from another direction,’” Boat says. “Being ready to make mistakes, to recognize them and correct them promptly is important. And to do that, you have to have really good outcomes data.”
You can always readjust goals depending on those outcomes. And, of course, when you do find the right solution, the pilot can also be a demonstration, convincing skeptics to buy in.
“More often than not, we ended up piloting things. And then when people saw that it was useful and successful in other programs, they were much more ready to jump on board and make the change,” Boat says. “There are always going to be skeptics in any process like this, but the more success we have, the less skepticism there will be.”
Show success in numbers
Seeing may not be believing for all the skeptics on your staff, so you have to use hard data to back up successful steps toward change.
If you started recording various metrics before instigating the change, like UC Physicians did with the monthly scorecards, you’ll have a point of comparison to mark your progress.
Boat shares those results in a newsletter called Connected, which began as a monthly but was eventually spaced out to publish about every six weeks. The publication explains the re-engineering process, describes goals and uses data to offer progress updates.
The key is transparency but not so much that all of the data overwhelms your employees.
“You want to be fully transparent, but you can distill the data down into the important points and help interpret,” Boat says. “So in the communications you send out, you don’t just give them tables of data. You say, ‘We’ve collected the data, and here’s what it told us. Here is our reaction to that. Here’s how we’re using that information.’”
Within one year, for example, the company’s operating margins increased by about $4 million. They reached fiscal 2009 revenue of $231 million, up from $220 million the year before.
“Our ability to talk about where we’ve made progress has been important in keeping people engaged, No. 1, and making sure that they see that this is a trajectory they want to continue,” Boat says.
On a broader scope, simply keeping employees updated throughout the process keeps them involved, not to mention motivated.
“Once people began to see that we were able to achieve [growth], I think they felt more comfortable that we’re on track,” Boat says. “Being able to show people data certainly solidified their level of confidence.”
How to reach: UC Physicians, (513) 475-8000 or www.ucphysicians.com
A big change ushered Randy Myeroff into his position as president and CEO of Cohen & Co. But that was just the beginning. It unleashed a domino effect of other transformations that he had to steer the firm through to find success.
Until five years ago, the accounting firm’s 18 or so owners served as the board, voting on decisions like naming partners and acquiring other firms. The owners were also responsible for electing a five-person executive committee that ran the firm.
Initially, Myeroff was the managing partner over this committee, a position that — despite the title — didn’t really give him much authority over the group. Plus, he didn’t get to choose the team he worked with, and big decisions had to move on to a board vote anyway.
“It’s a great way to be inclusive, but a bad way to move quickly,” Myeroff says of the old structure. “We acknowledged that we had too many owners to have them vote on recurring things.”
The firm assessed its structure by looking to the future, questioning if the status quo would hold up through time and growth. Before the decision-making process got too cumbersome, it moved pro-actively to make sure it never would.
“Our governance system wasn’t failing,” Myeroff says. “But we had to project forward. As we get larger and get more owners, a system that requires everyone to contribute to every decision is going to get bogged down.”
So the firm, which posted 2008 revenue of $31 million, streamlined to make the firm more nimble. The owners elected Myeroff as president and CEO and named a sleeker six-person board for him to work with. They also gave him the freedom to choose his own four-person leadership team.
That restructuring positioned the company for growth, setting off a chain of changes. In just the past two years, Cohen & Co. has hired about 60 new employees, acquired three other firms and opened a new office in Columbus.
Through it all, Myeroff has learned to stay adaptable and instill unchanging values in his 300 employees to guide them through the future more smoothly.
Here are a few leadership lessons Myeroff learned from the string of changes that have reshaped Cohen & Co. in the past few years.
Drive change through the company
In order to rally employees together under a change, it needs to be founded on the company’s best interests. And that requires communication about what those common goals are and how to best reach them.
When the leadership team at Cohen & Co. began re-evaluating the firm’s governance structure, for example, it identified what factors would cause the status quo to break down. Then the leaders considered whether it would be easier to change the company pre-emptively or after those triggers went off.
Likewise, by continually weighing your options against the firm’s best interests, you can encourage consensus along the way.
“[The employees] better believe that your interests wholly relate to what’s in the firm’s best interests, not trying to move the balance of power,” Myeroff says. “If they really believe that … you really get rid of all the roadblocks.”
Before you can unfold the decision to the entire company, you need to make sure that the management team members are behind it — even if they’re not all getting what they want.
“You make sure the leadership group is fully supportive. That doesn’t necessarily mean that they agree,” Myeroff says. “It doesn’t mean that they would have done it exactly that way. It just means that they understand and they’re totally in support.”
But that’s not the hard part, because rolling change across the entire company is an even bigger feat. The communication alone takes a lot of effort.
“You can’t take anything for granted in terms of people understanding; you can’t do minor communication,” he says. “Because you’ve lived it and it’s been in your mind, you try to communicate it to someone and you’ll almost always leave things out that are important.”
Cohen & Co. sent employees to governance information meetings that covered everything from big-picture reasons for the change to details like who employees should report to. Myeroff began by explaining to employees the importance and integrity of the old structure. Then he discussed the trade-off, covering why changes were necessary and how they would benefit employees.
You should also clarify what remains unchanged, like your values. Make sure to distinguish between what’s constant and what’s adaptable.
“We’re never all going to agree on everything,” Myeroff told his employees. “But we agree on things like a passion for client service. We agree on quality. … We know the rules of the game, and they are very clear and they are unambiguous and they are not negotiable.”
With the same consistent, no-nonsense language, you need to lay out what those rules are for your company. They’ll form a common ground that everyone agrees to, even if individual perspectives diverge. And no matter how ingrained your values seem, don’t hesitate to reiterate them at every meeting.
About six months after the initial announcement, Myeroff started going back to each office. Likewise, after your company has started to live the change, get feedback about the progress and ideas for improvement.
Even though the company’s governance structure was condensing, Myeroff didn’t want employees to feel like their ability to participate in decisions was diminished. To reiterate how important employee input is — even if you’re changing the formal feedback outlets — provide plenty of opportunities for employees to voice their opinions.
