Balance the structure to grow. Our business is made up primarily of several different groups, and at a meeting, I tell the executive committee that in order to go forward, we need to keep a good balance between those.
And then I give the high-water marks of where I want each of those to be. Then I let them then discuss the formula for balancing each section of growth, and we make our goals from that.
We don’t want to become too reliant on one section of business. Over the last few years, the group that’s grown the most is military, so we had to revise our goals and understand that’s a little bit larger segment, but we have to be mindful of growing the others.
You never want to stifle one section of business because something else is successful. We just keep saying, ‘Let’s get a little bit more in balance here.’ We never want to cut back; we want to work on growing the other segments faster.
We let our executives feel individually responsible to figure out how to keep that balance. One of the things we do is have quarterly checks to see how we’re doing on that balance.
We give each department head the independence to make the decisions how to get that job done. When you have the right to make those decisions and are held accountable by the other groups, that makes them want to come to work and they have a participatory interest in the company.
There is some competition that comes with that. It’s never to the detriment of the team, but I want them to be able to set the pace, and brag and say, ‘Gosh, look at me,’ a little bit.
Update the plan before adding new people. At the end of every year and the beginning of the next, we revise our five-year plan. Once we do that, we have each of the vice presidents go to their managers and say, ‘What will be needed to reach these goals?’ Then we can add people or do other things to match those results. Then they can come back and indicate that, ‘We have this need for more people because of this new goal.’ And they can indicate what these people will do and give us a solid job description.
Have a cup of coffee with employees. We have a once-a-month ‘coffee with the chairman’ meeting where I get up and tell them what’s going on and take questions. It’s something that they look forward to, and I do, too.
We acknowledge birthdays and anniversaries, we talk about new developments in the industry, and I let them know where I’m going to be in the next month and if we have anybody coming into town.
Then we acknowledge recent superior performance and then I open it up to questions. And I also ask my vice presidents and others to also stand up and give presentations on recent moves.
It gives everyone a chance to see what they’re a part of so they don’t come to work and just say, ‘We’re just going to do whatever Steve tells us to do.’ We have a suggestion box that they can put ideas in, and I answer those at that time.
I give them answers right there. I tell them, ‘We’ll look at this, or this is my answer for right now.’ I deal with all of them so everyone knows what I’m thinking and what we’re planning.
Really listen. I think the ability to truly listen is the most important quality. You have to convey to whatever group you’re speaking with that you’re listening and you don’t have some preconceived notion of how you’re going to answer them.
And once you’ve listened to their side of the story, give direction or feedback. Let them know if what they’ve said is acceptable or not, and then listen again. I always make eye contact with them. I reassure them that I will replay back to them what they told me.
I always ask follow-up questions, and if we end the meeting and something has to be decided, I get back to them in the time I tell them that I’m going to.
Lighten up. I think the hardest thing is probably not to take yourself too seriously; there are some ramifications to that. One is if you put yourself on a pedestal, you start to think that just because you have been successful that you can take everything for granted, or that you have all the right answers.
Success breeds success, but it can also breed complacency. Humor to me is a great release. There are people around the office that I go and just talk to and joke with, and you can ask them what they’re hearing. And when you have that ,it allows people to be a little more open and to bring up new things and they know they can do that without retribution.
The other thing that is important is that you have to admit your mistakes. I’m very free to admit that decisions are made that didn’t have the results we anticipated, and I’m sorry for that result, and we’ll move on. Be willing to adapt to that mistake.
In conversations with people I tell them, ‘If you don’t think my idea is right, let me know.’ And usually what I like to do is let everybody speak first, listen to their ideas and oversee the discussion rather than me leading the discussion and telling them, ‘These are the ideas we’re using.’
HOW TO REACH: Wheaton Van Lines Inc., (800) 932-7799 or www.wheatonworldwide.com
When John Rooney first got to United States Cellular Corp. in April 2000, there was nothing united about it.
“It was a company that was really sort of out of sync with modern business,” he says. “They had 26 different areas that they covered with their network, but they also had no uniform culture or uniform approach to business. They were basically, as one of my senior executives called it, 26 engines under the same hood. While they all had U.S. Cellular signs, they weren’t even uniform signs, so there was no real single character for the business.”
So when Rooney took over as the president and CEO, he saw a chance to immediately bring the company together under one culture — in this case, he put into place his dynamic organization, focusing on a culture of business ethics, employee training and focused customer service at the wireless carrier that did $4.2 billion in 2008 total operating revenue. It would be an understatement to say that it wasn’t an easy task when he first tried to bring everyone under one tent.
“We had a tough time getting it in because it was one of these things where there was no way to hide, so if you didn’t want to follow the principles and behaviors, then you were out,” he says.
But Rooney started off by making a clear declaration from the top, retraining his leadership team to get everyone on board, then, with a solid blueprint in place, he got his front-line people fully invested in pushing change.
Take the ball
Rooney didn’t expect the company to change immediately, but the role its top executive played did the second he came on board.
“There has to be a CEO who has got a feel for this type of leadership,” he says.
To do that, you have to clear your schedule of everything that doesn’t have to do with driving change.
“I have three jobs as the CEO,” Rooney explains. “I get to set the culture, which is the dynamic organization. I get to set the vision of the company, which is to be the best in customer service and satisfaction. And I also get to get rid of the ‘becauses’ — when someone comes to me and says, ‘I can’t do what you want because …’ then I get to go back in my old operating role and knock down the ‘becauses.’ I had a good COO here that could work on the other stuff. It’s a question of letting other people do the things that they’re good at and then making sure that I’m doing the things that I’m good at.”
So while Rooney let his chief operating officer handle the operations, he went out and made clear presentations to senior leaders.
“We really took the leadership at that time and told them what we expected of them. We had a fairly intensive effort for the first six to eight months that I was here to put the playbook out there and say, ‘Here’s what we’re going to do,’ and make it clear to them that they either subscribe to this or they were gone,” he says. “Many of them looked at that and said, ‘Well, this is the flavor of the month,’ and that they were going to outlast me. They didn’t do that.”
They certainly didn’t. Of the top 50 people Rooney originally introduced to the dynamic organization, he estimates fewer than five survived the transition.
“That’s the way things are; you have to just be intolerant of people that say, ‘I don’t want to live this way,’” he says. “They don’t want to live this way, fine, I don’t care. People have their choices, but that choice then says you don’t live here.”
As he explained these things to his senior leaders, he also went out to the front lines and shared the behaviors he was preaching.
“I went out to the front-line associates, who really are the most important people in this company, and I told them, ‘Here is what I want your leaders to be like,’” he says. “And then they were very intolerant of leaders that didn’t act that way.
“I didn’t want them tied up in a lot of bureaucracy, and we expected them to be proud of their company, and you can’t be proud of a company where there’s not a very strong sense of ethics. I promised them, ‘If you are being asked to do something by your leader that you think is a problem, you come right to me, and we’ll take care of it.’ In some cases, they did. And we also told the leaders, ‘Don’t try to interfere with the channels of communication. If you do, you’re going to get walked right out of here.’ And we had to do that, too, a couple times.”
After setting a sharp tone, Rooney backed it up by making leadership retraining a top priority. He began instructing the executive vice presidents on the expectations of the dynamic organization and then had them teach the vice presidents and so on down the line.
To ensure that the lesson was getting through, he set up the process so that it would rival a minor in leadership at most universities, bringing in Ph.D.s in business to help design a curriculum and make sure executives were clearly getting their point across. The idea was simple: No leader could stay with the organization if he or she didn’t thoroughly understand the new direction.
“I have a very firm belief that when businesses fail, it is not the associates that cause the failure, which, in many cases, it’s them that pay the price; it’s the leadership that screwed it up,” Rooney says. “And so often, the leaders get byes; well, they don’t get byes here.”
And while Rooney couldn’t personally teach every class, he did make a concerted effort to keep an eye on one group of leaders — those who handled front-line employees directly. When you’re focusing on company culture, it’s easy for a message to get lost down the line.
“That means that the most important coaches in the company are those people that we entrust our customer service people and our store personnel to,” he says.
So as U.S. Cellular went down that road, measuring leaders became important. It took more than five years, but Rooney put in place a measurement of how leaders were working that weighed as heavily as how they did on quotas and budgets. That meant a complaint about going against the dynamic organization held as much weight as a missed deadline.
