“That kind of gets people’s attention,” says Ed Stack, chairman and CEO, Dick’s Sporting Goods Inc.
A few years ago, Stack charged his store managers with sharing three things the sporting goods retailer does that makes no sense.
“It’s really simple,” Stack says. “Ask people for the things that you have them do that they view as doesn’t add value. We did it as a fun thing to do.”
The idea was part of an overarching theme of the importance of staying in touch with your business. It’s not enough to gauge how the business is doing by talking to employees and customers. You have to actually solicit their feedback. And one of the best ways to do that is by creating an interactive and engaging format.
At the end of 2009, Dick’s had 419 stores in 40 states as well as 91 Golf Galaxy stores in 31 states. All told, the company brought in $4.4 billion in revenue. Perhaps you, like Stack, can’t personally reach everyone to gather input. But you still need to solicit feedback in a way that portrays an accurate reflection of your business.
In order to do that, Stack asked his store managers to discuss the stupid list with their employees. Then, they submitted their three ideas via an e-mail created for the purpose.
“There was nothing off the table, they could put anything on that they wanted to,” Stack says.
Gathering the feedback is just half the battle. The second part is analyzing. When you’re gathering information from so many places, obviously you’re not going to be able to act on every decision.
“We looked at the 10 things that our associates indicated the most,” Stack says. “If somebody said, ‘This is a stupid thing,’ and we heard that 50 times and something else we saw was stupid but we got that three times, we went with the thing that we heard more.”
One of the issues Dick’s faced was it wasn’t monitoring its in-stock items for advertising as well as it needed to. Turned out, it was a computer system problem. A few adjustments were made and sales went up.
That was one problem with a fairly easy solution, but not every suggestion will be as easy to solve, nor will every suggestion be solvable. An important piece of asking employees for feedback is following up with them on your final decisions and explaining why.
Stack went back to his employees and spoke to them about what did and did not make it on the list and then an e-mail was sent to every store.
“We said, ‘This is what came up on the stupid list,’” he says. “‘This is what we’re going to do, [this is] why we’re going to make these changes, and these are some of the things that we can’t change, and why we can’t change them.’”
How to reach: Dick’s Sporting Goods Inc., (877) 846-9997 or www.dickssportinggoods.com
For more leadership advice from Ed Stack, he’ll be the keynote speaker at the 12th Annual Entrepreneur Growth Conference at Duquesne University on June 10. Also keep an eye on Smart Business Pittsburgh for a future cover interview with Stack on how to develop and maintain a vision.
When mortgage companies started to close due to the collapse of the real estate market, Deanna Daughhetee didn’t fear for her own company. Instead, she capitalized on the fact that there was less competition.
“You need to make sure you do think about what kind of opportunity does this present to us,” Daughhetee says about the economy. “It really starts you thinking about things in a different way, and that’s when you come up with new ideas and new opportunities that maybe you hadn’t thought about before.”
The company, which Daughhetee founded and owns and at which she serves as president and CEO, has 31 branches in 25 cities and opened 11 in 2009 alone.
Much of the company’s success venturing into new markets comes from the involvement of her 350 employees in the process. From gathering research all the way to replicating the company culture in each new location, the process must include effective communication and a set of expectations.
Smart Business spoke with Daughhetee about how to involve employees when venturing into new markets.
Decide how to expand. We actually have a team (to do research). Our marketing team is involved in it and our senior management gets involved in it. Then we also do some informal information gathering out of typically our sales force.
We would go out and we research the markets so we’re looking at demographics, we’re looking at competitors what’s the competitive landscape in markets defining what we think our opportunity is in the market to determine whether it’s a good market for us.
The second thing is can we find the right people in that marketplace or can we transfer people from within the organization into that marketplace.
Is there a good labor force there? Are there people that are trained in whatever it is you’ll be hiring them to do? If not, can the training be provided? What’s the unemployment rate in the market that you’re talking about? How many people are you going to need to hire?
Those types of things are all going to factor into your ability to get that off the ground with the right people.
It’s a combination of (then) analyzing the information and talking through it with your team because you really want to make sure you think it through. When you have a team together and people bringing up different aspects, different thoughts, different challenges, I think you end up making a better decision.
Create an expansion team. On that team, have a point person that will coordinate everything and communicate to the team everything that has to happen and the status of what needs to happen.
That tracking that that person needs to do needs to be from finding your facility down to the smallest detail of who is ordering the office supplies in order to make sure you get everything covered so you have a smooth opening that’s the most important.
The point person makes sure that everyone who needs communicated with is getting communicated with on a regular basis because things will happen, things will come up. In order to keep everything coordinated together, there has to be a process to make sure that everyone knows what’s going on because one thing may affect something that someone else is responsible for.
You need to make sure you have the right people on that team that can ensure what needs to happen gets taken care of and that there’s good communication and collaboration among the team.
Then, good communication with me on what the status is and where we’re at if we run into an issue to make sure that I know that, as well.
The point person needs to be a very detailed-oriented person because they will need to track a lot of information. They also need to be someone who can take charge because they are going to be coordinating with a lot of different people, and needing to get updates from a lot of different people and sometimes they need to push different people to make sure everyone is staying on track.
Define expectations. You also need to define very clear ramp-up expectations. As you either hire or promote whoever is going to be in charge of your new branch or your new area, just be very clear on what those expectations are so everyone is on the same page going into it. That’s one-on-one communication.
It puts everyone on the same page with what results we’re looking for. It allows everyone to work together to achieve those results and to make sure they’ve done what they need to do in order to support getting that result. And then it also allows for everyone to celebrate the successes as those results are achieved.
