Super User

Monday, 23 February 2009 19:00

Fruits of his labor

Mohammad Abu-Ghazaleh had a tough story to sell. At the time that Abu-Ghazaleh led his company to the purchase of Fresh Del Monte Produce Inc. in 1996, the producer, marketer and distributor of fresh and fresh-cut produce had reaped some rotten returns. Not only did the purchase come with the assumption of $300 million in bad debt, but it also came with a criminal record — or, rather, two criminal records. First, the company, which had been a part of the Polly Peck International family, fell on hard times when that company’s chairman, Asil Nadir, fled as it folded under financial pressures. In the fallout, Fresh Del Monte was taken over by Carlos Cabal, a Mexican businessman with his hand in banking, hotels and insurance. Within two years, Cabal became a fugitive of the Mexican government, accused of embezzling $700 million from his own banks. To this day, charges hang over the heads of both men. Meanwhile, Abu-Ghazaleh was left with an internal and external mess.

“The company was like a ship without a captain in the middle of the ocean, and it was really a miracle the company had gone through these two dramatic episodes and was still floating,” Abu-Ghazaleh says.

And then, it’s only natural that everybody was a little suspicious of Abu-Ghazaleh, the company’s chairman and CEO, when he started to tell the story about how the company was planting seeds for brighter days.

But Abu-Ghazaleh, the son of a famed fruit importer and businessman, believed that if he could restore faith both internally and externally he could turn the company around. The story wouldn’t sell overnight, and maybe some people would never believe it, but he began healing the company one day at a time.

First, he established a new relationship between management and employees and external people by setting a new tone for ethical behavior and keeping promises. As he began to establish that credibility, he improved on it internally by taking his tale on the road, visiting all of Fresh Del Monte’s locations after doing his homework to understand where the company was headed.

Here’s what he learned along the way.

Set the example
Abu-Ghazaleh doesn’t have to think long about where the financial troubles that plagued many of the nation’s former powerhouse companies in late-2008 stemmed from. His own experience with Fresh Del Monte taught him how important leadership integrity is to long-term success.

“The whole thing transcends from the top down,” he says. “We see it now in the market today, this whole turmoil with many of the financial companies and other companies in things like the insurance industry. The problem is actually management and leadership, in my opinion. It’s greed in one aspect, it’s self-interest, it’s short-term vision, so many factors play into this.”

Abu-Ghazaleh had that in mind when he began digging Fresh Del Monte out from scandal. The basic first step you can take when people — be they internal or external — are having trouble trusting a company’s management has to do with reining in your promises. It’s easy to set high expectations and tell investors, employees and your customers that you are going to do several great things. It’s much harder to live up to that. Since he first took over, Abu-Ghazaleh has been obsessed with keeping his promises. Rather than promising people a full turnaround of the troubled company, he first promised that the faith of investors and employees would be rewarded with steady growth. While he could have promised an immediate turnaround to bring money to the company and fire up employees, he knows that would mean nothing two years down the road if the company didn’t follow through.

“If you go back to all of our statements and my conference calls over the last 12 years or so, you will see we have been very clear in our message,” he says. “I was always saying that I will never try to drive the stock myself through wishful thinking and through ambiguous maneuvers or misstatements. For me, with all due respect to all the analysts, the investors, to everybody, I will not do something just to please the analyst or investor by saying or doing things that will be counterproductive or not in the interest of the shareholders. If you can start with that, you’ll always be successful at the end of the day.”

Beyond being careful about people’s expectations, Abu-Ghazaleh believes you can be the internal motivation for your company by simply knocking out the idea that the boss is out of touch with reality. Television bosses always show senior executives as detached people who come down from corporate to dictate orders before going golfing. It’s a stereotype, but you may be helping to feed it. Remember that everyone is watching you, so if you just told someone to cut expenses, you better have your own expenses listed as No. 1-A on a public audit list.

“It’s the way you act, the way you behave, I mean your day-to-day transaction of business and how you conduct yourself, how you conduct your business,” he says. “You cannot tell people, ‘Save money, don’t waste, don’t do that,’ if you are not an example of this. This is just one thing. You cannot tell people to work hard, and they see you taking vacations throughout the year on the beach and different places in the world — you have to be an example. And you cannot tell them to be honest when you are trying unlawful things or doing things that are not ethical.”

And Abu-Ghazaleh says his rules are there for businesses of every size. Big or small, you have to know that everything you do is documented by your employees and weighed against what you ask them to do.

“These are simple basic examples of conducting business or even a lifestyle,” he says. “It’s simple. I believe that regardless of how big, be it $10 billion or $50 billion or $1 billion or a $100 million operation, it’s just translates to the same way of conducting the business.”

Expand your credibility
Building credibility begins with basic trust, but if you want to dig out of a hole like the one Abu-Ghazaleh was facing, you also need to make a personal impact with every level of your company.

“I personally don’t have any problem meeting with the high-level executives as well as the middle-level management as well as the people in the field, which I do regularly,” he says. “I have to have these relationships with the top people in the business as well as in the field. An employee has to see your face and know that you exist. You have to transmit confidence; this gives them a kind of association or identification. They identify with this company, they feel they are part of this company, we are one team, and there’s not a big boss sitting at the top not even close to the people in the field. These are very important issues that one has to take in to consideration.”

The first part is taking the time to regularly be in front of your people. If you have two locations, you can obviously do more of this than if you have 200, but the point is you have to make the visits and meet with every level of employee.

“I do make visits every year, at least once, to visit these operations, and I meet with the people in the back office or the field and do have dialogue with them and look at the operation in the field,” Abu-Ghazaleh says.

Each visit isn’t just shaking hands. Restoring employee faith in leadership means that you have to show employees that you know your stuff. Abu-Ghazaleh makes sure he has real conversations with people about what their group is doing and how it measures up with similar groups in the company. Creating that type of conversation comes from doing your homework ahead of time. Abu-Ghazaleh has each of his centers send a weekly report on where production is, how that meets with its goals and what problems, if any, have slowed production. You don’t have to get every detail of every day’s work, he says, but you have to have a basis for where that group is headed.

“If there is a problem today, we have to correct it by tomorrow,” he says. “Our business cannot wait six months. We are in a business where everything is perishable, and you have to make decisions on a daily basis.

“I’m not just reading reports. From my background, which is in agriculture and farming, I do know more or less the obstacles, the challenges and the solutions that can be found for our operation, and that helps. When you know the business, it’s easier to speak with people.”

Abu-Ghazaleh says the more you can make these types of visits, the more you’ll have to take to the next meeting. In fact, if you can have these engaging conversations with employees, you will build up a knowledge that creates a benefit for both ends.

“It’s a mutual benefit,” he says. “It’s not only that (employees) take something from me or from the COO, which we are often on these trips together, but we learn from them. We learn that if we see something wrong we can rectify it immediately, and the only way you can really learn if the business is going right is by being on the spot, by being in the field. And when I say field, it doesn’t mean you have to be at a farm, it means you have to be at a distribution center or a factory. When you are there, with the knowledge one builds, you can even read behind the lines, you can tell if things are right and if something is not right.”