“Getting feedback isn’t always a formal process,” he says. “It’s walking around the hallways, being present, calling people, periodically asking them to stop in, ‘What do you think about this?’ When you do those kinds of things … people feel like they are engaged, that they have an opportunity to ask questions. They have an opportunity to at least hear what the firm is thinking.”
The communication loop shouldn’t end when employees respond, though. Reinforce their willingness to participate by letting them know how much you appreciate it.
“Be over the top when people offer suggestions,” Myeroff says. “If someone makes the most minor suggestion in the world to me, I will always leave them a personal e-mail or make a phone call: ‘I really want to thank you because, no matter what the issue is, it takes some risk to put yourself out there and put ideas out there.’”
Hire employees who fit
Through the changes, Myeroff has also learned that you can’t force employees to adopt company values. So rather than trying to convince employees why yours are important, just hire ones who share similar beliefs in the first place.
Because any applicant can tell you what you want to hear, Myeroff recommends giving each one an objective personality assessment. Measure applicants against traits that your employees already possess. Cohen & Co., for example, ran 10 high-performing employees from different departments through a personality test to come up with a master profile of commonalities to judge candidates by.
“I never thought I’d say that I’ve gotten more scientific about the interview. I felt like it was a gut feeling,” Myeroff says. “But interviewing is more of a science. Doing profiles and personality assessments is really valuable.”
The gut feeling comes into play during the interview portion, where Myeroff has several current employees conduct round-table discussions with candidates.
Again, to avoid canned answers, don’t start by describing your culture then asking if the employees agree.
“You can’t tell somebody, ‘Here’s our culture,’” he says. “You have to be strategic about it so that it doesn’t appear to be about culture: ‘When’s the last time you got upset with a co-worker? How did you react? How did you resolve it?’ Ask those kinds of questions. Their answers can tell you a lot.”
After the interview portion, bring all the interviewers together to compare notes about their interactions with the candidate. Because your employees won’t all ask the same list of questions, they’ll each see different sides of the candidate. Together, you’ll be able to paint a more comprehensive picture.
Myeroff also checks references and backgrounds to see how candidates’ prior behavior lines up with the values at Cohen & Co.
But ultimately, at least for Myeroff, the decision comes down to science.
“If they don’t do well in the interview but they fit on the profile, we give them a chance,” he says. “If others go through the interview and they miss on the profile, we may make the decision not to take a chance.”
Make the most of mistakes
Myeroff meets with every new hire to explain the firm’s expectations. But he’s learned through the changes he’s overseen through the years that even if employees start from the same foundation, they won’t all make the same decisions.
To deal with the difference, he borrows a formula from one of his mentors called the 80 percent rule.
His mentor admitted that he wasted energy getting upset when people didn’t make decisions exactly the way he would. He realized that his standards were high, and he needed to leave some leeway for people to make up their own minds.
“If people can do something 80 percent as well as you think you would have done it yourself, that’s not a reason to be upset. That’s a reason to celebrate,” Myeroff says. “People aren’t going to do things the way you would do them; they’re going to do things the way they want to do them. That’s how they’re going to grow and develop.”
Now, Myeroff operates Cohen & Co. on the philosophy that there are no absolute right answers. He empowers employees to make their own decisions, and as long as those are in line with the firm’s nonnegotiable values, he remains open-minded.
“Delegate. If you don’t start trusting, you won’t develop leadership,” he says. “Give people the experience of making decisions.”
Sometimes, employees may be more than 20 percent off target. But Myeroff believes that mistakes come with built-in recovery. If your employees existed in a vacuum without you, they would still learn from their mistakes.
“You don’t like falling on your face too many times, so either you’re going to stop trying because you don’t like how it feels when you fail or you’re going to get a little upset and say, ‘Alright, I’m not going to let that happen. I’m going to figure out, why did I fall on my face, and how can I avoid falling on my face?’”
The best thing you can do to complement the experience is to celebrate what the employee did right, rather than dwelling on where he or she went wrong. Help employees identify the strengths in their approach and then develop those further.
“Let people make mistakes. It’s OK,” Myeroff says. “Sometimes the only way to learn something is to fall on your nose and get yourself back up.”
How to reach: Cohen & Co., (800) 229-1099 or www.cohencpa.com
Dave Suder knew what the keys to his culture would be before he even co-founded his company. In fact, if you ask him how he sets a vision for the West Coast limb of KHS&S Contractors, his answer has been nearly a whole career in the making.
“It’s like you work your career and different positions and different organizations and you see what works and what doesn’t work,” says Suder, the co-founder, president and CEO of KHS&S West Coast. “In your mind, you start saying things like, ‘If I had my own business, I would certainly do this, but I wouldn’t do that.’”
The one fundamental from his early career that shapes his leadership today is the importance of people.
“The biggest thing, without a doubt, is treating people right,” says Suder, who worked at other companies where corporate politics drove out employees and he vowed not to let bureaucracy take a toll on KHS&S. “If you look at your balance sheet, your equipment and your plant and your offices probably are the largest line item. But your personnel costs are more [important] than anything we spend money on.”
A couple of years ago, Suder made his company nearly 40 percent employee-owned, giving everyone a stake in its success. But the culture seeps much deeper than an ownership plan, thanks to his constant communication efforts that keep everyone aligned.
Suder builds an environment of teamwork by involving employees in the goal-setting process and empowering and entrusting them to achieve. That team effort boosted the West Coast company’s 2008 revenue to $326 million, up from $255 million in 2007.
As the company continues to grow, Suder keeps employees informed of where the company’s headed, uniting them under the same vision.
Here’s how he does it.
Communicate as a team
Every month for the past seven years, Suder has sent a monthly message out to all his employees.
He instigated it as a way to keep a conversation going as his work force continued to expand — which it did by 500 employees in 2008 alone. Some months, he’ll provide progress updates. But if the company failed to meet plan during another month, he doesn’t shy away from the bad news.
