Laura Green

As founder and president of the 250-employee consulting firm, Leadership Dynamics Inc., Nancy Clark is regularly working shoulder to shoulder with business executives to help them overcome their leadership challenges. From this perspective, she frequently sees leaders struggle to adapt to new expectations as they are promoted up through management.

“It is not simple, and for many, it is not natural,” says Clark, who is also the author of “18 Holes for Leadership: How a Round of Golf Can Make You a Better Leader.” “Some have to develop the capabilities. Some need to depend on others to fill in the gaps, and some may have strengths that directly conflict with achieving a leadership position.”

Smart Business spoke with Clark about her book and why self-awareness can help you become a better leader within your organization.

What example in the book do you think best illustrates how leaders can become more successful?

The importance of self-awareness is a thread throughout the book and is considered one of the most critical foundational elements.

I formally introduce it when Sam, the executive coach, and Paul are waiting to tee off on the fourth hole. Sam helps Paul to see how he approaches golf, which is completely different than Sam. Neither is right or wrong, but the result can be completely different. Paul is very thorough, analytical, task-focused. He is not ‘people-focused’ and is surprised that he may be perceived by others as unfriendly or distant. Given that Paul is experiencing a high number of defections from his team, he may want to adjust his style to achieve different results.

Why is self-awareness a trait that business leaders need as they move up in a company?

What really seems to implode for some leaders when they make it to the top is their guiding values get sideways, whether they just get so pressured by really earning or they drink the Kool-Aid believing that they are all powerful and above all of this. But they end up sort of throwing their values under the bus.

Sometimes they think they are so unbelievably great that they could run any business any time anywhere, and they begin going a little bit outside of their competency areas.

A lot of it is there really isn’t that self-awareness, that they don’t really understand the impact that their behaviors are having on other people and how that really is creating havoc. Then they go through one of our workshops or learning or coaching, and all of a sudden you see these lights go on. It’s literally waking them up. The real strong first step is self-awareness, because they have to understand and recognize what their strengths are and how best to utilize and how to adjust.

How can a leader become more self-aware?

Some CEOs are very reflective and more naturally aware of their strengths and work styles. For others, it is not as straight forward.

Often when I ask a CEO or leader, ‘What are your strengths?’ I hear more of a chronology of work experiences and education. That is not what is being asked.

The first step is find out that there are great tools out there that can help you be much more effective, also be much more productive and drive performance so much better as well as make people happier and more productive in their positions.

There is a great quote from Dr. Edwards Deming: ‘Experience alone teaches us nothing.’ If CEOs do not have a theory or framework to understand themselves and others, they are left to recurring experiences with no possibility of predictable improvement.

How to reach: Leadership Dynamics Inc., (925) 831-9100 or www.leaders-inc.com

You could say that Tim Westergren is a bit of an expert when it comes to managing feedback. As founder and chief strategy officer of Pandora Media Inc., which runs the streaming music web site Pandora.com, he’s elevated the business philosophy of “listen to your customers” to another level.

“Consumer feedback is a huge influencer on Pandora,” says Westergren, who helped develop the Music Genome Project technology that allows the site’s users to craft their own music radio stations using thumbs up or thumbs down feedback on suggested songs.

Considering that Pandora has never advertised itself any more than a bit of search engine marketing, the value of this influence couldn’t be more apparent. For all intensive purposes, the company has expanded almost entirely through word of mouth to 100 million registered users. Since it made its IPO offering in June, the company has also experienced at least triple-digit growth every quarter since.

“We have a saying at Pandora: ‘It’s the playlist stupid,’” Westergren says. “It’s as simple as that — making it a super easy, intuitive experience and nailing the music choices. That’s really the basis for Pandora’s success so far.”

By staying attuned to the needs and interests of consumers and employees, Westergren has helped scale the business from start-up into a major public company with $138 million in revenue last year. Here’s how.

Know your audience

Pandora’s users have substantially shaped its evolution since the beginning. Perhaps the most obvious example is that fact that the web site was originally launched as a subscription only service.

“Not many people do know that because listeners ensured that it did not last long,” Westergren says. “We pivoted because they said, ‘This ain’t the way.’”

The site went free not long after.

With today’s technology, Westergren says it’s even easier to gain insights about who your customers are and what they want.

“You have a pretty intense feedback loop, which I think is becoming ever more true of all companies right now,” he says. “You have listeners who are much more participatory than they had been in the past.”

The company utilizes a combination of implicit and explicit user feedback to guide its direction. This involves monitoring how people are using the site — which features are gaining popularity and which are waning — as well as looking at feedback in the form of tens of thousands of monthly e-mails from listeners.

“That can influence the small things, little tweaks to the design, and that can affect big things like what large features we might want to add or a new domain we might want to go after,” Westergren says. “So we pay heed.”

An example is the company’s recent web site redesign, which was two years in the making and tested extensively with users before the September release. Some changes included removing the 40-hour listening cap for users, adding new “follow” and “shuffle” options and overhauling the design itself.

“When you do these things you have to get sort of a critical mass of feedback because otherwise you are just guessing at what the right answer is,” Westergren says. “So that’s a prerequisite for any significant change. We had a pretty good notion before this launched how it was going to impact our listening audience.”

If you have a large market opportunity, understanding your customer is even more critical if you want people to choose you over a competitor. Westergren’s strategy for differentiating the company from others with a similar business model — Spotify and Sirius XM Radio to name a few — is fairly simple, and it doesn’t rely on marketing.

It’s really by creating a product that they love,” he says. “Someone finds it, uses it and it solves a problem for them.

“If they love using it, they will be a long-term loyal listener and they will tell other people about it.”

As your customer base expands, resist the urge to be satisfied with past or current success.

“There’d be ways for us to kind of contract, and be more conservative and focus a lot more on near-term results, but we believe that the opportunity is big enough that it warrants a certain audacity,” Westergren says.

Maintaining consumer loyalty over time requires you to keep finding ways to serve your audience as their needs evolve.

“You need to really actively innovate, actively challenge yourself to maintain the pace and the velocity of innovation and effort that you have had in the previous years,” Westergren says.

That’s why the company’s innovations are driven by both customer feedback as well as the intuition of its leadership.

“It’s kind of a natural life cycle,” he says. “You feel it. You feel it in terms of your own disposition toward your product and you feel it from consumers.”

By investing heavily in its foundation via technology, talent and strategic business investments, the company is working to take advantage of the largest possible opportunity.

For example, several years ago the company’s growth accelerated sharply when it introduced its mobile application for smart phones and seized on consumer demand for mobile listening capabilities. Mobile now accounts for 70 percent of the company’s listening audience.

“I don’t think about the future in terms of obstacles anymore,” Westergren says. “I think it’s more about how do you prioritize the opportunities? That’s our challenge more than anything.”

Solidify your values

While there’s an immense amount of development that’s gone into getting the company to where it is now, Westergren says that all growth initiatives still fall under one primary area of focus: personalization.