But if you’re looking to turn a company around, you can’t just go through this process once. You have to stay on top of each unit’s reports and continue to make visits. Building up confidence in the short term will quickly be forgotten if employees no longer have a touch point with you the instant the company starts to improve.

“You are not coming every six months to look at this report, you are reading it every week, and you are watching the macro environment,” Abu-Ghazaleh says. “You have to be aware of what’s going on around the world, what’s going on with the raw materials, fuel, so many factors, and you have to put this picture all together ... so it takes time, it takes effort, but if that’s what it needs, then that’s what you have to put in.”

It’s been more than a decade since Abu- Ghazaleh took on the challenge of changing Fresh Del Monte’s story. But from a company with $300 million in bad debt, Fresh Del Monte has been able to see solid fruits to its labor, pushing beyond $3.36 billion in sales in 2007, along with $179.8 million in net income. To Abu-Ghazaleh, a majority of the company’s resurgence is about rekindled faith in management.

“I think at least 50 percent comes from that because all the players adapt to that kind of mold and you have to build respect between the top management and the middle management and the lower management,” he says. “Big company, small company, middle-size company, news spreads around very quickly. If there is something wrong, it spreads even faster. So it’s very important the image and the attitude you portray to people at the end of the day. In one word, ethics in everything in life, that is the most important thing.”

HOW TO REACH: Fresh Del Monte Produce Inc., (800) 950-3683 or www.freshdelmonte.com

Monday, 26 January 2009 19:00

On demand

Don’t be surprised if Anne Doris shows up at your door someday soon.

If you’re a customer of Cox Communications Inc. Cleveland, she might just be riding along with the technician who comes to your home or office. And during the call, Doris probably won’t even mention that she is general manager and vice president.

“I first just simply say, ‘I’m Anne, and I’m here to install whatever services today,’” she says of her customer visits. “Then someone might ask what do I do, and I tell them, and they’re very pleased that I’ve taken the time out to come to their particular installation.”

Doris doesn’t ride along on calls every day, but she wants her 180 employees to see that she understands the business, so she has no qualms about rolling up her sleeves and joining the crew.

Smart Business spoke with Doris about why you have to listen objectively if you want to bring people in and how to build rapport by riding shotgun with your employees.

Listen carefully before reacting. Something that’s been critical for me has been the ability to listen. ... Successful leaders have to be able to listen well and use the information they get to help formulate the strategy for their organization.

It’s really critical when you hear information to probe further and get more facts but simultaneously assume as you go along positive intent of the information that you’re hearing.

We’re all in business with the purpose of serving customers, and there are times when information may not be as clear as you might think, and perception may not always be reality. So the burden on you as a leader is to always delve deeper into any issue that you’re faced with and not make any assumptions about the information that you’re receiving.

It’s very important to be objective. You’ll find yourself being cut off if you’re not clearly maintaining objectivity about the information you’re being given.

One of the things that I try to do at all times is maintain a certain sense of unflappable calm, and that gives me a great deal of advantage. That way I am always open and listening. People will respond to how they think you are reacting.

Acclimate employees to you and your company. I can’t personally hire everyone, but one of the things that we do focus on is the orientation schedule for employees. We want to be sure that they understand what each department does, what are their objectives, what their work is in regards to a product or a customer, and we want them to have an understanding of what the organization’s strategic vision and goals are.

So we ensure that their very first day with our company they learn our company history and tell them what customer service means to us.

Then it’s really important for me to set the stage at each new employee orientation class for them to know what I, as the leader of Cox Communications in Cleveland, expect of the organization and the role I expect them to play. I want them to know our products, align themselves with our goals and support their coworkers and to deliver a high standard of customer service.

Create both formal and informal avenues of feedback. It’s very important to employees that they stay connected with their leaders. It’s a two-way [street].

They want to understand the strategic direction the company is headed in, they want to hear feedback, and they want to ensure that the things that they’re seeing — they know more about what’s going on with our business, they know more about our challenges because they see them every day — are being articulated formally or informally. They really need to see that you get it; they need to understand not only the direction you’re headed in but also that they are able to push upward to you information that is being acknowledged and being taken into consideration.

I do that formally and informally. Informally, I begin my day in the parking lot; I may spend some time talking with our installers and technicians as they are getting ready to leave for the day. I walk around my business a lot so that people can find me approachable. My door is literally open to any employee at any time.

Formally, I do ride-alongs, meaning I will join an installer or technician on their route for an entire day. I might join a salesperson. I might sit in on the telephone in either the care or tech support.

I have those visits scheduled on my calendar. I set them up a year ahead of time, and I don’t change them unless there’s a very compelling reason.

I hold ‘Ask Anne’ meetings in which I pull together a cross-functional group of employees and we have lunch so that they can not only talk with me but talk with each other about ... things we can improve on. If there are opportunities for us to take those ideas and implement them, we do.

When it’s something that you can’t do, you know that almost immediately, and you can discuss that with them right there. For the ideas and solutions, I generally bring them back to my senior team and talk about it with them and then create an action. So if it’s something that can be done, we’ll put something in place and get it done.

Then they get the understanding that we want to be close to our customers, and they think that it’s very important that they share that information with me or with their supervisor or manager.

HOW TO REACH: Cox Communications Inc. Cleveland, (216) 676-8300 or www.cox.com

Friday, 26 December 2008 19:00

On the rise

Upon first take, Jose Royo seems too cool to be a self-described geek.

Born in Spain, Royo has simply merged a hint of his native accent into the natural hip of Southern California style.

But he’s also the first to admit his natural draw to the nuts and bolts of technology — his first job was modeling IBM’s first generation of PCs at a trade show in Madrid at age 14 — and its constant adaptations. As such, he’s found a home as CEO for Ascent Media Corp., the world’s largest provider of integrated global services for the creation, management and distribution of media content.

In a world where the technology used to print this magazine is just about obsolete by the time you pick it up, Ascent Media is facing shorter deadlines and expectations to have work done in mere hours.

“We used to have months to do certain activities,” Royo says. “We now only have, in some instances, hours, days and, at most, weeks.”

That means Royo spends every day trying to keep his 3,500 employees spread across the world nimble enough to jump on the next technology while still putting out today’s product.

“You sort of stop and wonder and say, ‘OK, this is what we do today. Given these changes, the business models that are emerging, the global nature of the industry and the technology changes that we’re all experiencing, how can we be relevant and continue to have the business with the high profile?’” he says.

So Royo uses some of his cool to overcome his geekiness. He constantly touches base with his employees at all levels and cuts out the jargon, describing for them very clearly where the company needs to go and how they can help. As he mixes in new technology experts with his existing staff, he works to quell egos and keep everyone focused on Ascent Media’s success.

Here is how Royo keeps a $672.3 million company ahead of the curve.

Touch base with employees

To keep his company adaptable, Royo starts at the bottom, laying out his vision and then touching base with ground-level employees to talk industry trends.

