Customer service is the business of every employee now, that’s not just a phrase Dave Wangler throws around at TMW Systems Inc., it’s the attitude he wants his nearly 400 employees to embody.
“Everybody realizes they’re here because of the customer and only because of the customer,” says Wangler, president and CEO of TMW, a solutions provider for the transportation sector. “Our employees recognize that TMW might be the name on their paycheck, but they actually work for our customers, and our customers get to vote in the marketplace on whether we’re doing a good job or not.”
In order to build strong customer relationships, two sets of expectations have to be addressed what you expect from your employees in terms of customer service and what your customers should expect from you. It’s those interlocking thoughts that have allowed TMW to meet its 1,800 customers’ needs.
Smart Business spoke with Wangler about how to set customer expectations.
Build customer relationships. What it comes down to is establishing very clear expectations and delivering upon those. Say what you’re going to do and do what you said you were going to do.
We deliver fairly complex software solutions that companies rely upon to run every aspect of their business.
Having expectations, for example, of what an implementation of our software might look like, what benefits they can expect to see, what challenges they’re likely to encounter as we implement and as they go forward using our solutions.
Establishing clear expectations in the sales process and in the delivery process and delivering against those really drives successful customer relationships.
If you get off on a good footing as you begin the relationship, you establish a reputation with that customer, or an expectation of if they’ve got a problem, what is your response going to be.
You set those expectations. ‘If you have a problem, you call us. Here’s what’s going to happen.’ And you follow up on those, and you deliver against those. I don’t think it’s any more complicated than that.
Be open. If you can’t (meet their expectations), then you have to explain to them why.
Notice I started with establish clear expectations. In other words, if we go in and our expectations are mismatched about what a product or service is going to do or what it’s going to cost, we have a problem.
I need to establish clear expectation on the front end and agree to what those are. If I fail to meet expectations that I’ve set, I think one has to be pretty frank with customers and sit down and explain to them why. Either one or two things is possible, A, they’re reasonable, but you’re failing to meet them, so you need to come up with a plan as to how you can. Or they’re unreasonable; maybe things have changed.
You’ve got to be clear about re-establishing, resetting expectations so that you’ve got the right yardstick that the customer can measure the company by.
Communicate service as a culture. I have 1,800 customers and 400 employees. Is it sitting down with certain customers? Sure. But it’s got to be more than me saying it. It’s got to be a culture.
You’ve got to have a consistent repeatable process, whether you’re delivering a new implementation to a customer, whether you’re building some special capability for them, whether you’re solving day-in- and day-out problems. You’ve got to have this culture of establishing those expectations and delivering upon them.
It isn’t just something I do; it’s got to be a culture of our business.
You also need to have a culture of being invested in your customer’s success and a willingness in leading from the front, a willingness to, when there’s a problem, drop everything and take care of it.
I think culture gets established over time. If the culture isn’t something you can grow upon and, as the CEO, you enter a situation and you need to instill that or change the culture as we’ve sort of done with some of our acquisitions, at that point, it’s about lead from the front.
There are probably two schools of thoughts (on communicating that culture). There is the personal leadership that flows down through the organization. If you can get your C-team and your executive management team to live that, as well, that moves down to the vice president and that moves down to the directors and that moves out into the field.
That’s the organizational behavior side of this.
There are lots of things that you can do and that we do to communicate that. You have to measure everything you do.
You can have this lead by example, this sense of urgency, but I think you have to measure and incentivize.
Let me give you an example. We have call centers for customer support. We measure the performance of those call centers not by how many calls they close or how many calls are open; we measure performance based on customer surveys.
We survey every customer twice a year with the same questions. How are we doing? Are you happy with the level of service, the knowledge of the person helping you, the responsiveness? There’s a 12-question survey that goes out.
We incent the support group in each one of our businesses based upon the results of that survey, so there’s a monetary incentive.
If that survey is greater than a certain threshold, then there’s a bonus payout. If it’s not by a hundredth of a point, then there isn’t.
You measure and incent people based upon the results of those objective measures.
That alone I don’t think will do it, but it is a way to really enforce that culture and put the focus where it is.
You build the culture, you lead by example, you propagate that through, you measure and incent.
How to reach: TMW Systems Inc., (216) 831-6606 or www.tmwsystems.com
First it was the rise in cremations. Now Bill Backman III and his clients at Aurora Casket Co. Inc. are competing with mass retailers like Wal-Mart, Costco and even Amazon.com for casket sales.
You would think trends like these would be difficult to deal with for the nation’s largest, privately held casket manufacturer, but it’s all about how you approach it.
Backman has embraced the climb in cremations and spun the big-box competition to its advantage by not only supplying a product but spotlighting the additional support services it and its clients offer.
The result is an uptick in Aurora’s revenue, and casket manufacturing accounts for 20 percent of that growth.
“If you view it as a challenge, you become stale, you become stagnant and you become ineffective,” says Backman, president and one of the company’s owners. “When you view it as an opportunity, you’re thriving, you’re moving forward, you’re a winner.”
But before you can take your best shot at creating opportunities from changing trends, you have to spot them.
A family-owned company established in 1890, Aurora puts value on the fact that it doesn’t want to be a vendor — it wants to be your partner. And it’s those strongly developed customer relationships that help it identify trends.
“You have to have that partnership relationship with them,” Backman says of customers. “You have to understand where they’re going, what their goals are, what they want to accomplish, and you have to be able to execute the things that are pertinent to them. It’s a very delicate balance because you have to stay within what your strategy foundation is, what your vision and what your mission is to do that.”
If you are collecting the right data from your customers and the market, you can position your company to stay one step ahead of industry-changing trends that could threaten your company.
Do your research
Backman realized with more than 900 employees, service centers in 60 cities and sales offices in more than 80 cities that he needed a constructive system so that those in the field could relay what they’re hearing from customers back to headquarters.
Now the company uses a thorough process to gather information, sift through it and strategize on whether a new idea fits both their mission and their clients’ needs.
Aurora isn’t simply a casket manufacturer. The company provides funeral homes multiple products along with consulting services, such as marketing and business planning tools.
With a wide range of offerings, it’s important for Backman to understand each customer’s needs as well as his customers’ customers’ needs and how his company can act on those, especially the recurring themes.
