Adam D. Singer, M.D., says the doctors whom he oversees are living Shakespearean plays.
“There’s happiness and new birth, and then there’s tragedy and death and everything in between going on in these hospitals,” says Singer, the founder, chairman and CEO of IPC The Hospitalist Co. Inc. “They’re comrades-in-arms because they’re dealing with so much human emotion every day they’re at work. So it’s very important that they find the right people that are going to live that tragedy with them.”
Singer puts a lot of effort into hiring employees who will mesh with the rest of their team, but it’s not just for the sake of a cultural fit. Because he manages more than 1,000 affiliated health care providers in more than 150 private practice groups, he can’t be constantly looking over their shoulders. So his employees need to be able to fend for themselves and each other.
“I want people that are out there self-starting, self-motivated, self-correcting,” says Singer, who also serves as IPC’s chief medical officer. “That’s how life becomes a lot easier for us in management.”
Instead of telling employees what to do or how to do it, Singer is more intent on providing the tools they need to make those decisions themselves.
That empowerment means he has to be prepared for mistakes, but Singer says you’re better off allowing those flops.
“You have to be prepared to allow those mistakes to happen in order to move forward,” he says. “You learn a lot more from your mistakes than you do from your successes. The more [mistakes] that you have, the more people are trying to stretch the environment with new ideas, the better I think your company is.”
Singer manages a mobile dispersed work force across more than 500 facilities in 21 states by giving employees the power to manage themselves and their teammates. Their self-improvement also drives the company’s success, taking it from 2007 revenue of $190 million to $251 million in 2008.
“We try to empower our employees to have a lot of autonomy in the way that they function and deliver results to their clients,” Singer says. “We don’t have a situation where you just come here and we tell you what to do. … You really just have to lead the horses to the water. They figure out how to drink it themselves.”Finding a fit
The first step to empowering employees is finding ones who can handle the power.
For Singer, finding the right employees goes beyond interviewing candidates over dinner to learn about their interests outside of work. In fact, you don’t want them to stay too relaxed because you want to see how they’ll handle the stress of the job when you’re not sitting across the table.
“One of the challenges is that people act differently in an interview than they do when under stress, and in our world, they’re under stress a lot,” Singer says. “And so, in some ways, it’s very difficult to interview someone if you don’t put them under stress during the interview. How they’re going to respond in an interview may be very different to what happens to them when they’re in the heat of battle of saving someone’s life.”
To see how they might react under stress, you can ask candidates about stressful situations they’ve handled in the past. But a candidate can say anything, and it might not be indicative of his or her actual behavior. Singer takes it a step further by simulating stress in the interview.
“In the middle of the basic questions Where are you from? What kind of schooling did you have? I’ll all of a sudden launch a question like, ‘By the way, why did they make manhole covers round?’” he says. “And then you watch how they respond to that. Do they creatively come up with some goofy answers? Do they just say, ‘Look, I don’t know,’ and fail to respond?”
The point is that you won’t always be around to hold employees’ hands. You want to see how they handle the unexpected whether they think through the problem calmly or freak out.
“All of a sudden they’re thrown a question that they never anticipated getting, so they’re under a little stress,” Singer says. “So finding some kind of question that’s totally out of the blue that throws someone a little bit of a curveball will allow you to see how do they think, how do they process, how do they problem solve. The point of the exercise isn’t to get to the right answer. It’s to watch them struggle.”
You also want to see how candidates acted independently in the past. If they’ve taken risks by making autonomous decisions, they’ve likely made mistakes. So Singer asks them about their failures and more importantly what they learned.
“I ask a lot more about people’s failures than their successes,” he says. “It’s really interesting because in an interview, the interviewee never wants to talk about their failures. They’re trying to pump themselves up and talk nice of themselves, of all the things they’ve done. I’m almost not interested in that.”
So you’re making progress with a candidate if he or she answers the question at all. Singer spent two years interviewing 65 candidates for the position of chief operating officer before he hired one the only one who was willing to discuss his failures.
“I could spend an entire interview dissecting why someone failed at something and, at the end, think they’re the best candidate for me because they won’t make those mistakes again,” he says.Empower with policies
A few years ago, IPC employees complained about the increasing complexity of their incentive plan in both surveys and exit interviews. So Singer simplified it in 2006 by aligning incentives with the company’s success. But the catch is that the incentive is tied to each practice group’s performance as a team.
The plan also came with the power for teams to make their own changes in order to earn their incentive. Singer learned that even details like the structure of your incentive plan can foster an environment of empowerment.
“What it does is it forces the high-productivity individuals of the team to work with the lower-producing members of the team to improve their productivity so the overall team does better,” Singer says.
At IPC, 40 percent of each employee’s income is incentivized. But individual incentives ride on the team’s success.
“Either the group hits its target and then they get their bonuses, which are individually based,” Singer says. “Or the group doesn’t hit its target and nobody gets a bonus.”
You make your job easier by giving employees the power to control how they achieve goals. When the plan dictates that each employee’s success depends on their team’s success, everyone is motivated to pull each other up to par so you won’t have to.
“If there is someone in that team that’s not pulling their weight, it comes out of the bonus of the higher producers,” Singer says. “The higher producers get penalized for a lower-producing person on their team. So it has the team working together to get eve rybody profitable, as opposed to the company coming down on an individual.”
The structure of your plan can inherently empower teams to help each other, but you have to give them permission. Singer’s groups which typically consist of four to six doctors can divvy up workloads and rearrange work shifts to give lower performers the right amount of work in order to reach their goal. They’ve even asked underperformers to lower their base salaries so they don’t create a loss.
“The beauty is that the compensation plan itself (empowers people),” Singer says. “If I’m losing money because you’re not producing, I’m motivated to make changes to identify what the problem is and fix it.”Encourage idea-sharing
Maybe underperformers are reluctant to lower their salaries or take on more shifts for the team. Or maybe top performers are frustrated because a low-performing teammate is keeping them from their incentives.
It’s one thing if you order those changes, but when employees are empowered to control their own and, to a degree, each other’s success, they might not be certain about the best way to achieve it. Empowerment is not just giving employees the opportunity to set their own path but also the tools to navigate in the right direction.
It might be easier for you to just tell them, but that doesn’t necessarily produce the best results.
“In some ways, I want them to be frustrated because that frustration leads to better performance. It leads to changes in what they’re doing, to figuring out how to excel, and how to be more productive and more effective,” Singer says. “I think it’s OK to allow some frustration to enter into your company. It can be very revealing and motivating.”
The best way to nudge employees in the right direction is to show them their progress. Singer calculates how much incentive each team member earns by looking at individual productivity through a lens of metrics including encounters per day, week and month, revenue per encounter, length of stay, readmission rates and client satisfaction. In other words, monitor both quantity and quality of performance.
The key is that those metrics should always be visible to employees. You can’t hover over them to provide step-by-step directions on meeting their goals, so you need to give them tools to make those adjustments themselves. Singer publishes dashboards monthly for each employee, which are benchmarked against the practice, the region and the overall company.
“They can see how they stack up,” he says. “If you’re an outlier on any of these measures, you start figuring out strategies to not be an outlier.”
Singer recommends paying bonuses monthly, too, rather than annually, so employees see a more immediate reward to their productivity.
That transparency will foster self-correction. But it’s also important to have a forum for open communication so employees can share ideas and struggles especially when team members may spar over the best corrections to make.
Thanks to technology, you have several options that can allow employees across the country to serve as each other’s immediate sounding boards. Singer uses Yammer, an “intranet of Twitter” that lets employees post questions for the entire company to ponder and respond to.
“If I’m having trouble with my team leader or my practice partner, I have the ability to say, ‘You know what, let’s find out what the other thousand doctors would do,’” he says. “Either I’m right or I’m wrong, but I’m going to hear about it from lots of people. It allows a massive jury to be put into place to help resolve my conflict.”
Singer also uses videoconferencing systems to allow entire practices to share their struggles and ideas.