“That’s the first step to that process: Laying out that broad vision and then engaging with people to collect their knowledge,” Royo says. “The process of including people and collecting their input is important in being able to get their support.”

Royo isn’t best buds with 3,500 employees, but he starts the engagement process with quarterly trips to every facility and keeps in contact with every region’s senior manager via weekly meetings.

“It gives you a better feel of what’s going on in each individual facility and the services they provide but also the opportunity for people to feel like they may know you to sort of provide input and feedback,” Royo says.

And when Royo makes his visits, he takes time to visit with different levels of employees in a no-agenda setting just to see what topics are on their minds.

“I ask the head of a given facility to choose 10 or 15 employees, and I go and have breakfast or lunch with them with no particular agenda,” he says. “It’s just, I’m here to listen and learn, and so what do you want to talk about — and those tend to be very productive. And there’s a cultural aspect to it, in London what it usually means is take a bunch of people to the pub.”

Of course, four visits a year and a few pints isn’t enough for you to say you’re a man or a woman of the people. You need multiple touch points, including some that regularly engage employees on current issues. When Royo first came aboard at Ascent Media, one of the first things he did was create a blog on the company’s intranet. He posts a few times a week, and his goal is to mix it with corporate updates and down-to-earth things meant to stir up ideas.

“The postings can be specific. For example, we had an employee who was critically injured in the MTA train accident, and I gave people updates on how things were going after going to visit him at the hospital,” Royo says. “Or they can be very strategic. (In October 2008), in the face of all these economic challenges, I wrote a long note about what I think the implications are for Ascent, where we are in terms of our financial position and asking people to think out of the box.”

Similarly, Royo says you have to constantly maintain your e-mail. He knows that you get inundated with more e-mails than you can fully respond to in a day. He does, too. In fact, he estimates he gets nearly 400 a day.

“Everybody is very busy, and we all need to make sure we carve out some time to actually do some work,” he says. “Sometimes late at night, after I put the kids to bed, I spend some quality time going through and making sure I’m being responsive.”

To be clear, Royo is not telling you to stop your life to answer every e-mail. Being responsive means getting to the issues of the e-mails effectively. When he gets 25 e-mails about the same thing, he knows there is an opportunity to show he’s on top of it by responding through a public outlet.

“There are times when you’re getting a lot of issues about something, and that’s when the blog or some of the e-mail communication becomes important and/or setting up a specific meeting to address these concerns that have been raised by a number of people,” he says. “And then there are a lot of things you need to learn how to delegate, so hit forward, send it to somebody, and tell them, ‘Can you run with this one?’”

Mix in new people

Fifteen years ago, nobody knew what a Web programmer was. Today, some companies have entire departments of them. The point? As business evolves, new skill sets are regularly needed. In a hyper-paced industry like Royo’s, he’s not afraid to bring in new people.

“In some instances, we need what I call new DNA,” he says. “You need people who have a different set of skills and experience, so bring on board some of that new DNA that is going to enable you to think outside of the box from where the company and the business has been in the past.”

Of course, bringing in people to help you adapt and change your business comes with the very real threat of internal fallout. The more new hires you bring in, the more you can hear your veteran employees crying, ‘Who the heck are these people?’ The solution to that is making sure those people understand the purpose of any new employees.

“The first thing is education,” Royo says. “Make sure people understand why you brought some of that new DNA into the company so they’re not threatened and you don’t introduce some sort of old versus new.”

At Ascent Media, for example, Royo includes current department employees in the interview process for new additions. He also gets managers on board by having them do an honest assessment of their department so they can realize the skill gaps that exist.

“There’s an ideation process, as we call it, of asking, ‘What is it that we need to do this new direction?’” Royo says. “And we ask, ‘Do we have the skills in-house to execute that?’ Once you reach the decision on what the plan is going forward vis-À-vis any new opportunity, do you really have the skills? You need to be intellectually honest to execute, and out of that, usually, you identify some gaps. And by involving people through that ideation process and then filling in those gaps, it feels as if this is an organic sort of transformation or change versus a radical turn off the switch and then turn on a different switch.”

During that process, Royo says people begin to understand what role the new DNA will play in helping them evolve their jobs, creating an atmosphere where people are more willing to blend their departments with old and new ideas.

“It gives us this opportunity to create this blended environment where people can see some of these new skills and gives them an opportunity to reskill themselves and see a career path beyond where they are today,” he says.

And after making that effort to help blend the new and old, he says you have license to be very direct with those people that still don’t adjust. He recommends telling them very clearly that after the adjustment period is over, there is no room for people refusing to catch up.

“Then there are instances where some people are resistant to change, and if you attempt to address those issues through training and additional education and they’re still not responding, then you just have to have blunt conversations about what that means in terms of the creative path of that individual,” he says.

Simplify the details

It would take too much space to fully explain all the services Ascent Media has, but one point of note is that its digital distribution, which handles, among other things, everything done by Sony Pictures, distributes about 50 terabytes a week.

That can lead to simple employee questions like, what’s a terabyte?

And even those who didn’t Google terabyte to learn that it’s equal to 1,000 gigabytes might not fully understand what role digital files play in the future of the industry. This problem is not unique to Royo and Ascent Media. Whenever your company is doing something new or making a change, people are often fuzzy on the details of what tomorrow’s business tools and ideas mean to them.

“Simplicity helps a lot, so it’s about how you articulate a vision that is clear and astute so everybody knows that this is what we aspire to be,” he says. “Be clear about what the vision is, collaborate through the definition of that vision, and then be clear on what the execution components are going to be and who’s going to be doing what so there is a common sense of purpose.”

Royo uses the example of sharing the vision with his financial people.

“The first thing that we try to do is make sure our finance people are subject matter experts, meaning you want finance people who are not just running numbers but who understand the business, so as we engage through these discussions, it’s not, ‘Well, all of that is Greek to me,’” he says.

How do you make the elaborate easy to understand? Take out the part that makes it elaborate — new technology specifics, high-end financial terms, anything that an outsider wouldn’t understand, and make it about how this is pushing the overall business goal.

“It’s not about technology, really,” Royo says. “It’s about business, and how do we have a healthy business going forward. So you try to extract out all the acronyms and the lingo about the technology and say, ‘OK, this is the service the customer needs; these are the key components and requirements that come into being able to provide that service.’ Strip all the technology sort of noise out of that equation and make sure that the business explanation and the business model that is put around any financial decision is laid down to that simple vision. So you force people to distill their ideas away from the pure technology and into the service definition and businesses that we’re trying to service.”

HOW TO REACH: Ascent Media Corp., (310) 434-7000 or www.ascentmedia.com

Sunday, 26 October 2008 20:00

Check marks

Bruce McWilliams is thinking about the future right now.

He’s not ignoring what’s on his plate for today; it’s just that McWilliams constantly remembers advice given to him by a mentor.

“He would tell me a business is either growing or dying; there’s no such thing as steady state,” he says. “You always have to be thinking about growing your business, how it needs to change over time.”