“What we’ve done and what we’ll continue to do is a tremendous amount of research,” Backman says. “Our research ranges from studies internally to doing outside focus groups across the county to determine the needs and the wants that our customers will need to move their business forward as the business climate shifts.”
While technology is great for staying connected with clients, Backman finds real success from being in front of his customers, in their space, asking questions, discovering and uncovering what their needs are and what opportunities they might be exploring for the future. He directs his sales team, the link to the customer, to look for ideas that Aurora can implement to move the company and its clients forward.
“We want to know exactly what makes our clients tick,” Backman says. “We want to know what their beliefs are. We want to know what their strategies are. We may ask a question such as, ‘Can you tell me what five or six things have to go right for you in order for your business to be successful in 2010 and beyond?’ Then, we listen.
“We also want to find out exactly what our clients are hearing from their clients and what their shifts may be from an attitude standpoint or from an economical standpoint.”
You may be asking the right questions, but the second part to understanding your customers and doing solid research is really listening to what they’re saying.
“The keys to being a good listener are simply asking a question and really having the ability yourself to shut your mind down, open your ears up and listen to what that client is telling you at that point in time,” Backman says. “(Don’t) be thinking about the next question you’re going to ask them. (Don’t) be thinking about what your response is going to be in the next minute or 30 seconds. Really put yourself into the situation that you’re in in the present and listen to exactly what clients are telling you. That’s what I work on and I work on this continuously.”
Once your employees have compiled your customers’ concerns, you need a systematic approach to organize the information.
Aurora employees send their information electronically through a customized data system. The system is regularly updated to ensure it’s applicable to the company’s needs. One thing Backman has learned in order to be top in your industry is that you have to work quickly with the information that you have, and in order to do that, you have to be organized.
If you don’t have a system to gather information or your system isn’t working for you, conduct an internal assessment and consult external resources to find the best technology for your company.
“I would look at the things that best fit the culture and best fit the needs of what my organization is trying to do and trying to accomplish,” he says. “I would talk with other businesses that are in like situations, but not competitive situations with me, and see what works best for them. I would talk to professionals that are out there and utilize the skills that they have in order to be able to provide the services that I might need for my particular organization.”
Once you have a system in place for information to go in, you have to think about who looks at that information when it comes out.
Backman has put his marketing team in charge of collecting the information, organizing it, determining if there’s a need to act on it and, if so, delivering a recommendation to him in a timely manner.
If you recognize a trend, before you sit down and strategize, it’s important to clarify exactly what the customer is looking for. Backman trusts his marketing team verifies with salespeople any lingering questions and seeks more in-depth information if needed.
In the case of an accelerating number of cremations in the last decade, Aurora didn’t just rely on what it was hearing in the field — it hired a company to conduct focus groups to verify facts.
“Quite frankly, we’re not afraid to enlist the help of experts because we don’t know everything,” Backman says. “It’s a great feeling to be able to work with other professionals who are experts in what their fields are to give you ideas on what you can do to move forward.”
If you’re planning on conducting your own focus groups, Backman says you have to go in well prepared.
“The keys to pulling off a good focus group are the fact that the content of what it is that you’re going to be discussing has to be very, very relevant and very pertinent to what it i
s that those folks want to talk about,” he says. “You have to be dead on with … what it is you want to find out as an organization.”
Aurora determined cremation would continue to be an opportunity in the future. So now not only does it sell products for those who choose cremation to honor the deceased, but like its other services, Aurora has come up with techniques to educate their clients on how to deal with questions they receive about cremation from their own clients.
Review customer ideas
A customer recommendation might sound like a brilliant idea, but before you give it the green light, you have to make sure it fits your company’s foundation.
“We have a very, very detailed and a very good process, organized process, of understanding information within our organization and being able to move forward,” Backman says.
Each idea, before it becomes implementation-ready, must align with Aurora’s seven-piece strategy map. Think of it as a matchmaker game. Aurora runs the idea past the definitions of its core values and beliefs, its purpose as an organization, and its core strengths, competencies, operating model, who the company serves and its mission.
“We need to make sure that within the gathering of this information we have strategic clarity,” Backman says. If the idea passes the test of the strategic map, “that means that the strategy will have a much, much better chance of working than not.”
You have to use your best judgment on who in the organization to involve in strategizing based on the size and effect of the new focus. If the information from the marketing team affects the vision and mission, Backman has his hands on it.
“I recommend the CEO being in charge of it,” he says of creating the strategy. “It has to be a participatory process, but I believe that the vision and the mission must come from the CEO.”
The team of people helping with the strategy should involve members from departments that will be directly affected, such as sales, marketing, customer service, manufacturing and IT.
“I want to make sure that it’s an involvement of the entire organization so we all understand what it is that we’re going to do,” Backman says. “When you have the power of an entire organization moving forward and believing and having an understanding of what your core values are, what your purpose is, what your competencies are, who you serve and what your mission is, the power of that is phenomenal. The power of that is best of class.”
The more different departments of the organization are involved from the beginning, the easier it will be to circulate news and changes.
“You have to move quickly,” Backman says. “You have to be precise and you have to have a very clear understanding of what it is you do, but you have to execute and you have to move quickly.”
When implementing a new strategy, Backman reaches employees and customers through personal contact, external marketing pieces, social media and e-mail. It’s important for employees to clearly understand the message, so those who are passing the message along, probably the sales team, can communicate it to customers. After all, helping the customer was the entire point.
“We always go back to (customers) and tell them we listened because we listen to everything,” Backman says. “What we do from that point forward is we communicate again what we heard, what came out of the research and what we know to be the best practices for whatever that is for that particular situation.”
Throughout the entire process you need to be organized, but for Backman, the key is speed. He points to the fact that the company’s nimbleness comes from it being family owned. No matter what your company’s hierarchy, speed is an element you should work to perfect.
“The importance of moving quickly is getting quickly back to your client … with whatever that need may be that you need to move forward with,” Backman says. “It also shows your organization that you’re engaged, that you’re organized and that you’re truly, truly moving forward for the right reasons and that you truly, truly trust and have confidence in the things that they bring to you as a team at all levels.”
How to reach: Aurora Casket Co. Inc., (800) 457-1111 or www.auroracasket.com
Meeting with customers is frankly a higher priority than anything waiting for Tony DiBenedetto at the office.
“If I can focus on the customer,” DiBenedetto says, “not only have I done a good job listening and bringing that information back to our team and setting the strategy, but I also set an example for everybody else that we should be focused on the customer.”