“If you’re having some unique issue and not able to get consensus, we [find] a practice that’s either further along or equally struggling on a topic, and we videoconference them together. We have them brainstorm their issues,” Singer says. “As much as possible, you want your employees empowered to figure this stuff out themselves. What you don’t want is to come in and tell them what to do. That’s the least effective way to enhance your business.”
Besides allowing that open communication, Singer also provides plenty of data about other employees’ results. If you provide people with the financial performance and experiences of others who have faced the same issue before, they tend to make similar decisions without you dictating what to do.
And if they disregard that data to make a decision out on a limb, they’ll learn from it.
“A large part of that empowerment is let them take some risks; let them try something that maybe you wouldn’t agree with,” Singer says. “What that does is really engenders a better trust between you and your employee one, that it’s OK to take risks, but also maybe next time, they want to listen a little bit more to our experience.”
How to reach: IPC The Hospitalist Co. Inc., (888) 447-2362 or www.hospitalist.com
Jerry Chapman’s wife laughs every time he attributes his company’s growth to luck. That’s because she saw all the 20-hour workdays that were really behind it, at least when her husband first founded Signal Group LLC.
Back then, the self-admitted control freak had a good excuse.
“When you’re a control freak, you have to work 20 hours a day because nobody can possibly do it as good as you,” says Chapman, CEO of the 50-employee company. “No one’s going to give the customer service you think the customer needs unless it’s you.”
But as SolidSignal.com the company’s online retailer of audio and video equipment and accessories has grown to 2009 sales of about $18 million, Chapman has had to adjust.
“The reality is that I stopped micromanaging and started surrounding myself with people who could make great decisions, who understood the vision,” he says.
Smart Business spoke with Chapman about empowering your employees to provide the kind of customer service you would.
Share best practices. People come with all sorts of different talents that you don’t have. So you sit down, you try to tell them everything you know. Then you have to learn to let go.
Now you start empowering. You start saying, ‘OK, what do you need in order to get better?’ You just become a listener. It’s very easy to say, ‘No, no, no, just try it this way or do it this way,’ instead of listening and trying to figure out the problem. Instead of saying, ‘Well, here’s what we’ve been doing,’ you try to look at what it is that they’re asking and try to solve their problems.
At the end of the day, we spend a lot of time talking to each other. Many times we have many different viewpoints with the exact same piece of data. It’s very surprising sometimes somebody will claim something and they have all this evidence to prove it and they’re right until you add one more piece of data in there: the way somebody else is looking at it. How quickly that other person will look at it and say, ‘Oh man, I can’t believe I missed that.’ Let people know what’s going on and all this informal communication will occur.
Sometimes you try to figure out what went right instead of what went wrong, and then you try to mass produce that. So it’s that whole best-practice concept.
Give employees information. We’re developing wikis now, and we have this database of information that’s easily searchable internally. As you grow, you start developing how you’re going to handle the vast amount of data that you have whether it’s just customer information or sales information, purchasing. It starts making them a little more powerful as they can utilize that data. Because you have this ability now to extract the data you already have, what about putting data in? That’s the difference between what we call wiki and just data.
The idea behind it is if somebody calls up on the phone and they need an answer to the question, we’re hoping that we’ve already answered the question a hundred times. If that customer service rep doesn’t know it, they don’t have to learn it themselves by trial and error. They can just type in a couple things and maybe something will pop up.
The first time you do it, you’re sort of reading it. And then the second time that you’re doing it, you’ve read it before ‘Oh yeah, I remember that.’ Maybe by the third or fourth time, you’ve had somebody else explain it to you or something else that you knew about this jives now.
After you recommend a few hundred antennas, you get really good at recommending antennas. And then after that, you get really good at recommending antennas, let’s say, for Chicago. And then after that, you get really good at recommending antennas for Southfield. And then after that, you get really good at some part of the country you’ve never heard of before because you’ve [done it] four or five times.
It has to do with: How do we make the people that we have even better, faster, more nimble, more flexible, [learning] different ways to approach a solution.
Let employees pass it on. If we’re doing that internally, why shouldn’t we make that available to our customers? That way, they’re not even asking the question. They already know and they feel comfortable about their purchasing decision or maybe not to purchase.
I think there are different ways to answer a question. All those answers can be based on all sorts of variables they could be based on how much money do you have to spend, could be based on location, could be based on the impact of new technology in the future. To take away the ability for somebody to think is if you say, ‘OK, here’s what you have to do.’ The minute you do that, our answers become stale.
So the objective is to be able to provide the information as detailed as possible to the customers so that they can make the better decisions for themselves. We’re making recommendations; we’re not holding guns to people’s heads.
We’ll make a recommendation to a customer and he or she doesn’t want [that] and they want to try something else and it works. We’ll post that so people can see what it is that other people have done in their area. We also do that with best-selling products.
You’ve got to keep going. So the first one was just linking everything together. The second one was adding to it. The third one was letting our customers have access to it. The fourth one is let them add to it. And then there’s no end.
We’ve got people who steal content from us all the time. And that’s perfectly fine. At least a customer knows what it is that they’re getting. It helps reduce our return rates. It doesn’t matter that they didn’t find it from us but maybe they’ll still purchase it from us because we have the best service or the best price or maybe we have it in stock and nobody else does. But at least they got the information before they purchased.
How to reach: Signal Group LLC, (877) 312-4547 or www.solidsignal.com
Even without leaving a footprint, Brian Scheinblum is gaining quite a following.
Through green cleaning supplies, new light bulbs, efficient HVAC systems and the LEED-certified buildings themselves, he’s trying to make Cambean Hospitality LLC carbon-neutral. And he can back every green decision for customers, investors and his 70 employees.
“Any time you make changes, it takes time for people to understand the reasoning behind it,” says Scheinblum, president of the hotel management company.
He began by hiring HVS, a hotel valuation and consulting firm, to conduct an operations sustainability analysis to quantify the company’s greenness. And then, as he acted on its suggestions to be more energy-efficient, he researched every step to make sure that it benefited more than his own eco-consciousness.
“We’ve learned that there are considerable saving opportunities, which will give us hopefully an advantage over some of our competitors with a lower cost structure,” says Scheinblum, who led the company to 2008 revenue of about $10 million.
Smart Business spoke with Scheinblum about how to be sure about being green and how that convinces others to follow.
Analyze potential savings. I strongly recommend to anybody out there that they analyze what their [energy] costs are, what their impact on the environment is and what the benefits are.
[To conduct an operations sustainability analysis], they do a full walkthrough of the property, looking at everything that utilizes energy. We looked at transportation of our employees. We looked at transportation of trash. Of course, we have the standard: the gas usage, the electricity usage, water usage.
They gave us an analysis of what we were spending and then they gave recommendations of things that we can do, costs to do these different things and what the savings would be. Like our water fixture retrofit they’re estimating an $800 cost and the payback period of .8, which means the return on investment’s 125 percent. So that’s something that we look at and say, ‘OK, that’s something that we should do immediately because there’s a great return on investment.’ And this was a matter of just changing aerators on faucets.
I’m not saying that somebody has to go out there and hire a company to do this. I think people can do this themselves. They can find all of that data within their operations. Look at all the different light bulbs. Look at all the different faucets, the toilets, everything else that they’re using and say, ‘Where can I get savings here?’
It’s pretty easy to go online these days and do a search and see the cost of a replacement item and make a determination: ‘OK, well, if I’m using a 60-watt bulb now but my replacement bulb is a 13-watt compact fluorescent, I’ve saved 47 watts. My cost per watt on my electric bill is this amount. I’ve paid for that replacement bulb in six months. I’ve got a 200 percent return on investment.’ It’s pretty simple math; it’s a matter of taking the time and making the effort. These are not things that just necessarily help the environment; they definitely help the operating cost of any business.