If those are the only two options for a business, you can guess which one McWilliams, chairman and chief strategy officer of Tessera Technologies Inc., is striving for. So he is forever challenging the 400 employees of Tessera — which provides manufacturers with transformational technologies for next-generation electronics, optics and imaging solutions — to make a bigger splash in the marketplace. In turn, they have helped grow the company from 2003 revenue of $37.3 million to 2007 revenue of $195.7 million.

Smart Business spoke with McWilliams about how you can set growth goals for tomorrow while working on today’s business and why a customer who hates your new idea is a good thing.

Create a team specifically for growth. Four years ago, we set up a group that is focused on nothing but how do we grow into new businesses and think far out in time. And then, when we acquire those things, how do we protect them so they don’t get squashed by the organization, even though they will seem at the time to be in their infant stage.

You start by saying you have to grow at a certain rate, and you have to find a certain market to do that. I often had ideas of where to go, but when I would come to a particular executive in the organization, they would say to me, ‘Do you want me to work on the current quarter or year, or do you want me to go look at this new thing?’ And I’d always say, ‘Well, you’ve got to focus on the current quarter; if we don’t make that, we’ll get hammered.’

So how I overcame the problem is I set up a separate group that’s job is the vision, and I hired a guy who was very talented in marketing, I put my chief technical officer in there, an engineer who can run the numbers and two lawyers ... and I told them, ‘By 2010, we need an additional $100 million in revenue, come back with ideas,’ and we set up a strategic committee with the board.

You can’t just overnight create a big business, so this is a key strategic plan, and we have to isolate this group. And there are people working on nothing but this.

Explain your vision — for now and later. A leader needs to have a vision — both near-term and long-term — of where the organization is going and the value it delivers to its customers. So you need to be able to explain that to anybody almost in an elevator speech.

In terms of the near term, have two or three, or four at most, goals that you can say, ‘These are the things that we need to accomplish,’ and it needs to be at a level that everybody down to the receptionist can understand.

Have a compelling vision for why your company is going to grow and be an exciting contributor in the marketplace. (For Tessera,) it might be why people like pictures and video and why we’re going to see more and more of that, and that will be something people can understand.

Bounce ideas off the marketplace. To understand the marketplace, your people and the leader really need to get in touch with your customers and your customers’ customers. We sell to the people who buy the components that make the things like mobile phones, PCs and games. But for us to really understand the marketplace, we need to go to the level of HP and Apple and understand what type of products they want to get to the market and how what we do is working or doesn’t work.

One way is to come in with specific concepts and then ask them to critique it so you almost can’t lose. If they like it, they’re going to tell you why they like it. If they don’t like it, they’re going to tell you why they don’t like it, and that’s going to tell you where to go.

Divide the power; then check in. A leader has to really empower people. If they get a sense they’re going to be micro-managed, there’s no way really talented people are going to work like that.

The way our process works is those top-level things we do become the corporate (management by objectives). They are made more quantitative, and on each of those, you decide which of your executives contribute to making that happen. Then they become owners of that goal and expand on down to a bunch of things they need to accomplish to achieve that.

So, basically, if they are on track for hitting their goals, then they don’t see much of me. The other thing is having a weekly staff meeting where you listen to what the problems are, and the problems between groups, and take a stance on how we’re going to address that. Generally, if you truly listen to them, even if you don’t agree and do something else, they’re fine — they realize there’s not necessarily a right or wrong answer, they just need to make sure their input is heard.

HOW TO REACH: Tessera Technologies Inc., (408) 894-0700 or www.tessera.com

Thursday, 25 September 2008 20:00

Cultural evolution

Robert D. Kerscher has seen the way that bad leadership can kill a company.

Years ago, Kerscher was part of a start-up that he loved. But when the company was sold to a venture capital group, things went from people first to profit first.

“That’s the first time that I had experienced working for someone that really didn’t care a whole lot about our customers or our employees but was focused more on their personal net worth,” he says.

So Kerscher and a few others broke away and founded Lexi-Comp Inc. in 1978. They decided then that the focus would be on culture first to push people to better results. Today, the 130-employee provider of medical information and clinical content solutions is focused on employees’ needs and concerns every day — including during the recent transition in which Kerscher turned the CEO chair over to his son, Steven, while staying on as chairman.

Smart Business spoke with Kerscher about how to use communication to keep up your company’s culture and why it’s important to have a smooth succession plan in place.

Make a smooth handoff to the next generation of leaders. What we did is we announced that the next five-year plan was going to include a strategy that would basically provide for a younger management team to come in and be properly trained and be in a position to run the next generation.

So when you say how do you train successors, in this particular case, the training was really through the exposure and experience that my son had working in the business.

I gave him various assignments to head up this group, head up that group and ultimately become part of the management team. So the exposure to the strategic planning and all the activities associated with running the business was something he’s been exposed to for a total of seven years.

And what I chose to do is not totally bow out but take a backseat role and just try to be there to support the business. In the fourth year, I stopped running the management meetings and basically began that transition so that the beginning of the sixth year, everything was kind of operating, and there was never an abrupt date that things dramatically shifted.

Remember the big hype that took place when we were going into the year 2000? The anticipation of this whole thing, then all of the sudden it came, and there was really never a dramatic end — the clocks continued to work, and everything continued to go. Well, certainly, this was not on that scale, but there was an anticipation that something was going to take place.

But in truth, the transition took place very smoothly in that we were already operating in the new structure for basically the last year.

Use several avenues to reinforce communication. We create a vision, we try to communicate that vision and constantly reinforce it. We have monthly company meetings, we have a company newsletter, and we are really focused on providing great communication around the building so as decisions are made, even though they’re difficult, we try not to do anything overnight.

As you grow from a handful of people to more than 100 people, it becomes more of a challenge. Even when you have company meetings, you know that there may be 15 to 20 people in the business that are not there and that are not capable of hearing the latest message.

That’s why these things must be reinforced, because if you are not at the company meeting, then you’re certainly going to read about it in the company newsletter.

What we encourage our management team to do is communicate (the vision) to their group. I encourage myself, and now my son, to sit in on departmental meetings on a quarterly basis.

The real thing here is we’re still a small company, and the people that work want to feel like they can walk in and have dialogue on any topic they would like, and certainly, that’s encouraged when we show up for these meetings.

Get out and see your customers. I spend a lot of time traveling to medical meetings with our sales staff, having one-on-one dialogue with each member of our management team about the customers, and I’m very engaged in asking questions that promote dialogue.

That’s where our best market research is done. I still believe being face to face with the customer is an absolute key. The customer is our best source of market research so, because I travel to so many medical meetings, I am always in position to be able to have insights in terms of what the customers needs are.

Then, during dinner conversations with employees, you tend to replay conversations that you’ve had with customers during the day. And by the time you come back to the meeting, you usually come back with one or two ideas that you put into the hopper and try to get them validated, and that kind of guides the business.

You have to have a willingness to participate. I’ve never considered myself the smartest person in the world, so you’re always attempting to understand what their issues are and you are trying to come up with solutions that satisfy their needs. I’ve learned that in order for us to service our customers, we have to have a strong dialogue with them.