Everything from redesigning the web platform to a higher performance HTML5 site to growing mobile offerings to expanding artist selections has worked in harmony with the goal of increasing the level of personalization for users. Westergren says that this is an area that the company has been singularly focused on for more than a decade.

“We’ve essentially been on this path for a long, long time,” he says. “That’s not only about the Music Genome Project and playlist station personalization capabilities. It’s also about streaming and structure. It’s about all of these deployments to multiple platforms on multiple operating systems in multiple environments.

“We’re the first company that’s really doing that at scale, and to me that is the promise of the web.”

As the company continues to hone the concept of personalization in new and exciting ways, Westergren also knows that amid all the change, he needs to make sure the company doesn’t stray from the core values that have helped it grow.

Staying close to your core doesn’t mean that your company’s not changing. Instead, having strong core values acts as a taproot for your business that helps the next generation of leaders and employees to be successful.

“There are lots of things that have to happen when you go from the early stage into a more mature stage,” Westergren says.

“You go through a period where you really need to clarify and codify the core of your company, who you are, why you are doing what you’re doing, your vision and so on – really cement that in such a way that as the company gets big and has more moving parts that you still have a nice, clear anchor vision for everybody to rally around.”

Westergren defines the company’s set of core capabilities as the areas where the company needs to be No. 1, and stay No. 1.

“So the challenge that we give ourselves constantly is ‘Are we meeting that?’” he says. “Are we really the best in the world at that? And if we’re not it’s sort of an all-hands-on deck response.”

This also goes for cultural values. A set of cultural guidelines called ‘Pandora Principles’ govern some of these fundamental areas for employees, ensuring that the company’s culture stays integral as more people come on board.

“It’s kind of like a manifesto,” he says.

“There are things like how do you want to treat each other as employees and what kinds of people do you want to work at your company and how do you want to communicate with each other. Each one of those areas benefits from having core values and principles.”

Develop future leaders

As the company has grown larger, Westergren’s ability to control its direction, even with the help of his management team, continues to get harder. So it has become even more essential to attract and to cultivate a new generation of leaders who can be empowered as new ambassadors of the culture, mission and vision. Doing that requires a successful mission and culture.

“There are two things that people look for in business: a mission that they can really get behind and get excited about, and a place that really values them, treats them well,” Westergren says.

The company’s mission, “enabling people to enjoy music they know and discover music they love,” is one that employees and consumers have naturally embraced.

“This is a product that listeners are deeply passionate about and that trickles down to everyone in the company,” Westergren says. “You know when you say, ‘I work at Pandora,’ somebody goes ‘I love Pandora’ or they are excited to hear that your work there because they love the product.”

However, while driving a unique mission is exciting for employees, that alone isn’t enough to keep people motivated to do more.

“I read somewhere recently that the best employee perk is giving people a place that they love to work,” Westergren says. “That’s kind of it right there.”

As a leader, facilitating a culture that encourages collaboration and avoids hierarchies gives people the freedom to contribute their ideas and run with them.

“So your role as a leader once you have them in the company is to help them do what they do,” Westergren says. “It’s not to control them. It’s not to micromanage them. It really starts with a place of trust.”

Trust covers everything from what level of supervision you give your people to what level of access to information that they have, which at Pandora is very transparent. It also means having faith that the talented people that you hire are going to do a good job. When you build a culture of trust, employees feel like they are part of the solution and want to step into more active roles.

“It’s not, ‘Oh, you solve this. I’m the employee and I’m looking to you to solve this problem,’” Westergren says. “They feel much more sense of ownership, where they want to know how they can help. They understand that things change, and they trust the same way that you trust them that you are doing the best job that you can.”

The team at Pandora has grown to 295 employees since 2005, and the company continues to build its bench of talent. Because people enjoy working there, they also tend to stick around, making it easier for the company to develop leaders internally.

“We have a long tenure in our team, and an unusually long tenure I think for a technology company,” Westergren says. “We’ve been able to grow that part of our company really successfully.”

As you develop the next level of leadership, you gain the latitude needed to keep up with constant change and fast growth.

“You need to stay very closely connected to your company,” Westergren says. “Don’t let layers insulate your leadership from what it’s like to be a line-level employee.

“You give people responsibilities. You empower them. You compensate them properly. You give them a nice environment to be in. If you treat them well, they will reciprocate with effort and innovation and all sorts of contributions.”

How to reach: Pandora Media Inc., www.pandora.com or (510) 451-4100

Takeaways

  • Make decisions with a good understanding of your customer
  • Solidify your core mission and values
  • Develop the next generation of leadership

The Westergren File

Tim Westergren

Founder and CSO

Pandora Media Inc.

Born: Minneapolis, Minn.

Education: B.A. from Stanford University

Westergren on his management style: There are some unique things I can bring to this as a musician. Managing and operating a band can teach you a lot about how to operate a company believe it or not. So I think there are some really interesting insights that experience brings to this.

Westergren on how Pandora levels the playing field: I think one area that, to me, is particularly exciting is the impact that we are beginning to have on artists. Because of the way we analyze and recommend music, Pandora is a place that is a completely level playing field for musicians. So once your song gets added to the collection, we’re blind to popularity in recommending any given song on a playlist. We have over 900,000 songs in our collection and over 90 percent of those played last month.

What is your favorite station on Pandora?

That’s an unfair question to ask a musician. Actually, I’m pretty scattered in my tastes. I like all sorts for music. I’m a piano player so I’m somewhat partial to piano music, but I also really love a good melody. So I can listen to punk music or classical music or country music if it has a good melody. So I don’t really have a single spot that I sit on very long.

In 2011, Pandora:

  • Hit 100 million register users
  • Was the most downloaded free music application on Apple’s and Google’s app stores
  • Made its stock market debut with a market value of $2.6 billion
  • Reached its 10 billionth thumb rating. The song was a thumbs up for “Ridin’ Solo” by Jason Derulo.

Barry Wolfson joined Tervis at a time when the company was expanding nationally, increasing sales and enjoying double-digit revenue growth. From the outside, it was a CEO’s dream. Internally, the company’s 700 employees could barely keep up.

“When your business is growing 60 percent a year, it’s everything you can do to just focus on running the business day to day,” says Wolfson, CEO since 2010.

“I just think that there wasn’t an opportunity for anyone to say ‘Hey, we need to step back for a moment,’ because there really wasn’t time to step back.”

By restructuring the business in a way that allowed it to scale, Wolfson has helped the company — known for its tumblers that “keep hot drinks hot and cold drinks cold” — manage the demands of fast growth.

Smart Business spoke with Wolfson about the keys to scaling a fast-growth company.

Set your timeline. There were things that we put on the timeline that we said, ‘In 2011, we need to get these things done.’ There are other things that we’ve started to work on during the year and say, ‘OK, now over the next five years, where do we see the company going and what are the capabilities that we have to put in place to get there? So there were short-term things — less than a year — that were very critical for us to do… and then the other is developing this longer-term vision and strategy for the company. Phase one was a little bit of an Extreme Makeover Tervis edition as we just put in place the basic capabilities to support growth. But the phase that I’m in with my senior management now is a little bit longer-term vision in terms of what products and markets do we want to focus on.