If they’re not achieved, everyone can also get on the same page with looking at what’s gone wrong, why are we off and what do we need to do to fix it? So it doesn’t come as a surprise.
Set a culture. You have to start with a strong culture initially because you really need to build on that.
The best way is if you’re promoting someone from within to go lead that expansion because that person is already immersed in that culture. Whoever the hands-on management in that new expansion might be, they’ve got the primary responsibility of making sure it’s consistent with the rest of the organization.
If it’s not a promotion from within and you’re hiring someone to lead that, you really need to immerse them in your culture.
What we do is we bring them into our corporate headquarters so they get familiar with both the people here, the environment, the culture, get an understanding of how they work, then we’ll send them out to different branches so that they can get that perspective also. It’s a great way for them to really talk to a lot of people and really understand the organization and what the culture is.
Then lastly you have to talk about it. You have to make it clear that your expectation is that they build the same culture, so you’ve got to be able to define it and make it part of what they’re responsible for.
How to reach: American Equity Mortgage Inc., (314) 878-9999 or www.americanequity.com
As an entrepreneur, you start alone and you end alone.
Jeff Taylor believes that theory because it’s played out inhis own life. He founded Monster.com in 1993, then left to start new ventures in 2005, the year the “job board” Web site turned employment solutions company reached $987 million in revenue.
Now, Taylor keeps busy as founder and CEO of Eons Inc., a Boston-based holding company for four Web sites he started that cater to baby boomers: eons.com, eonsboommedia.com, tributes.com and meetcha.com.
From his experience at Monster, he’s taken lessons from recruiting employees and innovating in order to grow his new companies.
As an entrepreneur, Taylor says, “You also have the opportunity as your idea grows that you begin to give pieces of that idea away to other very capable people. In the end, if you give enough of the idea away, then the idea becomes an engine of its own with lots of talented people workingon it.”
Smart Business spoke withTaylor about how to find employees and innovation.
Find where you add value.The key to success as an entrepreneur is to be able to identify your strengths and weaknesses and to hire to your weaknesses. Too many times, as anentrepreneur, you think you can do all of it. You move into a mode in your life where you can’t be told that it can’t be done, so you think you can do everything, and you’re not going to listen to anyone else.
One of the things I found is that I have some clear strengths and some clear weaknesses. One of the things I developed was a sense of being able to identify people that were great contributors that had strengths where I didn’t have them.
Part of it is looking at what are your key messages. If someone were to ask you to describe yourself, do you describe yourself as a particularly organized person? Or are you a really good marketing person? People tend to be able to, with a little bit of poking and prodding, identify strengths that they have.
It’s a little bit harder to make a list of things that you’re not good at even though maybe in your heart of hearts you know that (it’s aweakness). For example, you really don’t want me to be in the accounting department of my organization. I tend to like more culture building, human resources, dealing with employees around the idea. But in terms of being operationally built, that’s not my classic skill set. So I look for people whoare more organized.
Identifying your strengths I think most people can do, it’s the weaknesses you need to spend a little more time on.
That was an important part of my hiring process. I also like to hire people with a lot of passion. I would look for people who were extremely interested in even if it was hobbies or passion that they had in their life outside of work, where I could see somebody go deep and long into asubject or topic or experience.
I love to hire that kind of person because as they caught fire to my idea, they would want to be part of it, and they would work hard to live that idea to its fullest. A big part of the recruiting process is identifying people who have a similar desire as you but maybe with a different skill set.Find passion. I typically open an interview and ask someone to tell me about themselves. What defines them? And I would not limit it to the workplace.
That is where someone would say, ‘I run 50 to 60 miles a week.’ I would love the way an interview like that would open because somebody would talk about the fact that they run, they run on the street, they use an odometer, they connect to the Web, they compare their running paths with other people’s running paths. They talk about the importance of mind, body, spirit,so their passion then bridges over to a work-related scenario.
I would also ask somebody to talk about a work experience that was explosive for them that really worked. Get them to talk about something that they have done that was extremely exciting.
If I watch people to struggle to find that, then that might not be the right kind of person to work at my company.
Find innovation. In defining the company, I look to continued innovation, not just innovation in the first idea but that you always have an innovative process. As you get your first product off of the ground, how do you get your second-curve strategy in place so you’re always reinventing yourself?
There’s some things that we talk about in terms of style of company. You can be an innovator, or you can be a fast follower, or you can be the low-cost provider. One of the things I find is companies sometimes don’t know how to identify what they’re going to be good at.
If you’re going to be the low-cost provider, then you need to focus in on your process engineering. How are you going to take this idea to marketplace with the least amount of expense associated with it because your margins are going to be slimmer? If you’re an innovative company, then you have to focus in on ‘OK, how do we keep being innovative.’ You can’t just have one idea and then stand back.
Most companies do the same thing every day and hope that they just keep growing. I think reinventing your product and or your service that you offer is something that is hard, especially when you begin to get profitable and you think you’re invincible. What I’ve found is with any initiative within a company it needs an owner. I would typically assign someone to break our product or reinvent some aspect of our product.
Innovation is either going to happen or not happen within your company. So assigning an owner and identifying the new trends and how do your products and services fit in with those trends and actually getting out there with new products that can really help your customers, I think is a really important initiative.
Georgette Ciukurescu never practiced the martial arts. But she managed to spot a gaping need for nunchakus, throwing stars and all-things Bruce Lee.
