Even if Grant Cornwell had come to the College of Wooster unaware of the school’s deep commitment to tradition, it wouldn’t have taken him long to figure it out. As just the 11th president in nearly a century and a half, Cornwell recognized how the school’s traditional roots and mission had helped the college build a strong reputation in higher education. Yet after assuming his new office in 2007, he was also aware that it was time to bring some of those traditions into the next century.
“These are very traditional, tradition-bound places, and that pretty much creates a kind of stability that protects the integrity of the mission through time,” says Cornwell. “For the most part, that’s a very good thing. At the same time, what that means is when there is a leadership transition, it’s a time when nearly everything needs to be rethought. I think my greatest challenge has been systematically working through our business practices and our kind of culture of decision-making and trying to bring it into this new era of strategic management.”
Cornwell’s challenge was not to change the college’s mission but to make it more relevant and effective with the changing nature of knowledge and global society.
“I have spent a lot of time in my research and in my consulting helping tune liberal arts colleges for this era of globalization. … That’s what I’ve been doing for 20 years, and that’s what Wooster felt it really needed to do now,” Cornwell says.
“As a college, Wooster is a great liberal arts college. In terms of the integrity of its core mission, it’s extraordinary: the teaching, the quality and depth and rigor of the teaching and learning that goes on here. At the same time, the college, the core mission, is supported by an organization, and I would say that the organization was only good. It emerged that really my work was to work with the organization to bring it to the level of performance worthy of the mission of the college, and move it from good to great.”
Though this kind of transformative change doesn’t happen overnight, to Cornwell, speed was not an issue at all. It would take a systematic change, and therefore, a systematic plan.
“We’ve had a very inclusive and transparent strategic planning process that has probably been slower and more complex than maybe some are used to, but that has been intentional because it’s gone in really three broad steps,” Cornwell says.
“If you look at other kinds of institutions of higher education, they can be whipsawed by trendiness. If something emerges on the landscape as a hot topic, they build a major in it and they hire faculty and then in five years it’s like, ‘What was that about?’ There’s a kind of stability and durability to an approach to liberal education that is deeply, deeply rooted in history yet not backward-looking.”
Communicate the plan
To get people on board with change, you first need to communicate what it means for them and for your organization.
Whether it’s through meetings, phone calls or informal chats, the more you actively involve people in building the new vision, the more you make change a blanket commitment across your organization.
“A leader has to know whether the ideas that they are putting forth are resonating with the people who have to move them forward and implement them, and so to be able to listen and meet in a common vision is critical for a leader,” Cornwell says. “What would be something to hold somebody back is the mistaken notion that leadership is the product of individual genius or a strong hand. I just don’t see that at all, at least, in the way that I conduct my work or what I see as successful. It has to be a commitment to listening, collaboration and building commonality of buy-in and inspiration.”
No matter what business you’re in, changing a vision doesn’t just affect employees but also customers, competitors, investors, the community and any number of people who are invested in its success. Facing the unique challenge of leading a college, Cornwell realized that the success of his vision involved a lot of people.
“These are complex organizations,” Cornwell says. “The stakeholders include students, of course, the faculty, of course, the board of trustees, the alumni, parents and the local community. So the first step was to work with all of those constituencies to rearticulate our mission and also articulate our vision of who we want to become to better realize our mission.”
It’s easy for people to grow accustomed to thinking and operating a certain way, and so it takes inspiring leadership to show people the benefit and the urgency of making changes.
“One critical element of success is the ability to articulate and communicate a vision in a way that is inspiring to others, because it doesn’t do any good to have a brilliant vision for a place if nobody else is inspired by that vision,” Cornwell says. “Communication is critical.”
By opening up communication with stakeholders, Cornwell was able to share the advantages that global learning and diversity could bring to further the mission of college, such as international learning opportunities for students, teachers and staff and a competitive edge in the higher education arena.
“It’s mostly a function of will,” he says. “Really, Wooster was completely ready to do this. The whole campus really just needed permission and a little urging to get on with it.”
Pick your battles
Now that you have a rearticulated sense of your mission and are clear about what you want to achieve, the next step is choosing which areas you want to track and show progress in carrying out the new vision.
“The second phase was going back to all of those same constituencies to say, ‘How will we know that we’re making progress?’” Cornwell says. “‘What are we going to measure? What are we going to attend to? What are we going to track? What are we going to study to know whether the things that we are doing differently are actually moving us from where we are to where we want to be?’”
In the strategic planning process, a pitfall of many businesses is to rush from point A to point B without thinking about what needs to happen in between. Strategic planning is meant to be a process, and while it’s tempting to start implementing changes right away and put your vision into action, it’s important to make sure the changes you’re making are set up for continuous improvement. Otherwise, the progress you make toward your goals will not be sustainable.
“If you are really going to make this kind of transformation, there’s no single tactic,” Cornwell says. “It has to be a systemic commitment, and so everything that you do has to be insolent by that set of values and that vision. So yes, it has to influence faculty hiring and staff hiring. It certainly influences new student recruitment. It also influences how you organize your work on campus, what the curriculum looks like and how you provide kind of developmental support for the community to become more diverse and international.”
A vision filters throughout an entire organization, so there isn’t just one way to measure its success but many. To create a road map for Wooster’s progress, Cornwell again worked all of his constituencies to develop key metrics that would be a good reflection of the changes Wooster was making.
“Each metric that we look at is itself a composite of a number of metrics, some of which are quantitative and some of which are qualitative. … It’s structured and systematic,” he says.
While using a systematic approach can take longer, it gives you a better opportunity to assess how your goals align with the vision while keeping focus on your core mission.
Implement your strategy
With the plan in place, and people rallied behind your vision, it’s now a matter of putting your goals and vision into an actionable strategy.
“That’s the most fun part of leadership, because it’s translating vision into practice,” Cornwell says. … “I’m a philosopher by training and I love ideas, but I think ideas are most interesting when they are actually put on the ground and put to practice in the world.”
You know who you are, what you want to accomplish and how you are going to measure the progress on your plan. Now your job as the vision leader is to help your senior leadership team execute it to the best of their ability.
“A leader has to have this mix of compassion and high expectations,” Cornwell says. “My real job is to help everybody else be successful. The role of the president is to try and make everybody around me as successful as possible, and that means making sure that they are satisfied, that they have a scope of creativity but also that they are held to account for their performance. They all have very clear goals that we talk about and negotiate on an annual basis, and we refer to those goals in every single meeting — how are we doing on achieving those goals? It’s a constant check-in with what we agreed that we’re doing.”
From bringing an international focus and diversity to Wooster’s campus, to implementing new studying abroad programs, student recruitment pipelines, and channels for student, faculty and alumni research around the world, Cornwell’s strategic planning process has successfully married the tradition and history of Wooster with a global approach to liberal learning.
In his first two years, more than half of the new tenure-tracked faculty hired brought either domestic or international diversity. The newly recruited classes have been the most diverse in Wooster history, in the number of international students, countries represented, as well as in the number of U.S. minorities attending.
For Cornwell, the goal again was not to change the mission but take it to the next level. So far the new vision has succeeded in helping Wooster carry out its mission better. In 2009 and 2010, U.S. News & World Report ranked the College of Wooster fifth out of the top 10 colleges in undergraduate teaching.
“The important thing for the College of Wooster and what I’m trying to do in my time here is not change Wooster but help it more fully realize its potential in who it already is,” Cornwell says. “That means both being committed to continuous improvement on the delivery of our mission, but it also means that making sure that more and more of that market knows how good we are. That’s what I get up and do every day.
“Tradition is not something that needs a lot of care and feeding. If anything, you have to always say, ‘Listen, we value these traditions, but we have to have them be dynamic traditions. Tradition doesn’t mean you do things the way you’ve always done them; it means that you hold on to a sense of yourself while you continually innovate.”
How to reach: The College of Wooster, (330) 263-2000 or www.wooster.edu
The Cornwell File
The College of Wooster
Born: Aurora, Ill.
Education: B.A., St. Lawrence University —1979, M.A.; University of Chicago —1982 Ph.D.; University of Chicago —1989
Affiliations: Serves on the advisory board for the National Institute for Technology and Liberal Education; member of the SAGE Group, a collective of national educational leaders formed by the Association of American Colleges and Universities
If you could have dinner with any one person who you’ve never met, who would it be and why?
I would definitely have dinner with Obama. Actually, what I’d love to do is play basketball with Obama. I’m a basketball player, and I have this idea that I’d just love to be in a game with him.
Who are your role models for success?