“A lot of it is letting people know what’s going on — the good, the bad, the ugly,” Suder says. “Communication of bad news should be direct, honest and brief. Don’t dwell on the negative, but make sure they know the truth. If not, a lot of time is wasted by employees communicating their respective theories about the situation.”
Regardless of the content, the communication brings everyone onto the same page — which is the first step of creating teamwork. Suder lists the other forums available at KHS&S beyond his monthly correspondence, such as round tables, team meetings and regional meetings. What’s important is not how your communication is set up, just that it is.
“I think the greatest strength of an organization is its ability for people to communicate with one another and walk in lockstep,” he says. “It can also be an Achilles’ heel if you don’t do it.”
Suder’s constant communication isn’t just a way to give employees a warm, fuzzy feeling of inclusion. It also acts as a rudder to point them in the right direction.
“In sports, if the team doesn’t know what play is called, how can they run it?” he asks. “It’s the same in business.”
Let employees decide details
Some corporate decisions will allow more room for employee input than others. Even when the end goal is decided in the boardroom, you can give the rest of the company ownership by leaving the details up to them.
At KHS&S, the planning process starts at the beginning of the year when managers present their annual plans to the senior management team. Suder and the other executives do a broad check to make sure the plans are built on the right foundation of the company’s vision, philosophy and personality.
Then the managers take those outlines back to their departments, where the details are hammered out. Suder refers to this as a drill-down process as the plan moves from the philosophy stage to a certain office’s involvement to who must do what within that office to make the plan work.
“If you make people part of a process — as opposed to sending them out a memo saying, ‘We’re doing this,’ — if you allow people to participate in it, they’re bought in,” Suder says.
So if the executive team decides to open a new office, Suder doesn’t just announce the news, which might send employees running to the watercooler with rumors and speculation. He also explains why the company has decided on the change. And, most importantly, he requests a company meeting to discuss the details.
In that meeting, for example, employees will hash out how to set up the systems for the new office or who should go to the union.
“Take the speculation out of it,” Suder says. “Set the direction and let people participate in creating the result.”
Managers should constantly check progress against the goals throughout the year. KHS&S uses weekly project cost reports, monthly financial statements and feedback from clients on every job. But those aren’t just methods of measurement; they’re also opportunities to remind employees of the destination.
“Let them know what the direction is,” Suder says. “Let them know where you’re headed. Communicate to them often and then, through your management teams, continue that throughout the year.”
Train people to grow
Before employees come into KHS&S, they are evaluated on everything from technical skills to attitude and confidence. Beyond the initial qualifiers, Suder relies heavily on training to get employees where they need to be.
“I think one of the greatest ways to motivate an employee is to actually train them well,” he says. “Give them the tools to do their job and then let them go do it. The satisfaction that comes from that is more than any attaboy you can give somebody.”
To start, Suder gives assignments commensurate with each employee’s experience and skill set. If employees succeed, he gives them more responsibilities and more challenging opportunities. But all the while, he looks for areas that can be improved, and he attacks those with additional training.
Training — much like empowerment — is a process. Along the way, it’s crucial to acknowledge an employee’s improvements as he or she gains your trust.
“It’s important that they know you believe in them,” Suder says. “If somebody knows that I trust them and I believe that they can do something, there’s a chance that they’ll even rise above where they think they can be.”
The most meaningful way to express your trust is by assigning increasingly difficult tasks. But don’t assume your pride swells in proportion with their tasks. Explain the magnitude of responsibility you’re placing on the employee and why you think they can do it.
“People need to know they have been entrusted with responsibilities that affect the bottom line and everyone’s livelihood,” he says. “Leaders that communicate trust by virtue of what they empower their people to do are far more successful than leaders who don’t.”
Another way to display your trust is to back off and let employe
es do their jobs.
“Don’t micromanage, as this conveys a subconscious lack of trust in your people.”
Suder says he has to bite his tongue when he’s tempted to micromanage, but he has taught himself that a leader doesn’t always have to be leading to be in charge.
“Sometimes leading is following,” he says, who displays a sign on his desk that reads, ‘Lead, follow or get out of the way.’ “Sometimes when you are participating in one of your groups, you let them lead and you follow. You try to coach and support so they can get to where they need to be.”
That was the case during Suder’s recent travels to Singapore, where KHS&S is setting up an office. The meetings there were clear-cut examples that Suder was not on his home turf, and he had to turn leadership over to the regional directors there.
“I’m there to show that I care by being present,” he says. “And afterward, I might give the individual a little bit of observation or suggestion. But in that particular case, I’m following. I’m not there to run his business; I’m not there to do his job. I’m there to support him in being successful at his.”
When you step out of that leader role, which is necessary when empowering employees, you adopt the traits of a coach instead. Instead of calling all the shots, you’re simply making minor adjustments to keep the company on track.
“I think it starts with trusting your systems and people, and then helping guide the outcome so that it is consistent with the vision and character of the company,” Suder says. “Coaching requires … asking pointed questions that would require your people to make sure they too are seeing the bigger picture the way I do.”
Suder draws the illustration of employees wearing bigger glasses as they move up through the organization. It’s his job to make sure their new lenses are in focus when they make decisions.
Make the most of mistakes
KHS&S employees know when Suder isn’t satisfied.
He gets sarcastic.
He’ll have a snarky comment for a mistake that costs the company, such as, “Well, we could have sent two kids to Harvard for that one.”
Although he gets frustrated, Suder expects mistakes to happen. So he has set safety nets in place that prevent mistakes from killing the company. For example, his estimating group operates on a system of checks and balances, requiring several different perspectives to go into each project. That way, if one person misses something, there will be opportunities for his colleagues to counteract it.
Still, those safeties don’t prevent mistakes from happening.
“You wish they wouldn’t happen and you bite your tongue,” Suder says. “And sometimes, if it’s a big mistake, you beat yourself up a little bit — quietly, privately — but outwardly, you continue to support your team, knowing that there is a larger goal that we’re trying to accomplish.”
That’s where the coaching approach comes back into play. Suder will sit with an employee to analyze his or her mistake, asking questions to determine if they both share the same big-picture view.