While helping a friend outfit his martial arts club 40 years ago, Ciukurescu noticed the lack of outlets carrying inventory. The frustration enticed her to feed the market need, starting by making nunchakus by hand at her kitchen table.
Product by product, Ciukurescu has grown Asian World of Martial Arts Inc. into an international manufacturer, supplier and distributor of martial arts and sports equipment.
But understanding consumer needs only gets you so far, Ciukurescu says. You also need to develop loyalty with customers by building strong relationships and providing good service.
“I want to embrace the customer,” she says. “I want them to say this company cares. And that’s what I’m trying to do.”
Ciukurescu, owner, founder, president and CEO of AWMA, passes that philosophy on to her team, which ranges from 35 to 50 employees depending on the season.
Smart Business spoke with Ciukurescu about how to provide customer service.
Build relationships. You have to communicate constantly with the individual (customer). If you can be with them one-on-one on the telephone, that’s even better.
You have to let them know that you’re just an average person just like they are, and sort of relate to them with all their ordinary day issues.
You have to get a feel for who your customer is and what they like and just stay with that individual connection. It’s very important in a business relationship as it is with even a personal relationship. I kind of relate the two.
I see with one of my employees, he sends out e-mails to his customers. He talks to them about the sports teams and what they’re doing. He talks to them about movies that he likes and has anyone seen a good movie. He gets dozens of responses from the customers just interacting about movies.
These are people that buy from us, but they love this guy. They love what he brings to the table besides business.
It’s not just all statistics. We’re your family, and that’s what we try to express with our customers. That’s what they get from us and from our employees, which makes us a little bit different than the other person and hopefully brings the loyalty base in with our customers.
Understand your customers’ needs. We’re constantly asking them how they feel about our product. Are there any problems with anything? What would they like to see differently? Is there a product that they would like to see us carry?
You try to find out is there something new they would like to see in the market. We want to make a good product, and we don’t want any complaints about it.
Everything is valuable information. You can’t ignore it. You just cannot ignore it.
You can’t always think you have the right answers, too. You do have to listen to what your customers are saying, and you do have to listen to your sales team because they’re dealing with the people on a day-to-day basis.
If you want to grow and be successful, you have to pay attention.
Receive regular sales team feedback. We have meetings every week, and we break up into groups of eight people because we want to make sure we have enough time to talk with everybody.
We’ll do an overview as to what are your three major complaints in our process: Is it shipping, is it returns, is it defective merchandise, is it the person is not getting their order on time? What are you hearing?
Then, of course we like to hear the positive stuff. What are the positive comments that you’re getting? Then, what ideas do you have?
If we have new products, we’ll bring the product in for people to understand how it’s made and what it does and the benefit of it.
Then, you want to also get a feel of what’s going on with everybody in the room, too. This person hasn’t been that talkative, what’s going on, are they upset with something? You need that to find out what’s going on with your team. You need to stay connected with them.
(It’s) feedback and also keeping your business on the right track and successful. You want to make sure your employees understand what you’re thinking and what’s important for you and the whole program of what your company is all about.
You want to make sure employees are on the same track as you. We have employees who have been with us for over 20 years. Things are a lot different now than they were 20 years ago.
Build trust through service. You always try to be ... honest and fair. You put a good product out there. You deliver what you promise. And if there’s a problem, you take care of it.
If one person is upset with you, they’re going to tell several of their friends. If they’re happy with you, they’re going to tell their friends they’re happy with you.
I tell my employees the customer is always right. Whatever is the problem, fix it. Even if you know maybe what that customer is saying or doing is not correct or you know they’re at fault. Make them happy. Take care of that situation.
You get some customers that can be trying, for lack of a better word. And it affects your employees, it has to. You have to constantly have meetings with your employees; you have to explain to them how you just have to deal with this individual. ‘Let’s try and make this telephone conversation, an e-mail conversation, a positive one.’
You want that good vibe going out into the universe, but you have to show it, and you have to demonstrate it and it all comes down to your sales team. It’s just everything that goes on internally that brings that about.
That’s why you have to make sure that your people are on the same page as you are and that they are supportive of what you’re doing.
How to reach: Asian World of Martial Arts Inc., (800) 345-2962 or www.awma.com
Adapting to change is just a basic element of doing business for John Kratz.
In the field of information technology, Kratz, president of Information Control Corp., constantly has the changing effects of technology, globalization, competitors and the economy on his radar screen. And when factors indicate, he has learned to be flexible, including with the company’s vision.
“We don’t live in a static world,” Kratz says. “You have to establish a vision, you have to stay focused, but you have to be willing to adapt to changes as they become apparent to you. You have to be, I believe, open to the idea that things can change and will change.”
Don’t make radical changes, Kratz says. You need to make calculated decisions if you’re thinking about changing your vision. That means talking to outside sources and gauging the market as well as evaluating your goals as a company.
The process has helped ICC grow to 2008 revenue of $44 million and 400 employees.
Smart Business spoke with Kratz about how to establish and adapt a vision.
Establish a vision. What comes into play is ... the personal and corporate goals that you have, and then trying to develop a picture and how you’re going to realize those goals.
You have to think far enough ahead that you really truly have a vision rather than just quotas for the upcoming year or whatever the period of time in question. I think almost all companies have goals for their monthly objectives or their annual objectives, but for me, a vision is something beyond that it’s where you want to evolve to be based on what you know about yourself and what you think is achievable.
I think a vision (is) typically maybe three to five years. But again, it’s subject to modification based on all the factors that come into play.