Understanding customers’ needs is the priority that has helped Tribridge grow, reaching $65 million in revenue in 2009.
Really, the key comes down to thinking like your customer, says DiBenedetto, chairman and CEO of the IT services firm. But it’s not as simple as asking questions once.
To stay engaged with customers Tribridge uses multiple techniques, including training employees to ask effective questions and using a customer council to get a cross section of clients talking about their needs. DiBenedetto spends months on the road meeting clients. And the company uses surveys, which indicate Tribridge has a 98 percent client-retention rate.
Smart Business spoke with DiBenedetto about how to understand your customers.
Try on your customers’ shoes. The key, frankly, is to put yourself in your customers’ shoes. When I think about what a customer is going through, I think about what I would be going through in their shoes.
In other words, I run a company, and we have IT needs, and we have business process needs, and we have strategy needs, so anytime I’m talking to a customer, I put myself in their shoes like I run their business.
When I do that, it makes me just listen differently, ask questions differently. It becomes a ‘we’ thing versus a ‘them’ thing. I really try to put myself in their shoes and ask the questions like, ‘Hey, how are we going to fix that issue?’ or, ‘How are we going to fix that problem?’
When you start getting customers to talk, then you’re really learning because they ultimately have been spending all of their time trying to figure out solutions to problems and your job is to help them solve that problem.
So, if you can listen really well and kind of separate the noise of the problem from the real root cause, and then really figure out what the business benefits would be to solving those problems, then you’re in the head of the customer.
The cornerstone is the listening and the attitude that you’re in their shoes, whether you’re an owner or an executive in their company.
Ask questions that engage customers. When we’re in the beginning of an engagement with a customer or a client, we’re making sure that we have a full understanding of the business strategy, the business model, what the problem is.
The most effective questions are open-ended, as you might expect, and they’re questions that allow a customer to talk about their business.
We have structured questions [that] we have for our discovery, so it’s by industry. We make sure we’re asking questions that are relevant to a particular industry. Then, we ask those questions in a way that allows the executive to open up a dialogue with us that is less structured and closed off.
Open structure is key. Pointed to the fact that they’re related to the industry that they’re in is a second key. Third, being able to ask the question in different ways multiple ways gives you that ability to get different dimensions to the answer. Sometimes the answer to the question is answered, but you don’t really get the full 3-D view of it, so we tend to ask questions with multiple view points.
Then, we also ask multiple levels within a company. We wind up talking to different levels within a company to get different perspectives.
At a high, very high, level we’re asking questions like, ‘Tell us a little bit about your business strategy.’ Then, ‘Give me the plan for the next three years.’ Then, we might drill down and say, ‘What are some of the obstacles in the way of you achieving those objectives for that strategy?’ It’s that obstacles question that tends to illuminate the problems that they’re having.
‘Tell me the top five things that are keeping you stressed at night or are getting in the way of you being able to accomplish the vision that you’ve laid out.’ Questions like that tend to get people talking.
To the extent that they share those with you, you might go into a whole line of questioning around, ‘Tell me some of the things you’ve tried before to fix that problem.’ That may sound like an odd question. But, inevitably, they’ll tell you. They’ll start talking about it, and they’ll realize the problem was bigger than they said, or there’s another dimension to it because they tell you about solving a problem that is somewhat related but not exactly.
Get out and meet your customers. Without question, one of the keys of growing a business is to focus on the customer. My job in the company is to truly understand the needs of the marketplace. The marketplace is defined by the customers.
I go on the road every year for a couple of months and have very direct one-on-one conversations with customers and ask them very direct questions about our business, about competitors’ businesses. You just learn a tremendous amount about what resonates trust with a customer.
My advice to any CEO, I don’t care what the business is, is to become intimate with the customers. Don’t fool yourself or filter yourself based on surveys or anything else, it has to be direct contact. I don’t know how else you could make solid decisions or be right about anything.
I fancy myself as a good listener and being able to provide a good business that provides products and services, I don’t profess to tell a customer what their needs are. A CEO that’s not spending time with a customer, in essence, is telling a customer that he knows better what their needs are.
The only way you’ll know better is if you are actually talking to the customer themselves.
How to reach: Tribridge, (877) 744-1360 or www.tribridge.com
When Clark-Reliance Corp. launched efforts to reach double-digit revenue growth year after year, Rick Solon knew it wouldn’t be all organic.
So the president and CEO of the manufacturing company created a process for acquisitions that starts before the first phone call.
You must understand your core competencies and processes and procedures in order to find the best strategic fit, Solon says.
Second, you can’t leave employees in the dark. Not only will the communication make the transition easier when it’s time, but employees can play an integral role in your acquisition search.
Clark-Reliance, which had 2008 revenue between $60 million and $70 million, formed a list of 900 potential acquisitions based on employee feedback.
“Talk to your sales and marketing folks, all of your employees, about what they think or what they hear,” Solon says. “What companies they come across that they think would be a good fit based on their knowledge and experience both working with us and perhaps working outside the company.”
Smart Business spoke with Solon about how to prepare for acquisitions.
Understand your company. The most significant issue for every company is if you’re looking just at your internal products and processes, you’ve developed some understanding of what you believe your core competencies to be. Whether those competencies are in fabrication and welding, whether they’re in human resources, how do you hire people, you’ve understood and developed a sense of what those core competencies are.
Then, typically you want to go out and find someone or some other company that will actually be a very good strategic fit with those products, processes and ... how does this complement or augment your core competencies?
You have to be honest with yourself that you have a very strong foundation from which to work. By that specifically I mean, if you are a typical manufacturing company that has some combination of fabricating, welding, machining, light assembling, in those particular regards … in order to establish that base you have to be able to say to yourself, ‘These are things that we believe we do well.’
For very small companies, it’s hard. You read all this stuff from Harvard Business School and the rest about well how do you build a core competency that maintains a sustainable competitive advantage. That’s a great statement for a small company, but most likely for very small companies $10 million, $1 million you’re not going to achieve that.
But what I would tend to counsel anybody else on is make sure that you’re comfortable with the processes you have in place internally, whether it’s quality systems, manufacturing processes, internal ordering process.
The process and procedure, the process by which you get the work done, is incredibly important. If you have robust processes, then generally those processes will allow you to understand just how quickly you can bolt down an acquisition or you can grow based on your knowledge on what it’s taken to get your resources trained and educated and in the right place to be able to go after acquisitions and internal growth for that matter.