I’ve had a number of very influential mentors throughout my career and they’ve been different people at different times, but I’ve learned a lot by watching people lead and talking to them about leading. A lot of what I’ve learned has been learning what not to do, too. Even mentors and leaders who I admire, I see how they have had shortcomings that have kept them from fully realizing their aspirations. I’ve learned a lot from those, too. So it’s been more a series of more personal mentors throughout my career.
What is your favorite part of your job?
What I like most about my job is when I walk out of my home and walk to work every day and I walk past thousands of students and know that these are wonderful young people whose lives are being changed by their time here, and that I have a part in that. That’s deeply inspiring on a day-to-day basis.
When local airports canceled flights to Portland during a horrible snowstorm, many travelers were left stranded in Seattle hotels on Christmas Eve. One of the hotel’s guests hadn’t celebrated Christmas Day with family in three years and thought he would be missing the holiday once again.
Instead, the hotel’s bellman, an employee of Kimpton Hotel & Restaurant Group LLC, offered to brave the eight-hour trip through the snow to drive the guest home to Portland in time to spend Christmas with his family.
Niki Leondakis, Kimpton’s president and COO, says that what differentiates her company from competitors is the fact that employees are always striving to create meaningful customer experiences, or “Kimpton moments,” by going the extra mile to take care of guests and show them random acts of kindness. In the Market Metrix Hospitality Index, Kimpton consistently achieves the highest scores in customer satisfaction and emotional attachment of any U.S. hotel company. This commitment to customers played a key role in the company’s strategy for dealing with the impact of the worldwide economic recession.
When your business is facing financial or economical challenges, you have to reinvest in the areas that set you apart from competitors and that make your business successful. For Kimpton, this meant reinvesting in the people who make Kimpton moments possible every day — the front-line employees at its hotels and restaurants.
Prepare for change
Easing employee fears at the start of the recession was a primary concern for Leondakis. Stressed out employees typically don’t deliver top service. Many people were fearful about the future of the company, seeing friends and family lose jobs and hearing about mass layoffs at high-profile companies. They were under a great deal of personal and professional stress that was directly related to the economy. Leondakis realized employees needed help managing this added stress if they were to overcome the new challenges placed on them.
The first step was to provide them with tools and information to better manage this stress, such as situational leadership training, stress management and self-care classes for employees to address their pain points. Easing their worries also meant keeping their spirits up, which can be as simple as cheering an employee up with a funny joke to take off some of the pressure.
“We went out of our way to create a spirit of fun and laughter and not take ourselves too seriously,” Leondakis says. “While we spent an appropriate amount of time dealing with brass tacks and business needs at hand, we also balanced that with some fun and making them laugh and just being silly. I think that combination helped keep people inspired, because at the end of the day, it’s got to be fun to come to work every day or you aren’t very engaged or motivated. We worked extra hard in the last two years to make sure we were providing our people with stress release.”
Keeping the emphasis on the vision and goals of your company is another way to motivate employees to stay committed to its long-term success. In the wake of any kind of major change, uncertainty and fear can distract people from their goals. Therefore, you want to reinforce the goals that are most important in carrying out your vision.
“I think one of the mistakes companies make is changing the focus for their employees too often,” Leondakis says. “Another mistake is having too many goals for employees to focus on. That’s why we’ve narrowed our focus to one wildly important goal, so that 6,500 employees in the organization know which way is north, what’s most important and, at any given moment, what is their highest priority.”
In Kimpton’s case, simply increasing the focus on its No. 1 goal, customer satisfaction, was much more beneficial than increasing the number of goals for employees.
“We increased the focus,” Leondakis says. “We talked about it a lot more. We got very granular with metrics around our customer satisfaction scores and set very specific targets for continuous improvement, specifically in the areas that don’t require financial investment.
“Being friendlier or more helpful doesn’t cost any more money. Focusing our people on what they can control — them and their employees and their attitudes and the way they take care of our guests — made people feel empowered in a situation like this great recession, where there’s a tendency to feel out of control. People felt like they did have control over certain things, and that was our customer experience.”
Giving employees more focused goals eases their stresses by creating more certainty about their role in the company and how to handle the changes that affect your business. In having this control and accountability, they then have more opportunities to be proactive and to act on change rather than react.
In times of crisis, the reaction of some business leaders is to stay out of the spotlight and avoid confrontation by hiding from tough questions. However, when the head of a company is not visible and unwilling to address organizational challenges, it can leave employees fearful of the worst, which, in turn, can hurt your service level.
Leondakis says that though you can manage your company from the corporate headquarters, you cannot lead from one, especially when your business is facing potentially difficult times.
“People don’t know what’s going to happen,” she says. “They read the headlines. They read that thousands of people lost their jobs during this recession. They read about businesses closing. They want to know what’s happening with our business. Being able to answer that firsthand is incredibly valuable.”
If you want to keep employees motivated and united in your vision, you have to open up communication and show them that you are not abandoning them to ambiguity. When Kimpton started feeling the impact of the financial crisis in 2008, Leondakis knew that her presence at the company’s businesses was even more essential. In the past few years, she has spent more time traveling to Kimpton’s hotels and restaurants than ever before.
“Part of my strategy for dealing with the recession was to be more visible, to be more hands on,” Leondakis says. “I’ve always been pretty visible and out there, but I just felt that now, more than ever, people need to know we’re in this together, and we will get through it together. If you have problems or barriers, I want to be there to help you.”
Increasing your face-to-face communication and personal interactions with employees also increases organizational transparency, which is an important part of building trust between employees on the front lines and the corporate side of the business.
“It’s modeling the behavior, and if I do that, then my direct reports do the same thing, and then it trickles through the entire organization,” Leondakis says.
Whether it’s holding formal presentations or conducting fireside chats with employees in a relaxed setting, Leondakis has increased opportunities for direct communication with employees. By doing so, she’s given them more opportunities to share their ideas, goals and barriers, and ultimately, ways to add value to Kimpton businesses.
“When I travel, I do fireside chats with employees and ask them, ‘If you owned this hotel or this restaurant, what you would do differently to better serve our guests and to make it a better place to work for all of the employees?’” Leondakis says.
“When people see you being honest and genuine and authentic, they begin to trust you, and they will talk to you and tell you what’s happening.”
Being responsive to employee insights and feedback is incredibly valuable because it can give you ideas to improve your business that you may never have considered.
“We take that feedback very seriously and we share it with our senior leaders; we share it at our operations meetings, and we actually put action plans to that feedback to implement,” Leondakis says. “As a result, some of the best ideas, some of the most iconic ideas at Kimpton have come from our employees.”
One example is Kimpton’s well-known goldfish program, where its hotels deliver live goldfish to the hotel rooms to keep guests company while they are traveling. The idea started with one employee at one hotel but was developed into a brand program.
Reinforce your values
Because what separates the Kimpton brand from its competitors is its customer experience and the emotional connection the company’s guests have with its employees, reinforcing operational excellence has always been a key part of the company’s business strategy.
“We could, like a lot of other hotel companies, compete on geographic distribution, but that would require significantly more hotels and much more markets than we have today. It would take a long time, just to compete on, ‘We have a hotel in every primary, secondary and tertiary market in America,’” Leondakis says. “Rather than compete on, ‘We have a hotel where you go,’ we’re competing on operational excellence as a point of differentiation. And that operational excellence is really defined as the way every Kimpton employee interacts with every Kimpton guest, creating an emotional connection. We create a loyal following that way.”
In lean times or times of growth, achieving operational excellence always begins with the hiring process and always bringing on people whose values and personality align with your company’s core values. These are the employees who will strive hardest to carry out your vision, because they truly care about its success.
“To see how a potential employee might treat another potential employee is a very good indicator of how they would treat a guest; it’s just how they react and respond to other human beings,” Leondakis says.
“I’ve never believed in the idea that, ‘OK, we’re on stage, everybody get on stage.’ You hire genuinely kind people and you inspire them to be themselves and be their best selves. I’ve never supported the idea of, ‘OK it’s 5 o’clock. The shift’s starting. Doors are open. Everybody put your smiles on.’ It’s a more authentic and genuine approach hiring people who are genuinely caring people, not people who are great actors.”
She says you can always train employees to execute job processes and set targets for continuous improvement, but you can’t train them to have self-initiative, like the bellman that drove the Kimpton guests through the snowstorm or the Kimpton employee who stayed up until 1 a.m. to help a guest deep condition her hair after she burned it with a blow-dryer.
By hiring employees who are committed to Kimpton’s core values, then providing them with stress release, a clear vision, priorities and increased communication, the company has helped employees continue to achieve success and create Kimpton moments for guests every day.