Take a forward-thinking approach. This is not something that happens in one day, that you go from ‘This is the right way to do it’ to ‘You can’t do it this way.’ It happens over time.

When you are in senior management, you have to look a little bit further down the road and say [what’s] fine today are the things that we need to do differently. It wasn’t necessarily changing every aspect of the business. Tervis has been a successful company for 65 years and so it’s a matter of saying ‘Hey, what can be preserved the way that we’re doing things and what needs to happen differently to be able to continue to grow profitably, and grow in a way that makes sense for all involved?’

Allocate resources. It was first huddling with my senior management team…then between us prioritizing here are the things that we believe in our experience and at our level that we needed to do and the time frame of doing them. We went through that process, identified a number of things that we needed to get after, and then it was a process of saying, ‘What are the resources involved in doing this — people and investment capital?’ At that point, it’s engaging with the ownership of the company and getting their support in making the investments that we needed to make both in people, systems and plant equipment.

Build a deep bench of talent. You look at how fast we’ve grown — there are many, many people in the organization who have not been here very long. So continuing to develop a culture and the key people in the organization is something that I spend a lot of time on. Generally, besides the culture, it’s continuing to develop intellectual capital that’s required in the business. Develop people from within with additional skill sets and complement that with bringing people in from the outside that can give us different perspectives on the various levels of growth and business that we are trying to achieve.

Think sustainability. Sustainable growth will come from us continuing to reach out to a wider audience of potential customers in various different markets and geographically. Staying very fresh, relevant and innovative in our product offerings is something that again fuels growth.

You have to be very intentional about the growth. We don’t see growth for growth’s sake. We want to be a strong consumer brand out there in the marketplace that is a high value brand. We don’t want to grow just to sell more tumblers. … Resisting that growing for the sake of growing is extremely important in a business that has the opportunity to grow.

How to reach: Tervis, www.tervis.com or (888) 508-8859

John Bauer has had a long career background in the food business, so much so that in 2011, he was appointed to the U.S. Agricultural Advisory Committee for the benefit of his expertise. As global trade in agricultural products has increased, keeping up with the nature of the industry today takes a certain set of skills. These are also skills that Bauer has been honing over the last 34 years.

“We had boom times and had some recessions, but the situation now is all together different,” says Bauer, president and CEO of Basic Food International Inc., an established, Fort Lauderdale-based supplier of canned, frozen and packaged food products worldwide.

As import and export figures rise, staying competitive in the industry has become increasingly about a company’s capacity to operate effectively on a global scale.

“We have to learn and we have to really be ahead of the curve as much as possible in order to remain a factor in our business,” Bauer says.

Smart Business spoke with Bauer about the keys to success in the agriculture industry.

Embrace globalization.

In the future, it’s going to be survival of the fittest in our business and in any business. You’ve got to be able to withstand, to compete and to develop.

But globalization is a definite plus. We have open borders and every country practically has open borders. There are fewer restrictions.

The emerging markets, but also countries in Latin America, are going to be great countries and great markets.

It’s one world. It’s like one country. We’re in touch any minute of the day with whoever we want to be in touch with in any part of the world. It’s an unbelievable situation. I talk at night to my suppliers in Vietnam and in China, and early in the morning I talk to buyers in Europe or in the Middle East or South America.

Form strategic alliances.

The business requires strength. We’ve been approached and we are approaching other firms similarly situated as we are for strategic alliances, and we work together and cooperate. There’s no use competing with one another. You have an affluence of competitors at this time. Some of them will disappear naturally and others will be forming groups with others and will become bigger and larger and more effective.

We are looking for potential partners that we can either acquire or work with. It will cut down the expenses and the competition.

Stay connected.

Everything is going at a very fast speed. Everything is speeded up and the volume has increased accordingly.

We have locations in Fort Lauderdale and Miami and in Guatemala, so altogether we have about 50 major employees and we are constantly in touch with a system of communications. The system uses the Internet, talking on Skype, conferences.

You have to provide a lot of guidance. You have to instill in them a lot of confidence. You have to instill in them the desire to learn and to get ahead and to be very thorough in everything you do — to think of all the possible danger points where you may have a problem.

Be detail-oriented.

It all requires a tremendous attention to detail, our business in particular, because we have shipments where one container of merchandise is $100,000 or more.

You’ve got to be aware of what the new regulations are, labeling regulations, regulations in countries to which you ship, and you’ve got to familiarize yourself on the importance of food products and imports. You’ve got to know what the requirements of USFDA are. Whatever we buy for the United States, we go and inspect the plants. We make a very thorough analysis of their products and their raw materials so as to assure that we are getting product that is produced and shipped in accordance with the standards that we require, both federal, state and for ourselves.

It’s gotten a little bit more complicated, because we’ve got a lot more products to deal with. We’ve got a lot more regulation to deal with and we have a lot more uncertainty to deal with, especially from the point of view of sanitary controls and regulations pertaining to food processing, contents and ingredients. So it has evolved.

HOW TO REACH: Basic Food International Inc., (954) 467-1700 or www.basicfood.com

If you frequently watch the Home Shopping Network, then you probably recognize Tony Little. He’s that energetic fitness guy with a ponytail and baseball cap, standing next to some healthy product, talking to you about changing your life and saying, “You can do it!”

Maybe you were convinced, and maybe not. But for Little, “you can do it” is much more than another sales tagline used to sell exercise equipment. It’s a personal philosophy for success.

“I’ve just always felt that whenever you hit that roadblock, there are a zillion other ways around it,” says Little, founder, president and CEO of St. Petersburg, Fla.-based Health International Corp., which sells Tony Little-branded consumer lifestyle and fitness products. “I think that too many people quit too soon.”

Little’s own roadblocks have included everything from a handful of near fatal car accidents, to going completely broke, to last year, having an employee steal more than $600,000 from his company.

“That was probably one of the toughest areas for me, because I still had to carry on business,” he says. “I still had to make up the money that was gone.”

At the time, Little’s newborn twins, born prematurely, had also been hospitalized for medical reasons. With his children in a life-or-death situation and the business he’d built facing catastrophe, Little says he only got through it by believing in himself.

“You’ve got to come out fighting,” he says.

Today, Little’s twins are doing fine with occupational and physical therapy, and he has already made up much of the lost business. In fact, his company generated $100 million in revenue last year.

By overcoming personal and professional challenges time and again, Tony Little has become one of the most successful television sales people of all time, selling more than $3 billion worth of products to date. Here’s how he builds, grows and preserves his successful brand.

Pick the right opportunities

Little’s incredible sales track record stems first from his ability to identify profitable market and product opportunities that grow his brand.

“I have well over 45 million people that have brought Tony Little products, which I never really thought that would happen in my life,” he says. “I’ve been successful in the fact that the percentage of projects that I do have been winners.”