“This is where we really started looking at the how with as much weight as we looked at the what and started taking people out that were doing the whats but were not doing it the way we wanted to do it,” he says.
That’s where the intolerance Rooney mentioned came into play. He didn’t expect changes overnight, but he did want them to be willing to try overnight.
“If it’s a will issue, just don’t let the door hit you on the butt on the way out,” he says. “If it’s a skill issue, I’m willing to show patience because, especially if you bring someone in from the outside, they have never been trained this way. I mean this is so different than most corporations and I can understand how someone can say, ‘That’s how I lead.’ We’re willing to coach them and put them through training and work with them, and as long as they’re making progress and they’re honest in their approach, we’re fine. We don’t expect them to automatically change overnight, but I expect those spots to fade pretty quickly.”
Get people f
As his leaders began to better understand the new direction, Rooney had to make sure the bulk of his employees — those without fancy titles — were fired up about the company’s new direction.
Rooney did a baseline culture survey in the summer of 2000 to get a feel for his employees and has done it yearly ever since, focusing on a few unusual elements. First, he was interested in how much pride they had in the company. Along with that, he gave employees an open forum to discuss any competitive advantage they saw.
He found that people had some pride in their job, but there was plenty of room for more. Looking to make a more personal touch, Rooney stopped hoteling call center employees, something competitors still do, and let everyone have their own desk where they could feel at home and put up personal items and pictures — which Rooney comments on during his visits.
“They just love it; they eat that stuff up,” he says. “Somebody’s paying attention to them and when you pay attention to them, they’re going to pay attention to the customer.”
The other thing that employees told Rooney about took some time. As the organization was changing, they began to wonder why U.S. Cellular didn’t flaunt its new focus on the customer. While it didn’t happen immediately, Rooney says you can’t ignore repeated outcries from employees, so the company came up with what it called human coverage, a way of presenting itself to the customer based upon the culture of the business. Rooney wanted his people fired up, so he told them they were now the face of the company, something he says pushed them to have a competitive edge.
“So I keep on telling them, ‘I want you to be cocky,’” he says. “‘I want you to get out there on that floor and feel sure of what you are and where you stand, and I want you to understand that you’re the best of the best.’”
And as more items employees mentioned on the survey became part of the culture, the more the pride element went up. Today, more than 90 percent of employees fill the survey out every year, answering questions and producing thousands of pages of extra ideas.
And that also gets other leaders more interested in seeing what people are thinking.
“Once I got this thing started, the leaders became more interested in hearing what their front-line people were going to say, too, because they wanted to know what they were going to say to me,” Rooney says.
While he doesn’t have an exact total for critical mass on a change like this, Rooney watched the pride element reach the point where more than 90 percent of employees felt positive about the company. And that’s a result of being unflinching along the way.
“It occurs when people figure out that you’re serious about being intolerant,” he says. “When they figure that out, then they become self-policing, because they then have to make the decision whether they want to stay with the business or not.”
Even with the success he’s had, Rooney doesn’t think he’ll ever be done pushing his organization forward — especially when inevitable bumps like the recent economic downturn can make people regress to old habits. Still, he says U.S. Cellular has watched turnover in its call centers fall to roughly 25 percent in an industry where the average is more than 60 percent. It’s getting those sorts of numbers that indicate forward movement. Any leader can get a group of direct reports in line, but it’s full buy-in that’s important.
“I can get the vice presidents singing together like the Mormon Tabernacle Choir, but that’s not what we want,” he says. “What we want is the whole organization singing together. The only way this company is competitive and successful is if I get 9,300 people to be creative and innovative and customer-focused, and if we’ve got people that really care, it’s sort of like a football team or a basketball team, right? People that are fired up about playing the game, they’re going to play a hell of a lot better.”
How to reach: United States Cellular Corp., (866) 872-4249 or www.uscc.com
For Rick Malir, it was the brisket and the original barbecue sauce.
When both were developed at City Barbeque, he couldn’t stop eating them. Here’s the thing, though: He isn’t the only one with tantalized taste buds. The barbecue restaurant has become a hit, growing to more than 10 locations and 350 employees.
So while Malir still enjoys the food, his role as president and co-founder has become a lot more executive-like, as he deals with more government rules and regulations, more hiring, and so on.
“As a company gets bigger, there are more mandates and rules and paperwork that’s required ... and that does become quite a challenge to work through all of that,” he says.
But while Malir has to deal with all of that, his busier schedule can’t come at the cost of sending out a bad brisket, so he has to put in systems that allow him to take the temperature of each location.
Smart Business spoke with Malir about how he stays in regular contact with his people and how he works with his senior leaders to ensure customers are left with a good taste in their mouth.
Collaborate with your top people. We have reviews with our teams and what I do with my seven direct reports is I have a monthly one-on-one session with them. I see them all the time, but every month we put into stone to at least sit down so we know that at least once we’ve had a very meaningful conversation about goals and where we want to go.
It’s about an hour, and it’s very simple. First question is, what is my role in achieving our company goals and strategic plan? And you can write what you want. No. 2 is, how will I contribute to our company goals and strategic plan? And then, what do I want to accomplish and what are the expected results — results must be measurable — what are the key measurements that indicate success? So those are the three basic questions we talk about. Then, what are my priorities or projects for the next 90 days?
Keep an eye on hiring and training. We have probably a more detailed interviewing process just on our entry-level jobs than most restaurants, so we do that a little more in depth. We actually do background checks for everybody.
Then we have a director of training, and that’s a full-time position. He was in operations before, and what (he) does is he helps us develop what we need as a company, classes to promote our service standards, what barbecue is, the technical training, standardization of procedures, classes on who we are, what we are, anything to do with education, as well.
We’ve seen improvements, and people are at least being exposed to what we are, and there’s more consistency.
Create ways to regularly stay in contact with everyone. It comes back to the people, and the challenge is they’re not in my backyard. It’s easy when we have one in Powell — well, that’s 10 minutes from my house. It’s easy to keep an eye on, but I have regular scheduled visits no less than every 30 days just so I know what’s going on in those markets and they know I’m not neglecting them.
You have to just over-communicate. A memo does not replace a conversation in communication.
I meet everyone and try to know their names. I have a method for remembering, and I’m not saying I know every one through all 350, but when I walk in, I can tell you I’m at 80 percent, and that’s very important to me. I want to know everybody.
If I don’t talk to everybody when I’m in the restaurant, it must have been because I was really in some hurry and I was only in there for five minutes. My primary objective is to see everybody when I’m in there, that’s why I go around, mainly.
To keep communication going, we have weekly conference calls with directors, we have quarterly general managers meetings, we have a newsletter called ‘Smoke Signals’ that celebrates achievements and, we call them shout outs, great things our teams are doing. We can talk about our standards and our vision in there, as well. We have a very good strategic planning session every year so people know where we’re headed and then we have mission, vision and values that we live by. We also have the best Christmas party in the industry.
Set stretch goals that reward people on merit. I’m very big on letting people run their business, letting them have autonomy and control within our standard. Our bonus plans are set up on only what they can control. We have a pretty good benefits plan, as well, because we want to invest in there, and then we strive to promote and give raises on merit, not seniority.
It’s fairly basic. It’s really broken down by what the general manager and the teams in their restaurants can control; it’s based on sales and expense control. The rent bill and my salary don’t go into that, for example, because they can’t control what we negotiated on rent or taxes or my salary, but they can sure as heck control food costs, labor, utility bills and sales, obviously.
It can serve as a weed-out, as well, because some folks don’t want that environment, and so we have to really find the people that thrive in that and have a little bit of that entrepreneurial spirit themselves to know that, ‘Hey, if I work 80 hours this week maybe I’ll get a little bit of something more than just the standard paycheck.’
And it’s kind of interesting, one of the leadership things I found out is a team will only rise to your standards, it will not exceed them. So if you set standards low, they’re going to hit them; they won’t exceed them. And so that’s just human nature, so I have to have a high standard.
How to reach: City Barbeque, (614) 583-0999 or www.cityqbbq.com
F. Robert Woudstra has been bought and sold so he knows what it feels like.
Nearly a decade ago, he was an executive about to be acquired by insurance powerhouse Farmers Group Inc.
Sitting across the table from Farmers, he had his own concerns about how being acquired would affect his career and his people, but he was quickly impressed with the empathy, thoroughness and welcoming nature of Farmers. In fact, he was impressed enough to stick around and eventually become the company’s CEO.