HOW TO REACH: Lexi-Comp Inc., (800) 837-5394 or www.lexi.com

Tuesday, 26 August 2008 20:00

Ripple effect

Mark R. Goldston has written a book and has 13 patents to his name — including one for the original pump-up sneakers.

Why is that worth mentioning? Beyond its general worth at cocktail parties, that background gives Goldston the confidence and sense of humor he needs as chairman, president and CEO of United Online Inc.

And there have been times that he’s needed both. United, a provider of consumer Internet and media services that spawned from the coming together of NetZero Inc. and Juno Online Services Inc., has grown to more than 50 million members across its brands and posted more than $513 million in revenue in 2007.

But there have been some challenges as the company has been built up on bringing companies into the United portfolio. Take the Net Zero-Juno merger in 2001 that originally formed United. The two rival companies were both hurting and a local media outlet made an interesting analogy when it panned Goldston, then the head of NetZero, for the deal.

“They said it’s two skunks trying to breed a mink,” Goldston says, and that’s where he used a bit of that humor. “And, really, that is one of the great comments of all time.”

But Goldston also had confidence that he had done his homework.

“The point was nobody bothered to try to understand what vision had been articulated for the two companies,” he says. “They just focused on the fact that, at that point, these were two money-losing companies that had come together to compete in an industry against a virtual monolith, which was AOL.”

And were those critics a bit off? “So what happened, ironically, since the companies merged, we’ve generated almost $700 million in EBITDA,” Goldston says. “In retrospect, you can decide whether or not they were two skunks, but we definitely bred a mink.”

The results came from Goldston’s basic idea to fully understand the people at a company during the always awkward time after a company is acquired. If the people are right for his company, he can make it work by bringing them together under one rallying cry and get them walking the same path of accountability.

Recently, United acquired floral and related products provider FTD Group Inc., increasing United’s head count to roughly 2,200 employees — and starting the integration process all over again.

Here’s Goldston’s outline for how you bring a new company in and meld it with your people.

Understand the new players

A few months back, Goldston made a personal visit to FTD to make sure he understood what its people were about. While the company was probably more used to getting flowers, Goldston believes a more personal touch is required.

He spent four days in FTD’s Chicago office and took the time to speak in front of every employee. He also met with every single member of the senior management team — all 40 of them. His hands-on approach played to what he thinks is most important when you’re acquiring a company: You have to get to know them.

“Why do so many acquisitions fail? Let’s face it, they’re done by smart companies with smart investment bankers,” he says. “Why do so many of them fail? Because it’s the conquering theory: ‘We’re going to force our culture onto your company’ — that doesn’t work. You have to be able to meld and assess people, assess their skills and make them feel post-deal they’re not part of an us and a them.”

That initial assessment requires the hands-on approach Goldston uses. Instead of sending out his people to figure out if a company can fit with United, he makes sure he does the scouting.

“Most guys that I know that are peers of mine, they send out their advance teams, they do the work, they report back and decisions are made, and the only people the CEO meets are probably the CEO, the CFO and maybe one or two other key players, that’s it,” he says. “You rarely meet a CEO who’s met people 40, 60, 100 deep in an acquired company.”

When Goldston is looking at a company’s people, he is trying to figure out the work ethic and job capabilities of the company.

“Part of it is, is it very clear to me and to them what their jobs are and how they are doing,” he says. “Some of that has to do with the overall corporate fortunes, the other has to do with how does the head of marketing and his or her marketing department perform. What do they do, what’s their work ethic like, what’s the quality of their work product like, and what kind of people do they appear to be?”

If a company doesn’t have the clear makings of what will work with United, Goldston won’t close the deal.

“Buying a great brand name and a company that you perceive to be a great enterprise that doesn’t have great human capital, will not be a great company,” he says. “You see some of these big brand names go bankrupt and you’re like, ‘Wow, how could that company go bankrupt, everybody’s heard of them?’ Yeah, well, what kind of people did they have?”

Prep your team for transition

While you may be persuaded to spend all of your time working on the big deal, Goldston says that internally, you can’t lose focus. When you are working through an acquisition, you have to be clear-cut with your people and lead them through a time full of distraction.

“It’s really important to have a high-level, clear strategic vision that you can articulate [and] use as a rallying cry, No. 1,” he says. “No. 2, you come up with your list of three to five critical things that must get done to do the acquisition or the merger and have everybody focused against that and then, thirdly, articulate to people from a business and personal standpoint what does this acquisition mean to you.

“It’s important for the people in the company that is the acquirer to understand how this fits into the total mix of the company and what it means for them so that they also understand that, as an acquiring company, does this company provide additional career opportunities, does it provide opportunities to leverage all of the things that we’ve built as a team?”

The important thing is to make the acquisition an important focal point that doesn’t completely drive the company in a new direction.

“You don’t want people to become like kids in a candy store,” he says. “It’s very easy to get sidetracked because there’s so many new and different things you’re being presented with; you have to stay focused on those three to five things and have regular, weekly updated meetings as to where you are against those.”

The thing is to set realistic goals about bringing the new company in and assimilating it. You can’t expect everything to run smoothly — in fact, Goldston says you will most certainly hit snags you never dreamed of — but by setting reasonable and measurable goals for the company’s transition period, you will stay on track.

“You can’t constantly ask people to climb Kilimanjaro, not everyone can climb it, and you don’t have to get to the top of Kilimanjaro to be a very big success,” he says. “So it’s important to set aggressive goals but goals you believe that if people work hard and are smart can achieve, because coming up short of a very lofty goal on a constant basis is a major demotivator to workers because they don’t, in retrospect, think they achieved a high level but just didn’t get to the pinnacle, they think they came up short.”

Put the lineup together

When he’s got his mind made up on a company and his internal people ready, Goldston puts the whole puzzle together carefully. He gives the new team members the personal attention they need and reminds them that United isn’t there to swallow them up but instead to help them grow.

“Some people say, ‘This is the XYZ Corporate way, and we’re going to mold you no matter what you were before into that,’” he says. “We don’t want to be the company that comes in as the omniscient acquirer, because if that’s the case, then you’re not buying anything of value; part of the value in what you’re buying is how bright the people are.”

That doesn’t mean that United welcomes the company in and then lets it run amok. Goldston very clearly articulates some non-negotiable items revolving around respect, integrity and ultimate controls.

“Making sure that the business has strong internal controls so there are checks and balances is nonnegotiable, but beyond that I really don’t care what your batting stance looks like,” he says. “Ultimately, if you’re a great hitter and you’ve got a great average, then I’m going to figure out how we’re going to use you in the lineup.”

That means that the onus is on Goldston to meld the new company and United into one team. To do that, he falls back to the three to five goals he gave his internal people and shares those goals with everybody — new and old — for a common starting point.

“Once the deal is closed, the way you create a winning culture is you then walk the walk,” he says. “Common goals that are updated regularly and monitored regularly and progress reported regularly helps to sort of instill a common spirit in the organization, which leads to a shared sense of accomplishment at the end.”