“You talk about it,” he says. “You talk about what happened, why it happened, clearly what they would have done differently. And you let them come to the conclusion. It’s very difficult to force anything into anybody’s head, so you really don’t try to do that.”
Instead, he says, you stay patient. And if an employee fails to align his view with the company’s because of your efforts, you set up other forums where employees can help each other.
For example, Suder organizes round-table discussions without any executives present so employees can freely share both their successes and mistakes, hopefully helping each other prevent the latter.
So while he may get frustrated — and, as a result, sarcastic — Suder says the culture’s success lies in the way mistakes are handled. Instead of screaming, he and his employees work together to keep the compass pointed in the right direction.
“We’ve always said people are going to make mistakes,” he says. “So let’s encourage learning from those situations.”
How to reach: KHS&S Contractors, (813) 628-9330 or www.khss.com
Robert O. Agbede isn’t a fan of Internet dating. The president and CEO of Chester Engineers Inc. prefers good old-fashioned face-to-face interaction.
Which is exactly how he approaches business matchmaking. In December 2008, he announced the acquisition of several business units from N.A. Water Systems, including Maryland-based VIEW Engineering.
“We have never done an acquisition that we don’t know the owner for some time,” says Agbede, whose engineering services firm is the largest African-American-owned firm of its kind in the United States, providing global water, wastewater and environmental services.
Before making an acquisition, Agbede looks beyond the management team to find a fit with employees and clients.
“We know the kind of the companies we’re looking for,” says Agbede, who led his 300-employee firm to 2008 revenue of $55 million. “So we take our time finding them. We have to align also in values and vision.”
Smart Business spoke with Agbede about “dating” a company through employee and client interaction before you make an acquisition.
Work together. Buying a company is like a marriage; you have to date first. Take the time to find out about them. Do your due diligence. Some would spend a lot more time on financials; I spend more time on the emotional quotient.
Sometimes they have their own expectations and nobody is expressing them before the closing until after they come in, and then you’re finding out they don’t fit. So I spend more time on the values, on honesty, on the integrity of the company.
Make sure you’ve done some work together. You don’t kiss on the first date. So it’d just be like holding hands. Do some little jobs [together]. You start getting a sense of how they approach work. You’re trying to test not just their technical competence but their integrity. Did they overcharge? Do they bill for every little thing?
So it’s those kinds of things that you have to say, ‘OK, does this fit into my model?’ Then you go to a much bigger job and start introducing the senior management to each other.
A lot of times the best marriages develop out of friendship, so you get to the friendship thing first. Then after a while, you can say, ‘Hey, having worked together for some time, I think it would make sense for us to look into marrying.’
People don’t always like the word, ‘I’m buying you,’ as opposed to, ‘you merging with me.’ [You say], ‘This is what merge means: You will be part of our family. Would that interest you?’ But it’s not a question that you just pop out of nowhere. It’s not like saying to somebody on the street, ‘Would you marry me?’
Talk to clients. On some big projects, we’ll have to go talk to the clients. We will insist on talking to the clients. Most [sellers] don’t like that because they don’t want anyone to know they’ve been for sale.
We want to know clients of a large account. Would clients continue to use you? Does the client like them? The client might say, ‘Shoot, I’ve been trying to get rid of them. I can’t stand the folks.’ Well, does that mean they won’t work with you?
So we ask the clients about those kinds of things: Do they enjoy working with them? If we buy, will they continue to work with us?
Suppose their client says no. Then we have to rethink our position, because they said there’d be clients. That’s one of the reasons why we want to buy them. So we either decide we don’t want to do it, or we’re going to do it at a very discounted price.
Ask employees about the company. You want to know about [employees’] expectations from the deal on the human side. We might ask them, ‘How would you react in this kind of situation?’ and, ‘How does your company treat this?’ And then depending on what they say, it also gives us an idea the kind of people we’re going to be dealing with. And sometimes they might tell you, ‘This is how the company treats people, but I never liked that.’
We did an acquisition one time that they didn’t allow us to talk to the employees until a week or two before closing, and we nearly backed out of the acquisition because we found out some other things, and it actually delayed the closing. So take your time to talk to the employees and make sure they buy in to it.
They need to see where you’re going with them and what you need from [them]. Be honest. I’m always very honest with them: ‘This is where I’m going with this company. This is what I’m going to do with your company.’
Welcome new employees. We talk to every employee so they tell you their aspirations. We have the same issue even in-house; it’s continuous learning to find out what their aspirations are.
You have to spend a lot of time making sure people feel welcome and wanted. We quickly identify the informal leaders amongst them. The manager is just a technical manager, but there’s Bob who is the informal leader. He’s the one that everybody follows. From talking to [all the employees], you’ll find out. Their name will keep coming up.
And we spend a lot of time with those people. Even though they may not be functional managers, to us they are leaders in their own right. It’s a matter of making sure they are involved. You ask for their opinion, ‘What do you think of this?’ By talking to them, that means you’ve talked to at least 20 people there.
How to reach: Chester Engineers Inc., (412) 809-6600 or www.chester-engineers.com
Lee Sanders walks into a Johnny Rockets, past the neon signs and stainless steel fixtures, and slides into a red vinyl chair. He orders his typical tuna salad, half orders of onion rings and french fries, and a vanilla malt.
The CEO of The Johnny Rockets Group Inc. eats at his restaurant about twice a week. But this time, he’s in Istanbul. And next week, he could visit Taiwan, Kuwait or Germany, or even the flagship ’50s-style diner in Hollywood.
Sanders’ challenge is making sure the experience is consistent regardless of which of his 250-plus locations he visits. Since its inception in 1986, the chain has sprawled across 11 countries and picked up 3,000 employees.
The first step to a consistent experience is securing energetic employees that sync with the Rockets philosophy. Sanders reins in their passion with cultural guidelines to maintain consistency. He makes those expectations and policies clear and holds employees to them, only opening the avenue to fun if they’re getting their jobs done.
“As the boss, it’s your job to make sure you have the right people, that they understand what their assignments are, and that you pave the way or empower them to do their jobs correctly,” he says.