“It’s an opportunity to pay it forward,” Leondakis says. “We believe in treating our employees as though they are guests. The idea is, if we treat our employees as individuals and we take care of them in a personal way, in an individual way, and see them as our customer, they will go the extra mile to take care of our paying guests.”
HOW TO REACH: Kimpton Hotel & Restaurant Group LLC, (800) 546-7866 or www.kimptonhotels.com
The Leondakis File
President and COO
Kimpton Hotel & Restaurant Group LLC
Born: Springfield, Mass.
Education: University of Massachusetts, Amherst, Mass.
What was your first job?
Working the fry station at a Hardee’s when I was 15
What do you think are the keys to building a successful culture for employees?
It has to be unanimous. Every individual at every level has to be committed to this culture and has to be in agreement about what the tenets of the culture are and how they are brought alive. Every individual has to see themselves as an ambassador of that culture. It cannot be viewed as human resources job.
Tom Swidarski may not be a secret service agent, a bouncer at a night club or a front desk manager at a high-profile office building, but as president and CEO of Diebold Inc., his job’s focus is similar to all three — security.
On one hand, Swidarski’s job is to supply security solutions for his customers, which include financial institutions, government operations and commercial businesses across 600 worldwide locations. However, in addition to handling security for customers, Swidarski is also responsible for ensuring the security of Diebold’s 150-year-old legacy, a part of his job that presents its very own set of challenges.
When Swidarski became president of Diebold in 2005, he was tasked with the weighty challenge of eliminating $100 million of cost out of the company over three years — a program dubbed the “SmartBusiness 100.”
“We weren’t sure exactly how we were going to do that,” he says. “But we said, ‘Hey, Charles Diebold probably had ‘SmartBusiness 1.’ He got the first dollar out. It’s our job to get the $100 million.’”
Building a profitable business is a matter of controlling costs as much as it is generating revenue, and amid the global economic slump, Diebold’s SmartBusiness cost-savings initiatives have been a key part of increasing Diebold’s profitability and securing its position in the competitive global landscape.
Since 2005, Swidarski has not only led Diebold to achieve the SmartBusiness 100; but in the last year, the company has already launched SmartBusiness 300, and begun its third $100 million tranche of cost reduction. The company’s shares rose 18 percent last year, with fourth quarter revenue increasing nine percent to $791 million.
“Hopefully, the economy turns and things move in the right direction, but in all of our businesses, you can control the cost side of the equation,” Swidarski says. “You can’t control the revenue side — so it’s making sure that we have a good understanding of the cost side.”
Get the info
One way to better understand the cost of your business is to utilize your information-gathering and research tools. By having focused research to use in your company’s strategic planning, you’ll know where resources are most needed for your business to become faster, more nimble and more cost-effective, whether that’s in setting up new operations or proactively adjusting value points with spending to meet changing customer needs.
Before you decide how to allocate your company’s physical and financial resources, you have to make sure information about your customers, industry, competitors and so on, is collected and evaluated similarly throughout your organization. In Diebold’s case, Swidarski added paperwork for all of his global market managers to analyze industry activity in detail.
“What we tried to put in place was a similar process that we could use across the board in terms of the evaluation,” he says. “Then we put it incumbent upon each of the country managers to fill out the documents and forms. At first, people looked at is as, ‘I’m filling out documents and forms.’… Now they understand that to get the R&D effort that we need for a place like Thailand, we need to know the specifics and granularity of the competitive landscape there and how that differs from Brazil, because they are different competitors. To get a group of diverse people across 90 countries focused on the priorities, everybody has to understand the endpoint. So collecting that information became very important.”
Implementing new information-gathering procedures in your business is sometimes necessary to ensure you have all the knowledge needed to make financial decisions.
For example, Swidarski recognized that Diebold could better plan for global operations by moving its $70 million per year R&D — previously based in the United States — out to its top revenue-generating countries and develop micro-market plans to map out each market’s strategy.
“In those micro-market plans, we know exactly what gaps we have, what technology from a software-hardware service standpoint and what we need to do to create competitive advantage,” Swidarski says. “Those countries — they drive about 80 percent of our total revenue — so [there is] very focused effort there.”
Having focused research for specific markets also helps Diebold identify which markets need new capabilities and which could be served by the company’s existing technology.
“Other countries may fall out that are going to use the technology we develop for a China or a Brazil or a United States or a France,” Swidarski says. “So though we may not develop something specific for a smaller country in Europe, we still have the technology that we developed that may be specialized for France that we can use there. That helps us hone our resources not only on the front end but on the back end.”
Look at the big picture
Another way businesses can learn to be more cost-effective is by changing the way they analyze their operations. There are many different parties and steps involved in operational processes such as product design or engineering, so it’s difficult to gauge how cutting costs in one area might affect another. To understand where costs can be streamlined, you need to look at entire processes as whole, complete puzzles instead of as their separate pieces.
“You may make a module less expensive, but then you have to service it out in the field,” Swidarski says. “So for us, it’s looking at all aspects of it and the intelligence you want to build in the module that may give you savings on the backend. That is even more important than saving $2 on the front end if you are going to save $5 or $10 on the backend by having a sensor that helps you have reduced inventory.
“Probably some of our biggest innovations come from our treasury. Our day sales outstanding in the United States have dropped from 60 and 75 days to about 30 days because of process improvements with less people. That’s really where we get the biggest gain. How do we handle everyday processes and look at them wholistically, rather than ‘my little piece of it.’ When you look at an order-to-cash process, where are the areas of ways you call pull out of that? And through that, you get cost savings, as well. We need to do that based on the competitive environment that we are in.”
By looking at the big picture, you’ll have a better sense of how different parts of a process interact and affect one other and, therefore, recognizing how to trim, alter or consolidate costs in one or more areas without sacrificing quality in others.
“There’s more to come out from a process-improvement standpoint than there is from working with suppliers and saying, ‘I want that for 3 cents versus 4 cents,’” Swidarski says. “That gets you a little bit. But it doesn’t change the process.
“It’s not only the design aspect of what’s needed in the marketplace; it’s what are the other aspects of what that device is doing and the connective tissue of it as to what the total cost is and how we attack that wholistically. So we’ve brought our engineers from our service organizations in earlier. We brought manufacturing into design. We brought software in and where we use to test serially, we now test entire pieces wholistically. It really has made a tremendous difference.”
Recognize your value points
You can’t have a good understanding of cost if your strategic analysis doesn’t take into account how the value points that your customers are choosing constantly change. So lastly, to understand the cost side of your business, you need to follow your value points.
The real value a business brings to its customers is shaped and changed based on the competitive landscape. Swidarski sees that more and more of the value Diebold provides customers today is in the service side of its products such as ATMs; so he’s led Diebold’s transition into services-focused organization rather than a manufacturing one.
“The way I view it is: If someone defines you as a manufacturer, you may or may not be,” Swidarski says. “That may be a little part of what your value is. … In our case, if you use a simple device like an ATM, the knowledge of how that needs to be incorporated within an environment is much more important — the software associated with that, the intelligence you can put on that to make it more valuable, the ability to self-heal a remote device. So as we look at it, manufacturing may be a phase that 10 or 15 years down the road, doesn’t have to be something that we absolutely do. Now, today, we do that, but I wanted to make sure that the value points, that the bank that my customer’s choosing, I recognize what those value points are.
“There’s 80 percent that’s spent on managing an ATM that has nothing to do with how much that hardware costs. It’s that 80 percent that has the services that have the greatest value that we spend a lot of time focusing on.”
The point is, you don’t want to define your value it in a way that may not be relevant for your customers changing needs and interests.
“When I met with the first CEO from one of the biggest banks in India, he said to me, ‘You know, your ATM costs four times what it costs for me to buy a car,’ and I said, ‘Well, my ATM’s about 40 times more reliable than your car,’” Swidarski says. “The point is, as you deal with different folks from a different perspective, there are different issues that are the most important issues in their decision process. Having something over-engineered and developed from very sophisticated U.S. folks may not make it to the marketplace because the price points might be wrong.”
When you better understand the cost of doing business, you don’t just learn what strategies are needed to save money and be more efficient. You also learn you can focus your financial resources where they can have the most impact, so as your customers value points change, your business can adapt and grow to meet them.
“It’s in viewing the value chain and how you fit in,” Swidarski says. “Not limiting our thought process in that regard has allowed us to move the value points and allows us to generate over half our revenues from recurring revenue.”
“Now we are about managing high value of networks, creating and managing complex networks. That’s really what we do. It happens to be an ATM today. It happens to be security devices. But in the future it can be anything.”