Keep an eye on factors that may lead you to adapt your vision. First of all, the vision can change from time to time. We’re not in a static world so various factors come into play that cause the vision to be modified, it might be competitive factors, it might be technology, it might be economic factors, any number of things that might be outside of your control that requires you to be able to adapt.
If you’re functioning in an environment where you’re not adapting to all these changes that are taking place around you, then you can be in for a rude awakening.
Our vision has been modified over the course of time based on experience. In other words, a lot of times you have a vision of where you’re going, and then once you begin to experience certain things, you sort of modify that. Sometimes you become more aggressive. Sometimes you become less aggressive. Sometimes you just change your course of action. There’s a variety of reasons why it can change.
Make calculated decisions based on outside factors. As a general rule, they are gradual-type changes that are made; they aren’t radical changes. It’s more of an evolution than a revolution when it comes to change.
You have to weigh on facts, as well as other opinions, as well as your own personal gut feeling. All those kind of have to come into play.
If your team is really focused on the vision, they tend to not always be aware of changes that are going on around them. So, I think it’s important that you stay connected to the outside world, whether it be through professional associations, business associates, clients, prospects, competitors, any source of information that you can use.
Ask yourself poignant questions. First of all is, what sort of trends are taking place within your industry and also outside of your industry. What type of technological factors are coming into play that are changing the way people do business or the way people change their values. Obviously, economic and political factors can come into play. New competition that was not maybe apparent. Those are all factors. Globalization is a big factor, especially in our industry.
Balance staying focused on your vision with needing to adapt. You need to constantly evaluate your progress, and if you set goals and if you’re just meeting your goals or not meeting your goals or marginally meeting your goals, I think that is one definite signal that you need to sort of evaluate those goals. Either they’re realistic (or) you need to adapt in order to be more effective in realizing those goals.
A lot of it is sort of a gut feel. I don’t think you can ever get too complacent. Just because you’ve established a vision and goals doesn’t mean that you cannot modify those goals if trends, competitive factors, the economy, all of the things that come into play. You can’t do that in isolation, so you have to be constantly monitoring all of those factors to make sure that your vision and your goals are realistic and achievable.
Make sure your goals are realistic and achievable. (You have to evaluate your goals) every day. But you have to have large enough windows so you can really realistically do those kinds of evaluations. Just because you have a bad day or a bad week or a bad month doesn’t mean you scrap everything. Sometimes you just have to do a double-check to make sure everything is headed in the right direction and all the factors that you’ve used in establishing your goals are realistic and accurate.
You have to listen to the market. You have to listen to what your customers are telling you. You have to constantly evaluate your progress in terms of your successes and failures to determine if you’re winning business, why [or] if you’re losing business, why. Just make sure you understand all the factors that are in play to validate your plans.
How to reach: Information Control Corp., (614) 523-3070 or www.iccohio.com
Bill Koeblitz doesn’t have problems communicating direction. He uses metrics.
“It’s helped us by being very clear on what it is we’re trying to get done,” says the co-owner, president and CEO of MobilityWorks, a provider of handicap vehicles. “It allows us to predict and plan with a lot of accuracy because each person is stating what they’re going to do and then doing it.”
When determining measurements, start by looking at internal and outside information. That’s where Koeblitz started with MobilityWorks, which had 2008 revenue of $66.1 million.
Smart Business spoke with Koeblitz about how to set metrics.
Q. How do you determine what metrics to use?
You have to start with some very high-level strategic goals based on demographics that your needs are serving. Then you’ve got to look at the reality of the people that are performing and create all of the metrics in between and start optimizing on everything.
It starts with trying to get an overall market assessment.
So there are 2 million people in wheelchairs. You say, ‘How many do I think would wind up having a need for our product?’ and starting at 50,000 feet doing that.
Then at the grassroots level saying, ‘What have we done in the last year in this market we’re in of Akron?’ and looking at the number of sales per capita and understanding that.
Then talking to 20 people that are in my industry and asking them the same thing, searching out who has the best practices, who’s doing it the best way.
Absolutely talk with other people in your industry and talk with data in front of you as opposed to just talking. If somebody says, ‘Hey, this marketing program really works,’ it’s nice but show me what it costs, show me that you actually got a response from it, show me the info that shows that.
You do that within your industry. Then absolutely do that outside of your industry also because a lot of the same principles apply.
You get new ideas from each resource. Within the industry you’ll get some good ideas about what you can do that’s relevant to your industry, a new way to market, a new way to manage your people, cost savings.
If you go outside the industry, you’ll find business concepts that might work better. We’re in the retail space, so talking to other retailers about what they do to market to their customers and to create customer satisfaction.
Q. How do you involve employees in the process?
We have pretty much every employee involved. We have 15 different business units. The person who runs each of those units sets their plan. They work with their sales team to set the sales goals, the service team to set the service goals.
We make it very easy to compare results among the different stores and business units so they can see how are they doing versus others. We create the metrics and the grids to let them do those kind of comparisons and let them come up with what their goals should be.
We review them as an executive team, but usually with very minor modifications.
It tends to be very fluid. You start out with very simple metrics.
As an example, a salesman would start out and we’d be saying how much he did in sales last month and what we expect to have happen this month. Then, pretty soon you say, ‘It would be good to know how many calls I made and how many successful closes I have on those calls.’
Then you might say, ‘Well, where did those calls come from? How many came from marketing?’
You just start recognizing how the machine operates that’s your business. What are the key components of it?
Over time, people will say, ‘Well, that measure isn’t as important anymore, but couldn’t we get this measure?’ They’ll think of something new and we’ll modify it as we need to.