Share your research. As far as my employees, my investors, my staff, there were different people to get on board in this. Obviously, [investors] expect to get a return on investment over time. Things like cleaning supplies where we’re able to do an analysis and show that after the initial expense we’re going to be saving 70 to 80 percent on our recurring costs that was an easy sell and that’s an immediate return. Something such as lighting, you have to show them that over time it’s something that’s going to pay for itself in reduced maintenance expenses, reduced energy costs, longer life. Investors are in business to get a return, so you have to show them where that works.
Just do your homework. The numbers are there. It makes financial sense to make these changes, not just environmental sense. We’ve been able to show that we’re going to have 70 percent savings on cleaning supplies by making these changes. There was a little bit of cost upfront and purchasing the machines that are required for mixing the chemicals which, in cases, companies will give you for free. But in the long run, it’s a big savings in cost with a quick return.
So if you have to present the budget for it, the numbers are very easily attainable. Any of the suppliers for the products will be able to give you those numbers.
Whereas I’m personally extremely concerned for the environment, I have to be aware that not everybody is. It has to be a decision that makes sense. You can’t be altruistic and not be profitable. At least be able to show that eventually you’ll be profitable. Otherwise, you’re not going to get the financial support to do these things.
Pass on the savings. One of the things that we really tried to do is educate people so they see how easy it is to do certain things. They can take this information home with them and be more environmentally conscious when they’re at home, as well. Show them that there isn’t a lot of cost involved in some of the things [and that] they can be done without any inconvenience to them or any change in their lifestyles.
People that are working for us also have homes. They’ve seen that we’ve been able to be just as efficient but we’ve been able to do it at a lower cost, and that’s something that hits home with these people who are living paycheck to paycheck right now. If we’re making changes that are going to save us money, it’s something for them to follow. So getting the employees to adopt these practices has been pretty easy.
We’ve set up a sustainability committee that is made of different department heads. We’ve asked those people to come up with ideas and suggestions on changes that they could see us implementing. And then on almost a daily basis, the department heads meet with their employees, and if there’s something new that we’re going to implement, they’re explaining to them, training them.
How to reach: Cambean Hospitality LLC, (305) 672-5858 or www.cambean.com
You probably wouldn’t think farm work translates very smoothly into an accounting firm. But Rodney Kinzinger credits his country upbringing for teaching him the discipline necessary for leading Deloitte LLP’s St. Louis office.
The managing partner keeps a yellowing, wrinkled copy of an article called, “Everything I Learned, I Learned Growing Up on a Farm,” in his desk, although most of the lessons it lists are already inherent to his character.
“One of the first principles is: Work comes before play,” says Kinzinger, who stepped into his position in June 2008. “What that gets down to is the self-discipline of getting the really important things done first prioritizing those things and then having the focus and drive to just get them done.”
Kinzinger’s methodical approach to organizing his day including setting aside time for his 215 employees keeps him on top of the tasks he has to tackle.
Smart Business spoke with Kinzinger about how to prioritize with discipline.
Keep track of tasks. I put everything in my Outlook as a task. So if I’m on a phone call, I may scribble it on a piece of paper, but I have a pretty good discipline then on making sure that piece of paper gets into Outlook. Otherwise, you forget about doing it. Every morning, I look at that long laundry list of things, and I go through a mental process of: All right, which are the ones that are going to make a difference? For me, the ones that make a difference are those that are touching either our current clients or our prospective clients. Those are the ones that I address first. From there, it’s internal things related to people or other [issues] that we would have with running the business. So that’s the mental process I go through: clients, people and then administration.
Stay focused. It’s very easy to get distracted, especially in this technology world. You’re continuously getting e-mails, you’re continuously getting instant messages, you’re continually getting phone calls, etc. If you’re not careful, you just bounce all around and then you really don’t ever get anything accomplished at the end of the day.
So if I’ve decided that making a call to a client is important, then I focus on that task until that task is done. I don’t get distracted by other things until that task is done. That doesn’t mean I don’t multitask; I multitask all the time. But you have to know your own abilities as to how much you can multitask, and don’t exceed that limit.
When it gets down to focus time, heads-down time, then I stay focused and on task.
It’s kind of a joke within the office, but I also have places that I’ll escape to where only a few people know where I am. There’s a Ritz-Carlton I go to and then there’s a McDonald’s West and a McDonald’s East. So when I’m out of the office, I may get an e-mail from someone that says, ‘Hey, are you at Deloitte Central or are you at Deloitte West?’
That’s where I really use time to work on projects where I’ve got to put thought and concentration into them. That’s important to have your getaways. I do my best thinking when I don’t have a lot of distractions.
The people who’d need to know where to find me know where I’m at all the time. So my administrative assistant, my office manager, they can always find me. I’m not that removed. I want to have an open-door policy, but you know, people take you up on that. I don’t want to stifle the freedom of people to do that, so if I close my door and draw my shades, I’m now sending a very different message of having an open-door policy. So what I do then is I just leave when I need that private time. That way, you still always have the open-door policy [and] you’re still getting your work done.
Be receptive to new tasks. [When new tasks pop up,] I run them through the same filters. So if somebody comes in and they say, ‘Hey, we have a client issue,’ that would probably get my attention. If someone comes in and says, ‘Hey, I’ve got a great idea. I’d like to bounce it off of you,’ I do have times that I have an open door so I know that I’m going to get distracted. I just do things that I can put aside and pay attention when someone walks in the door.
When that person is in your office, they need to believe that they have 100 percent of your attention. Yet, you need to manage that time such that you don’t allow them to hijack your day. You have to mentally say to yourself, ‘OK, I have 10 minutes to devote to this,’ and for those 10 minutes, you need to be devoted to it. So you don’t answer the phone, you’re looking the person in the eye, you’re listening, you’re asking questions of clarification, etc.
But then you have to have the ability to say, ‘Well, John, I appreciate you stopping by. There’s a couple of things I really need to get out this afternoon. However, this is good background for me. Let me give it some thought, and I’ll get back to you on Thursday.’ And then you need to get back to them on Thursday. You have to abide by your word.
Some people will recognize that they’re not in there for chitchat but others don’t have that same recognition, and they’ll sit and chitchat as long as you chitchat with them. You can eat up hours if you don’t end the conversation and move on. I say, ‘I’ve really got this other issue I need to get to now. Can I get back to you?’ When you say, ‘now,’ that will give them the message that they need to scadoodle.
How to reach: Deloitte LLP, (314) 342-4900 or www.deloitte.com
Martha Corbett eschews the traditional perch above her employees, clients and community organizations. Instead, she focuses on creating lateral connections, with her networks stretching out like a web around her.
The way the PricewaterhouseCoopers LLP executive looks at it, she’s simply building relationships out in every direction to stay in the loop.
“I want to make sure that I don’t just have my own view of what’s going on — that I have a wider and broader perspective on what’s happening, what’s on their minds,” says Corbett, managing partner for the accounting firm’s Southern California/Phoenix market. “I don’t want to be the last to know.”
She doesn’t just stay in touch with the 1,200 employees in her region — which spans from Los Angeles to San Diego, Phoenix and Las Vegas — and their clients to form that knowledge. Her network also includes other organizations unrelated to accounting or auditing. Deeply involved with charities like The United Way, she encourages employees to find similar organizations they can support, and she makes connections for them within her web whenever she can.
Her focus is on sustaining relationships with — and between — all of those groups. Beyond building her own relationships with her constituents, she helps them do the same with their own co-workers, clients and charities. Her role is even built around the importance of those relationships, as she’s charged with coordinating teamwork across her market and honing relationships between her employees and their clients.
Corbett’s approach starts with the basics — an open-door policy and a philosophy of managing by walking around to get input from others — but also involves a steady flow of communication back at employees.
So while there’s an aspect of leadership that reaches out from the center, it isn’t dictatorial. Rather, Corbett thinks communication should be built on and feed off of your relationships with those around you.