He says the first step in building a brand is clearly articulating your niche and purpose.

“You identify that there’s problem out there,” Little says. “You identify the fact that you know the solution.”

Growing your brand is then a matter of finding ways for that solution to extend to other products under your brand name. By focusing on the lifestyle market, for example, he has been able to expand his company to sell everything from shoes to food to pillows and even a personal care line.

“My brother calls me a living oxymoron,” Little says. “He says, ‘You started in fitness. You exercise people. You get them all jazzed up about fitness. Now you’re feeding them, putting them to sleep and they’re wearing your shoes the next day.’

“If you’ve been successful with the direction you’re going, then you just need to keep complementing that direction with other extensions.”

When you see an opportunity that fits within your brand’s niche, you want to make sure it’s something that you and your company can grasp and understand before you pursue it.

“The most important thing about selling a brand is not being overly technical with something and bringing it home so that everybody understands it,” Little says.

You have to be able to put yourself in the customer’s shoes. So do your research and make sure that the opportunity is within your knowledge comfort zone. If it is too complex, you may have trouble communicating it to customers or getting enthusiastic about it yourself. Little finds that the best sales results come from choosing opportunities that you can connect to and inspire your passion.

“Everything in your life is selling,” Little says. “It just comes back to the belief factor that you have in what you’re selling.

“I think I motivate a lot of people to feel better, look better, take charge of their lives and do things because I’m such a strong believer in what I do.”

While having enthusiasm alone doesn’t guarantee that every customer will jump on board, when you are selling something that you truly believe is positive versus negative or middle of the road, it’s infinitely easier to transfer that enthusiasm to customers.

“The more ammunition you go into war with, the better off you are,” Little says.

“I still believe that people love to get excited about something. So I have a large excitability about something if I truly believe in it. And it just translates. And that’s why I always say passion sells. Enthusiasm sells.”

Have a winning mindset

From the time he started in the sales world selling his own vitamin regimen, and later, helping grow a chain of pet food stores, Little has seen the power positivity and perseverance has in selling anything.

“No matter how much money you make, no matter what kind of education you have, no matter who you are in this world, you are always excited about someone who shows up in your office who has enthusiasm, passion and confidence,” Little says. “And so many people lack it.

“I’d never done television. I’d never sold pet supplies. I’d never sold vitamins. I never did infomercials. I just had the attitude.”

Little says that he’s no different than any other CEO when it comes to stressing about bills or an order not coming in on time. Yet he’s found that turning around any tough business situation often just starts with having a winning mindset.

“If you look at our economy now and how tough it is and how people get so beaten up and depressed so quickly, I think that it has to do with your mindset,” Little says.

He says that today’s business environment favors those who are prepared to think proactively and take the initiative to find something, figure out something or do something another way.

“If you’re sitting there waiting for people to bring you something, that’s a mistake,” Little says. “If you have an idea, follow it.

“You hear it every day with different people you work with. You ask them to do something, and they ask, ‘How do you do that?’ You just want them to go, ‘I’ll figure it out. Go ahead, Tony. Go away.’”

A winning mindset starts with eliminating attitudes such as fear and negativity that can inhibit your ability to make decisions and chase opportunities.

“The key to a successful company really is the person who is a decision-maker above anything else, because even if they are wrong with their decisions, their opportunities are at bat that much more,” Little says. “They are bound to get a home run.”

But understanding what good ideas and opportunities are out there isn’t enough if you don’t have the attitude to run with them.

“There are so many people that are going to say no, and it becomes a bit of a numbers game,” Little says. “If you take 99 no’s and you get one yes, the yes could make you a fortune or make your whole life.”

When Little first pitched his idea of selling a low-impact exercise video on HSN, the network had never sold an exercise video in its history. But after much persistence, he was able to track down the company’s owner, Bud Paxson, and convince him to try the idea.

“Bud looks at me and says, ‘So you are the guy that calls my company all the time,’” Little says. “I said ‘Yes sir.’ And he said, ‘Well, videos don’t sell.’ I made a bet that my videos would sell if they were presented a certain way.”

In the first airing, Little’s tapes sold out in four minutes. When Paxson called to order 1,000 more of the tapes, those sold out too.

“Certain people will get right up to a goal line and fail, whereas you really need to be the person who is going to bring it over the line,” Little says.

“There are actually a lot more opportunities out there. So many people are not realizing that the person who is going to get the job right now or the person that is going to be able to innovate on a product is someone who has an energy level and enthusiasm and a belief.”

Protect your reputation

Lastly, the strength of your brand is based on more than just your ability to choose the right products or get people to buy them. Because your brand name is synonymous with all aspects of your customer’s experience, everything from manufacturing quality, to shipping time, to how you handle a return affects how your customers feel about you and whether they’ll continue to buy your products.

“You must keep the customer’s experience great and never lose sight that it’s the customer who made you a brand,” Little says.

Once Little did a show to sell a shoe product, but it turned out that some customers who bought the shoes had high insteps so the strap would not fit them. Instead of just accepting that there would be more returns, he called the manufacturer and asked them to create a Velcro extender so that customers could extend the shoes to fit. He shipped the extenders out immediately, and the result was twofold.

“One, it reduces returns and it helps the customer have something that they originally bought,” Little says. “So I was able to make these extenders for the shoes and get them off to the people who had an issue and then they were all happy. Then what was a problem became an asset for my company. I was able figure out that that’s a really good thing to be able to adjust shoes. Now all of my shoes are adjustable.”

Whenever he discovers a customer issue, Little takes swift action to let people know that he cares and is going to make the issue a priority.

“What I do is try to cut the product off immediately, try to revamp everything,” Little says. “Let your consumers know that you understand their concerns and you are working on it. That’s how you preserve your brand.”

If something gets screwed up, he knows that it’s still his name that the customer associates with the problem and subsequently, his brand’s reputation.

“It’s a lot more work for me because people are buying Tony Little in the respect of, ‘I believe that he’s already checked this out,’” Little says.

“If I have a consumer that’s not happy with something, the type of e-mail you’ll get from that consumer is basically, ‘This has to have been somebody else. Tony Little would never let me down like this.’”

That’s why Little uses a range of media channels to connect with customers and talk to them about their feedback.

“The common mistakes are usually in the way people market a product, not understanding their demographics and not understanding the people they are selling to,” Little says.

He still writes in all of his online guest books, answers customer e-mails and always responds to anyone who reaches out to him personally about a product.

Transparency with customers also gives you a more accurate picture of your customer satisfaction, so you can gain insights from the positive feedback as well as the negative.

“The majority of people that send in a review on the Internet on something normally are always going to skew to the negatives,” Little says.

“People we find who love a product or are satisfied with a product aren’t just all of a sudden sending you stuff. They don’t have the same emotion.”

Being responsive, approachable and showing consumers that you’re really thinking about how they use your products builds trust with them as well as with your own business partners. When your brand faces challenges and you need to make up lost ground, having that trust is an invaluable asset.