Update employees. It’s critically important that (employees) understand the big-picture strategy, the individual details, (the) specifics of every strategic vision people have to carry out. The more they understand from the big picture down to the specifics, the more they understand what that is, the better they are able to go about executing that vision and helping you understand where you may have to change it, tweak it, adjust it.
The founding family that owns the company is very, very intent on making sure that not only from the acquisition perspective but also the whole employee culture we have developed, which gets driven from them at the top, is one of as much transparency, open, honest about what our big-picture direction is as we can possibly make it.
(Clark-Reliance Chairman) Matthew Figgie, when he was still in the vice chairman role, started talking to all of our employees at our quarterly meetings about the acquisition process three years ago. At that point, we weren’t really completely as active as we are now.
We try and make sure that whether or not that employee is going to be involved in that acquisition discussion from day one or not, we want them to start hearing about it from day one.
Form a list. Typically what we’ve done in the past and what we’ll continue to do, we try to first generate, what I’ll call, a wish list or target acquisition list of what we’ll classify as the top 100 or so companies that really make sense to us.
We used both internal resources and, to some degree, some external resources.
To be honest, what we find is the best thing to do is get all of your employees when I say all, the majority that are in product management and sales and have them do as much informal information gathering as they possibly can. Like, ‘Hey, you’ve been at a competitor’s plant,’ or, ‘You’ve been at this person’s plant. About how many people do they have? Who is their president? Who is their vice president of sales? About how big is their plant?’
We’ve had more luck, quite frankly, with the more informal information-gathering process than anything else, where it’s word-of-mouth. It’s getting all of your people energized to understand you’re on an acquisition program, that acquisitions are just as important as your organic or internal growth, and that you, as an employee, play a significant part in giving us ideas, bits of information.
Generally what they’re going to come back with, at least first off, is a list of your competitors, which makes sense.
No matter how big or how small your competitors are, it never fails there are sometimes billion-dollar companies that have very small divisions that may be interested in selling a piece of them off. No matter how big the company is, never discount making that phone call.
How to reach: Clark-Reliance Corp., (440) 572-1500 or www.clarkreliance.com
They all point to one conclusion: move Cintas Corp. from the No. 2 document management company in the country to the top position.
Carnahan was handed the responsibility along with her position of president and chief operating officer of the Document Management Division in 2008. With the charge came the objective of leading her 1,800 employee-partners under one vision to accomplish the feat.
“The most important key to being a good leader is building a team, a very effective, energized team of people who understand the vision,” she says. “A leader has to be able to inspire people to achieve that vision. But I think it comes down to … how do you set that vision to begin with?
“The key to setting that vision in the first place is getting the buy-in of your team of people understanding that it is an achievable vision. You will come out of the huddle, so to speak, understanding that that’s the vision that everybody agreed to, that it is achievable and that you’re all rowing in the same direction in order to achieve it.”
Carnahan, the first female division president at the $3.8 billion business services company, has followed that method in order to stay on track to reach No. 1 and achieve some of the division’s main goals, such as maintaining annual, double-digit revenue growth and venturing into new markets.
In fiscal 2009, the Document Management Division reached revenue of $213 million. The division recently expanded past the U.S. and Canada, opening two operations in Europe. And in June, Cintas was the first company in document destruction to become North American AAA certified by the National Association of Information Destruction.
Carnahan credits her success to watching and learning the importance of vision from a great leader, Cintas founder Richard “Dick” Farmer.
“Dick had the ability to paint a vision that was exciting and achievable,” she says. “Along the way, he provided the leadership, yet wasn’t afraid to roll up his sleeves and get down with us in the trenches to make sure that vision was achieved.”
Here is how Carnahan develops and communicates the vision for Cintas’ fastest-growing business division.
Put the pieces together
Stepping into her role, Carnahan realized that if she was going to get her employees to follow her, the vision couldn’t be created by her alone.
“It’s a collaborative effort,” she says. “In order to be a really powerful, energized, profitable division, there are multiple constituents who have to weigh in on and contribute to that success. Again, I would go back to the word collaborative because you’re painting a vision for the 1,800 partners who are carrying out the business day to day. We’re only as successful as those who give us valuable advice, counsel, support in order to build that infrastructure and foundation underneath us to make us successful.”
To achieve overall collaboration, you need to pull from a cross section of functions within your organization. Truth is the details of your vision will probably offer a comprehensive overview of your goals from financial and customer expectations to developing products and services.
To cover all of her bases, Carnahan invited her regional business directors as well as partners from Cintas’ supporting services departments, such as accounting, procurement and administration to sit down and plot on paper what the vision should be and how to get there.
Carnahan says there are really two parts to a vision: quantitative and qualitative. Both need to be clearly defined, and both are developed by looking at different internal and external factors.
Every fiscal year, Cintas sets projections for its top-line, bottom-line and all of the expense-line items in between for each operation, e.g. document management, uniforms and apparel, facility services. Once the details are set, the Document Management Division then sets projections all the way down to the grassroots level that it can measure monthly against the actual progress toward its vision.
“It’s just like in sports,” Carnahan says. “You have to know what the score is, right? Those (measurements) are our scorecards about whether we’re achieving what we expected to achieve at the beginning of the fiscal year.”
When Carnahan thinks about vision in terms of numbers, from a financial standpoint, it’s usually setting realistic goals based upon market size and the potential of the market her division serves. As you go through the process to determine your ultimate goal for market takeover, she says there are specific company aspects you need to understand. First, where are you situated from a market-share standpoint? Second, what are your core competencies? After analyzing those questions, you’ll get a better understanding as to what the realistic market share is in the future.
For instance, the Document Management Division has 75 locations between North America and Europe. But it wants to continue revenue growth and it wants to expand its geographic coverage to 100 percent of the top 150 U.S. markets.
“You go about it in a somewhat very objective way so that people understand the way you came about the vision was very objective,” Carnahan says. “It makes sense in that it is something that can be achieved. That would be what I would say about setting a vision from a financial standpoint. Setting vision though from other aspects of what you’re going to do qualitatively is more based upon our corporate culture.”
Part of Cintas’ vision is to build inspired, energized, passionate teams, which directly links to its corporate culture and its belief of what makes a successful company. It’s taken so seriously that the corporate culture is taught to all of the new management hires coming into the company.