“You often see leadership speaking from the center or speaking from a podium,” she says. “What’s even more important is the one-on-one relationships that you have with your people. You can’t just stand at the podium and espouse your vision and your strategies without really knowing what everybody’s thinking and what they’re able to do.”
Here’s how Corbett emphasizes the importance of relationships built on communication and how she keeps it flowing both ways.
Stay in touch
To find out what people are thinking, you have to get out there and ask.
Taking the temperature of your organization’s morale through employees can be a “touch and feel” process. You can even ask them directly what morale is like and how their co-workers are feeling, as Corbett does.
She takes management by walking around seriously, whether she’s at the L.A. office or any of the others in her region. She compares it to a networking exercise within the organization.
But it’s not just the traditional definition of MBWA she’s talking about. She’s also walking to meetings, because they’re not always in her office.
“When I meet with people, I don’t usually ask them to come into my office. I usually go to theirs,” says Corbett, who got the advice from a PricewaterhouseCoopers partner in another market. “It just sets a different tone and openness for the meeting.”
By literally meeting employees where they are — and, consequently, where they’re comfortable — you create an inviting setting for an open conversation.
Beyond the general “how’s it going?” that she asks employees, Corbett makes sure to ask partners about specific concerns or issues they’re facing. Then she asks how she can help.
“What I’m trying to find out is how their business is going and what kind of challenges they’re facing and how I can support them,” she says. “Sometimes it can be a simple thing like … I can get them a spot on an agenda to speak about the business that they’re trying to build.”
To help employees relax and open up, you need to create an air of approachability around yourself. That can be as simple as keeping your door open so employees have the opportunity to initiate a conversation if they need to.
Corbett also opens them up by sharing about herself first. For example, she may get started by sharing some of the challenges she faces trying to balance running a company with raising three children.
“I think if you share, they will share,” she says.
Still, it’s hard to connect with every single employee if you have as many as Corbett does and especially when they’re stretched across multiple states. So you can rely on some employees to channel multiple lines of communication to you.
“I will gather a staff council in one of our lines of service,” Corbett says. “And I view that as a voice of the people. So I ask them if I can come to one of their meetings and I sit with them and find out what’s on their minds.”
Listen to those around you
There is some degree of speaking from the center in leadership. As important as it is to get input from employees, you should always be communicating back to them, as well.
Sometimes, that’s just to keep them informed and answer questions about issues that come up through your walk-arounds and client feedback. You can do that through multiple methods, from monthly newsletters to an intranet and team meetings to marketwide all-hands meetings at the start of each fiscal year.
Corbett also does that more intimately by pooling groups of employees to discuss topics in a smaller setting, which she describes as both mini town halls and fireside chats. About every six months, groups of 10 or 12 staff members sit with a partner. The partner explains what you’ve been hearing from employees and clients while reiterating bigger messages like the importance of building relationships with each other and with clients.
You can adjust the messages and methods based on the input you get back. For example, Corbett realized that her employees — especially younger ones who haven’t experienced a recession — were feeling pressed by the economy. So, it became a mini town hall topic.
You can also look for cues about how your employees communicate to adapt your methods. Corbett saw the tools young employees were using and rolled them out across her market, for example.
“A lot of the young people really like to be connected electronically, so we have our own internal Web pages that are unique to each of the offices,” she says. “There’s lots of information for them and lots of forums for them to give us their feedback and communicate.”
Corbett arranges similar mini meetings with customers, too, bringing several of them to sit in on executive board meetings. In addition to hearing about your thought leadership on a topic, customers can also learn what their other peers are doing about it.
Those round tables are preceded by plenty of research about the market, such as CEO surveys, to ferret out topics that are relevant to them. The forums are further planned with a steering committee. But it’s not made of PricewaterhouseCoopers employees; it’s the clients themselves decidin
g what would make the most meaningful conversations for them.
“That [study and research] is a starting point,” Corbett says. “And then it’s listening to our clients as to what part of that they want to hear about. So there’s this ongoing dialogue.”
You can keep the atmosphere more open and relaxed by keeping the meeting small.
“The key is to keep it small and intimate and create that one-on-one feeling, that feeling of trust,” she says.
Corbett also emphasizes the importance of building relationships and communicating by — you guessed it — communicating just that. Her messages to employees almost always include a reminder about it. But you shouldn’t stop there.
“It’s a soft skill, but I actually believe and the firm believes that that relationship-building culture is also a skill that you need to build,” she says. “So as opposed to just saying that it’s one of those softer sides of our strategy, we actually do have some training around that, and we actually do have a feedback process around that so that we can test the strengths of our relationships.”
A lot of the training revolves around the different styles of interaction and communication people have.
It starts with tests and evaluations to help employees identify their own styles, and that helps them connect those with other styles they might encounter.
“Everybody has a different style, and understanding and adapting to a style — even just in a conversation — is a skill that you need to build and have experience on,” Corbett says.
The training provides some of those skills by helping employees look for cues in conversations and gestures to improve their communication.
“If you have a style that’s very methodical and can be slower, when you’ve got a client sitting across the table from you tapping their fingers, it means that you should pick up the pace,” says Corbett, offering an example.
You can further train relationship-building by letting employees observe it in action as a third party. Corbett encourages that through shadowing.
“If you’re going to meet with a client, bring the intern with you. Bring the staff person with you,” she says. “Let them shadow you to experience and to get exposure, whether it’s [with] the client or firm leadership or whoever it is.”
She also urges her managers to adopt the same mindset.
“It’s easy to go to that meeting with just yourself or with a partner,” she tells them. “Take a second and think about bringing somebody with you.”
It’s one thing to give employees those tools and opportunities, but you should also get feedback about how they’re using them. Evaluate the relationships they’re building and how they’re communicating within those.
“You develop to high performance; it doesn’t just happen,” Corbett says. “It’s all supported by coaching and developing and feedback. And that feedback loop is a big part of that.”
She uses a 360-degree survey process and asks employees to give feedback on their peers and their direct reports.
Questions on the survey cover how employees communicate with questions such as, “Do you voice your opinions?” The survey also tries to uncover what kind of relationships their managers have built with them by asking, “Does your leader inspire you?” It also asks if they’re getting all of the tools they need to improve those areas through coaching and development.
“Our values and behaviors are imbedded in our coaching and development and evaluation process, so they illuminate the standards that we have as a profession,” she says. “They’re observable behaviors and they’re coachable behaviors.”
“It’s somewhat cultural — the importance of that relationship and the basis for establishing those relationships around our values and the way that we treat one another.”
How to reach: PricewaterhouseCoopers LLP, (213) 356-6000 or www.pwc.com
Michael Schwartz will tell you that strategic acquisitions are about people.
Sure, the deal may begin with a focus on the business itself, as it did when MetLife’s vice president of dental product management began eyeing SafeGuard Health Enterprises Inc.
MetLife was looking to couple its preferred provider organization products with SafeGuard's dental health maintenance organization ones, providing customers dual options.
But Schwartz, who became SafeGuard’s president, knew even a strategically sound acquisition would fizzle if the deal didn’t have a foundation bigger than the basics.
“It tends to start with the financial implications of the business,” says Schwartz, who maintains his roles at both companies now. “Sometimes you’ve got to think broadly about this. It’s not just the financials: It’s the people. It’s the infrastructure. It’s the process.”
“Such an important part is assessing how the organizations are going to fit together. At the end of the day, it’s people and it’s the leadership. The underlying components … are really the folks that are going to make this successful.”
Schwartz looked beyond the books of business, focusing on setting expectations, understanding the culture and using regular communications to make the integration a success.
“You try to build trust and get feedback and have people engaged and bring the cultures together,” Schwartz says. “You do an enormous amount of that up until your close, and then you do more. Think about that as an ongoing commitment to the success of a transaction.”
Through the process, SafeGuard became a successful MetLife company with 2008 revenue in excess in $200 million. Here’s how Schwartz’s focus on people smoothed the acquisition.Establish expectations
If you want your people to be successful in a merger or any other process, you have to set clear expectations for them.