It evolved out of the real-life situation we’re in trying to be successful.
It’s just trying to achieve awareness and understanding of what’s going right, what’s going wrong, and why. Continuing to measure and monitor that and give feedback to that.
Q. How do you communicate the metrics to employees?
We have metrics on things like number of calls, number of vehicles sold, customer satisfaction numbers, all and all, probably two or three pages of financial info and metrics.
We’re reviewing those every single week with everybody in the company. The manager of a store is meeting with his people each week and saying, ‘How are we doing versus our plan in a bunch of different areas?’
Reviewing that with his people, finding out if there’s any major issues going on, major opportunities, and that’s done on every operating unit level.
Then the executive team meets each week and talks about how all the operating units are going.
Doing it weekly keeps everyone focused on the most important things they need to be focused on. It gives them a pat on the back if they’re performing, or it gives them a kick in the pants if they’re not doing well without me or their manager having to say it to them.
They know what’s important. They know that these are expectations we have for performance. They know they’re reasonable because they help set them.
When an employee presented Bill McAlister with a study on why the office walls should be painted pale blue to stimulate the brain, he painted the walls blue.
And when each of his female employees shot down his idea for a new hair product, he too dropped the idea, returning to the drawing board.
For McAlister, founder, president and owner of sales and marketing firm Media Enterprises Inc., employee input is an essential part of business.
“I think that’s the biggest part of the success of this company is that everyone is involved,” he says of the firm that posted 2008 revenue of $50 million.
In essence, McAlister has created an infomercial enterprise by involving his eight local employees, and 40 nationally, in nearly every step of the process from determining product ideas to launching the commercial.
Giving your employees a voice comes down to determining what decisions you want to involve employees in and creating a culture that supports that ideal.
Smart Business spoke with McAlister about how to involve employees in making decisions.
Know when to make decisions yourself. If you’re the president, CEO, owner, you have the experience to pick whatever your next deal is going to be, and lots of things are involved in that. In our business, it could be the price of the product, it could be the distribution of the product, it could be where you make the product.
You have to make what the best decisions are based on what your company’s future is going to be, what your company model is, so that has to be done by the person who is involved, which is me.
After I make that decision, I then get the employees involved.
Empower employees by involving them. I value the opinions of the people in the office. In our business, 39 out of 40 commercials that go on the air fail, so the success ratio is very small. In our area, we’re about 60 percent success ratio in our company. I think it’s because we do things like bounce it off of our employees, get their opinion.
Our employees are the people that buy off television and that’s important. We use the value of their opinion, and we get them involved right away.
You have to get employees involved where you think it’s going to help your company.
In our case, our employees are actually our customers, as well. I like to get the employees involved because they feel like they’re part of the process, and in fact, they are. I don’t care if you’re selling a widget or if you’re selling Mighty Putty, it’s always good to have your employees involved in the decisions or feel like they’re involved.
Little things, like we have customer service people in this office. Anybody could pick up a customer service call, and we’ve sold 20 million sticks of Mighty Putty, but anybody in this office (can take the call) because everyone in this office knew from the very beginning what Mighty Putty does, what it doesn’t do, what it works on, what it doesn’t work on, and that’s important.
Involve employees at all levels. It’s a small office and everyone is aware of everything we’re doing. They’re involved in the naming of it, the packaging of it and their opinion on the script of the commercial.
All eight or 10 of us have something to say, so everyone is involved from the receptionist all the way up to me. That’s what keeps everyone in the loop, and everyone feels like they’ve contributed to the commercial because they have.
It’s kind of fun because you have different opinions, from different people, from different places in the country as well as different age groups. I thought one product would be very good, but it was a female product and (all the) females rejected it they said it was horrible.
That’s one thing, I know what I don’t know, and I don’t know anything about female products. So I let the experts tell me, and they rejected it.
Keep the employee number small. Other people in our industry, or who are the same size company as we are, have between 50 and 60 employees. I believe most people that get to that go out of business. For me, I keep it under 10, and we do the same amount of volume with people who have 60. We outsource a lot of our things.
The team concept does work. Once you get too big, you lose it. I’d rather keep my company this size and continue to have one hit a year or two hits a year than grow bigger and try to hit 10 because you lose it, your company.
All these big, huge companies, it’s impossible to keep (an inclusive) culture when there’s that many employees.
Create an idea-fostering environment. We’re a very relaxed culture here. We have a lounge area instead of a conference room with big cushy chairs with a TV and people can go back there for 15 to 20 minutes at a time.
If you’ve ever been to Microsoft or any of these large companies, it’s like a think tank. People have to be relaxed. They have to have their brains think. They can’t have me telling them what to do, so we’re the opposite of that.
When we hire people, we tell them basically what their job is, but there really isn’t a job structure. We are a think tank here, we’re only as good as our last product so we need the next product, and everyone in here, anyone who has an idea, we listen to it.
But that’s just the nature of what we do, and that seems to help everybody work together.
How to reach: Media Enterprises Inc., (800) 471-6123 or www.mediaenterprisesinc.com
Randy Hetrick had no pressing need to create the TRX Training Center. It was a significant investment and there was little value for all of his customers.
The gamble, which Hetrick thought would add to Fitness Anywhere Inc.’s branding, worked out. He’s amortized the investment and strengthened the company.
A key to successful leadership “is the ability to make decisions, act on them and not spend much time looking back,” says Hetrick, president and CEO of Fitness Anywhere, a provider of training products and exercise programs.