“Obviously there will be certain times that you just don’t agree…but in the long run no matter how negative a person is or what their experience has been ? as a person who built their business off of their brand – you try to always respect your customer,” Little says. “I don’t think I would be in business if it wasn’t for taking care of my customers.”

How to reach: Health International Corp., (727) 556-2959

Takeaways

1. Build your brand with products you understand and believe in

2. Develop a can-do mindset in decision-making

3. Be accountable for your customer’s experience

The Little File

Tony Little

founder and CEO

Health International Corp.

Born: Fremont, Ohio

What would your friends be surprised to find out about you?

That I’m a very quiet person, and that I love reading books — as many as I can get my hands on.

How do you regroup on a tough day?

I’ll give myself a self-motivational talk and put myself through a challenging workout. It never fails to energize me.

What is your favorite part of your job?

It’s important that I have fun when I work; I don’t like to get too serious. Even when I’m selling or presenting new opportunities, I like to be myself and have a good time. If you don’t enjoy what you’re doing for a living, you should find another line of work.

What is your favorite Tony Little product?

The Gazelle. The Gazelle was an exercise machine that has been used in more motion pictures than any other infomercial. I also used it on the Geico commercial, which was fun. It was over a billion in sales for just that one product. It was just fun and the amount of mail, the amount of letters and before and after pictures and stories — even to this day I probably get two or three a week. People just still love the product.

Whom do you admire in the business world?

I have great respect and admiration for people who are self-made. I’ve always looked up to Donald Trump as someone who is willing to speak his mind and create victories from adversity. I would also include Cornelius Vanderbilt. I just finished reading his biography, ‘The First Tycoon,’ and he really was an amazing man. He wasn’t particularly well-educated, but he wound up being one of the wealthiest people in American history. Then there’s Steve Jobs. So much has been said and written about him since his death, but I admired him most for never giving in to a challenge, no matter how tough it got. He never gave up on himself, and that’s a lesson for all of us.

Jeremy Rayl has witnessed a lot of industry change since he became the third generation to take leadership of his family’s transportation company in 2007. But he knows that today’s stricter regulations and compliance standards are just the beginning.

“There’s a big fundamental change coming in transportation,” says Rayl, CEO of Akron, Ohio-based J. Rayl Transport Inc., which operates approximately 200 tractors and 600 trailers in the U.S. and Canada.

Yet while other trucking firms have struggled in the past years, Rayl’s company has opened up four new locations, made several acquisitions, grown sales and increased employment by 135 percent to 240 employees in the last five years.

Rayl says the company has stayed competitive in Akron and other areas by being able to identify opportunities, which a CEO needs to be able to do in both a bad recession and a good economy. One of the benefits of doing business in Akron is the access to capital from the area’s large banks.

“With my industry, if you don’t have access to capital you’re not going to have the ability to grow, let alone survive,” he says. “The ability to attract and retain companies here in Akron would center around the availability of capital.”

Because his company has many moving parts and variables that make measuring profitability difficult, Rayl also knows that having a well-defined cost model is absolutely essential in today’s business environment. Ultimately, not understanding your cash flow down to the penny is a critical mistake for a leader, because that’s how you recognize areas that can damage or improve your business.

“If you don’t understand the risks that are out there, then you’re being naïve to the potential things that could possibly bankrupt your company,” Rayl says.

“It’s being able to identify these opportunities and being able to accurately identify our costs, what our revenues need to be and really understanding what drives profitability for our company.”

ROI is the first area Rayl looks at when considering business investments, though the return doesn’t necessarily need to be in dollars. It could also come in the form of improved quality, service level or safety. Either way, the return has to warrant the risk that you are taking on.

“It has to have some sort of measurable ROI and it has to add value to the company whether it is dollars saved or overall quality improvement,” Rayl says.

As the company goes forward in making new acquisitions and adding more U.S. locations, Rayl looks for areas where there is already more demand than the company can support.

“If we open up a new location, we’re already going to have preexisting customers there ready to give us business before we even open the doors,” he says.

By breaking down the risk versus reward and return, Rayl makes calculated investments that meet the changing demands of customers.

“It gives us flexibility and the ability to change as customers needs change, whether it be supply chain solutions, whether it be more efficient delivery options or just reporting for those customers to measure how well they’re satisfying their customers with on-time deliveries,” Rayl says.

That goes for adapting to new industry regulations, as well, such as the now tighter limits on “hours of service” or the number of hours that drivers are allowed to drive in one week.

“Every single hour of that driver’s availability is that much more valuable,” Rayl says. “So it is very important that we are operating that asset and that driver as efficiently as possible to maximize the amount of miles and deliveries in a week that that driver and equipment can do.”

By identifying opportunities ahead of time to invest in new technologies and equipment, he positions the company for future competiveness.

“It represents an opportunity for us,” Rayl says. “If we can be a leading company when it comes to safety standards, equipment standards, driver standards, we’ll be that far ahead of the competition when these new rules are enforced, and they will be coming soon.”

How to reach: J. Rayl Transport Inc., www.jrayl.com or (330) 784-1134

Akron invests in biomedical

Over the past 35 years, Akron has successfully transformed itself from the rubber capital of the world into a diversified business climate that supports more than 600 metalworking, electronics, machining, advanced materials (polymers) and biomedical technology companies. In the past six years specifically, the city has devoted a major economic development effort and significant private capital investment towards attracting companies from this last area.

The most recent investment came in 2011, when a new vehicle was created to further attract and create new biomedical company investment in Akron. Akron Bioinvestments Funds LLC was created by the city’s Akron Development Corp. and was funded by private organizations including Medical Mutual, First Energy, Cascade Capital Corp. and Northeast Ohio Medical University. It is a $1.5 million loan fund aimed at providing financial support for the commercialization of high-potential biomedical early-stage companies that are close to market entry.

There are two components of the fund. First, $1.25 million will be dedicated to the Rapid Commercialization Loan Fund, which will include loans in the $100,000 to $250,000 range that are approved based on the merit of the applicant’s business plan and feature low interest rates and flexible repayment schedules. In addition, $250,000 will be dedicated to the Product Development Fund, where grants of $25,000 are awarded based on proof of product concept, market assessment and business plan development.

A major goal of the initiative is quick turnaround time on all funding requests reviewed. This new availability of funding is expected to draw both national and international interest from companies in the biomedical field to Akron in coming years.

Raquel “Rocky” Rodriguez was physically starting a new Miami law office from scratch. She didn’t have a team of employees. She didn’t have an actual office yet. From a support standpoint, however, she had a stacked deck.

Joining McDonald Hopkins LLC as its newest managing member in 2011, Rodriquez had the rich culture and resources of a firm with an 80-year history of client service success.

“So it really was very much of a start-up operation, except that I had a really good solid team supporting me all the way,” Rodriguez says.

Smart Business spoke with Rodriguez about the keys to entering a new market, starting with finding and developing a strong team of employees.