By sharing goals you begin to create a common thread of accountability across the company.

“Basically what you’re doing is saying, look if you’re part of the family, you’re part of the family, and you don’t have separate family rules for different children,” he says. “It’s about the company’s agenda, and your personal advancement and your personal compensation should be predicated on how well you accomplish those goals of maximizing the benefit to the shareholders of the company.”

To get that accountability started, Goldston puts himself out in front of the company and shows them the measurable goals that he is sharing with the public and lets them know specifically what he will be doing.

“If you’re going to ask somebody to do 100 push-ups, don’t do it in your motorized cart eating bonbons,” he says. “Get down on the field and do some push-ups with them; even if you didn’t do all 100 with them, show them that at the end of the practice the coach is sweating, as well.”

Taking that tone from the top creates an accountability level that every employee can understand and melds the entire company together under one scorecard and set of standards.

“The tone at the top of the company a lot of times, most times, will dictate what people choose to emulate,” he says. “So if I deal with my executive staff that way, then they, in turn, will act with their people that way, and it’s a ripple effect.”

In every step that Goldston takes along the way, he puts the effort into making sure people make the adjustment, noting that the companies will come together if you simply define what the merger means for everyone involved and tie it to reasonable and beneficial goals. When they see that, you can start breeding your own mink.

“I do not subscribe to the people are fungible theory,” he says. “People are critically important and who you hire and what you give them to do and how you measure them and how you interact with them is what makes your company a success or a failure, period. And, in order to do that, you have got to create mutual trust where people are willing to go the extra mile for you because they know that you’ve got their best interest at heart.”

HOW TO REACH: United Online Inc., (818) 287-3000 or www.untd.com

Saturday, 26 July 2008 20:00

Team captain

Just call Paul Franks afield general.

As president and CEO of Sports Construction Group LLC,which does sports field installations for teams including theCleveland Indians and Browns,Franks has become morequarterback than boss as hiscompany has nearly tripled itsrevenue from 2004 to 2007.

“Everybody’s role is a key tothe success; it’s just like a football team,” Franks says. “It’snot one person that’s outthere; it’s a team. You just haveto all work together and doyour assignments.”

Smart Business spoke withFranks about how he handsoff the ball to his 100 employees at SCG and then truststhem to get the job done.

Q. What is the key trait tomanaging a growing company?

You have to allow people todo their jobs and not micro-manage. Along those samelines would probably be learnfrom your mistakes, and don’tbe afraid to make mistakesbecause you certainly don’tmake them twice.

You’ve got to trust people, andthen that goes with the secondthing, where I said learn fromyour mistakes. No one is perfect, but everybody tries hard,and if you’ve got people that tryhard and demonstrate that theycare, demonstrate that they’refocused on quality and demonstrate that they want to succeedand have a potential to moveup in the organization, that’s animportant part of it.

No one is perfect. I make mistakes, everybody in our company makes mistakes. It’s how youlearn from that mistake and solve the problem. And don’t tryto solve the problem as an individual; you solve it as a team.

Q. How do you create a culture where employees feel theyhave the autonomy to makemistakes and then move on?

That’s a culture that evolves;that’s not an immediate reaction. That evolves over timewhen people become awarethat they aren’t going to getchewed out.

Sure, people can make mistakes that you can’t tolerate, but if you’re trying and you make a mistake and you see the efforts to try to correct it, that’sdifferent.

Q. How did yourecognize that youneeded to hang backand let people growfrom their mistakes?

Probably working withother organizations where they do micro-manage and seeing howemployees are not satisfied and seeing how production and performance is lacking. Everybody is afraid to make adecision because they will getchewed out if they make adecision that the micromanager doesn’t accept. With micro-managing, you see change indirection of the company consistently because it just isn’t agood business atmosphere.And I think retaining employees is also difficult under thatscenario — there’s so muchcommon sense to it.

Q. How do you keep othersin your company from micro-managing?

That’s all a part of taking timeto grow a team. When you aregrowing the company, you’repicking people or bringing people in who pretty much havethat same kind of philosophy.

If I had an operations personthat was all about micromanaging, he wouldn’t be here. If I hadour estimator for project managers micromanaging and notletting the superintendents dowhat they feel is correct or givethem the opportunity to betterthemselves, then they probablywouldn’t be here, either.

It’s a team. You don’t get aSuper Bowl team the first year.It takes time to get the wholegroup interacting with eachother the right way.

Q. As you’re forming thatcohesive team, how do you copewith the fact that people aregoing to make big mistakes?

There are two types of mistakes. One is a mistake that isa result of something out oftheir control, and then there’sa mistake that is made justbecause of lack of commitment. When you’re in a veryfast-paced business, you haveto roll the dice a lot of times,and if it comes up the wrongnumber, sitting around coming up with a solution is somuch better than chewingsomebody out that reallycares.

It’s kind of like treating people the way you want to betreated, the old Golden Rule,and you apply that in businesswith common sense and within a guideline that makes acompany successful.

Then, make sure you don’thave a big ego. That’s wheremicromanaging comes in,when you think no one cando this except me, I’m betterthan thou — that whole thing,to me, is a road map to failure.

There are many roads to getto the same destination. Sometake a little longer, some takea little shorter, but you getthere, and you might learnsomething if you go down adifferent road. I learn a lotevery day. Every day is agrowth period intellectuallyfor everybody, and if you’re soclose-minded not to look atother people’s opinions andaccept them and let them goforward with them, you’re notallowing yourself or theorganization to get better.

HOW TO REACH: Sports Construction Group LLC, (216) 241-9900 or www.sportscongroup.com

Wednesday, 25 June 2008 20:00

Talking tough

David Schmidt has seen constant turmoil since joining SCAN Health Plan.

Don’t get the wrong idea, Schmidt loves his role as CEO at SCAN, a Medicare Advantage HMO.

But when he joined the company in 2002, he had to deal with the final stages of bankruptcy, and just when things had finally started to look bright, he had to deal with a change in California policies that disrupted a major part of the company’s core business — providing in-home services for seniors who otherwise would need to live in a nursing home.

The changes in government policy had not come as a surprise, and Schmidt had worked to keep his employees informed every step of the way. This open and honest communication forms the foundation of Schmidt’s leadership style.

“You have to identify what are the critical problems, and I think you have to be explicitly honest, and you have to tell people what you’re going to do,” Schmidt says of the days leading up to the change in government regulations. “And then, do what you say you’re going to do, and hopefully, you make the right choices, and then people start making the right choices, and then it just begins to somewhat snowball.

“We communicated a lot to our employees. We let them know what was going on, we started communicating about (the change) probably 30 months before it occurred — that this was a potential issue, and then that it was an issue and so on and so forth.”

And when it finally came time to face the consequences of the loss of funding, the results weren’t pretty.

“We had roughly $40 million in cash and $75 million in unfounded liabilities,” Schmidt says. “So if the business is shut down on that day, not everyone would have gotten paid.”

That HMO specialization was a big portion of SCAN’s business, and while the company could stay healthy, it was forced to lay off more than 200 people when the funding stopped.