How to reach: Diebold Inc., (330) 490-4000 or www.diebold.com
The Swidarski File
President and CEO
Education: Bachelor’s degree in marketing and management at the University of Dayton; master’s degree in business management from Cleveland State University
What is a typical week in the life of Tom Swidarski when you are not in the office?
Quite a bit of my time — maybe 40 or 50 percent — is spent traveling. And a lot of that is international. That’s really for me to get in front of customers as well as our associates and understand and make sure that we’re meeting customer needs and where we have holes or gaps and making sure that the information we’re getting in. It’s important for customers, especially larger customers that are maybe spending $100 million or $150 million with you, that they see the CEO and that he’s committed to it. So China is important in that regard. Brazil is important in that regard. For me, it’s also important to not only go see them but also to view our operations, to sit with our top team as well as always spend time with our folks internally.
How do you get employees to buy in to your vision?
If you can demonstrate in the deepest, darkest hours the humanity of making tough calls and doing it appropriately, that really helps people buy in to the vision of what you are trying to accomplish, regardless of how good you are at communicating. Regardless of how good your vision is and how fancy it is, it comes down to do people trust you. For me, that’s what it’s about.
Richard Howe wouldn’t call himself a “turnaround guy,” but based on his track record of turning around struggling companies, some of his peers might.
“I’m not a ‘turnaround guy’ just because I’ve done three turnarounds,” Howe says. “You get kind of branded that way, but I’m not really the turnaround guy. Really, I’m a business grower.”
As president and CEO of Inuvo Inc., Howe has already helped reposition the $50 million company to generate fourth quarter revenues 46 percent higher than the same quarter of 2009, which was also the year he joined Inuvo. Part of his strategy to accomplish this was improving Inuvo’s organizational structure to eliminate inefficiency and better carry out the company’s vision.
“I’ve run about a dozen businesses and three of them were turnarounds, and they all have similar characteristic traits to them,” Howe says. “One specifically, is the company has been excessive in its spending of money, so that needs to be curtailed. The costs need to get under control. Two, the team, the people around you often need to be changed, retooled and improved.”
One of the biggest expenses most companies have is in employee head count.
“I believe in team, so I spend a lot of time making sure we have the right people in the right roles in the company,” Howe says.
“You go through an exercise of evaluating staff. We created a system and the system had variables in it, different characteristic traits for what constitutes a great employee and what constitutes a not-so-great employee, and we rank ordered them. We took a look and said, ‘Going forward, what are the parts of the company that we’re going to focus on? From the collection of resources that we have and scores that we’ve gotten from everybody, who’s best to help us achieve the vision of the company?’”
Rather than set a specific head count number of employees to keep or cut, you should simply look at ways to structure the leadership more effectively. Sometimes that can involve small changes in personnel, but in other cases — at Inuvo it was also a matter of consolidating subsidiary businesses — it can mean creating an entirely new organizational structure and changing out entire management teams and boards.
While making personnel decisions is always difficult, reassessing your leadership team is a key part of getting your company back to operating efficiently and profitably on a cash-flow basis. It also demonstrates to existing employees that you’re giving them the leadership they need to achieve growth.
“The whole company was re-energized and re-motivated when they finally realized that we actually did have a senior leadership team at the company that was committed to the success of the company, one,” Howe says. “Two, they felt like they were a part of something that was going to be very successful and grow.”
Howe saw that personnel headcount was the biggest expense base for Inuvo and a key area to improve cost efficiency; yet, before making these decisions it’s important to look at all your areas of business to examine cost saving opportunities.
“Every single expense line in the company we just systematically went down through them and said ‘Why are we spending this money? Why are we spending this money?’ And, is it giving us a return or not?’” Howe says.
Most important, once you have a plan to reduce expenses, you need to enact it quickly.
“When you first do a turnaround, you’ve never done one and you get in there and you tend to over analyze the problems,” Howe says. “It causes you to take too much time to make the kinds of expense cuts you need to make to get the operation under control.”
How to reach: Inuvo Inc., (727) 324-0211 or www.inuvo.com
There will always be unforeseeable challenges and problems that arise to threaten a company’s growth, but according to Rich Howe, the most successful business people are those who undertake such challenges with strong intent and determination.
“It’s one of the single, greatest characteristic traits that I’ve found in successful business people; it’s the sense of urgency,” says Howe, the president and CEO of Inuvo. “It’s waking up and realizing that today is the best day to call someone or do something or get something done. … I’ve just found that those people tend to be able to get the impossible accomplished.”
Even when things aren’t going their way, these people won’t let themselves be steered off course.
“In business, you are going to encounter rough periods,” Howe says. “It’s just going to happen. It seems like some individuals have the ability to get punched in the face and get back up and keep going, and others seem to not be able to deal with those challenges, and they end up failing as a result. The most important characteristic trait of any leader: Can you take a punch and get back up and keep fighting? And if you can, then there’s a good chance that you are going to be successful, because it’s the getting back up part that’s the key.”
Before coming to the United States to oversee Grupo Eulen’s international division in Miami, Luis Rodriguez had worked for the Spanish outsourcing company for 10 years in various divisions at its Spain, Dominican Republic and Chile offices. During that time, a question he repeatedly asked employees that worked for him was, “Do you think you will retire still working with Eulen?”
In Chile, where Rodriguez spent four years prior to becoming CEO of Eulen America, he estimates that 95 percent of his employees answered yes to that question.
“We always look for that, that people are remaining with us for a long period of time, because that’s being part of the growth of a company and being part of a company,” Rodriguez says.
After moving to the United States two years ago to head up Eulen America, Grupo Eulen’s newly acquired aviation services subsidiary, Rodriguez noticed that people in the United States changed jobs much more often than in other countries, moving from one company to another every four or five years instead of every 10 or 20.
As a part of a $2.4 billion company, Eulen America has the capital resources to expand and grow, but to grow successfully, it takes personnel resources, as well — employees who are willing to commit to the Eulen vision and communicate it to customers. To grow his company in new markets, Rodriguez had to show his people the value of being a long-term employee at Eulen (pronounced A-lin).
Address employee needs
Employees won’t follow leadership that they don’t feel can lead them effectively and, therefore, they can’t trust. As a CEO who oversees nearly 1,600 employees in Miami-Dade County alone, Rodriguez is unable to meet with every employee and build this trust through personal and daily interactions. However, there are other ways to reinforce trust through the way you manage your business and the way to handle the areas that affect employees most directly.
One is payroll. To earn employee trust, Rodriguez says you have to pay on time and you have to pay correctly — no exceptions. When it comes to payroll, just one bad experience can tarnish employees’ trust in its leadership. Therefore, you also have to have accountability in payroll to make sure the systems are always working and employee concerns about payment are addressed immediately and effectively.
“Whenever somebody has their doubts on their monthly check or weekly check, whenever they have to sit down with a supervisor in order to review overtime, that it has been correctly paid or the number of hours they have worked or the health care benefits that they have and so on, … you have to have people that are capable of explaining those things to the employees,” Rodriguez says. “That has definitely been the reinforcement that we have done.”
In addition to monitoring efficiency in payroll, Rodriguez works continuously to find ways to improve employee benefits. If you want to keep your top talent from moving to competitors, giving them lower costs on insurance compared to other companies in the industry is often more valuable than giving them pay raises.
“It’s a matter of motivation through incentives, and not so much in salary but in benefits,” Rodriguez says. “That is what is going to improve fidelity of them remaining with us.”
Offering competitive benefits and paying employees on time shows them that your company invests in their success and hard work. Responding quickly to employee concerns in areas such as payroll is an important part of keeping a business efficient. Additionally, it’s how you show employees that they can trust leadership to fulfill their needs.
Rodriguez makes sure that that he and his direct reports have effective ways to respond quickly to any employee issue, whether it concerns a client relationship, a missing uniform or an error in payroll. In a company with 35,000 employees, mistakes will happen and problems will arise, but implementing the fastest response possible shows employees you support them and recognize their individual problems as the company’s problems.
“Trying to have a quick response to them is the key to have them happy with us and working with us and feeling the spark of a team,” Rodriguez says. “At the end of the day, the ones that are representing you as a company are your employees because they are in the houses of our clients. Obviously, if they are going to have problems, they are going to transmit those to our clients. The best recipe is to be aware of all the things going on with your employees. That is the main way of fixing the problems.”
Whether you are managing 35 people or 35,000, you can’t handle the situations and issues being faced by all your employees at any given moment. It’s not realistic. However, when there is an opportunity to help an employee deal with a problem, as CEO, being the first to step up and take control of the situation shows people who work for you that you are still personally driven to make your company successful.
“Whenever someone has trouble doing a spreadsheet or typing a letter or going to the airport and having to manage the baggage and the belt loader, I’m going to do it as the first one in the company,” Rodriguez says.