“We define it as a principle objective, we define it as a management system, and we define it as the characteristic that we want in our people as professionals and motivated partners who are, all again, achieving or driving for that vision of the company,” Carnahan says.
Once you’ve set your vision, you need to collaborate on the path or initiatives that will help you reach that vision.
“It’s primarily going back to what the primary vision of the division is and also then developing, what I would call, key initiatives that will lead us to being able to achieve that vision,” she says.
For the Document Management Division, it came down to priorities. One, naturally, is the security of customers’ information since its main solutions include offering secure document destruction, document recording and storage, and digital imaging. The second has to do with people — making sure employees are safe.
“Your goals must be milestones or realistic steps that allow you to get to the vision,” Carnahan says. “They’re financial as well as nonfinancial, but regardless, they are measurable milestones.”
Share your vision
You can’t fear sounding like a broken record. The only way to get your vision across to employees is through repeated communication and defining their roles in accomplishing what you’ve set out to achieve.
Carnahan doesn’t stop at just talk or even e-mail. All of the work that went into setting initiatives and benchmarks for the vision is u
sed to communicate the vision precisely and to get employee buy-in.
“The most important way is just communication,” Carnahan says. “It’s communicating the vision over and over again and measuring our results against the vision, key benchmarks, financials as well as qualitative benchmarks on how we’re progressing that vision.”
The first step in communicating the vision is making sure everyone at all levels understands what the specific goals are both in the long term and in the short term. Carnahan relies on her general managers to set the tone of the vision at the local level. Since Cintas has stringent measurements for performance, general managers are able to specifically outline the vision’s initiatives and give constant feedback to employees on how they are making strides toward the vision.
The process goes back to Carnahan’s philosophy that you have to inspire employees to achieve the vision and employees need to see the vision and believe it’s accomplishable. That only happens when people understand what the goal is and how close they are to achievement.
“People buy in to a vision by winning,” Carnahan says. “It’s just like coaching a football team. The players have to see the vision to score touchdowns in order to win the game. They need to visualize what must be done.”
The same goes for those managers. Monthly goals are set, and if they’re not met, then Carnahan and her staff revisit the goals to determine what fine-tuning needs to be done to get everyone back on track.
And fine-tuning will need to happen, especially when you’re trying to grow or venture into new markets.
“Sometimes you have to make changes because you may find what you expected would happen in a certain market, when you go into a new market, it’s not according to the timeline that you originally expected, so you’ll fine-tune,” Carnahan says. “You won’t fine-tune the vision; your vision will stay the same. Your timeline might change though. Again, it’s constant communication.”
Employees won’t connect with the vision by measuring results alone. While the general managers are charged with establishing the vision at the bottom level, Carnahan makes sure all upper management is seen and heard to ensure the message she sets from the top is being communicated.
“I’m out in the field a lot with people because the answers aren’t really in my office, the answers are out in the field,” she says. “I make sure that I’m out talking to my partners constantly.
“They need to see our leaders, not just myself but the other leaders in my division, all the time to make sure they’re getting the message.”
At the beginning of each year, Carnahan, along with her general managers and regional business directors, set a detailed calendar to ensure she is reaching every region and a good representation of her employee-partners throughout the year.
Sometimes that means meeting service representatives in the field before they start their daily duties at 6 a.m. The keys to making those conversations successful are talking to employees about what they’re seeing on the job, asking them about their lives and updating them on what’s going on in the rest of the company. In Cintas case, the Document Management Division’s 1,800 employees is a small number compared to the overall company’s more than 30,000 employees.
“We’ll have communication and interactive communication back and forth, and talk about what their challenges are, what they’re seeing in the marketplace, how we can help them be better at their jobs,” Carnahan says. “It’s really very just open communication. You talk about safety. You talk about security. You talk about, again, things that are on their minds.”
Being with your employees in the field, not only allows you to check on progress toward your vision, but it gives employees a sense that you care about them as an individual and you care about their work.
“The key for any executive to inspiring employees to buy in to the vision is engaging your employees — from the front-line employee-partners to your direct reports — and making every employee realize they each have a valuable role in the overall success of the company.”
How to reach: Cintas Corp., Document Management Division, (800) 246-8271 or www.cintas.com
Shan Padda needs employees to buck the status quo.
“Part of the challenge of being a CEO of, hopefully, a fast-growing company, is how do you create a culture and employees that are comfortable with constant evolution and constant change?” Padda says. “Embrace it as opposed to being something that they’re afraid of.”
To set a culture that supports rapid growth, you need employees to see change as a positive and you need them to take everything in stride, even setbacks. The ability to do so comes down to how you communicate and what you communicate.
“It’s very important to be honest and not be misleading,” says Padda, chairman and CEO of Health Integrated Inc. “When things are going well, share that, and when things are not going well, also share that, but also explain why and what can be done about it so that people get energized.”
That philosophy has helped the innovative health plans partner grow to 220 employees.
Smart Business spoke with Padda about how to form a culture around growth.
Create a culture around communicating change. In order to create that kind of a culture, it’s really important to communicate, and from the very beginning, be very transparent and vocal about the fact that change is a natural part of the landscape. The ability to change is one of the advantages that a smaller company has, i.e., it’s nimbleness in meeting customers’ needs. Help people understand or frame the thought process around the ability to evolve and change as a positive trait versus something that they’re afraid of.
In order to do that, you certainly have a lot of different mechanisms for communicating with employees, but what I’ve found is most effective is you have to get in front of people and communicate with them.
We try to accomplish that through something called all-staffs, where we’ll get up or I’ll get up with other members of the senior management team. We probably do this once every six weeks to communicate with everyone on both what’s gone well, what hasn’t gone well, and then also to share with them what’s changing, what’s different, and why that’s good and why that’s a part of the process.
I think what’s important is you need to help people get a context of why it’s important to be able to change. The bigger message you have to communicate is that every company that is successful is successful because it’s providing value to its customers. In terms of being able to provide value to your customers, inheritably in that process is the ability to shift products and functions so you continue to be relevant to your customer base.
Also as a corollary to that, as I was mentioning earlier, the fact that one of the advantages of a smaller company is just the ability to move very quickly to innovate. It’s important for employees to recognize that, and that applies with the proper context of why it’s a positive not a negative.