“This is a key part of who we are and what we do, and now, all of the sudden, we can’t do that anymore,” he says. “And how do you sustain the mission, how do you keep the people who are left, how do we keep them pulling in the same direction and supporting the same mission?”

The answer became using the troubled times to realign the more than 750 remaining employees behind the company’s vision of quality member care at the not-for-profit provider.

Establish a rapport

The key to pulling out of both the bankruptcy and the systemic change wasn’t just that communication attempts were made but that SCAN found ways to get the situation across to every employee. Instead of tucking away behind closed doors when things are going tough, you need to find outlets to let people know what’s going on in your business — especially if you have an inkling of things that will happen a few months down the road.

“We talk about our product, what’s going on in our marketplace, we talk about particular things about the company,” Schmidt says. “With the social HMO transition, we talked about that. I gave them the facts, and we talked very early about the idea that change was going to be part of our lives as soon as I got here because the first change was having to survive the near-death experience.

“We really communicated a lot about changes coming, saying this is what we think is going to happen, that either change can happen to you or you can have a role in its outcome, and wouldn’t you rather be someone who has a role in its outcome to determine your own fate?”

While Schmidt relayed the important facts to everyone, he knew that some of the extremely difficult financial details or long-term plans for the vision didn’t have to be broken down line by line. Instead, he says you can give most employees the CliffsNotes version while giving decision-makers the full novel. The CliffsNotes version at SCAN helped people understand where the company was headed with its updated vision.

“I do really believe it played a role,” he says. “I’m a big believer in kind of the social psychology of the organizations — fundamentally, it’s the people. You know the (Bill) Clinton thing, ‘It’s the economy, stupid’? Well, running a business, it’s the people, stupid. That’s the issue. So we made it OK to deal with the problems, we made it so the member comes first, but the enterprise has to do well, and we have to be financially successful, or we won’t be able to serve them.”

The end result was a better understanding from the employees when the layoffs happened.

“Walking 210 people out the door was not fun,” Schmidt says. “But we framed that around the fact that it was something we had to do to continue to be able to serve our members, so that gives you permission to do a lot of things as long as you are consistent.”

Encourage communication

The initial role of a leader opening up communications during a turnaround is very simple.

“I can tell them why I think it’s going to work, and because we’ve done the things we’ve said we’re going to do, I think we have some credibility there,” he says. “But I can’t make them believe, I can only give them reason to believe.”

Schmidt first led by example, taking time to walk around and talk to employees and to go out in the field. But beyond that, he found ways for communication to come from the bottom up.

One outlet he created at SCAN was a brown-bag lunch with 10 employees. The employees are nonsenior managers, and Schmidt sits down with them for a free-form lunch where they can ask any questions or give any comments they want about the business. And, though he says it doesn’t make him a great comedian, he tells the same joke every time to help take the edge off.

“I tell them what I expect and what I hope they get out of it,” he says. “And I actually tell the same joke every time, which is that, ‘This meeting is kind of like the ads about Vegas, what goes on in this room stays here. Now, I will make changes, and take action on stuff you tell me, but if you want anonymity, you have anonymity.’ And I give them some examples of things that people generally know that are changes that occurred at the company.

“And I don’t do anything that’s really threatening, but I show them things that really are the result of somebody asking a question in the brown bag.”

Though he can only talk to 10 employees at a time, results from those luncheons go a long way to help push communi-

cations from the bottom of the company. Keeping that anonymity in mind, Schmidt takes what he hears out of the meeting to other senior leaders and tells them to watch out for the problems he’s heard about. The surprising bonus to the luncheons that Schmidt has found is that most employees don’t want to complain about bad bosses or co-workers, they want to talk about systemic issues in their daily jobs. And since most come in as quasi-representatives of their position, hearing and fixing their issues can often balance out a whole segment of the employee population.

Lead the communication

In addition to his efforts to get others in his organization to feel comfortable with speaking their minds, Schmidt says it’s also important for a leader to constantly check to make sure they are communicating and following the vision regularly and honestly.

“It doesn’t happen by accident, obviously,” he says. “It’s not manipulative, but it is intentional. ... It’s one of the things that’s really important for me, for my job, I need to, in fact, exemplify that because if I am less than honest about that, if I’m not consistent, then it’s kind of like scolding your teenage kid on something, and they’re going, ‘Yeah, you’re a hypocrite.’”

To exemplify that type of communication, you have to go beyond letting employees know what’s going on during hard times. You have to truly become a model communicator for your company.

Schmidt leads an annual forum for the organization’s members and staff called “Straight Talks” — a sort of “state of the health plan” event. The senior managers use the occasion to communicate the vision of the organization to both members and employees alike.

That kind of effort to get out and communicate the vision has helped SCAN get its employees to believe in communication from the top. In fact, SCAN does an employee survey every two years, and 83 percent of employees say that their manager follows the vision of the company, and nearly 84 percent say senior management does, as well.

“As long as you’re honest with people, and you consistently tell them the truth, you’re doing the right thing,” Schmidt says. “And the right thing doesn’t mean giving somebody everything they want. It means if you can’t give somebody something they want, you do the best of your ability explaining why and empathetically listen to what their concerns are, so that’s what we do.”

As a result of leading communications during the tough times at SCAN, Schmidt has helped the company from the trenches of bankruptcy and governmental hindrances to new success. When he joined the company in 2002, it had roughly 52,000 members and didn’t have enough cash to survive another bump in the road. Today, SCAN has more than 105,000 members, $1.46 billion in 2007 revenue and more than $1 billion in cash to work with. Naturally, there were many motions needed to get the company to such growth from the ashes, but Schmidt says communication in a turnaround really salves wounds.

“I think words are pretty important,” he says. “Would it have to be the exact same words? Of course not, but the communication is really critical to anything that an organization does, that’s one of the things that I believe very strongly, and I think the right words and attitude are important, particularly in a turnaround. You need to be serious, but you also need to be optimistic; you need to believe that you can make it work.”

HOW TO REACH: SCAN Health Plan, (800) 247-5091 or www.scanhealthplan.com

Wednesday, 25 June 2008 20:00

Educated risks

Ted Stahl would like you to forget about any economic woes you might be hearing about and just sit down for a conversation about the opportunities of education and technology.

That’s not Stahl trying to be an eternal optimist; it’s his method of leadership. As CEO of GroupeSTAHL, Stahl has made a living out of growing companies through innovation and education. In Cleveland, Stahls’ Transfer Express, a wholly owned subsidiary of GroupeSTAHL that manufactures custom heat-applied garment transfers, is a living example of that.

Stahls’ Transfer Express employees are constantly being taught to focus on the customer and on technology to adapt to what the market can bring next. As a result, the company continues to grow each year, blossoming to more than 100 employees in less than two decades, and it consistently bumps up the level of technology used in the industry.

Smart Business talked to Stahl about how to refuse complacency and why you need to have a few rebels around the office.