Use your network to find talent

One is to let people know that we are here through selective marketing, through interacting in the community, getting the word out, introducing the firm. The other is using my personal contacts to recruit the kinds of lawyers that we are looking for. We identify the practice areas we need, the client type, the personality set and either directly approach those lawyers or through my contacts identify who those lawyers are and then use those relationships to reach them.

Seek complementary skill sets

The biggest leadership challenge when you are expanding a firm or growing an office is being able to identify in potential [hires] the kinds of qualities that you want to reinforce in your firm while also adding capabilities that fill whatever gaps you may have.

You have to recognize that you have weaknesses because nobody is perfect, and nobody has every skill that they need for every job. Then you need to surround yourself with people who have the skills that you are lacking to compensate for them, which means that you have to be very self assure and confident rather than worried about people showing you up. You succeed by other people around you succeeding.

When you are interviewing associates or other staff as well as partners, you like to know that they have succeeded at, what they have done and know what their track record has been. You want to know that they are hard working and that they are not just going to coast. You want to look for indicia of people who always demand more from themselves.

Use interviews to find cultural matches

You work very hard at hiring people who contribute to the culture and who like the particular culture of the firm. Every firm evolves as it gets larger, but there are certain core principles in terms of how people relate to each other and the way that the firm serves its clients that cannot be compromised.

I like to know why they are speaking with us. What is it about their situation that they would like to improve on and what are their long-term personal and professional goals? I like to know about what they do in their free time when they are not being a lawyer. I like to know what their approach is to clients and practicing law.

Take charge

You have to be a friendly and approachable person, but you also have to recognize that there are boundaries, particularly in the workplace. You are not there to be everybody’s best friend. You are there to lead them and help them succeed.

A critical trait is to be able to communicate your vision, your goals and your expectations very clearly. If you don’t communicate clearly, people will assume that they know what you want, and you may not get what you are expecting.

You set clear goals. You agree on timelines and then you follow up on a regular basis to make sure that you are on track.

Do your part

If people do not see you contributing the effort, they are going to feel like you are unfairly dumping work on them. It doesn’t mean that you have to spend every waking hour in the office or constantly connected, because I do think that it’s important to unplug every once in a while so that you can do your strategic thinking. It does mean that you have to be willing to take on the hard work that you are asking other people to do.

How to reach: McDonald Hopkins LLC, www.mcdonaldhopkins.com or (305) 704-3990

Company Facts: McDonald Hopkins LLC

Headquartered in Cleveland, Ohio

Size: more than 130 attorneys in six strategic locations, including Chicago, Cleveland, Columbus, Detroit, West Palm Beach and Miami

About: The company has an 80-year track record of counseling clients as a business advisory and advocacy law firm

At his company’s national convention last year, founder and CEO Ed Kaloust was unsure of how to handle the announcement for Medi-Weightloss Clinics’ employee of the year. The problem wasn’t identifying a worthy candidate, but narrowing the success stories down to just one person.

“We just had three spectacular employees,” says Kaloust, who has grown the weight loss company from start-up to $16.5 million in revenue in 2011.

So he decided to announce three winners.

In today’s economic environment, having too many good people is hardly a problem a CEO is worried about. In fact, Kaloust says having the right people in the organization to grow its unique business model — a medically supervised and managed weight-loss program where physicians help clients lose weight through a combination of medication and diet – is why the Tampa-based business was one of Inc.’s fastest growing privately held companies in 2011.

“One thing that I believe in is what I call my ‘PLU’ method,” Kaloust says. “I believe that we need People Like Us. So we are very, very selective in the people that we choose to do this. By doing that, we can then be very supportive in helping them develop their program.”

From the time he started the company, Kaloust has been resolute in sticking to his PLU philosophy, carefully evaluating any business partner before he brings them into the enterprise, even if it means growing more slowly.

“People are really having a tough time out there,” Kaloust says. “I believe that it’s critical to keep that in front of us and to understand that growing through quality PLUs, people like us, is much better than trying to build 15 or 20 of these a month.”

Through deliberate organic growth, Kaloust has expanded the company from its initial three employees to 55 employees and 90 franchisees today. But in addition to having a company built with PLUs, he says, a leader needs to be able to support them effectively.

“My focus has changed from building the infrastructure to leading the infrastructure,” Kaloust says.

You need to let your people know that you are available to help them achieve their goals today, tomorrow and in the future, by “over-servicing” them. For example, Kaloust assigns a franchise field consultant to every 12 to 14 franchisees to help handle all of the marketing and compliance issues at each location so that they don’t need to worry about it.

“You need to do everything you can to protect the people who are investing in your program,” Kaloust says.

“That is one of the keys to not only growth, but it’s very key right now. Every time we turn around there is a new problem out there. So you’ve got to be there in front of them and keep reminding them, and you’ve got to be there to support them.”

It’s also important for leaders to demonstrate confidence and stability that people can look to and be inspired by.

“We have to protect the system and protect the clinics that aren’t doing well,” he says. … “We do whatever we can to help them get though the economy right now.”

Kaloust shows this by letting his people know that there is no problem too small for his involvement and no interference if an employee or franchisee calls him or comes to him with an issue.

“I’m not afraid to reach down to the smallest issue that we have in the company,” he says. “If I can help, I want to do that.”

In addition to having formal support systems in place for employees, an open-door policy lets them know you care about their wellbeing.

“I just make the time,” he says. “It doesn’t always happen and I don’t have that now as much as I used to because we have built such a strong company, but I would get involved.”

With the right team and support in place, Kaloust says, success is just a matter of letting people do what they do best.

“I believe that adage that you can take away everything I have and give me back the people, and I’ll do it again,” he says.

How to reach: Medi-Weightloss Clinics, www.mediweightlossclinics.com or (877) 633-5677

Mirror image

Ed Kaloust spent 43 years in the securities and investments industry before founding Medi-Weightloss Clinics in 2004. He had never planned on being in the weight-loss business. In fact, he was set on retirement, soon to be heading off in a custom-built sailboat to fulfill his dreams of blue water sailing. But then he got hit with a market opportunity that he couldn’t say no to.

“I felt that we were in the perfect storm, because we had a country that had an overweight issue and had 70 percent of its population dealing with it,” says Kaloust, CEO of the company.

In addition to making sure you have a clear problem, a differentiating solution and the right people to execute it, Kaloust says having a partner can be a key factor in how well you capitalize on a new market opportunity.

In addition to being an asset through complementary talents, partnerships can be a mirror to help you reflect on and guide decisions about a company’s direction.

“It’s a lonely office when you are a CEO or a president,” Kaloust says. “Everybody is looking at you, and where do you look?”

By partnering with James Edlund, now president of the company, Kaloust was able to balance his financial background with Edlund’s pharmaceutical experience to grow Medi-Weightloss nationwide.

“There are a lot of people who say that partnerships don’t work,” Kaloust says. “That’s not true. Some partners don’t work, but other partners will help you go on to do bigger and better things than you can do on your own.”