Maintain a sense of optimism during setbacks. For a leader in an entrepreneurial environment, there’s always going to be setbacks, there’s always going to be so many challenges to overcome, and if you’re not optimistic, if you don’t think the glass is half full, you’ll never be able to be, first of all, yourself successful in overcoming this obstacle, even more importantly, you’re not going be able to convey that conviction to those who work for you.
People generally know when there’s a setback, so the first step is [to] acknowledge what happened. People will be more open-minded if they feel you’re being truthful to them. But then the key is to help them provide the context, help them understand that all companies and all people have setbacks from time to time. Anyone who says that they don’t is not being truthful. Make them get comfortable with that it’s just a part of the process of building a company, part of the process of running a company.
The next step then is to frame out with their input in terms of what happened why did the setback occur? Lastly, help lay out a plan in terms of how you can fix it and how you can overcome it.
Show employees there is meaning in their work. I think that another really important thing, in terms of from a culture perspective how you build a culture of a company is to help communicate why what you do as a company matters, that gives meaning to work and everything else.
People want to believe that what they’re doing at work, which is a significant part of their life, means something. In our case, it’s actually easy because what we do is we help people who are ill with chronic health care conditions stabilize, and that keeps them out of the emergency room and keeps them out of the hospital, so in one sense, that’s easy for us because we’re having a meaningful impact on people’s lives on something that is very important to them, health care. But my point is that every company needs to come up with a way of framing how what they do matters.
Create an environment of inclusion. (The culture is) not going to work if you have a very rigid, hierarchical environment where, for example, management lives in an ivory tower. The core essence of having people be comfortable with that is to create an environment where people feel included, and that goes to everything from titles and approachability of supervisors, the approachability of management. It’s a combination of a lot of different things.
As a small example, we’re a clinical company. Most of our employees are clinicians or perform clinical functions. My office is right off of our main work floor, so when I’m coming or going, I’m walking right through the middle of where most of our people in our facility in Tampa are working.
How to reach: Health Integrated Inc., (813) 388-4000 or www.healthintegrated.com
Nicole Whyte knew the construction and real estate booms wouldn’t last forever.
When founding Bremer Whyte Brown & O’Meara LLP in 1997, Whyte and her colleagues mainly tackled construction litigation. But they knew the market would eventually drop. And they knew they would need to be prepared.
By diversifying its offerings, the law firm grew its client base and, in return, its bottom line. Bremer Whyte has grown from two attorneys to 141 employees spread throughout seven cities.
Whyte says there are four aspects to consider when deciding how to diversify and grow your company: your clients’ needs, industry trends, your company goals, and the flexibility and talent of your people.
“The key is being able to look to the future and being able to anticipate clients’ needs and industry and other trends to be ahead of the curve,” says Whyte, a founding partner and family law expert at the firm.
Smart Business spoke with Whyte about what to analyze when it comes to deciding how to diversify.
Understand and anticipate clients’ needs. Communication is key it’s staying in touch or being in touch on a daily or at least a weekly basis with the key people, the key leaders of your clients.
Communicating with them, and finding out what’s happening within their industries or businesses, and what their needs are and how those needs are changing.
Frankly, just sometimes asking point blank what we, as essentially a service provider, can be doing or should be doing, or what do they want us to do to better serve their needs.
It just comes down to communication. I think the one-on-one relationship is key. Obviously, today, much communication is done by way of technology, e-mail and so forth, but I still think the one-on-one meeting in person (is essential).
Getting out of your chair and traveling to the client, going to their facility or to their offices, meeting the key people, having an understanding of the employees and so forth is key so that you can see what their operations are and how they operate. That is extremely helpful.
Research trends and diversify. All of the partners within my firm are responsible for being informed and staying informed (on trends), and we have regular partner meetings. It’s really a group project if you will.
The key is looking to industry trends. That would be just staying on top of obviously the news and the economy, reading relative media publications, newspapers and so forth that will help keep you ahead of what those trends are.
To give you an example of that in my legal practice at the law firm, when we started the law firm we were handling a lot of construction litigation and that was in the ’90s when there was a construction boom here in Orange County and all over Southern California.
Of course, what we foresaw would happen because of the real estate boom and market (being cyclical) and even construction is cyclical that ran for a seven-to-10-year cycle we saw the real estate market (would) take a dive and with that construction, new construction.
It’s really having an understanding of what the trends are by speaking with people in the industry or reading the news publications and anticipating in seven years time this very busy construction arena is going to slow down, and with it, the litigation will slow down. We foresaw that and early on diversified into other areas of litigation. One of the areas we got into, for example, was employment litigation. That was an area that we got into that turned out to be a good area of practice.
Look at your company’s and your own goals. From my own experience with my law firm, we look to our own needs and our own goals. Every business has to have in place specific short-term and long-term goals. Are those goals to try to grow or at some point stop growing? I think that’s a very individual specific question, and the leadership of the business needs to, again, have short-term and long-term goals that are specific to the business.
I think the question is, ‘Where do we see ourselves as a company in five years? Where do we see ourselves as a company in 15 years?’ And then, for the individual business owners, I think individually you have to say, ‘Where do I see myself in five years and 15 years? Is my goal to keep working around the clock or do I want to be able to, at some point, back off? Do I have other up-and-coming leaders within the company who I want to step in and start taking over so I can step back a little bit and perhaps spend more time with family and more times with hobbies and so forth?’
It’s both an individual and a company goal that needs to be examined.
Hire flexible employees and mentor them in order to diversify. Surrounding yourself with good people, hiring good people, hiring people who have good vision, that is key.
I think the past is the best predictor of the future. Obviously in the interview process a lot of these issues can be discussed. But, you want to look at how the individuals have performed in the past with their previous employment.
A law firm is more of a calling in a way we like to hire lawyers young, and then we like to mentor them and train them. All of our partners have really come up, grown up through the ranks of the firm.
So I think if you have in place a good fundamental firm philosophy and you’re taking the time to train and mentor your young people, you train them in those ways, and hopefully you can make good leaders for the future.
How to reach: Bremer Whyte Brown & O’Meara LLP, (949) 221-1000 or www.bremerandwhyte.com
Until one of Tom Baugh’s managers pulled him aside to say employees didn’t understand the company’s direction, he had no idea his communication was failing.
Out of the conversation came an early lesson in Baugh’s role as CEO of Marketplace Events LLC: In order to get your message across to employees, you need an effective and uniform communication style.