Sanders keeps employees on track by looking beyond the big-picture metrics and talking to individuals. And when they need correction, he customizes his management style for his managers.
“My job is to get work done, make it as enjoyable for them as is possible and get the shareholders return,” Sanders says. “And assuming all those things can come into juxtaposition, we can have a happy shareholder, happy workers and happy guests in the stores.”
Find the fit
At Johnny Rockets, servers put ‘service with a smile’ into action by squirting ketchup into smiley face shapes on guests’ plates and dancing to songs on the jukebox. So naturally, passion and energy are musts.
The keys to finding employees with those traits are conducting multiple interviews and clearly communicating your expectations.
Sanders uses team interviews to vet candidates, involving the manager and several colleagues. To uncover passion, Sanders asks questions like “What do you get excited about?” and “What makes you jump out of bed every morning?” Then the interviewers compare notes to see if passion is a consistent trait.
He uses the same approach to find franchisees in other countries. He starts by assessing their experience and then, more importantly, whether they share his philosophy.
“You start with basic things, ‘Tell me about yourself,’ and then, ‘If you were in this situation, what would you do?’” he says. “So it goes from the concrete to the abstract. ‘Is the guest always right? OK, why do you believe that? How do you implement that?’”
But besides discovering what the candidate can offer, the interview should also explain what you expect from them. So it’s important to lay out the rules upfront.
“My job is to let them know that the passion for the business is expected,” Sanders says. “You know, ‘Look, this is the way we like to run our business. We would like to have some fun, we’d like for you to be passionate about our business, we’d like for you to work hard for our shareholder. Be sure this is what you want, because we’re not going to lower our standards to meet your expectations.’”
Then rely on your managers to help make the call. The “multitude of assessment experience” from the group interviews will judge candidates’ willingness to uphold those expectations better than you alone could.
Communicate your expectations
Your task of articulating expectations will continue after the hire. Before you get into job specifics, you need to establish the framework employees will be working within.
Employee orientation should drill into company history and culture. Explain why you do things the way you do to ground your policies deeper than a job description.
“We don’t start saying, ‘OK, here’s a hamburger. We’re going to show you how to cook that,’” he says. “No, we start at the beginning: ‘Johnny Rockets works well because we have the experience; we have the culture. We have the song, the dance, the whole ketchup-with-a-smile.’ You begin to indoctrinate them, then you get into the mechanics.
“You start at the beginning and talk about why your brand has done well. So it’s not a, ‘Here it is; do it.’ We try to tell the story so they’ll understand the background.”
Also, by holding all employees to the same basic cultural guidelines, you’ll ensure a more consistent operation because everyone will be under the same umbrella.
Then with the skeleton of the culture established, you can start fleshing out specific goals to personalize each employee’s role — at least for your direct reports. While fun and freedom may be the means for reaching those goals, you have to be frank about the end destination.
Sanders tells employees, “Look, No. 1 is we’re going to have to make plan. Plan is X dollars. We’d like to do that in an environment that’s fun; we’d like to do it where individuals can have some freedom to do their job the way they see fit as long as they’re productive. But let’s not lose sight of the fact this is a for-profit deal here.”
The next step — trusting employees to follow those guidelines — is a pretty simple one because in Sanders’ mind, it’s already completed.
“You’ve already voted, and you’ve given the person a vote of confidence,” he says. “She doesn’t have to earn it; she earned it when she got the job. So it’s not an audition anymore.”
But you can take empowerment to the next level by literally writing yourself out of the employees’ way when you explain their duties. In other words, they shouldn’t have to rely on you in order to do their job.
For example, the communications director has to get Sanders’ approval on news releases before they go out. But to avoid being a barrier, Sanders put a 48-hour timeline on himself. So if he doesn’t review the material by then, she can bypass him and go on with her job.
If he’s not happy with her work, he can point out what he would change next time. But he refuses to reprimand her if he hasn’t played his part.
“I empower them to do their jobs, and if I’m a barrier, they have all the authority in the world to go around me, within some rules,” Sanders says. “I don’t think the person running the company should be a funnel or a barrier. If everything has to go through you or your CFO, then it’s a company of a couple of geniuses with hundreds of assistants, which is pretty worthless.”
Check employees’ progress
Once your employees understand the goals and how to meet them, let them go. But make sure they stay within those guidelines you gave upfront.
“As the person running the company, you’ve got to be aware of what your senior people are doing or not doing,” Sanders says.
He doesn’t just keep tabs on his employees by watching the big picture, like whether they’re meeting quarterly goals or departmental objectives. He looks for little cues like attendance because “people that aren’t happy at work tend to be sick,” he says.
He also walks around the support center as well as various restaurant locations to simply ask employees how it’s going. Start with, “How long have you worked here? Do you like it?”
“If you will honestly listen to people and you will honestly ask them what you want to know, I’d say 80 percent of the people will tell you what’s on their mind,” Sanders says. “If they think you’re actually going to listen to them, you’re actually going to hear their comments, they’ll tell you.”
So in addition to the black-and-white metric of whether or not employees are meeting goals, Sanders also observes nuances that don’t surface on a monthly report.
“I’ve got the formal thing of [whether] your department is meeting goals or not,” Sanders says. “And I’ve got the informal thing of, ‘Gee, everyone that works for you seems to feel like you don’t communicate. Tell me why they feel that way.’”
He pays close attention to his direct reports, as well. In addition to their four-hour executive team meeting every two weeks, he meets with each one individually for an hour every month. The one-on-one is their chance to tell Sanders how they’re tracking against their goals, so they set the agenda and run the meeting.
The key is to never skip those appointments. That shows employees you carve out time because you’re interested in their progress.
Even when Sanders isn’t specifically gathering feedback, he watches for discrepancies during his everyday duties.
“When I see something I don’t think is right, my point is to rapidly make the time to take the person aside and say, ‘You know, in that meeting, I don’t think you handled that the way I want it handled.’ I don’t wait to give corrective direction. The sooner you get feedback the better, and the more direct the better. Don’t ignore the obvious. If there’s a problem, jump on it.”