“Your team has to believe, has to have the impression, that you are the one who is the first one to pull up your pants and get into the mud and to help anyone with a contract. That’s what I have always been doing and I’m going to continue to do that.”
As a leader, demonstrating to employees that you are willing to put in the hard work to help them be successful also shows them that you don’t just see them as people you manage but as colleagues in your business.
“As long as you have the people really joining you and feeling themselves as part of a team, they are going to communicate that to other people and potential clients,” Rodriquez says.
Before growing an office in a new market, Rodriguez always begins by looking at the local community and seeing how to adapt Eulen’s culture in a way that drives business and keeps employees loyal.
“One of things we usually do is to learn first about the culture of a country,” Rodriguez says. “Sometimes multinational companies don’t have a set strategy to do that because they are so big. You have to embrace the diversity that comes with being a global company.”
By listening to the local people that make up your business’s employees and customers, you can understand the keys and the barriers to succeeding in an area long term.
“We are not magicians, but the best way to improve a service is to listen to the employees who are the ones who really know what the day-to-day problems are,” Rodriguez says. “Sometimes the multinational companies do not have the ability to do that. They are so big that they lose the focus of getting to the little problems and the day-to-day business, and at the end of the day, those are the ones who see death in the growth of a company.
“Being involved with the communities offers you an opportunity of how to solve those problems, where you can search for labor or how to deal with local issues that appear of how to solve problems that maybe somebody from the community knows better than you, that coming from outside they are going to tell you how to solve them.”
Every city and its people are different, and business leaders need to study those differences in order to find the best ways to motivate and lead employees in diverse areas. By learning the cultural features that distinguish a community, you have a better understanding of what matters to the people you hire and can then adapt employee recognition programs, operations, training and incentives accordingly to fit that.
“Incentives programs with employees work 100 percent, but the programs have to take into account the people who you are working with,” Rodriguez says. “When I was in the Dominican Republic, the incentive program was completely different from what we are doing now over here or what we used to do over in Chile or Colombia or Peru.”
Keep jobs secure
Having effective employee programs is just one part of keeping employees happy at a company long term. If you are a large company with offices all over the world, your employees need to have assurance that their jobs are secure and won’t be outsourced to nonlocal employees to save the company money later. That is why Eulen almost exclusively hires people who are local to the areas where it operates.
“We are trying to hire people and to transmit to them that, within this company, what they can be sure of is that there is going to be stability and permanence in the company — that they have a future project with us as long as we are over here to grow,” Rodriguez says.
“At the end of the day, this is a company (that) is going to be built with local people as we have been doing.”
While Eulen America started out only providing services for the aviation industry, under Rodriguez’s leadership, it has added janitorial, security, landscaping, maintenance and auxiliary divisions, as well. In the last two years, Eulen’s opportunities to get new contracts has continued to increase, opening up even more avenues for new business.
Taking into account the worldwide lack of stability in employment, it’s very important to communicate with employees about new opportunities and growth at your company. For one, seeing the growth potential of their company builds their confidence in the organization’s success, but you also want to show employees where there are opportunities to succeed as individuals and stay with the company throughout their careers.
“Whenever we hire people, we talk and we speak with them about our company and that we have a presence in over 11 countries together with Spain,” Rodriguez. “We can always have a plan for people to not only remain on the place where they are hired at the beginning, but they can relocate from one place to another whenever they improve their skills within our company, and then move to another place where we need them.”
By showing people your vision for their personal growth within a company, you give them more reason to stick around. As the company grows, Rodriguez makes sure to keeps all management and employees in the know about the company’s strategies for and plans in adding new services, clients, jobs or offices. In doing so, he continues to build loyalty among employees who want to be part of that vision.
“In all the places that we work, you can go and you can feel that the people are proud of wearing a uniform from Eulen,” Rodriguez says.
“You just try to get people who are really going to feel like part of the team so that they have faith on the projects and are willing to remain in the company a long time.”
How to reach: Eulen America, (305) 269-2714 or www.eulenamerica.us
The Rodriguez File
Born: Madrid, Spain
Education: I went to an English school in Madrid 1974-1987: Kensington School.
I went to University in Madrid — Universidad Politecnica de Madrid and studied engineering.
What was your first job?
My first formal employment was as technical engineering for solar systems designing. Prior to that, I worked as tutor for math, physics, and even during summer times, I worked in Madrid unloading trucks.
What are the keys to successful leadership?
Transparency. Honesty with your employees and on a day-to-day basis to communicate as much as you can.
When partners Steve Goodman and Craig Swill purchased Welcome Wagon International, Inc. in 2009, the business was still the world’s largest welcoming service for new homeowners at 82 years old. They decided to keep the company updated and relevant moving forward by refocusing the company completely on sales and marketing. The problem was, the company’s corporate culture was very negative and communication between the corporate and sales sides of the company was poor.
“You kind of had a sales versus corporate clash going on within the organization,” says Swill, the company’s CEO.
The corporate side cared more about technology and was insensitive to many sales-oriented issues. The sales employees felt cut off from many changes at the corporate level, with some of them working as individuals in remote parts of the country.
“When people do not have communication and are out in the field by themselves, they kind of get this paranoia. … So you have a lot of missed communication when there is lack of any communication,” Swill says.
To get employees re-engaged in the vision for Welcome Wagon, especially on the sales side, Swill and Goodman needed to reopen some lines of communication that hadn’t been open for decades.
Together, they went on a “world tour,” visiting every company region to give presentations for the sales teams and to discuss their vision and goals for the first 12 months of their leadership transition. Most of the people they talked to had never met anyone from the corporate office, much less the heads of the company.
“They were very touched that we felt enough to go out and really learn about their challenges in selling and about their challenges in the economy,” says Goodman, Welcome Wagon’s president.
“We asked them questions to learn what they were looking for within the organization. From the very beginning, we opened lines of communication between the corporate office and our field organization.”
They implemented weekly meetings to provide sales training for corporate employees, so they could better understand the experiences of their sales counterparts. On the sales side, they offered representatives and managers training opportunities to learn new technology and skill sets, giving them the resources needed to be most effective. Now, sales officers communicate weekly and daily with field officers to reinforce and align their goals.
After their one-year anniversary in 2010, Goodman and Swill did another world tour to discuss progress and go over their five-year strategic plan. Their reception this time around was a lot different. They’d grown sales every month, and in less than a year, they made Welcome Wagon a debt-free company.
“We started receiving hugs. Literally, people wanted to come and hug us,” Swill says… “We were able to check off bullet point by bullet point, page after page, all of the things we promised them, and we hit everything that we promised them. We were able to gain their trust, and that is huge.”
Today, Swill and Goodman continue to make themselves very accessible to the organization’s employees by talking on the phone to address sales problems, questions or issues, and always looking for ways to support the sales team with the resources they need to succeed.
“Some of the most negative people that I could give examples of a year ago were so positive this year and saying thank you for taking this organization and totally revamping it, turning it around, giving us products and giving us a company that we can now go out and truly be proud of in the way that we sell it every day,” Goodman says.
How to reach: Welcome Wagon, www.welcomewagon.com
Law of limits
According to Steve Goodman, successful strategic planning isn’t just about winning people over to your vision. That is one part of it, and so is communicating that vision effectively. But another key part of executing a strategic plan is recognizing and understanding other people’s limitations.
“You have to always understand, that just because we can get something done and we see things going from A to Z, that doesn’t mean that all of the people that you lead see things in the same way,” Goodman says. “Some people are really pigeonholed in what they do 100 percent; they don’t understand how to tie things together at different levels within the organization.”
As a business owner, CEO or entrepreneur who is used to fast-paced change and goal-setting, you may be tempted to push hard and move fast in carrying out your plan. However, leading people isn’t about pushing people in the direction you want them to go, it’s about guiding them, showing them you are aware of their capabilities, and giving them the resources needed to get there.
“It’s the ability to get people to see things in a way that makes sense as they move forward and to help them further their careers,” Goodman says.“You have to see people’s strengths and weaknesses to see how to move them.”
According to Jane Mason, the founder, president and CEO of software provider eMason Inc., being the leader of a fast-growth company means always having to re-evaluate your strengths and weaknesses, both in your business and in yourself.
“You have to leverage every ounce of leadership and management skills that you have to grow the company — from where we were to here, and from here to the next level,” Mason says.
As a pioneer in offering Web-based business automation services, eMason has achieved 1,702 percent growth over the past three years as well as doubled its work force to 100 employees in just 12 months.
Smart Business spoke with Mason about her strategy for adapting her leadership style to manage her company’s rapid growth and expand the $10.2 million business.