“Set the expectation of what you want, and it’s beyond just deal value,” he says. “It may be people and assets and platform and technology and customer relationships. Make sure you’re addressing that as early in your due diligence process as possible.”
You can set specific expectations, such as what you’re analyzing and what you’d like the outcome to look like.
“If you don’t know where you’re going, you shouldn’t be surprised that you don’t get there,” Schwartz says.
Once the goals are articulated, you’ll have a gauge for measuring how well employees do that. So those goals will become the metrics for judging individual performance and contribution as well as the success of the change.
“Be very clear on what’s considered meeting expectations, exceeding expectations or not meeting expectations,” he says. “It’s really important that you define what those measures are upfront before you do the transaction, because you want to be able to look back and know you were successful.”
When all the changes are swirling around you, you’ll be grateful that you took the time to set those metrics ahead of time.
“With everything moving around when you’re doing a deal like this and you’re new to taking over an entity and you still have a lot to learn you need a good radar screen,” Schwartz says. “That’s why, if we set clear expectations upfront of how people are going to be measured, that can tell us whether somebody is delivering on what we’re looking for them to do.”Do your research
In any change, you have to understand the issues your people are facing.
When it comes to merging people from different cultures, you have to interact with them so you can get an idea of what you are dealing with.
“Engage folks that are going to have the most insight into that culture, because you’re going to be under a time frame for how much learning you can do before you have to move on to other things,” Schwartz says.
For him, that wasn’t just the leadership team but also the human resources managers. Not only do they interact directly with employees, but they also have the best insight into the policies and guidelines that shape the culture.
“You can learn an awful lot just looking at what the company does on a more formalized basis,” he says.
Policies around vacation time and volunteer activities, for example, can indicate how a company feels about and treats its employees. Those people policies can reveal company values, like contributing to the community or finding a work-life balance.
Through conversations with the HR director, Schwartz also learned how SafeGuard employees communicated. He found out that many product and policy ideas came from internal entrepreneurs within the company’s inclusive culture.
That finding helped shape how he communicated with employees and predict how they might communicate back.
“Don’t lose sight on the work and effort that you need to do in due diligence to know exactly how to demonstrate your plan and be able to communicate effectively,” Schwartz says.
Of course, staying in touch with employees along the way will also help you gauge how integrated they feel. Pay attention to what people say and how they interact. From their responses, you can distinguish the followers from the stragglers.
“Some of the ways that you can see how effective you’re being in that cultural integration are: Are people actually talking? Are they asking questions?” Schwartz says. “Do people act like they’ve been told what to do or do they feel like they’re part of it? When you ask them a question, do they have an opinion?”Communicate changes
People going through changes in an organization don’t like to be left in the dark.
From the beginning, Schwartz set the stage for open, honest communication by promising employees he’d share everything he legally, morally and ethically could. He made sure to note that his commitment would hold true even when the news wasn’t good.
“People tend to manufacture the drama if they’re not given facts,” Schwartz says. “It’s not always going to be great, but acknowledge that and take the mystery out of it. That lets people have a more fact-based understanding of what’s going to happen. It is usually better than the drama they create by not knowing.”
Throughout the acquisition, Schwartz relied on communication to smooth the way. While this is a crucial part of due diligence before the deal closes, it’s also the bridge to a seamless integration going forward.
“We worked very closely with SafeGuard’s leadership pre-close to get out in front of, listen to and talk to every single employee in that company,” Schwartz says. “It wasn’t necessarily one-on-one, but we did an extremely significant amount of interaction. You don’t just get to the close date and start doing that.”
He didn’t reach all 400 employees individually. But he dug down to engage employees at all levels in multiple ways from typical town halls, written communication and Q&As to small focus groups and skip-level meetings, where managers interact with employees two levels down.
To reach a goal of integration, you need to communicate as a single, unified company. That means leaders from both sides should address employees together. At monthly town halls at each site, for example, Schwartz made that unity visible by presenting alongside a SafeGuard senior leader.
“People in these types of situations tend to look to the leadership at each company to decide how they feel about something,” he says. “They saw people speaking together. And that cascades down into the organization as people started being included.”
Of course, it’s not just the presentation but the message itself that matters. In any acquisition, employees will be anxious about the future. Alleviate those worries with transparency.
Even before Schwartz made final staffing decisions, he made sure to explain both employee benefit programs and severance packages to everyone. Get those “me issues” out of the way right away so people can move past worry and focus on their work.
Be very clear about your timelines for making those decisions, too. Schwartz found that employees usually imagined tighter deadlines than he set, so even if they were let go, there was some relief in how much time remained before the ball dropped.
Just as communication should come from a unified source, the message itself should be created through a joint effort. So Schwartz also gathered input from everyone possible.
You already have avenues set up if you’re using multiple methods to reach employees. All you have to do is request feedback through those avenues.
“You just have to ask,” Schwartz says. “It is amazing what people want to tell you if you just ask them their opinion and you actually care.”
Just make sure your employees understand why you’re asking. Sometimes their input will help shape the direction you take. And other times, the outcome is less flexible and the decision must come from the top maybe it’s already made. You may have to administer certain policies or regulations, for example, such as benefit programs. If employees don’t have a say, don’t ask what they want.
“Only ask questions when you’re willing to listen,” Schwartz says. “You lose credibility if you ask people their opinion and you’re not willing to listen.”
Whether it’s a decision-in-the-making or already made, you should communicate and give people the opportunity to respond. But asking for input often comes with the expectation that it will be used, so acknowledge the difference between course-altering input and response-gauging feedback.
“There’s a difference between communicating and asking,” he says. “I want to hear everyone’s feedback, but we were very, very clear whether we were asking for feedback because we could influence a decision or we were communicating a decision and listening to their feedback.”
Not only will you tap a wealth of diverse ideas you couldn’t come up with alone, but you start to build consensus toward future decisions when you ask for input.
“What that does is it makes the message ours versus theirs,” Schwartz says. “When you engage folks that way, they feel like they’re part of something. They’re aware of the direction we’re moving in. They feel ownership of that.”
How to reach: SafeGuard Health Enterprises Inc., (949) 425-4300 or www.safeguard.net
John Matig admits he doesn’t know it all. But neither do any of his 60 employees at Frontier Steel Co. Inc. So while ideas might start with an individual, they only manifest when the whole team works together.
The founder, president and CEO relies on managers to carry their loads at the steel distributing company, which had $54 million in 2008 revenue.
“You’ve got to let key personnel manage their area of expertise,” Matig says. “I don’t know anything about operations. I have to trust the people there.”
But he also recognizes the value of multiple perspectives.
Smart Business spoke with Matig about how to plan debate into your decision-making.
Q. How do you set up meetings so everyone’s voice is heard?
The best thing is to spend more time on the front end in terms of preparation, knowing what you want to talk about, so when you’re in the meetings, it doesn’t derail. Everybody has the same sheet of paper of what we’re going to talk about today. Now we do open it up for new business or long-range planning or whatever you want to call it at the end of the meeting, but basically, every person has an idea what their responsibility is.
I put an agenda together of each person, what we want to talk about, and then we have an open forum. Everybody gets a chance to talk about their domain, talk about what’s going on, talk about their concerns, talk about their needs and wants. And then the group listens. And when the first person’s done, we go around the room until the last person’s done. Everybody has a chance to have the floor and everybody talks about their areas. And then at the end of the day, we have a wish list and new business and things we need to talk about.
The agenda is usually followed up with an action plan based on what we talk about: ‘OK, you’re responsible for this. You’re responsible for that. Delegate this down the line.’
Every company that’s out there, if they’re not doing some type of round-table management on at least a biweekly basis, too many things get missed. Something that may not be important to that person — even though they’re in the area of expertise — somebody else may be able to look at it a little differently and say, ‘Wait a minute, what about this?’ So you’re pulling from a lot of knowledge and you’re trying to extract the right information.