So as Farmers began the process to acquire 100 percent of American International Group Inc.’s U.S. Personal Auto Group, which includes 21st Century Insurance, the first dance was one Woudstra took slowly.
“When I first sat down with them, I said, ‘Well, the first thing I can tell you is in the year 2000 I was you, because I was part of an organization that was acquired by Farmers,’” he says.
Farmers announced the completion of the deal on July 1, 2009, at a purchase price amounting to approximately $1.9 billion. It’s the company’s fourth acquisition over the last nine years and certainly the largest in its history. But while 21st Century employees were pleased to take their successful unit away from the troubled AIG name, the whole process wasn’t easy and it wasn’t quick. Woudstra and his senior leadership team did a lot of work behind the scenes making sure the two pieces would come together into a stronger whole, and that meant legwork from the business end as well as from the standpoint of both groups of people. Once Woudstra did that, Farmers was able to roll out the acquisition in a way that was welcoming to 21st Century and thoroughly explained to both groups.
Find the right fit
OK, it’s not news, but it’s worth mentioning that an acquisition in excess of $1 billion doesn’t happen overnight. The reason it’s worth mentioning is that, really, it took roughly three years for Farmers to get from thinking heavily about such a move to bringing in 21st Century. Woudstra was in on the process from the very beginning, as he was president and chief operating officer before stepping into the CEO role in January 2009, and for him, there are a lot of components to the process. When you want to acquire, you have to look for a few things: fit, timing, price and a unique opportunity.
The first question you have to ask is what makes a potential acquisition unique. Farmers did customer research and knew there weren’t a lot of fits like 21st Century out there, as it would allow the company to maximize its customer marketing and reach all methods of automobile insurance distribution.
“You will find that there are not many other players that play what I would think of as all different ways of accessing customers, which we believe then puts us in a much stronger position in the upcoming years,” he says.
If you narrow your frame, the first thing you’ll realize is that a good percentage of what’s on the marketplace will come off your radar.
“Certainly if you’re an existing company and you say I’d like to acquire somebody who currently does automobile insurance through what we call the direct channel, there are not very many,” Woudstra says. “So deciding that you want to acquire somebody, again, there’s not a plethora of those companies out there to acquire, and we knew that.”
But once you’ve narrowed your search field a bit, you still can’t go overboard for something that looks right. Setting a price in your mind is an important part of the process. Farmers had its eye on 21st Century for a while, but as AIG’s troubles continued, the price became right.
“When the 21st-AIG opportunity came along because of obviously all of the issues we know AIG has been in — not this business per se but the corporation — we then got very excited about having this opportunity,” he says.
And when you have a unique asset available in your price range, the slow deliberation of the rest of the process has to be put away, as you need to attack.
“This kind of an asset, there’s not many of these that exist, and the ability to buy one in our past and in the future is not very high, so when this opportunity came about, and certainly with the price at which we were able to acquire it, there’s no question that this is a growth opportunity for the organization, for our shareholders,” Woudstra says.
So while this may take time, you can’t sit around when a company that feels like a match is at your price point. If you do, it won’t be around later.
“There’s no question strategically that this is an asset that we need to have, and if we wanted to wait until later, this could be unavailable,” he says.
Verify a cultural match
Once you’ve matched business needs, you need to figure out the most critical match: the people. At Farmers, Woudstra has been through the process to know how important that is.
“We needed to look at the people fit,” Woudstra says. “So this will be the seventh transaction in my career. I’ve been involved in selling companies and I’ve been involved in acquiring companies, and when you’re acquiring companies, it is a culture fit with the people.”
But, like evaluating the business deal, that takes time. You start it at the outset, when you begin negotiating with senior leaders, but you verify at each step, fleshing out how many people you speak with and, like any good marriage, by talking about your future together.
“We both had the opportunity to watch each other in action, so to speak, and we continued to talk about the future opportunities of coming together and it’s just through a lot of that contact over the last six months that has allowed us to get comfortable with them because we’re making the buying decision,” he says. “Certainly being comfortable with them and having the sense that they were extremely comfortable with us.”
You don’t sniff that out alone. Up to 20 leaders from Farmers came through and met with their counterparts within 21st Century.
“So it’s not just a matter of myself and one or two other people, there’s been a significant number of people involved in this process,” Woudstra says.
But even with that help, you still have to be there to be the face of the acquisition on both ends. When the deal was announced, Woudstra met with 21st Century leaders to field any questions about their future involvement.
“I traveled to Wilmington, Del. (21st Century’s headquarters), and spent one whole day there on site with the top 20 people within that business group and had the opportunities to listen to them talk about the things that they’re working on and explaining the strategy as to how we saw them fitting into our business plan,” he says. “I sat there for about three hours and let them ask every kind of question they wanted to ask me.”
During that process, time set aside for listening was first and foremost on his to-do list to ensure their comfort in the deal.
“First, I listened to them, things they’re working on in their business unit,” Woudstra says. “It’s like anything when you first start becoming a group — you don’t want to tell someone something; you want to listen. So the first few hours was me getting
an opportunity to listen to what they’re doing today within their business and having them have an opportunity to present it themselves on an individual basis, the top 20 people, and then, from there, it was a matter of talking to them about strategically how we saw this group of people in this part of the business adding value into the business.”
Roll out the transition
Once you put things into final motion, you have to plan for everything that happens right before, during and after the actual merger. That may mean a lot of financial work and press releases, but it also means keeping in mind the number of people involved on all ends.
“When you acquire something, there are a lot of different audiences,” Woudstra says.
Write down all of them and consider how the message should be portrayed to them. For Farmers’ acquisition, there were shareholders, employees, employees of 21st Century, customers of both companies, distribution groups like independent agents and so on.
“The way you meet up in the best place is when you understand who all your audiences are and you go about specifically talking to them, and not just in some general sense but more specific to that audience,” Woudstra says.
Farmers did that internally even before the transaction happened, explaining to the people who would be involved with the nitty-gritty details of the deal why the potential asset was important.
“That group we sat down and spent time describing what were the strategic reasons we would have an interest in evaluating this company so that group could completely understand our thinking strategically,” Woudstra says.
While rules and regulations will determine how hamstrung you are in telling details, as soon as you can say something, do. When the first announcement of the acquisition was made on April 16, Woudstra got on the phone with the top 250 people at Farmers to explain details.
Farmers also had a plan ready to go to get in front of other audiences immediately.
“Within two and a half days after we announced the transaction, we were in front of more than 12,000 of our 15,000 agents, face to face with a senior executive explaining exactly what this transaction was all about,” Woudstra says.
A plan like that intentionally includes senior people, and more to the point, it intentionally includes people who were close to the deal.
“It wasn’t just an employee; it was a very senior person and a very senior person who was involved in the due diligence of the asset and had the complete understanding of the 21st Century group and could articulate very strongly how we saw it fitting into our business plan and believed in it,” he says.
He also did what he could to address 21st Century in mass before he could do more personalized things, so he put together a video to address them.
“They’re in different locations and there are about 5,500 of them, so I had an opportunity to put a video together so they could at least see me and I had the opportunity to address them,” he says.
You have to continue that communication through all of the stages. Like the different audiences, you have to realize the stages of the acquisition — from the first hint of a deal to the day the two companies merge. At Farmers, the company put a message up on its internal site in July to welcome the new people when the final transition took place, and Woudstra and four other senior executives went to Wilmington to do town-hall meetings with 21st Century’s top executive Tony DeSantis and his senior team.
Prior to that, all of 21st Century’s people received a welcome bag with items like a personalized letter from Woudstra, a Farmers informational DVD and brochures giving an overview of company benefits information. It’s something Woudstra remembers making the transition easier in 2000.
“Again it’s welcoming and making them feel what they were becoming a part of, and even as we explained this to the 21st Century people, they were quite impressed to the lengths we were going to reach out to every employee to let them know that every employee was important,” Woudstra says.
How to reach: Farmers Group Inc., (800) 327-6377 or www.farmers.com
Maybe the worst is behind us, maybe it isn’t, but Jenkins is in the banking business, so you better believe it’s something he gets asked about regularly.