Baugh’s analysis drove him to start the “Monday Morning Update” to communicate with his 100 employees based in 11 offices and two satellite offices in the U.S. and Canada. He uses the e-mail message to update employees on everything, from company performance to his personal life, and as a mechanism for feedback.
“There’s no great technology involved, but it’s extremely consistent, and I think people have come to rely on that consistency,” he says.
He credits the consistency in helping the producer of consumer home shows expand in the marketplace, including this month’s The Great Big Home & Garden Expo.
Smart Business spoke with Baugh about how to reach scattered employees.
Set communication as a priority. We said an important part of our culture is open communication, and we don’t have the luxury of people being able to kind of think that if they’re concerned about something, we’re going to pick up on it because, physically, we don’t have enough people that can see how people react and feel on a daily basis.
We knew we had to work twice as hard to develop a culture of we were going to be straightforward as a management team and we wanted them to communicate back up through the ranks.
I’ve gone in front of the company, in front of all the employees, and said, ‘Listen, I am really good at several things. I’m really good at leading at times. I’m really good at communicating at times.’
But I said, ‘I can’t do any of this as well as I’d like to nor can you do your job as well as you’d like to unless we agree this communication has to go both ways.’
Although you’re not physically with all your people every working day of the year, I think it’s possible to build a culture where they’ll communicate honestly, and certainly when present, they will.
Pick a communication style that everyone is comfortable with. More than anything I think it has to reflect whatever the senior manager is comfortable with. For me, I’m comfortable writing; I’m also comfortable doing. I will do brief video clips.
I think the tool that’s used really depends on the manager, on the CEO. Trying to force a communication tool on a CEO that’s not comfortable using it, to me, there’s going to be a level of frustration that sooner or later people are going to pick up on. That’s certainly the last thing I would want.
Our people know that I’m really comfortable writing, I’ve got kind of my writing style. They also know that I’m comfortable in front of a camera, and they know if I’m doing it on camera it’s got to be something that’s either really important or kind of silly or whimsical like for a Christmas message or a Thanksgiving message.
We do teleconferences, and I will get on the phone with folks and I’ll say, ‘You know what, we’re going to go through the message, and I know I’m not going to get any questions at the end of it because I know I’ve got 100 people sitting around conference tables in 11 different offices. And who wants to be the first to ask a question.’ So much depends on the CEO and the nature of the business and the physical set up.
I would think that feedback would be critical (for determining communication styles). I get feedback all the time. I just gave a good example the teleconferences, our people hate them. They hate them because it’s not a format that really works well for us.
I learned early on that me doing a lot of conference calls, tying up everybody across three time zones in different offices, was not a good idea.
Make sure the employees got the message. I do think a CEO can have a significant impact on the culture, the direction, the vision of a company. I do think to a certain extent, however, that the greater personality, the greater effectiveness comes from the people that surround the CEO.
I guess what I’m getting at, the only way you’re ever going to know if the message gets across is if you have people around you that you trust to not only transmit the message but also be able to support it, further refine it and explain it.
One really good CEO who has a weak management structure underneath them can only do so much.
The key to our company is our show managers, and if we had layers, that’s the third layer. So we spend a lot of time trying to make certain that our show managers get it.
We find it’s not that hard (to measure whether the message was heard). The metrics will be different in every business. We’ll see it immediately with sales numbers; we’ll see it immediately with satisfaction numbers from exhibitors. You can tell it on a show floor.
Understand the importance of consistency. For a CEO, I think consistency means everything. The pressure on a CEO now is so much greater than it was three or four years ago because this is a different business model, this is a different world.
The consistency is noticed by people. It’s when there’s stops and starts, when there’s, ‘Oh wait, this was the message six months ago, but we’re going to do this.’ It’s a whole notion we are building this thing at this company is it on a solid foundation or a shifting foundation. And at least for us, I can’t say about any other business, our consistency is our strength. There’s no doubt in my mind.
How to reach: Marketplace Events LLC, (866) 463-3663 or www.marketplaceevents.com
Well, that degree can mean all sorts of bright or mucky things depending on how hard your company has been hit by the latest recession. The good thing is there are ways to stay in the clear and one is starting with your usage of technology.
The latest Smart Business Toolbox Series presented by Hyland Software Inc. brought together a panel to speak about how to best leverage technology to survive and thrive in today’s economic climate.
Four Northeast Ohio companies are using the visibility that technology gives them to better their customer service, internal processes and cash flow. But as these leaders pointed out, first there has to be buy-in, understanding and a payoff.
The panelists included: Tony Malangone, chief information officer, RTI International Metals Inc.; Mario Shahidian, chief information officer, STERIS Corp.; Lisa Huntsman, president, Lauren Manufacturing; and Chris Hyland, chief financial officer, Hyland Software.
Malangone on how he, as a CIO, sold technology on the front end: We hear about the interest of the CEO, the CFO and various areas of the organization. The key to all of what we do is people, processes and technology. Obviously, technology enables what people do through the process. How do we strategically align it and sell it to them? How do we show that we add value as a company? …
In the strategic alignment of the people and processes, what their pain points are, what their needs are, how to strategically plan road maps to various areas of the organization, is really at the front end of how I sell to our company, our value-add of what we’re doing for the business.
Very key is mission planning. What is the CFO, what does he feel is the most important thing that’s happening in his area? What is his strategic alignment to our business and the growth of our business? Where strategically are we growing? Are we growing along one product line, multiple product lines? Do we focus on those product lines? Do we consistently stay aligned with the business and what it needs to do in the future?
So our strategy is very much key. As we change the business and transform the business, we align to the business and we add that value.
Shahidian on how he got upper management to recognize the importance of IT: We (hired a) new CEO three years ago, where he came and looked at IT as a cost center. Turning that perspective that IT is not a cost center was a challenge for us. I made sure that he understood that not only are we not a cost center, [but] we are part of the core business. … You cannot take an order, you cannot ship an order, you cannot collect (without IT).
Making that recognition and selling that to the CEOs and CFOs is the biggest challenge. Once you’ve done that, it’s all up to your IT management team. One of the other things we did about three, three and half years ago, was we created responsibilities for our business relationship managers. These are purely IT folks, very smart guys. We picked the smart guys who are business analysts.