The key is there’s no egos. You break down the egos [by saying], ‘We’re all in this together. We’re all around the flagpole. Everybody’s taking the bullet.’
Q. How do you decide whether someone’s idea will fly?
The way I handle it is, ‘We probably need to table that for another six months.’ Rather than say, ‘Pooh-pooh, that’s a bad idea,’ give it a chance to run its course. But rather than waste a lot of time on it now, just say, ‘We need to table that for six months. Let’s bring that back up in May.’
The idea is let’s not do anything until we know that this is what we have to do. It’s not like if we do this, we’re going to get more business. It’s like, wait a minute, get the order and then we’ll do this. You’re not going to generate new business or necessarily make good decisions based on, ‘Boy, if I had this, our business would be that much better.’
It’s being patient, not panicking, not being in a position where you have to say, ‘Oh, we’ve got to do this now.’ Do you really? Usually you don’t. Usually you have more time than what you think.
Everybody has a core business and when you take your eye off that ball is when you usually get in trouble. So the advice I would have would be stick with what you do best. Continue to improve on that. Don’t expect to do something just because you’ve got a piece of equipment that can penetrate this market. If you don’t understand the market and you don’t have the personnel, you can’t do it.
Q. How do you debate and weigh the options to make a decision?
We don’t necessarily make decisions based on one person. We try to talk it through and everybody respects each other’s area. There’s always some debate in the process. Recognize that everybody has good ideas. You don’t make a decision without consulting the group.
As an example, in the summer, we were close to putting in a whole new IT system. It was a pretty even split. Sometimes procrastination does work, because it came down to, ‘Guys, the market doesn’t look very good. Let’s look into our own IT system and see what we have.’ So we hired a young fellow out of college instead of spending a half-million dollars on a new system. We found out that our existing system was able to handle the needs that we needed it to, but we just never had anyone with the aptitude to be able to make that work. If we didn’t have the debate and if, all of a sudden, myself or anybody else said, ‘Let’s do this,’ it could have been a mistake.
A lot of times, people try to throw money at a problem versus saying, ‘What do we really need?’ At the end of the day, you realize that it still comes down to the process, to the people. And no matter how good a system is, if you don’t have the right process and have the people, it’s not going to work.
How to reach: Frontier Steel Co. Inc., (412) 865-4444 or www.frontiersteel.com
Larry Dentice is one of a very few fish in a very small pond.
He heads Toshiba America Medical Systems Inc., a company that markets, sells, distributes and services diagnostic imaging systems in a field with three major competitors.
In such a small sphere where competitors often leapfrog on product differentiation, it’s especially crucial to stand apart in another way.
“What’s important is to really try to differentiate yourself in the marketplace,” says Dentice, the general manager and senior vice president of the $650 million company. “Our No. 1 differentiator over all of our competitors is what we do in after-sales support and customer satisfaction.”
So he has to keep his 1,300 employees focused on that and continually improve their ability to deliver superior customer service. That philosophy is woven through the company’s culture, starting with the mission: “To become the industry leader in customer loyalty by delivering quality products and services through long-term, customer-focused relationships.”
But last year, another player encroached on the company’s status. After holding the No. 1 spot in customer satisfaction for six years, Toshiba saw service ratings for its flagship CT scanners drop.
Not wanting the company to lose its differentiator, Dentice sprung into action. By relying on the customer-centric culture he’d already built, he turned the ratings around and led Toshiba back to the top.
“It wasn’t an option,” he says. “As the head of the company, I directed that we’re focused on customer satisfaction.”
Here’s how he used employee education and metrics to build a culture that helped him drive customer-focused results.Educate employees about service
A focus on customer satisfaction starts when you educate employees about customer needs.
Dentice does that through frequent training meetings that give employees tools and information about the best ways to serve their customers. To make sure those sessions cover everything they should, he gathers plenty of input before and after the meetings.
The first level of customer service needs come from his executive staff meetings every other week. He makes it his first action item, opening the meeting by asking what type of customer issues his reports encountered in the last two weeks. From there, he keeps digging for ways to help employees face those issues.
“We don’t just take an off-the-shelf, canned training program,” Dentice says. “We customize it by talking to customers and actually bringing customers into the training.”
Instead of taking your executives’ word for it, validate it by asking the customers what’s most important. The first step is setting up focus groups to ask them which issues they would like included in upcoming training sessions.
Their responses will carry even more weight if you let them speak with your employees directly. So the real key is bringing customers in front of your employees.
“Probably the best thing you can do is pull in customers when [you] do training,” Dentice says. “We may pull in a CEO of a hospital and have him talk to the group about what’s important to CEOs of a hospital. So we try to use customer testimonials.”
Dentice also conducts focus groups internally with employees who are in regular contact with customers — usually in sales, marketing and service departments — to find out what skills they use and need.
He also brings employees at headquarters together once a quarter for “Today at TAMS,” a town-hall type of meeting where he reiterates the importance of service. Beforehand, he surveys employees to ask what they would like to see covered. Then he incorporates their curiosities into a four- or five-hour state-of-the-company address, which includes managers giving rundowns of each department. Each of those messages should tie customer needs to specific solutions that the company can offer.
“I start by covering what’s happening in the marketplace. I let them know what’s happening with our customers,” Dentice says. “Then I go on to say what we are doing — what kind of specific programs is the company doing — to support what our customers are up against.”
Though the session concludes with time for employees to ask questions, Dentice also hosts “Lunch with Larry” once a quarter. That gives employees the opportunity to sign up for a more intimate, informal setting where they can get answers straight from him.
“You have to touch all levels of an organization, not just try to rely on your executive staff,” he says.
After these meetings, follow up with employees to see how you can improve your communication next time. Dentice surveys the attendees to gauge what they learned, whether their questions were answered, if they understood each presentation and how the next meeting could be more effective.Help employees use information
In addition to scheduled training sessions, you should constantly update employees with news that affects your customers. But to really help them provide better service, make the information tangible.
Every day at Toshiba America Medical Systems, someone in the marketing department scours the Internet and industry periodicals for relevant articles. Look at news through customers’ eyes by considering what issues and changes would affect them, whether it has to do with government regulations or your competitors. Then compile those articles into a mass e-mail update for employees. But realize how easy it is for them to simply scan through that without really registering what it means or what they should do about it.
“It’s a cadre of data,” Dentice says. “What we try to do is focus it down to the specific function where the employee can make an impact and make a change in what they do. There’s no sense in telling them about something that they can’t impact in their jobs.”
You can make information digestible for employees by following Dentice’s daisy-chain approach.
“It’s understanding how it’s going to impact your customer and how [you] can impact what’s happening and what products and services we have that can affect it,” Dentice says.
Because each manager knows his or her department and his or her customers best, have the managers pull out the news that affects them the most. So in addition to the generalized reports, managers should send additional e-mails to their divisions highlighting not just the news but specific products and processes employees can use to support it.
But that’s still not enough to make sure employees take the information away from the computer screen. You have to hold them accountable, too.
Managers should follow up with their direct reports to make sure they read the articles. Have them meet to discuss what it means for their customers and how they serve them.
“The manager would ask, ‘Did you see these articles? Let’s take a look at your customer base, where we think this is going to have an impact, and then go meet those customers to validate the information,’” Dentice says. “It’s to validate if they have the information, if they understand the information and then where are they going to use that information.”
You can train employees and feed them a constant stream of updates to help them serve their customers. But you’re stopping short if you don’t actually monitor the results.
Toshiba America Medical Systems surveys customers immediately post-installation and follows up intermittently after that, then collates that data against third-party analyses.
The survey is a series of 50 to 100 questions that dig into details. Think about every step of the customer experience, considering every department, each product and what each does for the customer.
TAMS’ survey, for example, starts by asking if customers were sufficiently informed during the initial planning, whether they understood the product and how to use it and then how the sales process met their needs. It starts with specifics and ends with the general question: Is there anything we could do differently or better to improve your experience and keep your loyalty?