But the fact of the matter is, Jenkins, the president and CEO of Harris Private Bank, has more than survived the downturn now synonymous with his industry. In fact, things are pretty good at HPB, which is a member of BMO Financial Group, the behemoth diversified financial services provider with more than $348 billion in assets. As the unit that delivers wealth services to high-net-worth families, HPB has taken advantage through diverse business functions like Harris myCFO Inc., a one-stop resource for multiple financial needs. But keeping things up in a down market means keeping employees on task and away from the front page of the few newspapers left in Chicagoland.
“The challenge right now that is always there but far more prevalent today is managing competing priorities,” Jenkins says. “But managing fewer priorities falls back to keeping our people engaged and working with their clients on a day-to-day basis and just keeping them away from the short-term market noise.”
So Jenkins’ goal has been to keep his roughly 600 people on task so they don’t worry about the short-term bumps in a long-term plan.
“You have to try to get people to look above the dashboard and to the longer-term horizon, both with their clients and with themselves, so that they’re not wrapped up in the daily, hourly gyrations of the markets and the headlines,” he says.
At HPB, Jenkins has prioritized, and on the top of his list are aligning his people around stronger team-based planning, focusing on talent for the long term and celebrating wins that would go otherwise unnoticed in the onslaught of negative stories.
Align around a priority
To Jenkins, the top priority in rough seas is to get people aligned as a team with the direction you’re pursuing. At HPB, Jenkins and his senior leadership team wanted employees to better serve clients through a more full, team-based financial planning focus.
“From a leadership perspective, you need to do a couple of things — call it alignment,” he says. “It has to start from my chair and the message that we send out with the strategy of the business and our strategy is to serve our clients as a team and go to them with an integrated plan based on a team of professionals.”
In any economy, building alignment starts with you.
“It’s really interesting how your employees and your team will take the lead from how your management team works together,” Jenkins says. “If they see us working together … it starts with that senior team, and do the words and the music go together, do they see us doing what it is we say we should be doing as a business?”
To follow that up, you need to begin to put your money where you’re alignment is.
“It’s got to be part of their role mandate, what the organization asks them to do, it’s got to be part of their compensation plan,” Jenkins says. “If you pay people for things different than what you’re asking them to do in the strategy, guess what, it isn’t going to work. So you line up the strategy in the business, you line up the mandate that you ask of them, you line up how you pay them based on team-based compensation. If any one of those breaks down, you start to struggle.”
Doing that means putting in systems like merit raises on team performance. As you’re implementing, you need to make an effort to show people you’re attacking a down market.
“The way to keep your employees is they need to feel a part of something, they need to feel that they are with a firm or a wealth management business that is moving forward and going somewhere,” Jenkins says.
So as you go forward, bring in people who know what’s going on. Explain overarching team strategies with the why, as in, “Here is why we’re doing this right now.”
“If your professional teams and your employees don’t understand the why, then there’s the risk they may not understand what it is they’re attempting to do, whereas if they understand the why and the what’s in it for them or what’s in it for their clients, my view is you get significantly better engagement,” Jenkins says.
As you do that, work employees into the strategy. If you’re in a service business, have them get feedback on what’s keeping customers/clients up at night and get managers to report common themes. At HPB, for example, baby boomer clients were constantly expressing concern over being part of the Sandwich Generation — people taking care of both their children and their elderly parents. HPB came up with a program that used multiple professionals to coordinate the mature family member’s finances easily.
Keep track of top talent
Another priority you have to keep on the top of your watch list is talent.
It could be easy to worry about all the short-term things popping up, but at HPB, Jenkins gladly moves watching outside talent to the top of his priority list.
“We don’t just look for people when we need people, we are in the advisory business, so we’re always looking for top talent, good people,” he says. “When you have that in your DNA or your culture, we very often will interview or get to know people even if we don’t have a spot and, over time you build up a really strong network and you become what I’ll call an employer of choice.”
Whether or not you need someone right now, you will soon, so you’d better keep your senior leaders focused on people.
“As a senior leader, you have to walk the talk in terms of interviewing people and regularly meeting people,” he says. “We’ll have four, five, even six people on my senior team meet them. Even if we don’t have a spot, we will have them. It’s nothing for my head of investment to give me a call and say, ‘Hey, Terry, I just met this great lady; I want you to meet her’ and you know what, it goes to the top of my priority list and we’ll take 30 minutes or an hour to make sure we meet that person.”
Taking that time now is one of those long-term investments that can’t get lost in the short term.
“What a lot of people don’t realize is when you’re hiring really good people, there are two decisions that are made,” Jenkins says. “One is, are they right for us, which is why we have them meet a lot of people. But it’s also, are we right for them, and you need to get that connection done and you need to build those bridges long before they are on the job, otherwise you get three to six months on the job and they don’t stay.”
That means demanding that time of people upfront can prevent later problems.
“It’s an expectation of your managers and your leaders that they survey the best talent and when you have talent in the marketplace, you bring them in and you continually fill the bullpen. Our client retention is superb even through these difficult times because we’ve built our culture around that, and the best time to do that with new people is before they are on the job.”
Prioritizing talent is a two-pronged job: You also have to keep a strong eye on your current people.
“You need a robust talent management process, so you need to be very good at identifying talent within your organization a
nd developing them,” he says.
You may not have promotions available in tough times, but you can make notes for your next upswing.
“We identify what we would call top talent or those that we believe can go on to bigger and better things in the organization,” he says.
What’s important is to have leaders be talent scouts of the entire company. Have them work with other departments and share notes.
“We’ll make sure that my senior team members have the opportunity to meet other professionals in other parts of our business,” Jenkins says. “So, for example, if my head of trust is going into a marketplace, she’ll make a point of working with the investment people and the bankers and really understanding where the talent is across the business, and we identify those people for her, and it’s part of her job to get to know those people.”
Celebrate good times
Along the way, one priority that can’t get lost is honoring the good your people are doing.
“Don’t forget to celebrate success,” Jenkins says. “Our business has been having some great success on the sales and growth side, and it’s easy, with all the noise in the marketplace and people’s stress, to forget about that. We always make time to celebrate success wherever possible.”
Here’s a case in point from HPB: The company took advantage of some opportunities in the first quarter of this year and had some successes where business was up more than 25 percent. Jenkins used an already scheduled quarterly town-hall meeting for three primary agenda items.
“One is having one of our offices come up and talk about the success they had in the first quarter because they literally blew the doors off of their goals,” he says. “So the managing director is going to come up and talk about it, then one of their colleagues is going to come up and do some presentations for some exceptional achievement. Then, we have some tenure awards, some 10-year anniversaries for the group.”
First, traditional tenure things that are always done can’t be cut at the risk of hurting morale. Second, you have to take the opportunity to shine a spotlight on great behaviors — like if people are showing the alignment you want.
“So it’s just kind of sending the message subtly and not so subtly that we’re having some great success in this environment,” Jenkins says. “We’re doing some good things and I want to hear from the people who are doing it and what it is they are doing to be so successful.”
Even if you think temporarily suspending celebration awards can save you some money, Jenkins warns against it.
“Your professionals are in front of clients every day,” he says. “Think of the conversations they need to be having with clients now and the depth of the planning because of the marketplace. What you need to do as a leader is you need to remember your professionals, in many cases, are struggling with exactly the same things.”
If you can keep your company filled with top talent that is aligned to your plan and believes in the organization, downturns could very potentially become an opportune time.
“This is also a time to build a business and a time to be, I don’t know if assertive is the right word, but certainly not to be timid,” Jenkins says. “Good organizations with good leadership and good professionals can do some good things with clients now, and the clients are frustrated and worried, and an organization that focuses on the right things can make some gains — call it being opportunistic or however you look at it.”
How to reach: Harris Private Bank, (312) 461-7335 or www.theharris.com
Mary Stengel Austen didn’t get much sleep last night.
It doesn’t matter what day you’re reading this, she almost certainly got fewer than four hours.
“That’s the truth — I don’t get a lot of sleep,” she says with a dismissive laugh that makes it seem as though the whole world dealt with sleep deprivation so well.
Sleep is far from Austen’s top priority. Besides having five kids, she is also the co-founder, president and CEO of Tierney, a full-service marketing communications firm. The company has 145 people, and Austen wants to have a connection to all of them. She believes every person is a chance for Tierney to take on a new opportunity, so she spends her hours helping with everything from interviews to getting people to laugh off a crisis.
Smart Business spoke with her about why it’s important to take a close look at any potential hire and how important it is for you to find some mentoring of your own.