We embedded these folks into the business. They are all part of the staff meetings, and any kind of challenges that they have [are discussed], so you understand the pain points and bring back the pain points to solve issues.
For us, the biggest challenge was recognizing that our CEO and our CFO recognized that IT is not a cost center.
Huntsman on how she bought in to IT and her beginning steps: I think technology supports the business and doesn’t run the business, and the feed stream comes from those people who are engaged in the processes.
I think what we’ve learned through our culture at Lauren is that the IT department was willing to listen.
If you’ve worked in manufacturing systems in any way, so many times, systems are very candid [and] they’re not flexible enough to really address the real needs of what you need in manufacturing. So from our perspective, the IT helps support our business and we do what is necessary because we’re spending countless hours looking at schedules trying to change schedules. We have 900 customers, so they change all the time. …
A lot of (the beginning steps were) back stream mapping. There was a lot of process mapping. What are the inputs we have for the right output because there’s a lot of loss? If you don’t know exactly what you need and you don’t have the right inputs, IT can spend a lot of time getting to the wrong stuff.
The knowledge leaders of the different processes it’s important they’re part of the system, part of the preplanning, so when IT gets ready to start programming, they really do have an accurate picture of what needs to be achieved at the back end.
For more from Huntsman, you can watch her share some thoughts with Dustin Klein, the executive editor of Smart Business, before the event.
Hyland on how he sets up incentive programs based on efficiency gains: We have the same targets as far as revenue and operating income and earnings. In the past it’s been more of a global target, but in the past few years, … I would say for managers, it’s about 20 [or] 25 percent of their total earnings tied to performance.
But we’ve been moving it to be more specific, so we’ve developed what we’ve called best-in-class ratios. For example, our division across the street is our consulting division, which does implementation, and they have very tight margins, very slim margins, so we push down (mandates) to them and (say), ‘This is where we are, and this is where we think the best-in-class ratio is.’
Then we set and improve the targets; we want a little bit of target improvement each year. And then it’s their job to actually build the operational metrics for how they’re going to hit that improvement.
We kind of tell them what we want the target to be, and then we let them tell us operationally what they think they can change in the business to meet those targets.
View another article on Hyland Software.
Having an open-door policy is so important to Claire Zangerle that she literally removed the door that separated her suite from her employees. Then she knocked down a partition that blocked the view of the sitting area.
When Zangerle was named president and CEO of Visiting Nurse Association of Ohio in July 2008, she knew the position would require a culture shift. To emphasize what she was communicating to employees, she took the extra step of physically showing them her door is open.
“You have to be accessible to anyone and everyone in the organization,” says Zangerle, who has 783 employees at the $55 million organization. “To me, that’s an expectation of any leader.”
In order to have an effective open-door policy, guidelines need to be in place, including setting aside time and articulating what issues employees can bring through your door. However, even if they’re coming to your office, you can’t underestimate meeting employees on their turf.
Smart Business spoke with Zangerle about how to open your door to employees.
Invite employees through the door. I write a short, weekly update letter to all the employees, it goes out through e-mail and it’s posted on our intranet site. At the end of my letter every single week, I offer the simple open invitation.
You always have to open the invitation. I always end my letter with, ‘You know where to find me. My e-mail is this, my cell phone number is this, my extension is this, and my office is on the third floor.’
I think a simple open invitation in the beginning, some are going to take you up on it, some aren’t going to believe you mean it, but then there are some who totally overuse it.
Once they come through the door themselves or hear about one of their colleagues that have come through the door, it’s not that difficult.
Set a schedule, but remain flexible. Truly to be the most effective having a dedicated time for the open door is the best, but things come up on an emergent basis so you really have to be prepared for that.
I block off Friday mornings or Wednesday afternoons that’s when I’m in my office doing some work, stop by or make an appointment with my secretary or whatever is best for you. But I don’t want to discourage people from coming to me on an emergent basis either.
That happens a lot. That’s where you have to use your judgment depending on what the issue is.
Work with your assistant to say, ‘OK, if this is something I can address immediately, and I’m doing something else, then tell them I will get back with them within this amount of time.’ Give them an idea that, yes, you will get back with them.
Make your policy clear. I make it clear to everybody that I’m not going to fix all of your problems, but if you’re coming to me to brainstorm or make me aware of a process that can be improved to make the organization run smoothly, then bring it on. They know they don’t need to come to me to tattle or gossip or whine because I don’t tolerate that. You need to go through the chain of command if any of that is going on.
The best thing to say is put a sign on your door that says no tattling, no gossip and no whining. You’ve got to be clear … (with) what you’re going to address as the CEO because generally the people that come to you are not going to be your management and leadership level because you talk to them all the time. The people who are going to come to you are going to be the front-line folks, and those are the people that need to know that I am not here to resolve the issue of somebody stealing your lunch out of the refrigerator.
I have people who come to me who complain about their managers, I’m like, ‘Look, you have a chain of command to go through.’ If you have an issue and unless it’s a terribly abusive situation, which generally it’s not, then you need to go through the chain of command.
Be careful not to undermine management. This can be an issue if it’s not handled delicately because truly if the management team is paranoid that their employees are coming to leadership with issues, then obviously we have a problem with management.
I struggle with not wanting to fix something that (employees) perceive as broken right then and there because I have the authority to do that, but then that does undermine management. So I have been very careful to let the process work (itself) out.
I have reassured management just because employees come to me they don’t need to be paranoid.
Meet employees in their own environment. It’s important to meet people where they are instead of where you are. I think that’s important both literally and figuratively.
Literally go to their place of work. It doesn’t have to be in the CEO office, which really frankly is more intimidating at times.
Then, figuratively meet them where they are. If an employee brings an issue to you and clearly it’s one that you don’t agree on as a leader, you have to listen to their side of the story and be respectful. Be open to changing your mind.
It’s more of a priority to go find out what’s going on in the field and with your employees than staying in your office. Sometimes our offices become our sanctuaries because it protects us from the outside, but you know all the work occurs outside of the office.
This is my greatest leadership challenge, wanting to fix something on the spot instead of letting others work through it and solve it on their own. It’s not because I think I have all the answers, I just want to make sure my folks are relieved of the stress of the process, but the process is valuable for them to work through.
You learn all that when you go out and meet them, not just when they bring the problems to you.
How to reach: Visiting Nurse Association of Ohio, (216) 931-1400 or www.vnaohio.org