What matters is not just when you attack issues but where you attack them.
“You don’t talk about it in front of other people. You say, ‘Look, I need to talk to you as soon as you get a chance down in my office.’ So it’s got to be private,” says Sanders, who even takes employees to lunch if they prefer correction outside of the office.
Beyond the time and place elements, you should tailor your approach with whatever type of management style your reports prefer. Some employees respond better to no-frills reprimands — like, “Look, you screwed this up. Do it this way next time and we’ll all be happy,” he says. And others need to be eased into criticism with encouragement first by saying, “You’re doing a great job on these 10 things, but thing No. 11 here, we need to work on.”
You need to know what employees respond to. And it’s as easy as asking, “Look, how do you like to be managed?” says Sanders, who doesn’t believe in the one-style-fits-all approach. “Do you want me to be in your face, or do you want me to take you to lunch and tell you the Pollyanna side of the story?”
“Everybody knows how they like to be managed, and most of them will tell you if you ask them.”
Take the heat
You may have to answer for employees’ shortcomings while you work to correct them. Yes, you have to explain to shareholders why the company didn’t meet its goals.
“When things don’t go well and you miss plan, it’s your job to stand up and take the bullet,” Sanders says. “Don’t blame your employees. … I see senior executives all the time blaming everybody but themselves. Maybe it’s not really their fault, but their job is to accept responsibility. Don’t deflect it to the employees or the guests or the government. Accept the responsibility and try to correct it.”
Without passing blame, you can establish that you are aware of the problem and that you are working to make the necessary changes.
“If the board of directors says, ‘Hey, we don’t think that so-and-so’s going right in marketing,’ say, ‘I’ve not been diligent in getting that change made, and I’ll work harder on it.’ Don’t throw anybody in the marketing department under the bus,” Sanders says.
Then, of course, you need to follow through and work with the marketing department to implement the change. Tell them you’re getting questions about their lack of progress and it’s time to step up the effort.
“There are days that you have to pull rank and say, ‘Look, we don’t have the luxury of time here. Let’s just do what we’ve got to do the way I say to do it. And we’ll continue to work on collegiality, but right now, we don’t have the luxury,’” says Sanders, who reserves this approach as a last resort when he’s up against a deadline or budget and employees are dragging.
But if you choose the right employees, communicate your expectations and keep an eye on their progress, those speeches should be rare. And instead, you’ll enjoy the fruits — or burgers and malts — of a consistent culture.
How to reach: The Johnny Rockets Group Inc., (888) 856-4669 or www.johnnyrockets.com
When the economy spirals down, Jim Laprade’s ears perk up. Listening to customers is more important than ever for the director of segment marketing at Barnes Distribution.
“The economic pressures and the changing of various markets are really driving an accelerated migration of customer values. And as a result of that, traditional solutions may not apply,” says Laprade, who works in the 1,600-employee distribution unit of Barnes Group Inc., a global manufacturer and logistics company with 2008 revenue of $1.36 billion. “So in today’s economy, listening to the voice of the customer can drive next-generation solutions.”
He recommends that companies establish a channel for regular customer feedback, such as a quarterly or annual satisfaction survey.
“You don’t want a laundry list of questions that is in the name of market research,” he says.
The survey should be brief, but the questions should be purposefully aimed at uncovering where you failed to meet their expectations, rather than just testing the opinions of the general public.
To narrow your focus, survey in phases.
“It’s important to begin with just a handful or a sample population of conversations — having your employees pick up the phone and call some key customers to get their arms around what’s really happening out there,” Laprade says.
This stage is a good opportunity to stratify your customers by size or end market, because each group may share certain needs and values.
This initial survey should include open-ended questions about how your current services align with customers’ changing needs. Start by asking what’s important to them and how well you fulfill that.
You can mold the common themes from those anecdotal conversations into a quantifiable survey for a larger pool of customers. For easier tallying of the results, the mass survey should replace open-ended questions with yes-or-no options and rating scales. For example, if the phone calls reveal requests for more frequent or more immediate contact with you, the broader survey could ask customers to rate their satisfaction with your communication.
At this point, you may choose to utilize a third party, such as a market research firm, to conduct the surveys.
Look beyond your customer base by reaching out to former customers who have taken their business elsewhere.
You may have to modify your questions for this group. Rather than asking what you’re doing right and what you can improve, you should ask what the competitor is doing better.
“It’s never, ‘Hey, where did we go wrong?’ It’s more about, ‘What was more attractive to you that made you choose someone else?’” Laprade says. “With everybody, it’s all about, ‘What’s your biggest pain point and aggravation,’ not just when it relates to your company, but, ‘What’s the optimal solution to be able to satisfy the need?’”
Don’t assume you made a fatal mistake, because the customer’s decision to switch may have come with a new sales representative. By keeping in touch with old customers regularly, you keep the lines open if they ever change their minds again.
Regardless of their reasons for leaving, you want to uncover what the competitor offers that you don’t.
Many times, the simple act of asking says a lot.
“We’re actually able to win back a good number of customers simply by reaching out to them and having a conversation with them,” Laprade says.
By just establishing a system to initiate those conversations, you may even position yourself to address customers’ issues before they leave.
“Ultimately, if you don’t have a standard process for customer satisfaction, then you’re probably going to have a problem with customer retention,” Laprade says.
How to reach: Barnes Distribution, (216) 416-7200 or www.barnesdistribution.com
Know your business
Jim Laprade knows he can’t please everyone. So while it’s important for the director of segment marketing at Barnes Distribution to get feedback from customers, he can’t always run with the results.
“If you make widgets and you’re going to have to build a spaceship to solve your customer’s problems then you probably look at that and say, ‘Well, maybe this may not be a market that’s in our sweet spot anymore,’” he says.
So before you can react to the results of a customer satisfaction survey, you have to make sure the solution will align with your business. You need to go in with an understanding of your company’s core as well as knowledge of the individual processes involved.