Take a look at your hiring process. You should surround yourself with people who play better tennis than you do — that’s not a great analogy for me because I don’t play tennis — but the idea is that you want to surround yourself with people that make each other better and that push each other in a collaborative way. That means they really provide a different skill set than you have, and that helps to foster more creative and innovative thinking.
I see all (senior and midlevel) people before they get hired. People can look very different on paper than they are in person, and that cultural piece is critical. Each new person creates new opportunities to change your business, and it can be positive or negative, so I feel really strongly that I need to see the senior and midlevel people and, frankly, sometimes junior people before they’re hired. I’m really pushing as we hire new people that we hire a diverse group of people. And diverse meaning not only the color of people’s skin, but their headset, meaning we have art majors, we have business majors, we have philosophy majors … and that’s by design, not by default. That ultimately provides you with more depth because you want people who think differently and come at problems differently. You want people who are really big out-of-the-box thinkers, and you also want people who are more engineer-minded in terms of, ‘OK, that’s a great, big idea, now how do we tether that to the ground and how do we pay for it [and] will it work?’
Start grooming new talent. When we have interns come in, we have them compete against a challenge. For instance, I sit on the board of Bryn Mawr Rehab Hospital and they have a program trying to (stop teens from drinking and driving), and one of the challenges was how do we continue to make that program relevant to today’s teenagers. That’s an opportunity where my senior managers, the client and I come together and listen to intern presentations. … What I’m struck by every year is really smart people that have great ideas, that may have a different point of view than I do. They have this whole layer of social marketing that I didn’t grow up in and how they communicate their strategies might be different. So that’s an avenue for them to have exposure to us.
The intern piece is also an opportunity for us to mine for talent, which is one of our challenges. That’s a really good thing for both of us. They get a test drive, and we get a test drive. Do they culturally fit into the organization? Do they have the chops to do what they need to do in the business? And vice versa — do they like what they see?
Help people keep perspective. You really have to keep a balance and recognize that sometimes there are certain things you can’t control, and you have to keep a sense of humor about it. I am not a brain surgeon. You have to really keep it in context and make sure that, yes, you work really hard, but you have to keep things in perspective and say, ‘You know what, we’ll move on.’
Much of my career has been issues management and crisis communications work, and I’ve learned that if you push people to step back from the actual incident or issue at hand, it tends to slow things down and people start to take a deep breath and say, ‘You know what, this is manageable; let’s take it piece by piece.’
Just chunk it out, so to speak. It’s not as overwhelming when you step back from something and, quite frankly, sometimes when you’re involved specifically in it from a client perspective, it’s harder to step back. So provide, as a third party, that ability to say, ‘Let’s step back and look at the big picture. What is the issue, what’s the strategy, and how do we go about working at it?’ That helps people stay focused on the big picture. So, yes, you have to think about your short-term goals, but you also have to think about what’s the ultimate goal, and that allows people to step back and think, ‘OK, how do I tackle this then?’
Find multiple mentors. I was very fortunate a few years ago to spend time at this event with Jack Welch with a total of about 100 CEOs. … He was really interesting because I had an opportunity to have a drink with him and he was pushing me about who my mentors are, and I told him (former executive at The Interpublic Group of Cos. Inc.) David Bell, and he said, ‘Well, who else?’ And I said, ‘I don’t really want to impose a lot on other busy people’s time.’ He looked at me and blurted out, ‘What is the matter with you?’ And I said, ‘Excuse me.’ And he said, ‘People kind of expect that you’re going to ask. They’re most of the time flattered, and if they’re not flattered, then something’s wrong with them.’ … That really did push me to kind of look to other organizations and other people and provide me with a different dimension.
How to reach: Tierney, (215) 790-4100 or www.hellotierney.com
Mohan Maheswaran admits that he wasn’t natural management material.
The Sri Lanka native is an engineer by trade, and he preferred tinkering with technology.
But during a decade-long stint with Texas Instruments, a mentor showed him tinkering could come from the executive suite.
“One of the things that he said to me was any good business must drive its own energy,” Maheswaran says. “In other words, it has to drive the energy to move itself, and it took me a while to figure out what that meant. Well, he showed me how it works in practice, and it’s really a wonderful thing when you see it working. Essentially, what you do is you put in place the systems, the processes and the people and, as the leader, you facilitate the business. But by virtue of the systems, strategy and the execution model you put in place, the business should have the energy to drive itself. So I’ve always taken that philosophy and applied it to everything that I’ve done in business. I say, ‘Hey, I can’t spend all of my day, seven days a week, focusing on the business.’ I have to be able to see it growing and scaling, even if I wasn’t there.”
So while Maheswaran became management material along the way, taking the post of president and CEO at Semtech Corp. in April 2006, he realized that not everyone shared his vision of a high-energy culture that could carry the day. In fact, the culture at Semtech was in direct opposition to this. The supplier of analog and mixed-signal semiconductor products was still performing — it posted $252.5 million in fiscal 2007 net sales — but that number was its second straight year below its record sales in fiscal 2005, and it was rife with signs of a struggling, fear-based culture.
“A lot of employees were somewhat afraid to take risks, unwilling to make decisions, and for me, a no-decision-making culture is doomed to failure in this competitive environment,” Maheswaran says. “You have to make fast decisions. You have to make well-balanced decisions, but you have to make them quickly, and that doesn’t come from a fear-based culture.”
So Maheswaran changed that culture by putting top-flight managers on the job and instilling systems that let people build their own expectations to fit his vision.Start at the top
Maheswaran realized he alone couldn’t change the culture of a global company with nearly 1,000 employees, so he decided he wouldn’t.
“For the leader, the No. 1 task is to put into place a management team that can get the job done,” he says. “I can do all the talking and waving and define the vision all I want, but if I don’t get the management team to go execute it, it’s nothing.”
If you have a vision of a culture that can drive itself, you have to have self-starting managers. Finding those people is twofold. They have to share your vision and then you want to make sure they have the winning attitude to carry it out.
“That winning attitude can drive high motivation even in downtimes,” Maheswaran says. “So the people with the can-win and can-do attitude, despite the environment, are the ones that differentiate themselves.”
How do you find that attitude? It starts with a passionate person who matches your drive and has values.
“Give me a passionate individual, someone who really wants to work hard and wants to achieve something, (someone) not looking for money, not looking for recognition, they just really want to achieve and do something great and different,” Maheswaran says. “The second thing is somebody with values. If you have somebody with a lot of integrity who is a good team player, they look to motivate rather than demotivate people.”
Since resumes and interviews can be misleading, you have to tune your ears in for some keywords to make sure you get what you ordered. Here’s a phrase to look for: earning it.
“Some people think that rewards and bonuses and equity are entitlement,” Maheswaran says. “Well, in my world, they are not. I find it amusing when I see all the news out there on executive bonuses and I see people getting massive bonuses when the company is in dire straits. I sit back to myself and say, ‘How would I feel if I got a bonus and the company is not making any money?’ That doesn’t make any sense to me. So I want people who come on board and say, ‘Look, if we perform well and deliver results, we want to be rewarded. If we don’t, we don’t want to be rewarded.’”
For the record, these people don’t come in any one shape or size. Maheswaran’s executive team is from all over the world and is composed of people he’s worked with before, executives already in place at Semtech and new hires. But he says you personally need to spend time doing interviews to ensure that each one meets this leadership litmus test.
Maheswaran also refused to take second best, getting permission from his board to do broad searches, extensive interviews and give the incentive-based compensation models that would befit the person he wanted.
“It’s the only way,” he says. “If you settle for anything less than that, you are really saying to yourself I’m going to have to not be as aggressive in pursuing the vision.”
Once he brings these people in, though, he doesn’t just trust that they’ll be 100 percent there on day one. He has them work directly with him during their training to share the culture of empowerment at Semtech.
“If I made the decision to bring in an executive, it’s my job as their manager and their leader to give them the tools and show them the way,” he says. “What I find is that when people have spent some time with me, they develop that passion and that culture because I have it and people who work with me develop it.”Build accountable systems
Maheswaran doesn’t use euphemisms when discussing the biggest challenge he had in reworking the culture at Semtech.
“The execution of the company was just not where it needed to be,” he says. “At all levels and all areas of the company, I found the execution to be poor at best.”