Prior to founding the company, Hetrick was a U.S. Navy SEAL. So his years of being quick to action has transferred to running his 60-employee company.
You don’t need to labor over every decision, he says. Make sure it’s an area you’re well versed, strategize with key employees and adjust when needed.
Hetrick’s philosophy has helped Fitness Anywhere grow its 2009 revenue about three times its 2008 revenue of $7 million and create key partnerships with people like NFL quarterback Drew Brees.
Smart Business spoke with Hetrick about how to make quick decisions.
Embrace quick decisions. I am a firm believer in the blink judgment principle. Oftentimes, so long as you’re qualified in the domain, and you have a lot of experience in the domain, the decision that you consider and act on quickly will be nearly as good as the one that you anguish over in committee for a long time then eventually put into grudging motion.
It’s the old military principle where the 80 percent solution executed violently now will trump the 100 percent solution executed six months from now every time.
No. 1, you have to make sure that you really do have sufficient domain expertise in the decision arena that you’re addressing. You bring in key advisers. You solicit their input. And you synthesize an outcome and you put it into motion.
I’m not suggesting that you never evaluate to see how it’s doing, I’m just suggesting that it’s important in early-stage companies not to waste time or bandwidth or get caught up in sorts of analysis paralysis.
There’s always five or six ways to do things. One of them is going to be best, one of them is going to be disastrous, and the other four or five will be pretty darn close in outcome if executed aggressively and to the fullest of your team’s ability.
Involve your team. Coming from the SEAL team tradition as I do, we actually are very aggressive in including all levels of the organization. Not just the senior people, for instance, but including someone from the tactical operational level and then someone from the strategic level, so we have a nice mix of strategy and tactical operational daily expertise involved in all the decisions that we make.
There’s oftentimes a misperception that too much of the brain power and expertise resides at the very top. A lot of decisions, probably too many decisions, get made by the top two or three people in the company when oftentimes there’s great ideas, better ideas, than you may have up in the executive suite coming from the folks that are interfacing the customer each day.
(Finding the right person for the conversation is) the function of the best fit for that particular job and the availability. There is the reality of not everybody is available all the time. We try to build some redundancy of capability in each of our departments so there’s usually not just one person who is perfect for that decision opportunity, there’s usually a few that will contribute equally well.
And I’m a big believer in giving the younger members of an organization opportunity to succeed and to stumble and learn from it. Then, they’re better for the experience.
Sit and strategize. The way this would generally work is myself or one of the other senior leadership members would frame up the issue at the start of the meeting. We’d make sure there is cross-functional representation in the meeting with people who have the authority to speak for their functions.
We’d outline the key issues, throw up a few alternative solutions that might be under consideration to get the discussion started, have a quick discussion we try and keep all of our meetings under an hour.
Then, (release) the hounds to debate it and do some quick scenario modeling and then come out with a couple of good alternatives.
One of them might emerge as the clear solution. In the case that there’s not and there’s differing opinions, then that’s where the executives get paid to make the tough decisions. You pick one and put it into action and go forward.
Be willing to adjust. You’ve got to be willing to admit when you’re wrong and make an adjustment to the plan.
You can’t be dogmatic, or as we say in the SEALs, ‘You can only spend so much time trying to clear a bad parachute before you cut it away and go to your reserve.’ If you wait too long to make that decision, you’re going to have a mouth full of dirt.
In general, No. 1, try to be quick to claim mistakes and slower to claim credit. My guys know that, at the end of the day, I’m the one who is ultimately responsible for the outcomes. They know that they have my faith and confidence to go forth and experiment. If something doesn’t work, then we pull back, we figure out what went wrong and we figure out what we should do to make it right.
This is an early-stage, rapid-growth business, where we are moving very fast and with always a scarcity of information that’s just the environment in which we live.
It’s a forgone conclusion that some of the time we’re going to get it wrong or we’re just not going to get it as right as we wish we’d had.
How to reach: Fitness Anywhere Inc., (888) 878-5348 or www.fitnessanywhere.com
Michael Teutsch never stands still. In fact, neither do his employees, which is pure evidence of the fast-paced culture Teutsch, founder and president of Etactics Inc., has implemented to grow the provider of electronic data interchange and statement services. If you really want to grow, you have to embody that decision and encourage your employees to do the same.
“The people who can’t keep pace with that have moved on, but the people who are here, it’s just part of who they are now,” Teutsch says of his 30 employees.
Smart Business spoke with Teutsch about how to embrace growth.
Q. What are the keys to growing a company?
First of all, I think you have to live it. In my mind, and this is not a Mike Teutsch axiom, but if you’re not growing, you’re dying. Everybody in a company has to believe that or else people become stagnant in what they do.
At Etactics, we add 30 to 50 new clients each month. People have to live by the thought that if you’re not growing today, then something is wrong. I think that’s why we’ve seen the significant growth.
Q. How do you get employees to embody the ‘if you’re not growing, you’re dying’ mentality?
It starts at the top. As the president of an organization, you can’t have the idea that where you are is good enough. Everybody who works for us wants to do better. They want to make more money next year; they want to have a better job, a better career.
As president, it is our job to create the environment where we can make that an opportunity for them to achieve those things. I feel that’s my role. I have to provide the opportunity.
Well, what’s the opportunity? In my mind, it all begins with growth because if you’re growing, a lot of times new opportunities just come at you because you’re growing. If you don’t embody that growth mentality, you’re just kind of sitting back and waiting.