“The first step of the process is, ‘Hey, where does the weight fall, as far as common issues that may have caused dissatisfaction?’” says Laprade, who suggests measuring every solution against your current value proposition and long-term company goals.
In other words, you can’t change your company just to please one customer. You want a focused business that consistently satisfies, not “a compilation of ad hoc solutions that stretches and breaks your organization,” Laprade says.
“You can probably do just about anything to satisfy a customer,” he says. “But at the end of the day, you have to ask yourself, ‘Does it make sense?’”
You’d think John Sullivan’s reputation would be the only thing he’d need to build trust. After all, the former CEO of Gold Star Chili does have 40 years of experience in the hospitality industry.
But Sullivan, who retired in May 2008 after 18 years at the restaurant chain, doesn’t rely solely on his track record. Instead, he takes the initiative to prove himself to employees.
“I think the first thing is always developing trust with the individuals that you’re trying to lead,” Sullivan says. “Trust is made up of two elements: competence … and the other is confidence. Another element would be your value system.”
Although confidence and competence come with time, Sullivan sets them off by exposing his value system to employees and asking to be held accountable. In turn, he requested the same of his associates at Gold Star, which reached 2007 revenue of about $71 million.
Smart Business spoke with Sullivan about how to build trust by getting your values out in the open.
Post your personal values. Years ago, I participated in a workshop where you put together your mission [and] core values. The guy that was directing the seminar said, ‘You also need to sit down and write out your personal values.’ I did that. I then published those to all of my staff and associates and said, ‘Here are the things that I believe in and you can count on.’
There were five things. One of my values is, always tell the truth. It’s extremely important that I always tell the truth, and it’s extremely important if I deal with somebody, they always tell me the truth.
I said, ‘If I tell you something, I will always tell you the truth. You can always take that to the bank. I don’t know, you can maybe catch me in a little white lie, and if you do, bring it to my attention.’
I think once the people that you work with understand where you are, then it just makes it a lot easier for them to follow you.
Just look within yourself to what you strongly believe in. When you post your values and explain them to people, you more or less say, ‘You can count on me for this.’
You just look at yourself, and it’s really a personal thing; it’s not a business thing. How [do] you conduct yourself? It’s not only how you conduct yourself within your business but also within your family.
When I posted my values, I not only posted them within the company but I also even posted them on my refrigerator at home to show my family. [Saying,] ‘If I don’t honor these, then you let me know.’ It helps you make sure that you honor those.
Use your values to make decisions. You have to walk the talk. In other words, if you do communicate what your value system is, then you need to absolutely follow it. I’ve been in those situations where a decision [is] a little bit questionable. You just have to go back to your value systems and say, ‘If I don’t follow these, then I’m giving up the ship.’
Ask employees to share their values. It built trust between myself and the associates within the company. And I encouraged each one of them to share their value systems, as well. It gives them a better understanding of what makes you tick.
Years ago, we did an exercise like Myers-Briggs [personality test]. It’s called brain dominance. You really find out as a team what all your strengths and your weaknesses are.
That type of thing, if you do it as a group or a team, you can really understand each other and understand where everybody’s coming from. For example, it will identify who’s more of a creative type, and usually if you’re creative, you’re not structured. And then you’ll find individuals within your team that are very structured but not very creative.
What happens, a structured person looks at a creative person and says, ‘Jeesh, you’re just ineffective,’ because they don’t follow the same brain situations that you do.
But once you understand where the other one’s coming from, then you can deal with it.
It’s on the table, ‘I understand that you’re not going to dot every I and cross every T, and therefore, I can deal with that.’ And then on the other hand, when the creative person just wants to fly and not put together a plan and is not very structured, then that person can also understand [that] these other individuals, they’ve got to have a plan or they just are not comfortable moving forward. It’s really just understanding each other.
Keep each other accountable. I’ve seen it added into performance discussions to where you actually can have that as one of the elements of the performance review or performance evaluation.
[But if someone violates their values,] you need to address it right away. I’d say, ‘Honor my commitments,’ and let’s say somebody comes up and says, ‘You said you were going to do that, and you didn’t,’ you have to apologize and tell them you’ll work your hardest not to make that happen again.
You have to deal with it on the spot. Everybody has a hiccup every now and then, and that’s understandable. You deal with them as they come up, but then over a period of time when you sit down on the performance review, you say, ‘Well, jeez. This has happened too many times.’
How to reach: Gold Star Chili, (800) 643-0465 or www.goldstarchili.com
A little grime won’t stop Bill Perkins from shaking your hand; he’s more concerned with making a connection with you than he is with the dirt on your hands.
As founder and president of Bill Perkins Automotive Group, he has to get through grease to reach some of his 160 employees — namely, the mechanics, who often hesitate to shake his clean hands.
“It means a lot to them,” says Perkins, whose company reported 2008 revenue of $110.7 million. “It shows them that I’m interested in not only what they’re doing but I’m interested in them if I think enough of them to shake their hand when it’s all oily and dirty.”
Little gestures can go a long way toward showing employees that they all have a part to play in a company’s success. To communicate that, Perkins builds relationships to learn employees’ personal goals so he can tie their achievements to the business.
Smart Business spoke with Perkins about how to tie your employees’ goals to those of your company and how to find the best people for your company.
When interviewing prospective employees, learn their goals. You have to get people to talk. You’re supposed to be conducting the interview, but in today’s environment, a lot of people, they’re interviewing you. They try to turn it around, and they’re busy asking me, ‘Well, how did you do this? How did you accomplish that?’
I’m not the one applying for the job, you are. So I have to make sure that I keep it in perspective, and I keep control of the interview. You don’t want to ask yes or no questions. You want to ask questions they have to discuss. They have to have a conversation with you.
I ask them, ‘What’s your long-term goal? What do you want to do? You’re coming to work for me as a salesman, but ultimately, is that all you want? Do you like selling? Are you just applying for this job to get your foot in the door, or is it a job that you really want? Where do you want this job to take you?’
When you are hiring people, you have to find out what their goals and objectives are. If they are somewhat similar [to yours] — they don’t have to be the same, but if they’re similar — then it’s a little easier to get next to that person, to motivate that person, to inspire that person to want the same thing that you want. You have to be able to identify with people.