So before he could completely empower people to make their own path, he had to make sure they understood the new direction.
“That was a big challenge because this is not only a cultural shift, but it’s also behavioral and a people shift,” he says.
Semtech didn’t have any systems in place that pushed for higher efficiency or risk-taking. The result left processes feeling stagnant. When you’re dealing with that type of cultural idle, you can’t just give people marching orders and expect them to change course.
“The main thing is really enabling the people to shape the vision to help them see that in their own roles how they can help create a great company, so not only communicating the vision but communicating the shared common purpose,” Maheswaran says.
In order to involve them in that process, you simplify it and let the energy build by explaining what individual results mean.
“Break it down for the people,” he says. “When you’re trying to bring out the best in people, you really have to simplify things to show them how to get from A to B.
What you do is you set the vision and break the vision down and say, ‘If we can achieve at the end of this year this milestone, and the end of next year this milestone, we’re on our way.’ It’s the road map of how to get from A to B. There are always choices and there are different paths you can take, but which is the right path for the company? That’s really where the leader and the management team play a very important role in defining that road map.”
So you create an overarching vision and then ask people how they’ll step up and perform to it over whatever realistic time frame you set for significant change. Then, you measure that.
“The first thing you do is you start to measure things and you start to set milestones and you put metrics in place and you start to measure people and hold them accountable,” he says. “So I asked people, ‘What are you going to deliver next quarter?’ You tell me I’m going to deliver A. Well, if next quarter you deliver B, I want to know why, what’s the difference?”
Many employees will be enthused to set their own targets and take on new challenges. But when people don’t perform right out of the gate, give them time. Remember that people will still be a little shell-shocked by the adjustment from a stale culture.
“The trick is to watch out for the people that are actually very good and can execute well but they’ve been demotivated for so long that they don’t actually get there,” Maheswaran says. “So you don’t want to throw the baby out with the bathwater, right?”
So when they don’t perform you ask them what left them out in the cold and help them adjust so they know something like coming up short of stretch goals isn’t the problem. If they come up short again, you repeat the conversation but not ad nauseam.
“One quarter, two quarters, three quarters, you give people opportunity to take charge and you try to help them,” he says. “But, in the end, if it’s a continuous story, you end up saying to yourself, ‘Well, maybe the issue is not the company anymore; maybe the issue is you.’ I haven’t tried to build a culture of if people don’t execute one time that they’re out. It’s more of a, ‘Hey, look, this is not working. Here’s how we’re going to improve it; if that doesn’t work, let’s try something else,’ approach to get better execution. But, in the end, if you’re not delivering on a consistent basis, then something has to be done.”
During this time, you’ll have some changeout of staff right away because, frankly, accountability isn’t for everybody. But this is a double gift: You’ll lose underperformers and new people will help cement your systems.
“When you bring in somebody new with the right excitement level and the right passion, that is somebody who doesn’t know the old systems, the old culture, the old people, they don’t know the old constraints,” he says. “So, essentially, bringing in new blood is its own catalyst for change.”
Once you mix new blood and start seeing some refreshed experienced employees, you’ll get a second batch of people that self-select career relocation when the systems stick.
“Eventually what happens is the people who can’t (meet expectations) start to realize, ‘This is too tough for me’ or ‘This is too stressful for me,’ or ‘I’m obviously the weak link here,’ and they leave,” Maheswaran says.
With managers cascading a winning culture and employees owning their own goals, things have come a long way at Semtech, as a downturn hasn’t stopped a culture where people set their own internal stretch goals.
“The company has started to become more of an empowered culture where employees know they will be held accountable for poor performance and poor results, but they also recognize that they are part of a team that’s working toward a common purpose and that the rewards come from taking some risks and trying to do that something extra,” Maheswaran says.
The financials bear that out. The company posted a then-record $284.8 million in net sales in fiscal 2008, and then pushed through to post a new record of $294.8 million in fiscal 2009.
“There are still areas where we can do better,” he says, “but I feel good about it, and the proof is in the pudding. ... Last year was a record year for us, the year before that was a record year for us, in terms of revenue, and so by delivering results on a continuous basis, you start to get a feel for are we really executing the way we want to execute, and that, to me, is the right sign.”
How to reach: Semtech Corp., (805) 498-2111 or www.semtech.com
With all the travel, hotel stops in different cities and subpar food along the way, life on the road can be tiring. But when you set 30 dates for a Rock Tour, you have to be on every night.
And so, Rock Jones has been taking his best playlist with him across the country throughout his first year as president of Ohio Wesleyan University. Jones’ trip to meet with alumni and other stakeholders across the country has been affectionately dubbed “The Rock Tour,” and even though he’s not playing Top 40 hits, he’s been traveling since last October to talk with people about the liberal arts college’s future to help shape OWU’s vision and strategic plan.
He’s already started to use feedback he’s heard to build momentum with all of those people he saw along the way as well as with the more than 135 full-time faculty members.
Smart Business spoke with Jones about how you get the proper context for a vision and why building up people’s trust makes you a more effective leader.
Build the proper context for a collaborative vision. It’s not so much that collaboration is the top priority; it’s a step toward the top priority. The top priority is creating and articulating a vision that advances the institution and allows Ohio Wesleyan to fulfill its mission in the most robust way. The way that objective can best be achieved is with a process that’s collaborative, and creating opportunities for all of the stakeholders to invest their time, their intellect and their capacity in reflecting on helping to create this vision becomes very important.
That happens in some ways formally and in other ways informally. Certainly much of my time this first year has been structured to create a context in which various stakeholders have an opportunity to invest themselves in the process. My travel schedule and calendar would reflect that.
Very little of my time has been behind a desk, and a large amount of my time both at events of all sorts on campus — from meetings and conversations that I’ve scheduled to attending student events of all kinds, athletic contests, musical concerts, theater productions, artistic openings, lectures, research presentations — to the times off campus, meeting individually with alumni in those 30 cities, that’s been dubbed the Rock Tour. But the point has been to give me the full benefit of exposure to everybody who cares about Ohio Wesleyan and wants to make a difference in its future.
I’ve created numerous opportunities for interaction with the students to hear from them. I have communicated electronically with parents of our students and have been able to solicit input from them in that way and then, as I’ve listened to the various constituencies, I’ve communicated back to them what I am hearing and the vision that is evolving for the future of Ohio Wesleyan. I’ve had some excellent feedback from draft documents of our strategic plan that have allowed me to improve on the initial draft with the benefit of insight and wisdom from all corners, from faculty, trustees, from alumni, from staff, from students.
It’s the leader’s responsibility to sift through all of the information that’s received all of the ideas that are shared and to articulate a vision that advances the mission of the institution, that is bold and aspirational but also is achievable. So it’s the balance between setting the highest possible aspirations and ensuring that the vision is one that both stretches but can be achieved.
Hire for diverse thinking. It’s very important to hire people who can be effective members of the team that work collaboratively, that can work with a common purpose toward a common vision. But at the same time, it’s important to bring in people who have different life experiences, different worldviews. It’s important to hire people who are comfortable speaking up when they disagree, who can give me good counsel, even if it’s counsel to take a direction different than the one I might be considering. But then, at the end of the day, they are willing to unite as a team and go forward with a single purpose. So it’s important to have a leadership team that represents a variety of perspectives and ways of thinking about the work we do but that also has the capacity to work together and be an effective team.
Selecting the right people to work with me is probably the most important thing that I do, and it’s a process that is somewhat intuitive. You spend enough time with candidates to begin to understand something about who they are and how they work, talking carefully and candidly with people who have known and worked with them in various capacities in various ways through the years is important. But, ultimately, you never know until you find yourself working together day in and day out, and these jobs are intense jobs that require long hours and a significant amount of time together.
Build trust to further collaboration. Another thing that’s been said to me in a number of different ways is people don’t follow what they don’t trust. And critical to effective leadership is the development of trust, and the whole issue of the power of empathy as a way to build respect and gain trust is very important.
Most people have pretty good sensitivities to whether or not a person listens and whether or not they are valued for who they are and for their convictions or their own values. You don’t have to agree with someone to respect the fact that that person has understandings that are important to him or her. So create opportunities for mutual exchange. Ensuring that people feel that they’ve been heard and that they can see in actions that are taken that they have been heard is an important aspect of trust building.