Q. How do you help employees deal with setbacks or failures when you do promote a growth mentality?
I don’t really look at it as failures, and I don’t think anybody here should. It’s really a level of success, not whether or not it was a failure.
I personally like to reward people more on something they’ve actually done than something that didn’t go perfectly.
If you provide people the freedom and responsibility to go out and do things, the expectation from that is good things are going to happen 60 to 70 to 80 percent of the time. When things don’t go perfectly, the other 20 to 30 percent, you can’t throw somebody under the bus.
You have to expect that it’s not going to be perfect all the time, but your expectation is solid. Smart business is going to be done in the effort of trying to get there.
Freedom and responsibility, I guess those are two things that I think are utterly important to embrace in a company that wants to grow. It’s impossible to do without your employees having the freedom and responsibility to really try and help.
Q. How do you maintain the company’s culture through fast-paced growth?
Part of growing is not just adding new clients but adding new products and services. That’s a core piece of what I think it takes to grow.
Companies could grow in different ways, some companies kind of reinvent themselves and develop huge new products and services and try to attack the marketplace that way. At Etactics, we’ve really tried to add incremental products and services that work together with our other products and services in a nice manner. They integrated with our other things and kind of had a little bit of verticality to it.
That’s one piece. One piece of that culture is to continually enhance what you have and develop small, new, add-on products that our customers will want to buy.
The second piece is to develop new products and services that are, again, a complement or have some synergy with our other products and services. I think the key is you have to have some really new things that are going on that have a large upside potential, but then you have a lot of these smaller things going on, [and] they’re just kind of helping you just keep the ball rolling.
Q. How do you recognize new products that will be successful?
(There are) a couple of different ways. I think the first key is that we encourage everybody here at Etactics to listen and engage our clients and provide feedback back to the marketing team in product development so we’re getting some of that feedback, as well.
I think that’s one of the key ways of enhancing and coming up with new product ideas. But it’s not the only way because most great innovative ideas were really the idea of one person, and unless you spoke to that one person with that great idea, you might have missed it.
Those few key great ideas, they may come from clients, they may come from competitors, they may come from somebody else knowledgeable about the business we’re in. It’s important to always engage different people and kind of formulate through your mind, our mind, what we can do based on the business problems that are out there.
Being able to recognize the ones that we can impact is something I think we do really well. The ideas are actually the easy things to come up with. The hard part is actually picking the right idea to work on and then following through on.
How to reach: Etactics Inc., (330) 342-0568 or www.etacticsinc.com
Some people think that in order to reach a top position at Rumpke Consolidated Cos. Inc. that you need to be a relative. There are plenty of Rumpkes leading the company, but there are plenty of other last names, too.
“We have people in positions that aren’t relatives, blood relatives,” says William J. Rumpke Sr. “Everybody thinks they’re a relative, and that’s fine. That’s the way we like the thinking to be. We want to all be thinking on the same line.”
Much of the waste and recycling company’s success is linked to management’s ability to align employees under one vision and then grow them through the ranks. Since Rumpke Sr., chairman, president and CEO, took over the family business in 1978, the company has grown from $8 million in revenue to $407 million in 2008 revenue.
The growth has been seen through more than 200 acquisitions and diversifying services, but as Rumpke Sr. points out, you need good, responsive employees who understand the company to lead and maintain that growth.
That is where looking to your own employee base is a benefit.
“They have a better understanding of the culture of the company, of what our expectations are of them and to provide the kind of service (we’re looking for) to our customers,” says William J. Rumpke Jr., chief operating officer. “They get a real indoctrination from the ground up.”
In order to breed future leaders, you need to create an environment where employees know there are opportunities. Then, you have to carefully pick the ones who are ready to lead and closely monitor their abilities as they move up the ladder. Much of it has to do with communicating with employees.
“No. 1, if you want to be a CEO and you want to be good at it, you need to get out in front of your people, you need to talk to your people, you need to interact with your people,” Rumpke Sr. says. “You need to let them know how you want to make this operation run, and get a staff of your own people who follow the way your thinking goes.”
Promote from within
At the young age of 5, Rumpke Sr. started learning the company ropes. He’d venture out on the trucks with his father, the company founder, and at each stop, he’d wait for his father to pitch the garbage to him so he could dump the can. He went from making 25 cents a load to the helm of the company.
The tradition continued with Rumpke Jr., who also only needed one hand to count his age when he started spending Saturday mornings on the routes.
In fact, most of the company’s management team knows what it’s like to do their employees’ jobs because they’ve done them themselves. And the employees know that history, too.
“Everybody here knows that we both have done the job,” Rumpke Jr. says. “I think that helps gain respect because they understand that we’ve been there, and we’re not too good to do what they’re doing. Because a lot of our management team has been promoted from within, a lot of them have been there, as well.”
If you’re going to make a conscious decision to develop your employees into future leaders, you need a culture that embraces that ideal. And that starts with not only telling employees there are opportunities but also showing them.
Rumpke’s human resources department puts out a list of available jobs throughout the company once a week. The more than 2,100 employees have the first stab at openings regardless of if the jobs are in their division or market. Current employees who apply are considered for the job before looking outside of the company.
“(Employees) look at those offerings by the week,” Rumpke Sr. says. “They can ask questions, nothing is hidden, no secrets, no special agenda for anything, and they feel like I have a shake at a lot of good jobs.”
In order to get employees to buy in to your words and actions, there is a fundamental step that a culture of employee progression cannot miss.
“The big key is how you take care of the people themselves,” Rumpke Sr. says.