“It’s got to be more of a longer list [rather] than a shorter list because you just don’t want to take a series of one or two data points,” Dentice says of the survey questions. “You really want to have multiple data points to cross-reference to make sure that you are optimizing customer satisfaction.”
Dentice looks at feedback quarterly for ways that the company can serve customers better. For example, when ratings dipped for the company’s CT scanners last year, his first step was creating cross-functional “Voice of the Customer” teams to take a closer look at the results and work together to improve them. To form the teams, he asked managers to choose senior employees in their departments who had the most time and experience interfacing with customers.
The team looks for red flags or low ratings that span multiple surveys, then digs into the cause of the dissatisfaction. They follow up with customers individually to find out more about their experience and what could improve it. The key is getting them to look at enough data to understand the extent and reach of the problem rather than relying on limited sources.
“It’s by validating as many data points as you can before you actually institute a change,” Dentice says. “Don’t have a knee-jerk reaction to a rating. Really investigate it to see if it’s multiple sites, if it’s multiple regions, if it’s across the country or across the globe.”
After all, you have to know what you need to fix. Once you can identify which customers are dissatisfied where and why, you can more easily pinpoint the root of the problem within your company and distinguish whether it’s stemming from certain people or processes.
Even if the problem is widespread, the solution should start small. For example, some customers complained that different employees followed up with them each time, meaning some information about CT scanners was repeated and other information was skipped. Instead of totally changing the process, Dentice started assigning a single point-of-contact to each customer in the southern region for six months. When the ratings there climbed back up, he rolled the change across the rest of the company.
Beyond departmentwide or companywide process changes, the survey results should also impact employees individually to some extent. Dentice ties a percentage of employees’ compensation plan to customer ratings. The more an employee’s position directly affects customers, the more his or her compensation will depend on that.
“It’s not an overall driver,” Dentice says. “It’s enough to tell our organization, ‘Listen, we’re serious.’”
A CT application specialist’s job, for example, widely revolves around the customer, so as much as 25 percent of his or her compensation plan may be tied to survey results. To make it easier to measure individuals, ask questions that specifically mention them, such as “How did the specialist train you?” and “Did you understand it?”
“Make sure the employees know that you’re looking at this data and give them feedback on the data of where they can improve as employees and how they can improve as a company,” he says.
After all, the point isn’t just to get certain ratings from your customers. In the end, the aim is really to improve your ability to keep customers happy so you can keep their business and grow your company.
“Really understand … what’s going to be important to (your customers),” Dentice says. “The goal is to have repeat business and maintain loyal relationships with your customers.”
How to reach: Toshiba America Medical Systems Inc., (800) 421-1968 or www.medical.toshiba.com
Ultimately, it was Andrew A. Fimiano’s discomfort that led to a transformational decision. The president and CEO of Southland Industries was squirming after enduring 45 minutes of relentless questioning from business consultant and “Good to Great” author Jim Collins.
Fimiano went to Collins in 2002 for advice on improving his mechanical engineering, construction and service firm. Although he’d grown revenue from about $10 million when he came on board in 1982 to $323 million in fiscal 2001, the company was starting to lose financial traction.
Collins’ interrogation revealed that Southland was splitting its focus across two business models. It lost 22 percent of its profit doing traditional “plan and spec” work, which involves bidding to build another firm’s design and charging customers for adjustments to those designs during construction. The company relied on “design-build” projects — designing and constructing its own plans at a set price — to make up for the loss.
Collins’ final question led to Fimiano’s revelation: Why would you keep offering a service that eats up nearly a quarter of your profit, causes the bulk of your legal problems, fosters customer dissatisfaction and burns out your employees?
Fimiano didn’t have an answer, so he knew change was crucial. He vowed to make the company 100 percent design-build in the next three years.
“Until you really look at the metrics, until you really look at it the way Jim Collins looked at it and the way we started to look at it, you think you’re doing OK. The overall company’s making money. One component of it isn’t, but it’s OK,” Fimiano says. “It caused us to really focus on what we did best rather than just being OK.”
This new direction wasn’t just a change for the 1,750 Southland employees but for the entire marketplace, as well. Fimiano knew it would take relentless effort to convince employees and customers alike that OK wasn’t good enough.
“We were always good,” he says. “But how do we get to the next level? How do we become really great?”Help employees visualize change
Fimiano knew he had to drive the change throughout the company and beyond. But first, he had to topple the initial domino by getting his employees on board.
“Before they can go out and explain it to a customer, they’ve got to believe it,” he says.
He started by communicating why the change was an improvement. This was easy to explain to the handful of executives who sat in on the Collins consultations; they had already examined the data and debated over the options with Fimiano. But when the message came down to the employees who would be most impacted by the change, he had to pump up his powers of persuasion.
“There’s got to be a lot of frequency and a lot of metrics and a lot of telling the story over every chance you get,” Fimiano says. “Every time I get a group of employees today, I tell them why we want to do design-build and the benefits of it. It is the best thing for the customer, it is the best thing for our employees and it is the best thing for our stockholders. You weigh all three of those things.”
To prove that the change was the best thing for each group, Fimiano looked at data from the company and beyond. Using both internal and national statistics, he compared the time and money demanded by both types of projects as well as the results in terms of price, quality and satisfaction.
But a change this big is overwhelming enough without a deluge of statistics. Condense the data to make it digestible for employees. The more you can convey through a quick glance — as opposed to wading through pages of numbers — the better.
“We try to look at big items in bar graphs so it’s not so much statistics,” Fimiano says. “We try to keep it simple. Honestly, a lot of numbers and statistics get crunched to make the bar graphs, but what they ultimately see is usually pretty simple.”
But repetition and statistics alone might not be enough to propel employees into execution mode. To motivate them to internalize the change, you need to make it seem tangible by painting a picture of what it will be like to reach your goal.
“When you get to utopia, what’s it going to feel like?” Fimiano asks. “We sat down with our crystal ball, if you will, and said, ‘What’s it going to be like when we get there?’”
That prediction comes partly from hopeful aspiration but mostly from data. Fimiano, for example, looked at satisfaction ratings from the two types of work to create his visualization that a design-build firm would sustain happier customers and happier employees.
“That’s helped a lot, just saying, ‘OK, here’s what we want to do and here’s our goal, but here’s what it’s going to feel like when we get there. Here’s why we want to get there,’” he says.Zoom in on resistance
Driving change isn’t just about securing buy-in but also recognizing who’s on board and who needs a more intimate nudge.
For Fimiano, it’s an easy distinction to make.
“The key to getting on the same page is a lot of rigorous debate,” he says. “If there isn’t somebody challenging and asking questions and being the devil’s advocate, then you’re not going to get there.”
“The people that are on board will ask the toughest questions,” he says. “They want to make sure that they understand it. ‘What about this? Did you think about this? How are we going to do this?’ They’re trying to figure out how they’re going to execute this plan.”
The employees who aren’t buying in to the change usually stay quiet during meetings. Those are the ones Fimiano approaches one-on-one.
“It’s not going to be as bad as you think,” Fimiano told them. “Let’s just take this one step at a time. You don’t try to eat this three-year goal in one gulp. Every three months, let’s try to improve.”
The employees who had the biggest changes to make were generally the most reluctant. The division leader of Southland’s Southern California region — a location that relied on plan-and-spec work for about 85 percent of its business — was one of the most noticeably upset. He feared the change would put him out of the job completely.
That’s where you need to step in. Get involved to make the change a team effort rather than survival of the fittest.
“It’s into frequency and into details and into time spent face to face with a lot of the people that have concerns,” Fimiano says. “Show them with actual circumstances and actual statistics that they can make this change and that you’ll help them make it. [Tell them], ‘You’re not going to do it alone. We’re not just going to say do it. We’ll get you help to make this change.’”