Lead though behavior. My leadership style is very hands on, but I also lead through motivation and by setting an example. From a good leadership perspective, having a clear vision that can be communicated regularly is very important, and I think the most important part is your behavior; leading by example. Our vision includes the words kindness and respect, and that permeates my leadership style. My style is more motivation than it is autocratic. The things that I’ve seen that don’t work are the aggressive, autocratic behaviors and not living up to what you say. I’m very clear and I’m very tuned into following up on what I’ve said I’m going to do, corporate strategywise and with people.
Set your priorities. As we’re growing, I’m modifying my behavior in how I interact with people. I’ve had to step back, and I can’t be involved in all of the day-to-day operational things, because that’s not healthy. That’s not good for our company. I have to keep my eye on the market, on the strategy and on the client delivery. Because there are so many things coming at us personally and through the business, I’ve learned to chunk it down into three pieces and try and accomplish those things each day.
Delegate tasks. Personally, instead of making something happen — I need to make this business development report — I go to the person whose job or role that is to create a business development report. I’ve moved myself away from the day-to-day operations through the hiring of consultants and other high-level, skilled people. I’m letting them do what they do best. It’s a personal struggle in some areas because it’s hard to let go, but through good hiring practices and motivating through kindness, I think we create a level of trust where people are holding themselves accountable and delivering.
Retool communication. The original group of people still meets with me personally, and I meet with the management group, but there are a lot of people now that work here that I don’t know and don’t really communicate with other than my corporate messaging. I do internal videos where I reach out to the company and tell them what are we doing, what are the successes or we’re having some workshops internally, so sign up. I keep them in tune. It’s kind of like an internal YouTube. It enables them to see me if they don’t see me because I travel quite a bit and I’m on a different side of the building now.
Hire people with initiative. We’re an entrepreneurial company at heart, so we want the people that come here to be the best that they can be and we want them to understand that we need them to help us grow and add structure to what we’re doing. Self-initiative and self-responsibility is really important for us. We’re looking for people that can say, ‘I have the skill set, but I’m also honest enough to know that I might not be able to do this job,’ or have the self-responsibility to say, ‘I don’t know how to do that, but I’m going to learn how to do it.’
Focus on your vision. Motivation has a lot to do with the passion we have for our product and what we’re doing. I think employees are motivated by the fact that they are responsible. They can see they are making a difference, and we talk about how they make a difference and how we as a company are making a difference; I think that jazzes people.
HOW TO REACH: eMason Inc., (727) 507- 3440 or www.emason.biz.
After graduating from Amherst College, Brad Stroh went to work for a venture capital firm. Then he went to work for another one, and then another. Through his experiences as an investor, Stroh saw firsthand the struggles of financial startups and entrepreneurial companies. By the time Stroh and fellow Stanford MBA Andrew Housser co-founded Bills.com in 2005, he well understood the challenges and risks associated with building a new business from the ground up.
In 2002, Stroh and Housser had successfully co-founded Freedom Financial Network as a platform for direct-to-consumer financial services. In growing Freedom Financial, the partners realized that what was really missing in the finance industry was consumer financial education. The idea evolved into a business plan for Bills.com LLC, an online portal of free resources and tools to help consumers with money management.
With Stroh as the company’s CEO, and Housser as the company’s only other employee, the two combined their entrepreneurial experiences to launch Bills.com using a scrappy, customer-focused business model.
“Challenge No. 1 was bootstrapping a business and figuring out a way to create value every single day for your clients,” Stroh says. “The reality is, we ended up picking a really successful industry, and we executed really well on our plan; our business became extremely successful. That led to a second major challenge.”
In five years, Stroh and Housser have grown their two-person company into a full-blown $106 million enterprise with more than 600 employees. Though they overcame the initial challenges of being under-resourced, undercapitalized and bootstrapped, adjusting a business model to account for fast-paced success and subsequent growth presents obstacles of its own.
“The things that made us great, which were that commitment to executing, being scrappy, really valuing your clients, having a very unique culture and appreciation of all of your employees — how do you maintain entrepreneurial vision when you are hundreds and hundreds of employees and you’re not 10?” Stroh says.
You do it by making sure every employee contributes to a company culture of entrepreneurism, innovation and competitiveness. Stroh now says his most important job is hiring and building a culture of entrepreneurism.
Find the right people
At first, Bills.com had to operate with a very restricted budget, resources and staff. When growing a company from scratch, you hire entrepreneurial people to get it off the ground and drive growth. But after your business is established, your people have to maintain that momentum.
As the former captain of his college lacrosse team, Stroh builds his team at Bills.com by hiring people with the same athletic spirit of teamwork and competitiveness to drive continuous improvement.
“They want to compete,” he says. “They don’t want to work at IBM. Not that there’s anything wrong with that, but they want to be a part of something that’s growing and challenges them.”
That means Stroh looks for people who don’t just care about making money but who really care about helping people solve problems. He’s found that employee referrals are the best way to find people who can thrive in the Bills.com culture.
“The vast majority of our new hires are referred by existing employees,” Stroh says. “That’s always the best place for us to get new, great hires, because it’s someone who embraces our culture, values it, and they’ve worked with other people where they say, ‘This individual would be a great fit here.’”
Get the buy in
Continuing to hire entrepreneurial-minded employees ensures Bills.com has the right team in place to grow successfully. But hiring is just one part of building an entrepreneurial culture. When building any team, you have to let your team members know what they are signing up for.
“Hiring is No. 1,” Stroh says. “No. 2 is training, getting people to embrace your culture from week one. The people that are joining you — they haven’t been along for the several-year ride that we have.
“You get people to self-select in or self-select out of your culture, and you want that to be a very conscious decision. You don’t want hiring to be mindless on either side, the new employee side or the company side.”
Today, Stroh visits the last session of every training class to share stories and history about the company and to talk to new employees about his vision for the future of Bills.com and their role in contributing to its success.
“The last message that I’ll leave with them is, ‘You guys in this room are hires 599 and 600 and 601. I’m standing in front of you as employee No. 1. … You guys, if you’re number 600 and 601, if you’re not smarter than us, better than us, care more than us, and don’t maintain and perpetuate that culture of entrepreneurism, which is looking for things to improve, we’re not getting better every day,’” Stroh says.
To get employees to buy in to a vision from the get-go, you have to help them really understand their role in its execution. You have to reinforce the importance of employees being entrepreneurial in their own right, whether it’s looking for things to make better or places where they can break things and fix them.
“The worst thing in a business is to have a bunch of employees with uncertainty about their role, the future of the company or about what they are supposed to be doing,” Stroh says. “It’s OK for the CEO to have ambiguity, but you have to be communicating certainty about where you are going.”
Align your goals
As your company’s work force grows, some of the intimacy that comes with having a tight-knit team of employees can get lost. In order to keep employees engaged in your vision, you have to find new ways to show them that you really care about them as individuals.
In the first months of Bills.com, Stroh was having pizza on the floor weekly with his handful of employees, using the time to talk about process changes, company updates, growth challenges or even just to chat about life and family. He was also closely connected to every one of the company’s clients and potential customers.
“As a bootstrap business, you don’t have layers and layers of management between you and the client,” Stroh says. “You, as the founder of the organization, are literally on the phone with your clients, on the phone with consumers, figuring out what do they value and how you can create a profitable business around that.”
Now, Bills.com has three corporate offices and 600 employees, and Stroh has had to find new ways to maintain effective communication and stay in touch with employee needs. Stroh still calls all his employees on their birthdays to thank them personally for their contributions and chat about their personal lives and individual challenges. He also continues to be very involved in talking to customers, finding out about their pain points, and seeking out opportunities to stay engaged in all levels of the business.
“Being a relatively young CEO, I’m really hands-on,” Stroh says. “I love to this day talking to clients. I love being in an interview and interviewing new employees. I love standing up in front of our employees and sharing with them our vision and values.”
Instead of pizza parties on the floor, Stroh now visits all three corporate offices monthly to have brown-bag lunches with anywhere from 25 to 250 employees, During these lunches, he talks about the company’s goals and challenges, answers employee questions and talks to his people about what matters to them.
The company also holds regular focus groups with employees, giving them opportunities to share insights and experiences. Stroh frequently sits in on the focus groups to moderate or prepares discussion topics to get feedback on specific issues, such as industry trends or customer needs.
“It goes back to the roots of our business,” he says. “That’s what connects me with the soul of our business, talking to the front-end clients, talking to our employees who are most directly on the front line.”