In order for your culture to turn full circle, you need employees to want to stay with your company and continue to move up through the ranks. The only way you can accomplish that is by getting in front of your employees and showing that you care.
Promotions and monetary incentives might keep them hungry, but your interest in them will breed their interest in the company.
“If someone is head of third shift recycling down at a plant or something, you talk to them about how things are going: ‘Are you keeping up? Do you have enough employees to run this thing?’” Rumpke Sr. says. “Something in their line of work that would be of interest to them, and therefore you ask them questions so you get knowledgeable about how they’re doing.”
“At the same time, you develop a personal relationship with them,” Rumpke Jr. says. “Talk to them about anything under the sun: ‘What’s going on with the local sports team, or what’s going on in the community?’ So they understand that we care about them, as well.”
You need to budget time to get away from your desk and in front of your people. Rumpke Jr., whose direct reports are the majority of the division directors and five regional vice presidents, says as a company grows, it gets harder and harder to reach all of your employees.
“I understand as companies get larger it’s more difficult,” he says. “But I still think they need to make their face be known, be seen.”
Find your leaders
There’s obviously more to spending time with your employees than just piquing their interest. One, is it’s a good way to understand which employees truly grasp the company’s culture and vision and which employees may be ready to take on more duties.
“There are certain people that can go to the next level and certain people can’t,” Rumpke Sr. says. “You have to ride the horse that will get you as far as you can go.”
In determining what qualities to look for in your future leaders, think about your line of business. As a service business, Rumpke doesn’t only consider whether the person grasps the company philosophy or not but Rumpke also puts weight on consistency and the candidate’s ability to interact with employees and the public.
It can be little things like work attendance and reliable performance on the job. And it can include the bigger picture, such as the perception of the person and what that person can do for the company moving forward.
“You have to see how they interact with people around them and see how they interact with the outside world,” Rumpke Sr. says. “You want the best face on Rumpke, the most compliant face on Rumpke that can be out there, the best neighbor in all the above things. If people fit in that category, then you’re definitely more interested in talking to them about different aspects.”
Deciphering the ability of someone having a positive influence on another person comes down to interactions. First of all, is the employee of interest engaged in the conversation? Second, have they had an influence on the person to the point where, when that person walks away, he or she has a sense of understanding or even thinking that he or she made a new friend.
Even if the signs are there
to elevate an employee in rank, you should still do a full evaluation of the employee’s performance. Rumpke looks at past experience and performance and gives employees a cognitive skills test to determine whether the person is capable of moving to a higher position.
“We really don’t want to promote somebody that’s not ready because we don’t want them to fail,” Rumpke Jr. says. “Once we do move them into the position we give them help to try to succeed in that position through the assistance of other managers.”
When you find someone who can be a leader, you have to make sure that the person is progressing.
“Once we’ve identified someone that we think potentially could be a supervisor or a manager, generally, we will move them along and increase their responsibilities as management as they go,” Rumpke Jr. says. “They may start as a lower-level lead driver or lead foreman, and as they progress and continue to produce and do a good job managing people and managing that function, they can get an opportunity to move forward to a larger role. And eventually progress within the organization.”
Rumpke has leaders ranging from district managers to front-line supervisors. Just because someone has moved to a position where he or she oversees employees, doesn’t mean the employee doesn’t need supervision.
“I will meet and the regional vice presidents will meet with lower-level managers on a monthly basis to evaluate the performance of particular lines of business or particular management groups,” Rumpke Jr. says. “We’ve established what’s called different scorecards that manages the production of each individual or each line of business, whether it be our hauling line of business, our landfill line of business, our recycling line of business.
“We’ll measure certain performance metrics that we want them to measure and strive to improve upon. If they improve upon those specific metrics, then the performance of our company will improve.”
In order to monitor your employees’ abilities to manage, it’s best to create a uniform system of measuring progress. You need to set metrics, make sure employees understand the metrics and have consistent follow-up conversations.
First, identify the key metrics that drive your business and improve your business. Rumpke focuses mainly on financial and customer-service-related metrics. For instance, customer service metrics might be the number of customer complaints, missed collections or the number of yards collected per hour.
“You need to make sure the information that you’re gathering is the important information,” Rumpke Jr. says. “If it doesn’t drive your company, there’s no sense in even paying attention to it.”
Once you’ve determined the parameters of measurement, you need to implement a tracking and communication system. Rumpke uses a computer software system that gathers information on its metrics and allows managers to pull up accurate information on the company’s progress in reaching its objectives. More importantly though, the firm has consistent communication with employees on the importance of each metric and whether they’re meeting their targets.
Meeting on a monthly basis to discuss metrics with your direct reports helps ensure that your employees understand and concentrate on the significant areas of business and allows you to provide employees with consistent feedback.
For Rumpke Jr., using metrics also gives him a sense that he can delegate certain duties to employees, and then step aside trusting they can get the job done.
“I try not to dig down too deep into their business, but the monthly or quarterly reviews that we do gives me a feel for if they’re getting the job done properly,” Rumpke Jr. says.
If you study the hard numbers and monitor employee progress through conversation, the dots will connect for continual promotion.
Rumpke Sr. collected garbage, drove routes and sold waste collection services at the beginning of his climb to the top. And Rumpke Jr. even had to prove himself as a driver, route manager and district manager before he received the title of chief operating officer.
“We’re very focused on promoting from within,” Rumpke Jr. says. “As long as that individual achieves and continues to perform, they get the opportunity to move up within the organization.”
How to reach: Rumpke Consolidated Cos. Inc., (800) 582-3107 or www.rumpke.com