How to reach: Medi-Weightloss Clinics, www.mediweightlossclinics.com or (877) 633-5677

Like many CEOs, Ray Titus got a reality check when the U.S. economy tanked in 2008. With his franchise development services company coming off 20 straight years of year-over-year growth, the idea of not growing was at the very least a foreign concept.

“It was all great and roses and now the last couple of years have been really trying and challenging,” says Titus, CEO of United Franchise Group, which owns and manages approximately 1,400 franchise locations in 50 countries, including well-known brands such as SIGNARAMA, EmbroidMe and Billboard Connection. “We were in a position to grow again as usual, and unfortunately the franchisees got hit, the economy, everything that was going on.”

The company’s customers and employees lacked direction, unsure of how to deal with the financial uncertainty of what would become a global economic recession. As fear of the unknown threatened to paralyze the company, Titus realized that changes were needed to adapt for survival in the new business environment.

“You had a real freezing of decision-making that was being done,” Titus says. “Nobody knew what was going to happen next, so nobody wanted to make a decision.

“We live in a business world today that is changing on a daily basis, a weekly basis, so anybody that is stuck in their ways — it’s my way or the highway.”

Because UFG had focused on growth for two decades, Titus knew that the first step forward would be taking a step back.

Rethink profitability

After reading a book called “Islands of Profit in a Sea of Red Ink,” Titus discovered an important takeaway about operating as a successful brand and revenue-generating business.

“That book really hit it right between the eyes, because it talked about that there was as much as 40 percent of your business that was not profitable,” Titus says. “You just did this work because you always did it.”

To create a stronger business moving forward, Titus realized that the company needed to start thinking more about profitability when making investment decisions.

“We were really focused more on growth than we were even on profit,” Titus says. “As an organization, when you take a step back, you realize, ‘Wait a second, there are certain things in this organization that we are more profitable on than others.’”

The first change that Titus made was to put a stop to the expansion mode that the company had been in for years. That meant selling fewer new stores and franchises and refocusing on strengthening the brand.

“We had to change the way that we were doing business,” he says. “We had to look at things a little differently, make cuts, look at expenses differently and change the thought process.”

Part of that was revising the company’s strategic planning process to having only one- and three-year strategic plans.

“We always looked at five years and even 10 years as a company,” Titus says. “You’re obsolete in your planning and your strategic plan if you are going beyond three years.”

Titus also now spends much more time doing due diligence to evaluate investments, assessing factors such as profitability and vetting out those that aren’t a good fit with the company’s philosophy and goals.

“We’ve created some really smart steps for us to go forward with,” he says.

“Based on that, it’s meeting the criteria, the budget, looking at everything and does it get us to where we want to go in our one-year and three-year strategic plan.”

Improving profitability short term was a matter of identifying and eliminating expenses that had minimal return for the company. Titus knew that several of the countries the company was running as a direct organization, including a new store in Switzerland, had become money drains but were still mounting in costs.

“What started out as a small investment all of a sudden became a rather large investment into it and we weren’t getting any return on it,” Titus says.

But by selling master licenses in less profitable countries such as Switzerland and Canada, Titus handed over the expense and ownership sides of the businesses so the company could scale back to a support role.

“So we went from something that was costing us a lot of money to something that costs us nothing, and we’ll probably end up in a better spot when it is all said and done,” he says.

At the same time, Titus knows that some investments pay off in ways that aren’t as apparent on a budget line, such as in learning opportunities.

“It’s easy to cut people from going to trade shows or seminars, but looking back on it, each time that we’ve ever done that it’s a mistake,” he says.

Instead, invest smarter. Rather than having four or five employees traveling to a trade show, have one or two people attend and then relay the information to the rest of the company.

Evaluate your talent

Ultimately, restructuring the business to withstand the recession also called for some initial job cuts. While it wasn’t an easy time, making these cuts was necessary to strengthen the company from the inside out.

“There has been a change in mentality that was needed, but it still doesn’t mean it isn’t painful,” he says.

In times of financial uncertainty, it’s important to fully understand how each employee fits into your company’s vision so you can hold your organization accountable for progress and goals.

“I think it’s kind of bizarre that now we go year after year, month after month and everybody thinks they are an A,” he says. “Everybody thinks that they are 15 percent underpaid.”

If you want your people to be the best they can be and add the most value they can to your company, you have to set clear expectations and a high bar.

“Every great teacher and every great coach that I ever had got more out of me than I even thought that I could,” Titus says. “If you do that with your people, they’ll eventually really appreciate that management style — tough love but love.”

Titus evaluates his people through an annual review process that assigns employees with an A, B or C letter grade based on 12 criteria — an idea he got from Jack Welch’s management book. A’s usually get bonuses, raises and more money. B’s are valued employees that do a great job with the company, and C’s get a warning — 30 or 60 days to show improvement. Just like in school, C is the passing grade.

“We don’t hire D’s and F’s, and we don’t keep D’s and F’s,” Titus says.

The evaluation process frequently reveals strengths or weaknesses of a person that weren’t obvious to their boss or co-workers.

“The first year that we did it years ago, we went around the table and the manager was saying that this person is B, but by the time we got around the table it was very clear that that person was a C, or an A,” he says.

Knowing people’s strengths can also tell you how they can be utilized more effectively for the success of the company. During the recession, Titus realized some of his managers were actually more valuable reverting to the sales or customer service roles where they started out and really excelled.

“Certain people took roles that they did for ten years, eight years prior and went back to doing what they really, really did well,” Titus says.

Titus even removed himself as brand leader for each of the individual brands and put a separate president in charge of each brand, which freed him up to take the role as director of franchise sales and get more involved in big picture strategic planning.

“It’s focusing your people and yourself on taking a step back, and getting away from the titles and all the other things out there to really go back to what made you successful in the first place,” Titus says.

“We’ve got to sit down with our people and we’ve got to say what we like, what they are supposed to be doing, what they are not doing and correct it, but then we’ve also got to be able to say ‘This is how I’m rating you.’”

Lead a new mindset

Titus knew that the lessons learned from the down economy — getting more pricing for products, being more efficient with resources and so on — were things the company needed to keep doing moving forward.

“All of us have had to evolve a little bit more and be more conscious of how we spend our money, what we are investing in, and even the projects that we bring on. It’s not throwing bodies at problems,” he says. “It’s throwing solutions at problems.”

The challenge was explaining to employees and franchisees that there would be no getting back to normal.

“I have ten direct reports and they average 20 years with the company,” Titus says. “So they go back so far that they’re used to different mentalities in business.

“As we’ve turned and been in a really good spot now for about nine or ten months as an organization, we’ve learned that we can’t go back out and say everything is fine and now it’s back to the way that it was. We don’t want people doing what they did before.”

When you’re asking people to accept a new way of doing things, it’s critical to manage expectations by clearly communicating what that vision involves, especially for long-term employees who may be eager to revert to old ways. Clear communication from the top down is the key to making sure people understand what is expected of them as well as keeping morale high moving forward.