How to reach: Ohio Wesleyan University, (740) 368-2000 or www.owu.edu
Kathie Mancini had a culture problem that couldn’t be fixed with corporate cash.
It was 2005, and Mancini was the chief operating officer of newly formed Molina Healthcare of Ohio, a subsidiary of giant Molina Healthcare Inc. And though corporate could filter money down for holiday parties and company outings, Mancini realized her people didn’t have the right connection to the community or to the vision at the company that delivers health care services to persons eligible for government-sponsored programs. The success of her growing organization rested not just on retaining top talent but also sparking that talent’s passion.
So Mancini developed the company’s Employee Activity Committee, a front-line employee group charged with handling the internal and external components of the company culture.
Today, Mancini is the plan’s president, and she does almost nothing for the EAC. In fact, employees own it to the point that it has a self-sustaining budget. But even though she wants the committee to take care of itself, she hasn’t lost sight of how important it is to the booming growth at Molina, which posted 2007 premium revenue of $436.2 million.
“It’s key to everything we do here,” she says. “There are a lot of call centers our staff could work in, so the more special we make it here for them, the more they feel like they’re serving a goal or purpose to help people, the more different we are, and they choose to stay. It helps with employee retention; it helps with morale.”
The whole process, Mancini says, was surprisingly achievable. First, she had to personally get involved to get it started, handpicking a few people she knew had a passion for internal and external programs. From there, the leadership team set some basic parameters about what the committee could do and then they simply let go, handing the reins over to passionate employees.
Get the party started
It started with a simple conversation and a realization that Molina was a company filled with people looking to do something more than just work. Mancini and Molina’s then-president realized they couldn’t do as much as they would like because people kept coming at them with external charity ideas and internal culture ideas that they just couldn’t act upon.
“We really talked about how we could get more engagement with the community that we serve,” she says. “And I was like, ‘Gee, I see all kinds of opportunities and we try to fulfill them, but it’s just the community outreach folks that are trying to meet all the needs from the agencies that we hear about,’ and he said, ‘Well, is there a way to make this companywide so more people can get involved?’”
There was. And Mancini says the company’s solution didn’t take a special culture coach or hiring someone to take over company activities.
At the time, there were fewer than 80 people working in her division and Mancini wanted to find a way to involve and engage front-line employees. Thus, Molina’s employee activities committee was born. Mancini says step No. 1 is about having the right people involved.
“You have to find the right people within your organization that really feel strongly that they can bring along the others and then you have to let them own it,” she says. “Because if we came to them and said, ‘OK, here’s what you’re going to do,’ it wouldn’t be as fun. This way they get to be very creative, and it’s a lot of folks that don’t get to be creative in their jobs on a daily basis. So they get to be creative and come up with the different competitions … or the different events we do and how we implement those and really how they advertise those to the office and make sure it comes through.”
Mancini says part of this includes an assessment that requires you to find the original people that can take the task. If you can think of a few people who could handle the role of successfully running your corporate culture right now, you’re probably ready to start. She started small, hand-selecting some people she knew were heavily involved in things like charity projects and often asked others to join them.
“When you work with people, you just know the ones that would take something and run with it, and I had a couple of people, one was actually my administrative assistant, and then there were various others who I knew the second I told them what we wanted to accomplish they’d be gone,” she says.
Set the parameters
During the infant stages of the EAC, Mancini sat in on the meetings to make sure the group was working within Molina’s vision. Once she saw they were acting in the best interest of the company culture, she made herself scarce.
“After the first three to four months of really getting it off the ground, I’ve never been to another meeting,” she says.
In fact, there are no executives — or managers, for that matter — on the committee at all.
“It’s not supervisors, managers, anyone in any sort of leadership position,” she says. “It’s really the folks that maybe from their role they don’t see on a daily basis how they’re fulfilling the mission, so they really want to contribute in other ways.”
The key is creating a feeling that employees own the group. You do that by letting them share the lead.
“The key is finding the passionate, organized people and what they do is say, ‘OK, we’re going to do X events for the year,’ and then they make a captain for each event so that not one person is doing everything. They really share the role of leading different events or drives that we do.”
As Molina has grown to more than 280 people, Mancini has let the group expand on its own, and it now has about 15 people. Along the way, though, Molina has asked that employees share that captain’s role — the EAC representative for a certain event — and keep a democratic view on representatives and programs.
“They do an annual survey through the staff here and say, ‘What events do you like and not like, are there suggestions you’d like to make, and is anybody interested?’ Then they pick a representative from each department so everyone is equally represented (along with) a couple extra people that have been volunteering for events during the year.”
Apart from the annual survey, the leadership team at Molina also gives some geographical requests to help equalize external efforts.
“We make sure it’s allocated equitably across all of our territory, so we’re not doing too many things in Columbus,” she says. “We need to do things in Cincinnati or Dayton or the Appalachia area. So sometimes we have to help with that, but once we have the parameters, they come up with everything.”
The EAC is also charged with spacing its events out to maximize interest and productivity. They can do one smaller staff event per month — such as an ice cream social — one thing for the quarterly all-employee meeting and one charity event every two months. With the charity events, Molina asks that as many as possible are about giving time so people don’t always feel like they have to donate financially.
“We try to mix that up so they can give things like their time, so it’s not just financial contribution,” she says.
The last touch point for management at Molina is the company’s human resources manager. Though the HR manager is not formally on the committee, Mancini says you want to have someone who understands company policy sit in and make notes of things that will affect people’s work just to keep things running smoothly.
Let your people take charge
Once Mancini and her leadership team kick-started the EAC, they did something many companies would struggle with: They completely let go.
To really engage employees, Mancini says you need to let them take over everything — the agenda, the planning and the budget.
“That’s why we have a waiting list for the EAC, because there’s such opportunity to help people, and it makes people feel better about their jobs because some folks sit on the phone or they type contracts in the computer and they think, ‘What am I doing to help our population?’ Well this gives them an avenue to do that,” Mancini says.
That empowerment also means giving aspects of your vision over to the committee’s creative license. Whenever Molina wants to celebrate anything, the company lets the committee take the reins. When the Ohio plan hit 100,000 members in 2007, the committee went around and passed out 100 Grand candy bars.
“It’s stuff like that, little things,” Mancini says. “They did a customer service week this past year. They did the theme of one world, one goal — one team, one goal — so they made a passport for each of the staff, and they went to different suites, which were each a different country, and they sampled food or played some games and really focused on service, the staff really enjoyed that.”
Those little things motivate employees with a social reward comparable to a raise.
“They get a lot of recognition for being on this committee, the staff sends kudos and thank-yous,” Mancini says.
And while that empowerment is a fantastic thing for Mancini to see, she also notes a very executive-friendly portion you can build in to an employee program — and you’ll like this part.
“The best thing is it costs absolutely nothing,” she says. “They’re driving toward a purpose, and a lot of times in business, people focus on ‘people just want their paycheck, it’s all about their paycheck,’ and it really isn’t. It’s about where people feel valued, appreciated and engaged, and that’s what this helps with.”
Creating a program that costs nothing was a simple step for Molina: They let the EAC figure it out. While the corporate entity still gives money for holiday parties and the like, Mancini told the group it could do other events if it could afford them.
The funding comes from things like a post-holiday white elephant sale, an annual book sale and a chili cook-off where people volunteer to make and sell food.
“It’s what they can earn during the year, and they make magnificent things happen, and really it’s because of the creativity and the engagement they have,” she says.
Those engaged employees have been pivotal in helping Molina push forward. Beyond markers Mancini likes to celebrate, like more than 16,000 school items collected during a drive for underprivileged kids, Molina also surpassed 175,000 members in 2008. That growth sparked it to $602.8 million in premium revenue in 2008, a jump of better than 38 percent from 2007. Mancini can’t overestimate the role the EAC has played in that success, from retention and employee engagement to the overall company culture.
“It helps greatly,” she says. “Every day it reinforces the culture. We’re the kind of company where we let you go work on these community events or employee events that help everyone and spend a little bit of time away from your work to do that. It reinforces that we care about our staff, that we care about those we serve, and it also helps them to go back to loading hundreds of contracts into the computer because they feel like they’re making a difference in other ways, too.”
How to reach: Molina Healthcare of Ohio, (800) 642-4168 or www.molinahealthcare.com
The next time you’re feeling a bit blue, don’t call Mitchell Feiger if all you want is to be cheered up.