Even with brown-bag lunches and focus groups, it can be tough to keep employees motivated to execute your vision when the big picture keeps getting bigger. As Bills.com has expanded across offices, Stroh has made adjustments to better align his employees companywide on strategy and goals.
In 2007, he introduced “The Founder’s Corner,” an employee intranet similar to an internal Twitter feed. Stroh posts updates on The Founder’s Corner constantly, communicating information about the company’s ongoing challenges, news, and short- and long-term successes.
“I’m a pretty vocal person, and the person right outside my door knows everything that I’m working on, and I know everything that they are working on, but what about the person who is in our Phoenix office and I see once a month?” Stroh says. “Maybe they don’t have the opportunity to come to a brown-bag lunch. The intranet was just a way to pump out all of key strategic initiatives that we’re working on, every single week.”
To make sure his managers also continually re-evaluate their individual goals and growth strategies, Stroh asks his vice presidents and their directors to e-mail their top three strategic objectives at the beginning of every week, and e-mail progress on those goals at the week’s end.
By having management constantly review the challenges facing the company, Stroh ensures that urgent day-to-day issues don’t interfere with achieving Bills.com’s long-term vision. It also keeps them thinking about new ways to add value continuously as individual entrepreneurs.
“When you are growing as quickly as we are, there’s one universal truth, which is everything is constantly changing,” Stroh says. “You are constantly reinventing your CRM systems, your phone systems, your AP process and your accounting systems. It’s a constant thing. You have to get comfortable dealing with change and have a culture that embraces change.”
Today, Bills.com ranks as one of the fastest-growing privately held companies in Northern California. It has appeared on Entrepreneur magazine's 2008 Hot 100 and has ranked on Inc. 500’s list of fastest-growing companies for the last three years. Promoting a culture of entrepreneurism long-term means you are always seeking out new opportunities to better serve customers. Stroh never stops looking for new ways to add value for customers. He asks his employees to do the same.
“We are constantly evaluating new ideas,” Stroh says. “It’s part of our core values, to constantly innovate. That’s both in new products, new offerings and new opportunities in what we do.
“In a perfect world for us, we’re taking hundreds or even thousands of small risks every day, but we try to limit the number of ‘bet-the-farm’ risks to a very small set.”
With lots of calculated risk taking, the company encourages employees to be competitive and innovative, without committing too many resources to an idea that may fall flat.
“Part of the reason we like to test small and let Darwinism work its forces is that with limited resources committed, you don’t have to keep sprinting if you are running in the wrong direction. You can change course quickly.”
With new product committees and new business opportunity meetings, Stroh gives employees many outlets to be creative, take risks and test new ideas. However, the chief way he gets employees to drive Bills.com’s entrepreneurial vision is still by showing them the value of that vision for the company and its clients.
“When people say I found something that I think we can do better, you don’t blow it off,” Stroh says. “You fix it immediately, and you send a message to the whole company of whose idea was it and what value that created for the business. Then you perpetuate that culture of entrepreneurism.
“We celebrate the success of our consumer clients with testimonials we post all over the office. Consumer successes —when we change their lives we make that very visible in our company so it never turns into a business that people aren’t tangibly connected with the consumers that we are helping.”
HOW TO REACH: Bills.com LLC, www.bills.com
Photo by Anthony Garcia
The Stroh File
Co-founder and CEO
Education: Bachelor’s degree from Amherst College; MBA from Stanford University
What was your first job?
I was a caddy. Until you turned 16 in my town, you couldn’t get a paycheck. So I caddied. Then, I had my own lawn mower business. I also scooped ice cream at the age of 16.
What sports did you play growing up?
I played everything, but the sport I excelled at was lacrosse. I went to Amherst College in Massachusetts and I was the captain of my lacrosse team. I would say I learned as much about leading a company as captain of lacrosse team as I did in two years of business school at Stanford. I also played basketball, football and soccer. In high school, I played three sports.
What do you do to regroup on a tough day?
I like to write creatively. I actually wrote a novel called ‘The Dharma King’… about the search for the Panchen Lama, a Tibetan Lama. For me, that’s a great creative outlet, which is very different than my day job. I like to work out. When you push yourself athletically, a lot of times you have these cathartic moments when your stress just sort of breaks, and you get clarity in a decision. And I really love going for walks with my kids. We kind of live out in the woods. I try to do it nightly.
By the time Tenet Healthcare acquired St. Mary’s Medical Center in 2001, the hospital had officially entered an identity crisis. In struggling to keep pace with industry changes, the West Palm Beach-based facility had floundered financially in its final years as a not-for-profit hospital. By the time Davide Carbone stepped in as CEO in 2006, St. Mary’s had become so unsure about how to move forward that it wasn’t moving at all.
“The hospital had a wonderful past and wonderful legacy and is a vital resource to the community, but it was treading water to figure out which direction to go in, in a world of constant change, especially in the health care universe,” Carbone says.
Despite coming in with a successful track record — Carbone spearheaded a major financial turnaround at Aventura Hospital and Medical Center as its former CEO — he had a big job ahead of him.
“The hospital had really not been advancing, had not been progressing, and people were concerned,” he says. “But they were also comfortable with what they were doing. One reason that the hospital wasn’t progressing or meeting the needs for growth was because they weren’t changing, and I became a change agent.”
Find an identity
To stabilize St. Mary’s financially, Carbone had to get its more than 1,600 employees and members of the community on board with some major changes needed to turn the hospital around. This was easier said than done.
“There was a large contingent in the community that easily wanted to see St. Mary’s go back to the old days that they remember fondly, but that was not practical,” Carbone says. “That’s not reality.”
Carbone needed to gain the support of the community and unite people around a new vision for St. Mary’s. The problem was that the hospital was perceived by community members in very different ways.
“This hospital had a glorious background and kind of fell into a trough and was having a hard time pulling itself out of it,” Carbone says. “It lives under the cloud of a lot of people’s impressions that we’re just a charity hospital or we’re just a trauma hospital or just a Catholic hospital.”
As a faith-based hospital, St. Mary’s is one of the highest providers of charity care in South Florida. It also functions as a level-one trauma center and a community hospital. Carbone wanted to show the community that St. Mary’s encompassed not one, but all of these things, and financially, it wasn’t a failing or destitute organization, but it had lots of potential and was still providing great services.
He decided the first step in re-establishing the hospital’s identity with the community was instituting a new logo that honored the legacy of the hospital while acting as a symbol for a fresh start.
“It seems trivial, but I think it gives people something to rally around,” Carbone says. “We all want to follow a leader. We want to follow success.
“In this case, it was just getting people motivated and getting them to see a vision of what could possibly be at St. Mary’s versus what had been at St. Mary’s.”
By getting the community excited about change and a new vision, people could start embracing change without feeling like they were abandoning the roots of St. Mary’s. Carbone refocused the hospital’s marketing and image-building efforts to generate excitement in the community about its goals.
He encouraged St. Mary’s staff to work proactively with the media. Giving the media more opportunities to learn about the hospital’s services and facilities, St. Mary’s began getting positive media attention instead of negative. This attention played a large part in renewing communication and building trust with community members, many of whom were Carbone’s biggest skeptics.
“Sometimes that criticism is legitimate and warranted, and sometimes it’s due to a lack of understanding,” Carbone says. “A lot of that is just communication.
“People have to see you as somebody they can trust and somebody you can believe in. As you develop that level of trust, people are much more willing to work with you and take risks with you.”
Getting the community on board with change was crucial. However, Carbone also had to make sure that employees were prepared for change at St. Mary’s. Having started in health care as a nurse’s aide and as an emergency medical technician, he knew how easy it is to get caught up in the hectic demands of the job and lose sight of the long-term vision. Many employees weren’t interested in changing the status quo, even with a negative company culture.
“It took a lot to convince some of the folks, especially on the medical staff, that change is a good thing,” Carbone says. “Change means change, but change also means progress and survival. You have to be a change agent, but you have to do it in the most positive way possible.”
In looking for ways to re-engage his employees, Carbone realized that one explanation for the alienation he saw was a lack of effective employee relations and recognition.
“One of the things I noticed right away was that we did very little in the world of employee relations,” he says. “We did very little communicating, very little celebration of our successes.”
Carbone had St. Mary’s human resources department bring on one person whose sole job would be handling employee relations and developing ways to call out the successes of employees and of the hospital.
With an employee relations department in place, St. Mary’s developed monthly employee newsletters, activities with employees and celebrations during the holidays. It started recognizing industry events, such as May’s hospital week, and being more active in charity events, including the Leukemia Walk and March of Dimes runs and walks.
The hospital has also developed awards for top employees and volunteers each quarter. By holding up these examples of success, Carbone hopes employees will see how each individual’s success benefits the hospital, which benefits everyone.