Find where prospective employees’ goals match yours. I always explain to them what I’m trying to accomplish. I let them know the goals and objectives that I have for the company, and then I come up with ways for them to get involved. They tend to somewhat buy in to it because I try to make sure that vision includes them.
I usually like to know [their personal goals] upfront, and then give them a goal that ties into that. One of my employees said to me that he wanted to do certain things for his kids at Christmas. He said, ‘My goal is, I need to make this amount of money.’
What I said to the employee is, ‘We need to finish strong. In the first part of the month, if you can sell this number of cars, there’s an extra bonus in it for you.’
When he did that, it provided me the opportunity to be able to do that for the entire sales force.
Check your employees’ progress. My responsibility as an employer is to assist, guide and encourage a person to accomplish what they want to in life. You have to make sure that when you are delegating to a person, No. 1, you give them the freedom to do the job, and then you have to monitor it. You have to offer them pointers along the way.
I ask them. Not only do I ask them, [but] if I want to generate so much revenue in a month, I can monitor that through our computer system; I can [get the] report as to how the used car manager’s doing this month.
A lot of times, I may not let the used car manager know that I’m asking for that report. If I look at the report and it looks like he’s on track, then I will go to him and say, ‘It looks like you’re doing a pretty good job. Keep up the good work.’
If he’s behind, I’ll find a way to say to him, ‘How you doing this month?’ If he doesn’t say anything, then I’ll say to him, ‘Well, I was looking at the reports this morning, and it looks like you’re having some problems. You want to talk about them? Is there something you need? What do we need to do to get you back on track?’
A lot of times, employees are afraid to admit that they can’t get something done. I try to remove that fear — in other words, ‘Let’s talk about this. Let’s discuss it and see what we can do.’
Reward employees. There has to be opportunity for them. If you’re growing and you’re making all the money and they’re not growing and they’re not making any money, they’re not going to continue to be happy people. They have to grow along with you.
And it’s not just all about money; it’s about the job, the status and things of that nature. Some people are motivated with things other than money. Some people can be motivated with time off. Some people can be motivated by receiving a plaque or recognition. Money’s a big part of it, but there are other ways to motivate people.
How to reach: Bill Perkins Automotive Group, (586) 775-8300 or www.merollischevycars.com
When it comes to making time to juggle the responsibilities of selling your company, John Nestor’s advice is simple.
“Sleep faster,” says the CEO and senior managing partner of Kirtland Capital Partners.
His second piece of advice is to take time upfront to choose a private equity firm that is the right fit for your company. To do that, he suggests you slow down and scope out several firms before making a decision.
“Management teams need to do some checking on the private equity firm that they’re thinking about (partnering) with,” says Nestor, who manages 20 employees and $293 million in capital at Kirtland.
Your research should start with the CEOs of other companies that are held by each private equity firm because they can provide the best insight about what it’s like to work with the partner in the daily course of business.
“All private equity firms can tell management teams what they’re like to work with,” he says. “The check in all of that is to have them talk to people who have actually worked with them.”
When you talk to those CEOs, ask questions such as how the partners in the equity firm respond to news — both good and bad — and the amount of control they take in decision-making.
Talking to those people can also give you clues about the types of companies the firms invest in and what areas of expertise they bring. Also, look for examples of how the firms have grown other companies, whether through acquisitions or geographic expansion.
Meanwhile, the private equity firms will be checking you out, too.
“It’s important for us to know that management is really looking for a partner, not somebody to run the company,” Nestor says.
For example, the private equity firm will test your understanding of your market, your awareness of growth opportunities and your plans for the future, because leaders who are just looking for “dumb money” don’t often set strong visions.
Your potential partners will also be watching how freely you share information about your company or whether you’re holding back, which can help them predict how your relationship together might go.
“There are some management teams, which basically tell you everything about their business,” Nestor says. “They’re not holding information back. That tells me, if they’re very open, that they’re going to be open after the deal closes. They don’t view giving us information as threatening. That’s one of the ways we can tell whether we’re going to philosophically be on the same page.”
Private equity firms are in business to build the value of their investment, and they want the companies they’ve invested in to be willing to take direction and grow. So to meet that need, you must learn to bare your financial secrets and ask for their help.
It’s a big step to collaborate with a partner when you’re used to working alone, and it’s even bigger when you’re being asked to divulge private information. So look for a private equity firm that can provide tools and suggest resources to help ease your transition.
Kirtland, for example, holds an annual CEO/CFO conference for its portfolio companies. In addition to offering expert speakers, the event also introduces the management teams of its various companies to one another, multiplying each leader’s access to a pool of advice.
By taking the time to find the right firm to partner with, you can stave off some of the stress of selling, allowing you to focus on your business and getting a full night’s sleep in the process.
How to reach: Kirtland Capital Partners, (216) 593-0100 or www.kirtlandcapital.com
A balancing act
Michael DeGrandis wants to know everything about your company. But don’t let that make you uncomfortable — it’s for your own benefit.
“If we’re going to own this, we want to understand where we can add value and how we can help support management,” says the chief financial officer and managing partner at private equity firm Kirtland Capital Partners.
When partnering with a firm, the more you open up, the more it can help you manage your time when you’re trying to juggle business-as-usual with the struggles of selling to a private equity firm or being sold by one.
“There’s this fine balance with your senior management team that you want, where they continue to maintain the performance in the business, and yet, at the same time throughout the sale process, keep your interested parties in the game by addressing their questions and concerns,” DeGrandis says.
For example, you may want to split your management team between the two tasks of running the business and working on the sale. And your partners can also step in to supplement your abilities. DeGrandis, for example, often prepares and presents information to interested buyers so that CFOs can focus on their everyday tasks.
And, of course, the better your partners know your business, the better equipped they’ll be to adapt as necessary.
“That shared vision can change over time,” Nestor says. “As we entered a more challenging economic time, we had to change our priorities. You’re constantly evaluating that shared vision and what’s best for the business.”