Encourage a few rebels to spark business. There’s a word called educated risks. If you don’t take any, you aren’t going to be growing anywhere. Everybody, and every company, is really in a state of metamorphosis, reinventing itself all the time. It has to be.

But then complacency is probably, if you are successful, a thing that sort of sets in. You hear, ‘We’re doing well, why should we be trying to change this or that?’

But if you’ve got people that are curious about their customers, curious about the world about them, they see the opportunities that are out there; if they have that passion, it becomes infectious.

So you talk about it, you make examples of people and promote people that do take some risks. Any type of a business culture has a tendency to try to homogenize itself, and you’ve got to have a few rebels around, and you have to let people see how much they help.

Be curious about everything. You have to have a curiosity about customers, about technology, about industry — basically you can’t define it right down to one particular interest. It’s more of a curiosity of the world about you and everything that affects it.

You can’t just limit it to just your relevant industry idea; you don’t know what technology is happening in Asia or Germany or here in the United States that might eventually affect your product.

And if you can put it all together, if you’re curious and you’re driven by your customers and you understand what their strengths and weaknesses are, what their needs are, then you can look toward the world of technology and put the two together. It’s sort of like keeping one ear to the customer and one ear to what’s happening in the world to help create products that succeed.

Refuse a complacent mindset.Growth and complacency is an oxymoron. Complacency, bureaucracy, lack of risk-taking, they’re all sort of the opposite of growth. You have to help people understand that, even though we’re growing and we’ve got some very substantial growth, the market potential is growing at an even greater rate.

Be aware of that and aggressively go after it by increasing your customer base, increasing the types of customers we’re selling to in different market segments, taking advantage of the international market and the way the dollar is at the moment.

I’ll go back to three words: bureaucracy, complacency and risk-avoidance. You have to try to ensure those don’t set in. It’s communication. If they constantly hear about opportunities out there from you, then it becomes sort of ingrained in the company, and they see the opportunities.

Today, you hear a lot about these troubled times, and I know a lot of people in business, and in certain segments that’s very true, but I know a lot of other people who have been aggressive and who have used their ingenuity to make things happen, and that comes from refusing to be complacent and sharing that with others.

Give employees appropriate perspective. There is an old story about a gentleman who went to a quarry, and he walked up to a mason pounding a stone and asked what he was doing.

The mason said, ‘I’m pounding this stone here, trying to square it.’ He went to another mason and asked what he was doing, and he said, ‘I’m trying to square this stone that goes right next to the cornerstone of this 3,000-foot cathedral.’

So there are two totally different motivations there. So the more that employees understand the products, understand how they’re used and understand the customer, the more they can put that little bit of extra into the way they’re packaging it.

I require that all managers go to trade shows, talk to the customers. They’re what’s it’s all about. Employees have to be totally comfortable with the products that we have. Nothing infuriates someone more than when you go into a store and you ask somebody a question and they don’t know.

So we make sure that one of the tenets of our success is always being the most knowledgeable about our products, how they’re applied, what they’re used on and doing that from a customer’s viewpoint so that we can really understand what they want. That comes from trade shows, face-to-face contact and working from the customer’s perspective.

If the only knowledge I have is what was explained to me ... then I won’t get it.

HOW TO REACH: Stahls’ Transfer Express, (800) 622-2280 or www.transferexpress.com

Friday, 25 April 2008 20:00

In the trenches

Anthony Daus understands that you might not want to work Friday nights. He doesn’t necessarily want to either.

But if you’re pulling the late shift at Geomatrix Consultants Inc., the diversified technical consulting and engineering firm where Daus is president and principal hydrogeologist, then the odds are he’s at work with you. That’s not just because Daus wants to make sure that the work is done; instead, he believes that the best way to motivate his approximately 475 employees is to show them that Geomatrix is a flat organization where everyone’s work and input count.

And he says that the principle is pretty hard to argue with when he and the company’s other leaders are regularly entrenched in the projects that occasionally overlap into those weekend hours. As a result, the $110 million firm has built some loyal employees — turnover is less than 5 percent a year — and engaged leaders.

Smart Business spoke with Daus about how working Friday nights can help forge great relationships and why you should turn off your BlackBerry and listen.

Remember that you set the tone. If you can lead by example, if you can do what you’re asking other people to do, they’re going to have a lot more respect for you.

Whether you are a general in the army, a president in an engineering consulting firm or of a large manufacturing organization, it’s important that you are well grounded in what your company does, what its front-line business is.

I’m on a first-name basis with everybody in the organization. Now, it’s only a 500-person organization, and I certainly don’t work with all of them, but I work with a large number of them, and I try to be very approachable. The great crucible or where relationships are forged is in the progress work, how we get things done.

And it’s one thing to tell someone to do it and another to get there and help them get it done. If people are working late on a Friday night, I’ll be here working with them. If they have to come in on a weekend, then I have to do that. And I tell my principals and partners they have to do the same thing.

Lead the way for collaboration. To a large degree, you’re just trying to get everyone to go in the same direction, get them to collaborate.

You really have to be able to justify all of your decisions; it has to make sense to them. There has to be one guy who is ultimately in charge of the final decision, but you need the other partners to buy in to it. It has to have a basis in good, sound fundamental facts.

And even though I’m the president of the company, there is a handful — maybe six to eight people — that really have a lot of sway with individuals in the firm, so you’ve got to get those people behind you so everyone will buy in to it.

We find that if we focus on the things that are necessary for successful collaboration, then the growth and profitability are the outcome. We always do better work when we get the best people in the organization engaged in working together on a project.

Give employees a fair chance before letting them go. One of the hard things that you have to decide as a leader is at what point have we given people enough of a chance to be successful. Those are some of the most gut-wrenching times, when you have to do something and it’s going to change someone’s life.

We give a lot of effort to work through whatever issue that they’ve got and let them be a contributing person to the organization. People want to be treated with respect, and that’s one of the most important things that we can do.

For most folks, I give them about a year, but it gets to a point where you sit down and talk to them early on and say, ‘You know, I think we need to do something different to make you more successful because it’s not working right now and maybe we should try this.’

After you do that, you’re at a point in your discussions where you have to figure out if the organization is the right fit. It gets a lot easier if you start the process early — if it doesn’t look like it’s working out and you talk through it with them.

Usually then they kind of know it, as well. It really needs to be a one-on-one sit-down at a neutral area, maybe a restaurant, to talk about their overall performance and whether it’s a good fit for the organization, and then let them go out on their own terms. So it’s rarely, ‘You’ve got two weeks; clean out your desk.’

I give them the reasons and say, ‘It may be more valuable for you to go to another organization.’

Take the time to really listen. Listen to the facts. It’s easy to jump to a conclusion with a limited number of facts, and when you do that, more often than not, you’re not including something that’s very important or not considering an important element of that decision-making process.

Take the time to talk to (employees) and make them feel like they’re the center of attention at that point — so you’re not trying to do three or four things at the same time you’re listening to them, and not looking at your computer, playing with your BlackBerry or something annoying.

HOW TO REACH: Geomatrix Consultants Inc., (510) 663-4100 or www.geomatrix.com