“You have to encourage people that it’s definitely teamwork,” Carbone says. “No one person, no one idea can save any facility. So you have to rally the leadership team. They have to rally the people that they work with to try to get on board and see we’re going in a new direction, and here’s the direction, and here’s why, and here’s what we need you to do to help us get there.”
Since Carbone stepped in as CEO, he hasn’t replaced one member of his senior leadership team at St. Mary’s, with the exception of a COO who left to become CEO of another hospital. By uniting the existing team to support change, he was able to build trust needed to move forward.
“Your job is to sell them your perspective, your vision and your goals and that you have the experience and wherewithal to make it happen if we can work as a team,” Carbone says.
Once you rally your people around change, you have to deliver it. Carbone was starting from scratch to develop a strategic plan that could turn St. Mary’s around financially and update it for the future. Before making any changes, he thought hard about St. Mary’s strengths, where it wanted to go, where it needed to be and how to get there.
“Those are all easy questions to ask but very difficult, especially in health care,” Carbone says. “There’s a lot of competition. Development of any service is very resource intensive, from equipment to supplies to personnel and to physicians. Changes are not easy to implement. Good ideas are not always easy to implement. So you have to prioritize what you think will have the biggest impact for the short-term and long-term success of the hospital.”
To grow, the hospital needed to maintain and enhance core programs, while developing others. That started with small steps, such as renovating and enhancing equipment and facilities. As Carbone examined opportunities to add new services, he looked at the services that St. Mary’s already offered and then considered how a new service could add to or enhance the existing services in a way that was successful for patients as well as the facility.
One way to do this was by providing people services locally that weren’t currently available. For instance, there was a lack of neurologists in the area willing to see patients in a hospital setting, and a lack of neurosurgeons willing to perform cranial surgery. Carbone worked to build a neuroscience team to supply these services at St. Mary’s.
He also led the drive to institute a pediatric open-heart cardiac surgery service and get it approved by the state. St. Mary’s is the first Florida hospital in 25 years to win approval for this cardiac service, which will be implemented this year.
St. Mary’s gets more than 3,000 transfers from other hospitals of people who are seeking its high-level services, so Carbone has dedicated much of his time to finding talented doctors and providing them with the resources needed to develop core services, such as pediatric, trauma, stroke and obstetrics.
“It’s very challenging for physicians in South Florida, but if we can provide them with the resources that they need and if they can see the same vision and opportunity that we do, then it’s a good match,” Carbone says. “If we can get them the right resources, they can build a successful program.”
Carbone brought on doctors to start a comprehensive stroke program, which opened in December 2008, and a physician to head a new limb orthopedic program, which brings in patients from around the world. He now constantly looks for ways to build out services that are not being met at all or not being met adequately to serve the community.
“All of our financial success has been built on building new programs, building better programs and making sure we’re meeting the needs of the patients that we serve,” Carbone says.
Build on success
By getting people to see how change benefits the community, the patients and the staff of St. Mary’s, Carbone has been able to transform the hospital into a growing and profitable facility. In 2010, St. Mary’s was elected business of the year by Palm Beach Chamber of Commerce and Carbone received South Florida Business Journal’s Healthcare Award for CEO of the Year. Each of its successes brings St. Mary’s closer to the next.
“Over time, as you build success stories and people see you are doing these changes for the right reasons, people get on board,” Carbone says. “Success breeds success. Bringing on good people brings on more good people. Having a successful service encourages others to take that same kind of risk to establish a new service.
“We’ve had major successes not only financially with the hospital, not only the development of services for our patients but also in the measurements of quality of the care we provide. Almost any measure you can measure, we’ve more than exceeded our goal.”
Infection rates have dramatically decreased in the last five years, and other core quality measures have improved. Financially, the hospital went from being in the red to being in the black. By building new programs and recruiting many new positions, St. Mary’s has increased its number of patients and employees, which has also benefited its local economy.
“A lot of skeptics in the community were taking a wait-and-see attitude to see where St. Mary’s was going to go,” Carbone says. “I think they’ve been pleasantly surprised that we’ve had a great deal of success in turning the facility around.
“That first year, year-and-a-half to two years is key to get a few success stories and get some energy into the facilities, environment and get people understanding that we are going to be moving in a new direction, but one that should be positive and beneficial to all of us. I think we’ve accomplished that, but you can’t sit back and be satisfied. You have to constantly be looking for the next opportunity.”
How to reach: St. Mary’s Medical Center, www.stmarysmc.com
The Carbone file
St. Mary’s Medical Center
Born: Boston area
Education: Bachelor’s degree in environmental biology from Clark University; master’s in health administration from Duke
What is your definition of success?
Being able to go home every day and feel you’ve done the best that you can for your facility or your employer and for your employees and to be proud of what you’ve achieved. … If you can go home at night and know you’ve done a good job, that’s probably the best measure of success. As long as you are gratified with the amount of effort that you put in and it’s actually leading to something that’s getting better and that you’ve hoped to achieve.
What do you like most about your current job?
The ability to make a change and make a difference in people’s lives, and that’s at every level, from the patients we serve, to our employees, to the folks out in the community.
If you weren’t doing your current job, what would you be doing?
There are lots of jobs I’d thought about early on through high school and in college, but I’m very happy doing what I’m doing and I can’t imagine doing anything else.
Before he founded Advantica EyeCare, Richard Sanchez spent more than 20 years working at Exxon Corp. He repeatedly filled out multipage documents and questionnaires designed to assess the performance of his employees. But when he retired to start his own company — now Advantica Dental and Vision Benefits, which is based in Clearwater — Sanchez decided that structured performance reviews were not how he wanted to determine whether he could trust an employee to do a good job. As the company’s president and CEO, Sanchez doesn’t use performance reviews and doesn’t ask his managers to either. Instead, he goes out in the field, constantly interacting and talking with his employees to verify their level of trust and commitment to the company.
Smart Business spoke with Sanchez about how to develop trust with employees by being flexible and supporting their needs.
Get face time daily. I try to have lunch every day with a client or somebody that’s touching our business, just to see how things are going. It may be a vendor; it may be a group of employees. I’m constantly in the field. My job is to cheerlead, to cheer them on, to communicate and tell them what I believe we are going to be faced with in the future. I will go to people’s offices, but I won’t intrude on them. I’ll chat a little bit. You really get a two-way conversation going, instead of sending out some e-mail saying, ‘Here’s our strategy for the next six months.’ (That’s) no way to have a conversation.
Reward spontaneously. When we see a champion, we celebrate. We make a big deal of it. We may give some dollars to the person. We may say, ‘Listen, for you and your wife, here’s a weekend. Fly down to Florida and spend the weekend.’ We kind of do it on the spot, so people aren’t trying to change their behavior to match a program. They’re just doing a good job. I’d rather have it more spontaneous. We might have five champions in one month, and the next month we might have zero. And it’s not necessarily a weekend in Florida, it’s just going up to the person and shaking their hand and saying, ‘You know what, you are doing a great job.’
Lend support. If there’s a really tough issue, a complex issue — it could be with a customer — instead of me saying, ‘Well, you’ve got to figure it out,’ I’m not scared of a situation. I think it’s good for me to go in and say, ‘Let me help you on this one. Let’s go see this person and iron this out.’ If I have to be the bad guy, I can be the bad guy. You can’t abandon your employees and say, ‘Well, you screwed that up, now you’ve got to figure it out.’ … I think the CEO has got to take on the tough issues.
Give people freedom. I grew up in an environment when work was everything. You missed your son’s birthday because of work. The world’s changed. The younger work force — they have friends. They have karate class at 6 o’clock, and by God, they aren’t going to miss karate class. I respect that. They have a life. What we really try to do at work is accommodate that. We tell them what we need to get done, and you know that they come in on the weekend, because they want to, not because they have to. I trust them to do that, and they can trust that we’re going to be flexible and they’re not going to have to be concerned if they are trying to improve their lifestyle or their health by coming in a little bit later.
Promote wellness. I noticed six months ago up in our Baltimore operations center … the vending machine had chocolate doughnuts and all that junk. We still have it in there, but we put stuff in the vending machine that costs nothing. We just said, ‘If you want to pay a dollar for the doughnut, that’s fine, but if you want a fruit bar or a granola bar, it’s nothing.’ We are really big on wellness here. We make sure every employee knows that they don’t have to show up here at 7 a.m. if they want to go to the gym and show up at 9:15 or 9:30 a.m., I’m all for that. We’re really into that at the company, because they’ll put a good day’s work in.
How to reach: Advantica Dental and Vision Benefits, www.advanticaeyecare.com