To bring them aboard, you have to make the goal achievable. Help them break the endpoint into more tangible steps.
“You don’t try to climb the mountain in one day,” Fimiano says. “You have base camps. We actually use the term base camp, where you set out small goals along the way. If we ’re 15 percent design-build today, in three months we would like to be 22 percent. If you see that progress, it stimulates more progress.”Drive change beyond your office
If getting employee buy-in is the first domino, then your next task is to keep that momentum rolling outside of your office. Equip employees to get customers on board, as well.
“Most of it is spending time with people one on one, spending time showing them how to do it,” Fimiano says. “I would take on the customer that had the most resistance and show them how to do it.”
Fimiano had plenty of opportunities, because the change faced significant resistance in the marketplace. Many hospital builders, specifically, shied away from the idea of design-build. So Fimiano went straight to the CEO of one of the largest builders and asked for only 30 seconds of his time.
It’s important to keep your message simple and succinct with your customers. Instead of diluting your presentation with pages of background and reasoning, jump straight to how the change affects them.
Fimiano laid down two floor plans — one design-build and one plan-and-spec — and let the difference speak for itself. Instead of just telling, he showed the customer how the change would improve the quality and lower the price of a project. That short-and-sweet approach has already manifested into several projects with that builder.
“If you can just show them the difference, there’s lots of data that will demonstrate that what we’re doing is superior to the old way,” says Fimiano, who equipped employees with statistics to support the case with customers.
“The point we’re making is (the change) is much better for the customer, ultimately,” he says. “The final product is going to be less expensive, it’s going to be faster and it’s going to be better quality. So we keep track of all those metrics so that our people, when they talk to a customer, can say, ‘We’re not just doing it because it’s good for us. It’s good for you, and here’s why,’ and we back that up with a lot of statistics.”
If you just handed employees stacks of statistics and set them free, you’d be giving them bullets but no gun. You must also train them how to use the data. For Fimiano, this included role-playing and prepping for the worst-case scenario.
“Typically, you know what a customer’s going to say: ‘I’ve always done it this way. Why would I want to change?’” he says. “Ask yourself, ‘What are the worst questions that they could ever ask me?’ and be ready for them. And then usually the other ones are easier.”
Fimiano asked employees to list the queries that would freeze them. When you talk through the best answers for those, you build their confidence. If employees are prepared for curve balls, their responses to basic questions will become second nature.Don’t stop
Change has to start at the top. But Fimiano says the biggest mistake would be assuming that you could just set the change in motion and walk away, expecting it to transpire unassisted.
Executive involvement is key throughout the entire process. You have to stay persistent and committed until your employees reach the goal.
“You can’t take a step back,” Fimiano says. “A lot of people tried me along the way: ‘Do we have to do it in three years? Can we do it in three and a half years? Can we do it this way?’
“You’ve got to be really steadfast. You’ve got to be black and white. And you’ve got to say, ‘No, this is what we’re doing. We’re going to help you get there, but this is what we’re doing. We’re not going to change the goal.’”
Fimiano set the pace by cracking down on the company’s project selection. He gave employees time to phase out of plan-and-spec projects in progress, but then took a disciplined approach to future plans. Working against the goal simply wasn’t allowed because the company stopped accepting plan-and-spec projects.
Even after the company stopped doing plan-and-spec work in 2005, Fimiano continued watching metrics to illustrate the progress.
“The best [monitoring tool] for a lot of people is metrics,” he says. “When they start to see the metrics, it’s hard for them to fight that we’re doing the right things.”
From 2003 to 2008, for example, Southland’s net income rocketed from just more than $600,000 to $44.6 million, and its gross profit margin grew from $27.6 million to nearly $98 million. In the same time frame, return on equity increased from 3 percent to 67 percent. And last September, Southland ended fiscal 2008 with $471.6 million in revenue.
“Because we pushed so hard,” Fimiano says, “we were able to actually change the market and change the way they looked at things.”
How to reach: Southland Industries, (949) 440-5000 or www.southlandind.com
As employees climb toward the peak of Summa Health System, Kyle Klawitter controls the rope. Her job is to support employees with the skills they need to achieve the leaders’ goals.
As the system vice president of human resources at the health care provider which has more than 10,000 employees and 2008 revenue of $1.6 billion Klawitter oversees Summa’s Leadership Institute. The classes are open to all management levels, either by self-nomination or the nudge of a supervisor.
But without a connection to the top, Klawitter’s efforts would be futile.
“The first key is support from the senior leadership team of an organization,” she says. “They have to be the ones who provide the resources. They also have to be the ones that support the people, attending and participating and growing as leaders themselves.”
Engage the leadership team members by, first, working with them to plan the development curriculum. Klawitter conducts assessments, asking executives what they need to personally develop as well as which skills they would like their direct reports to improve.
Coordinating with executives ensures that the course material aligns with the direction of the company.
“If you’re not providing the education around what your organization is shooting for, then you’re teaching them something they’re not going to be able to use,” Klawitter says.
She suggests using your company’s strategic plan as a road map for developing curriculum. From that, you know the leaders’ main objectives and what skills are necessary for employees to execute them.
For example, one of Summa’s key strategies is integrating new hospitals and leaders into its system. In preparation for that challenge, Klawitter created a class called Philosophies of Summa Health System to align everyone along the company’s mission, vision and values.
Still, the best way to directly involve leaders is to have them teach. At Summa, for example, President and CEO Thomas Strauss heads the philosophies class. Several other executives are featured in a video vignette during the class, explaining how they embody those philosophies in their jobs.
“It’s a variety, using not only our president but also other role models at all levels and all areas to show how that skill or that value is actually demonstrated in real life every single day,” Klawitter says.
Through the connected mentoring program, the institute also coordinates a panel of executives for a Q&A session about their career paths, especially the struggles and choices they faced along the way.
Although Klawitter also brings in external authorities, the process requires finding and vetting speakers and then bringing them up to speed with Summa’s culture and vision. But even though your own executives are familiar faces already aligned with your goals, they aren’t always compelling presenters.
“One way to overcome that is pair them up with a really great presenter,” Klawitter says. “We have a good sense of who our good presenters are because we’ve seen them in other venues, making regular presentations on a business topic.”
Klawitter asks employees to fill out evaluations after each course to get suggestions for improvement. If those responses reveal holes in a certain executive’s approach, you can subtly direct the leader to a class about making presentations.
Klawitter conducts general employee surveys to gauge the program’s success, as well. She asks everyone to rate whether their managers have the skills and abilities to effectively lead the department. She also looks broadly at the company’s overall metrics, such as financials and customer service ratings.
“The ultimate success of a good leadership development program is the success of the organization,” she says. “That is the direct result of a strong leadership team, and the leadership team is strong because of the development that is offered for those people.”
How to reach: Summa Health System, (330) 375-3000 or www.summahealth.org
A closer look
For some employees, a classroom setting doesn’t provide a close enough look at leadership. So Beth Vidmar created opportunities for more intimacy.
As the director of human resources development at Summa Health System, Vidmar developed and now oversees the mentoring program. She breaks it down into a yearlong program for potential managers, called Mentoring Aspiring Professionals, and a two-year fellowship for managers seeking further promotion.
The first step is asking mentees to make a list of three interests they’d like to explore, like finance or marketing. This sets their direction and helps you select their mentor the executive of that department.
“We prefer them not to be mentored in their own area, because they’ve already been mentored pretty much in that area,” Vidmar says. “We’re trying to broaden their perspective.”
Early on, protégés complete leadership assessments with their mentors to identify strengths and weaknesses and determine the focus of the relationship. If they want to learn how to run a meeting, for example, they may enroll in a class in the leadership institute or simply shadow their mentor by attending leadership meetings.
Their goals change as they discover what appeals to them or doesn’t.
“We’ve had protégés who say, ‘Management’s not for me,’ after shadowing a manager,” Vidmar says. “That, to us, is just as successful as someone saying, ‘I want to be in management.’”