Feiger is going to tell you the truth about what’s going on — even if that truth is quite bleak.
He’s not doing it to bring you down. In fact, he’ll be sure to put it in the appropriate context for you so that you understand where things have to be done and why. Take his feelings on the problems many businesses have in a down economy: “The mistake that a lot of small or midsized business owners make is they don’t reduce expenses fast enough when sales decline,” says Feiger, who is president and CEO of MB Financial Inc. “I understand, you’ve got a business, you’ve got 42 people working at your company … you know their families and now sales go down 25 percent and you’re losing money and your capital cushion is being eroded, and yet, you don’t want to release people. But they’re your biggest expense, so it’s really important to face reality and protect your company.”
It might be painful, but he says you have to own up to a resolution.
“I don’t think you do anybody a favor by keeping them on the payroll when you can’t afford it,” he says. “That may mean eight people out of that 42 you really can’t afford to have anymore, but if you decide for whatever reason you’re just going to keep them on and hope that something else comes along … well, what you’ve done is you’ve risked the jobs of the other 34 people.”
Partly because of that honesty, Feiger hasn’t had to deal with anything that drastic with his 1,400 employees at MB Financial, the holding company with $8.6 billion in assets that’s parent to MB Financial Bank N.A. MB Financial is holding strong — it reported net income from continuing operations of $15.4 million for 2008 — and Feiger is happy to share all the good and bad with his people. To him, it’s all about managing your company through communications. If you help employees understand where they can help the company, Feiger says they will.
Here are a few tips from Feiger on how to open up candid communications to push your company through good times and bad.
Create multiple touch points
OK, truth time: Have you ever skipped over an e-mail when you were busy? There’s no shame in it, and Feiger knows his people do it from time to time. The fact of the matter is, creating effective communications is more repetition than anything else.
So the next time you think about getting an important message out, consider a product advertisement that caught your attention recently. Feiger says the odds are you didn’t pick it up the first time you heard or saw it.
“To communicate with the most people most effectively, they need to receive the message in different ways,” he says. “A good analogy is multimedia marketing campaigns where you may see a company send a message in the print media and then send the same message on radio, TV, billboards and bus signs all at the same time, and that’s the most effective way to reach an audience.”
So MB Financial thinks like Nike or Pepsi when it has a message. The company uses conference calls, wall posters, an intranet, newsletters, internal e-mails, a company culture committee and an “Ask Mitch” e-mail option where people can send Feiger messages that are personalized or anonymous.
Plus, like any good campaign, MB Financial has a launch point everyone knows about that is short but sweet.
“Every Monday morning at 8:35, everybody in our company who is available is on the phone listening live to a conference call that I usually lead where I can bring everybody up to date,” Feiger says. “And it’s an amazing thing how you can convey so much information in just a 10-minute conference call.”
The call’s brevity is its strength. A brief overview will give people a starting point, and subsequent messages can flesh out details. A regular touch point allows you to be topical and gives you a chance to tie your messages around a theme.
“A lot of times, we’ll talk about things that we’re thinking about before we’ve made the decision so that they can understand where we are in the decision process, and that then makes them make better decisions for themselves and their clients,” Feiger says. “Then, oftentimes, we’ll try to coordinate the messaging that’s coming in those calls in newsletters or e-mails or in posters or in other ways.”
MB Financial has another way that these communications are similar to a marketing campaign: The calls are recorded so that the company can keep track of how many phones tune in live and later to make sure they’re making an impact. Feiger also tests message effectiveness from time to time.
“Every few months each year, I ask people to e-mail me back with some idea or some thought about some subject matter,” he says.
Now, you won’t have the time to sort through 1,400 ideas every time you need to make a decision, but Feiger has his people do it occasionally when he needs a good brainstorming session.
“Having 1,400 people ponder an issue is a powerful thing,” he says. “And if you have an effective way to solicit feedback from 1,400 people, which we do, you can get some really good ideas. It gives me a little bit of real-time feedback about our people listening to the calls — are they taking them seriously, do they consider what we’re talking about? And it’s remarkably effective, and to tell you the truth, I’m not sure why more companies don’t do this.”
Beyond measuring the effectiveness of your communications, you can also help give them a boost by being responsive. If you’re smart, you can address a commonly asked question to everyone at once and help ease some concerns.
“Every single person gets a complete response,” Feiger says of e-mails sent to his Ask Mitch account or responses to internal e-mails. “If somebody brings up something, good or bad, that I think would be of interest to more than just a handful of people, I’ll either talk about it in a Monday morning call or we’ll put in a regular newsletter or we’ll put an answer out on our intranet. I’ll give you an example: A week ago or so, I got an Ask Mitch about the safety of our people’s money in our 401(k) plans. So we responded the end of last week with a lengthy explanation of how we think people should be managing their money in this economic downturn and where they need to be cautious and where they may not need to be cautious.”
Put your message in context
Keeping up communications with your people has a tricky element to it — sometimes you’ll have employees reaching for antacid rather than calming their fears. But good, bad or indifferent, your people need to have the ability to properly place what you’re telling them.
“Look, sometimes by being honest with the staff, you can raise their level of worry,” Feiger says. “I think what you want them to have is an appropriate, realistic amount of worry, not an unrealistic one. In the absence of communication, people would fear the worst or worse than the worst, and we want them to understand what reality is. So I can’t say that we’ve lessened their anxiety, I think some days I’ve increased their anxiety.”
But while he admits to occasionally creating anxieties, he always does so in an appropriate context. He doesn’t just say things are bad in a market and the company is hurting when business is down, and he doesn’t say just the opposite when things are up.
“My general feeling is the more they can understand about what we do, the better,” he says. “Even in a public company, probably 99.9 percent — or 99.99 percent — of what I know and what the senior management knows, the rest of the company can know and probably should know. A lot of companies think that only the senior management team is capable of understanding things that are going on and making decisions; I feel the opposite. I feel that virtually everybody in this company is capable of understanding what we’re doing and why, and so the more they know, the better informed they are, the closer they feel to the company, the better they can understand when we make hard decisions why we’re making them. And I think frankly it gives people more confidence that the management team here at least has some idea that they know what they’re doing.”
And even though Feiger leads most of those Monday calls, he also brings in the appropriate experts and asks them to deliver commentary on things like the market, the company’s competitors and where they are against the yearly plan.
“Once a quarter, our chief financial officer, Jill York, leads the call to report to our employees about our performance,” he says. “And there will be times when we’re explaining a particular financial issue that she’ll dig down a little deeper and explain here’s how this works and why and its impact on us. Through those calls, I think we’re able to elevate the general level of financial intelligence or banking intelligence that our people have.”
Besides giving an overview of where the company is financially, Feiger thinks it’s important to put in place the context of competitors and the market. Talking about where you are gives your employees some context, but measuring it against your top competition shows people your highest and lowest point while also helping them see where the company can take advantage in any kind of market.
“The more knowledgeable they can be about our competitors and how they’re doing or what their weaknesses are or what our competitors are trying to accomplish, the better armed they are when they go to battle against those competitors for a client — be it a current client or a prospect,” Feiger says.
And whatever your message is, make sure you mark the beginning and end dates appropriately. Don’t just tell employees one thing is important for a quarter and then never go back and celebrate your success or comment on your failures.
“We tell it the way it is pretty much in any report that we give about our company, quarterly report or otherwise; we say, ‘Look, it typically goes like this in a quarter. Here’s how much money we made, here’s why, here’s the things we did well in the quarter, here’s the things we didn’t do so well in the quarter,’” Feiger says. “For example, in 2008, one of our high-level goals was to increase low-cost funding, low-cost deposits. So we report back to them, here’s how we did, and in the third quarter, we did incredibly well, and they were very interested in knowing about that.”
To Feiger, having all of his people understanding where the company is going, what challenges it’s facing and how it’s going to face those challenges is the foundation to keeping a company that can maintain in any economy.
“My thing is, the front-line people, they make more decisions than anybody else for our clients and the better that they can understand what we’re trying to accomplish as a group, as a company, the better decisions they’re able to make. So we’ve sent a very strong message that what we’re interested in doing is building a premier banking franchise here in Chicago. … I think that’s worked out pretty well,” he says. “The client base here is absolutely top flight, really strong companies, really good businesspeople and really good individual customers, as well, and a lot of that has to do with just trying to play it down the middle in good times and bad.”