“Any time you do cuts of any kind it is painful and it’s hard to keep morale in a good spot and keep things positive, especially when people all around are getting budgets cut or somebody is getting laid off,” Titus says.

“The challenge there is to keep a good positive attitude and convey that we are doing well, but in the same breath, we still have to be careful. We have to watch what we are doing and keep moving forward as an organization to improve how we do business.”

To make sure the message doesn’t get skewed, Titus prefers to deliver it person, whether it’s participating in superregional meetings, traveling nationally to different offices for Q&A’s or spending time with franchisees locally. There is nothing like face-to-face communication to really get to know people and make sure that you are all on the same page.

“You don’t run a business from a desk,” Titus says. “You run a business with people, so you’ve got to get out from behind your desk and get face to face with customers and prospects.

“Some of those meetings are tough meetings. Some of them will appreciate it and some of them don’t, and it doesn’t matter. The bottom line is we’ve got to be involved in the different aspects of our business that we can make a difference in.”

The company’s ability to execute these changes has made all the difference. By late 2010, UFG was seeing dramatic improvement from the start of the recession, and just one year later, annual revenue had grown from approximately $450 million to $500 million.

“We have consistently moved forward as an organization,” Titus says. “I don’t want to say that it is back to normal because what is normal? We’re in a new normal. So things are improving. Store volumes are up. Franchise sales are up. We’re in good place now.”

How to reach: United Franchise Group, www.unitedfranchisegroup.com or (561) 640-5570

The Titus File

Ray Titus

CEO

United Franchise Group

Who are your business mentors?

My first mentor was my dad. My eighth-grade school paper was how to start a franchise company. I would not be anywhere near where I am today if it hadn’t been for him. So he was the first one, and he introduced me to my second one, which was Gary Rockwell, who worked for my dad for 40 years. From my standpoint, the next one would be J.J. Prendamano. He is my father-in-law who has worked for me for 20 years. For me to have him as a mentor, as a helper and employee has just been incredible.

What is the greatest piece of business advice that you’ve ever received?

My dad telling me that there are always two sides to every story. There are always two sides. Sometimes you can really get emotional or caught up when you hear one thing, but there is a really good reason. There are always two sides and the truth is usually somewhere in the middle, a little bit of one and a little bit of another.

About JJ’s Entrepreneurs mentoring program:

Founded in 2011, J.J.’s Entrepreneur was developed by UFG to encourage and teach students about the benefits of entrepreneurship and owning their own business. The program was also created to honor J.J. Prendamano, a long-term employee who was diagnosed with brain cancer, by recognizing his commitment to mentoring and helping new business owners become successful. Through a five-year minimum $75,000 commitment by UFG, students participating in the competition are mentored by Titus and Prendamano as they create their own innovative business plans. Two winning students are selected to launch their business concepts, with one student awarded $10,000 and one receiving $5,000.

Last May, John Sensiba was elected to his second term as managing partner at Sensiba San Filippo LLP, a CPA firm with approximately 100 employees. Having been in the role for a little more than three years now, Sensiba has come a long way since he first transitioned from the practice side of the business to take the top spot.

“It has been a dramatic change,” he says.

One of the first lessons Sensiba learned was that he needed to be more confident in the strategic decisions he made and recommended to the firm. It was tempting to be overly participative in decision-making, but by taking a more laissez faire approach in everyday decisions about activities and investments, he realized he was freed to focus more on setting policy and strategy.

“In a professional services firm, the more that you involve the partners in those decisions, usually the better, because they are a bunch of smart people,” he says. “But sometimes you can do it to the point of distraction. Then you might wonder, ‘Why do you have a managing partner if the decisions are all made by a group?’”

While a leader should be able to make some decisions without too much input, Sensiba says you need a way to gain honest feedback on your choices. That becomes increasingly difficult the higher you get in an organization.

“Regardless of the fact that you know folks and you feel like you are approachable, you get different and filtered feedback when you are in the top position in an organization,” Sensiba says.

He now frequently looks outside of the organization to get critical feedback about his leadership and the business from other leaders.

“I learn a lot just talking to people who have been in different roles not within the profession but just in a variety of different businesses or nonprofit enterprises,” he says.

“It may not be the kind of praise that most of us would like to hear all of the time, but it can be really productive to hear things from somebody, and you change your behavior.”

That communication goes both ways. Sensiba found out the hard way that as a leader there is no such thing as overcommunication.

When he first took over as managing partner, he would very carefully craft communications and messages to the firm and for meetings only to have people approach him later on and be frustrated that they hadn’t received the information.

“I thought, ‘Ugh, can I go back to your e-mail for you and show you where I sent it to you?’” Sensiba says. “You get that frustration and sometimes that would come through in my communication.”

Sensiba knew it was damaging for the culture to show frustration with his people, but he admits it was a good lesson to learn early on. He shared his irritation with one of the other managing partners about how his efforts to communicate seemed to be futile.

“He said, ‘If for some reason they didn’t hear it, it’s still your fault,’” Sensiba says. “‘If you said it 10 times, maybe you need to say it 11, but the market is never wrong. Your people are never wrong.”

If people are not getting the message, you can’t blame them. As a leader you need to look at the way you are communicating and do something differently.

“You just cannot put the message out there enough,” Sensiba says.

That goes for communicating day-to-day info and strategy, but also communicating the everyday vision to inspire future leaders of your business. That has been the key to maintaining the firm’s 92 percent client-retention rate.

“My role is to continue to build leaders at every level within the firm — to convince people that you lead from the day you start in a business — you are a leader,” he says.

How to reach: Sensiba San Filippo LLP, www.ssfllp.com or (408) 286-7780

Relationship mechanics

For John Sensiba, retaining clients and generating new business at Sensiba San Filippo LLP is a matter of executing a simple and popular principle.

“It goes back to the golden rule,” says Sensiba, the firm’s managing partner. “Treat people the way you’d like to be treated.”

How does this apply to business? Sensiba gives the example of going to a mechanic to work on your car’s transmission, only to find out that it was your fuel injectors that needed work. Even though the mechanic might do an OK job, it’s not that person’s specialty.

“He might say, ‘You know what, it’s your fuel injection and I’ll work on that for you.’” Sensiba says.

“But I would have much more respect for that mechanic if he said, ‘It is your fuel injection and here is my business partner who does nothing but fuel injection, and he is the guy that you need to talk to.’”

While you may lose some business referring customers elsewhere, you earn their trust by showing them that you are looking out for their best interests.

“If you come to me with something that we don’t have the expertise for or we’re not passionate about it, we’ll tell you ‘Call my friend from X, Y and Z firm. They really focus on that. They will do a great job.’” Sensiba says. “Because that is what we would like people to do for us.

“Our growth is built on a very stable client base that tends to stay with us and refer us business. It’s a very good upward spiral when you do good things for people.”

How to reach: Sensiba San Filippo LLP, www.ssfllp.com or (408) 286-7780