1. Weatherhead 100
Magnus International Group Inc.
City: Painesville Township
Year founded: 2007
Sales growth: 2,735.6%
Co-owner, president and CEO: Eric Lofquist
Magnus International is a manufacturer and distributor of unique, natural animal feed ingredients, natural waxes and alternative fuels.
Magnus International Group Inc. bases its growth model on high-volume product development coupled with a high degree of trust in sharing information with its suppliers and customers.
That model is working remarkably well for the Painesville Township-based manufacturer. Magnus has achieved explosive growth during its five years in business. The lion’s share of that growth has taken place since 2010. Up to that point, Magnus had concentrated on converting petroleum-based waste into renewable fuels and all-natural waxes. But 2½ years ago, Magnus started concentrating on creating products for a new market segment — animal feed ingredients — and its business took off.
“By far, the largest segement of our growth has been on the animal nutrition side of our business,” says Eric Lofquist, Magnus’ president and CEO. “The growth on the energy side — renewable fuels and so forth — has been good from time to time, but natural gas prices are low right now, so that makes it hard to grow in that segment.
“However, our growth on the animal nutrition side has been strong and constant. Once we started focusing on the animal feed side about halfway through 2010, we really started to see the change. That’s when we started to grow in a big way.”
Magnus’ leaders attribute their company’s growth to two key factors: prolific new product development and getting those new products to the marketplace quickly.
“The year 2011 was by far our best one in terms of growth, in both real dollars and percentage,” Lofquist says. “We hit a real sweet spot with new product development, which has continued through 2012. Most of these new products are in the animal nutrition area; that’s where 90 percent of our new product development is focused. And we’ve been able to move the products from development out into the market very quickly because of the way we have our business structured with our partners.”
Magnus is uncommonly ambitious when it comes to developing new products.
“We want to have at least one new brand per quarter out in the marketplace,” Lofquist says. “So that might mean we’re working on three, four, five different products a quarter. Some of them won’t make it past the lab stage. Some might not cut mustard out in the market. But we’ve learned that we always need to have a bench of new products we’re working on from the development side.”
The speed with which Magnus is able to move products from development to market is based on the company’s close, partner-based relationship with its customers and suppliers.
“The way we structure our business and our relationships with our vendors and customers, we’re very transparent,” Lofquist says. “We share a lot of information about profitability and cost, and that helps us move to market much faster, as opposed to having the traditional vendor-customer relationship. We’ve modified these relationships to function like partnerships. Even though they’re not partnerships in the legal sense, they feel like partnerships because of the amount of information we share.”
Many of Magnus’ “partners” are versatile in terms of how they work with the manufacturer, serving as both supplier and customer at different times and sometimes in both roles simultaneously.
“We transform materials that are thrown away by food companies — fats, oils, greases — into a number of products,” Lofquist says. “Sometimes we’ll buy some material from a vendor, then make a new product from that material, then sell it back to them as a customer. So it crosses division lines for some of these large companies.
“It’s fun to be able to sit down with them and say, ‘We’ll pay you X for this material. It’s going to cost us Y to remanufacture it into this higher-level product. And then you can take that back to your marketplace or use it in some of your internal products.’ ”
How to reach: Magnus International Group Inc., (216) 592-8355 or www.magnusig.com
95. Weatherhead 100
Foundation Software Inc.
Year founded: 1985
Sales growth: 29.14%
Chairman and CEO: Fred Ode
Foundation Software is the developer of Foundation for Windows construction accounting, project management and scheduling software.
Since Fred Ode first struck out on his own as a programmer in the early 1980s, he has made several decisions in business that have proved successful for Foundation Software Inc., the developer of Foundation for Windows construction accounting, project management and scheduling software.
In 1985, Ode, who serves as chairman and CEO of Foundation Software, spent two years writing the company’s original software application for the construction industry. It took about a year before he sold it in 1988. From there he converted the program to Microsoft DOS in 1990 to run under that environment and then introduced a Windows application in March 2000. The company has been in business for 27 years.
“Our main product is offering software and services to the business sides of commercial, industrial and government contractors — heavy highway, bridge builders, roofers, electrical and mechanical contractors,” Ode says.
One of the biggest turning points for the company was Ode’s decision to upgrade its software application from Microsoft DOS to Windows.
“In 1996, we decided instead of taking our DOS application and doing what’s called an overlay to make it look like it’s a Windows application, we decided to start from scratch and write a whole new application, and that took four years,” Ode says. “That decision is paying off huge now.”
Many of Foundation Software’s competitors took the easy road reworking their existing applications instead of taking advantage of new technology and new ways to design software.
Another crucial point in the company’s past was in 2008 when the recession hit. The market and the company’s competitors were suffering. While the competition was pulling back on advertising, trade shows and cutting staff, Ode stuck to his guns.
“Part of my philosophy has always been to conserve cash,” he says. “I’ve always accumulated cash, and we had a lot of cash in the company. So we didn’t change anything.”
Everything stayed the same with one exception –— Ode decided to increase research and development efforts.
“We kept our marketing and staffing equal and we increased our development, because the idea was when the recession starts to settle down and business starts coming back, we’ll be several steps ahead of our competitors both from a branding and marketing perspective but also in product development,” he says.
At this same time, Foundation Software decided to add a side company called payroll4construction.com, a symbiotic relationship where one feeds off the other.
“We get payroll service companies that want our software, and we get software companies that want our payroll service,” Ode says. “In 2008, the idea was to put our foot on the gas pedal as opposed to hitting the brake. It has paid off huge.”
In the first half of 2011 alone, Foundation Software saw sales revenue increase by 60 percent, and the company added 25 new employees. That success, however, didn’t come without challenges.
“The part that was hurting was our client services,” Ode says. “We have a great reputation in this industry for responding quickly, giving quality answers and for our training, but we fell a little behind.”
It took three to four months to get people up to speed in client services. Customers were used to getting their responses in 30 minutes and it dropped to 90-120 minutes.
“That was a barrier we had to overcome, but we are back down to 30 minutes and we’ve been that way ever since,” he says.
Currently, Ode and Foundation Software are in a great position to continue and improve upon the growth the company has seen.
“Positive cash flow is happiness and we maintain a lot of cash in the business,” he says. “Right now our assumption is we are going to continue growing.”
While being smart with cash has put Ode and the company in a strong position, he says he wants to make sure he keeps his focus on where the business is heading.
“The challenge is not getting too caught up in this current stage of accelerated growth and to be thinking five to 10 years from now,” Ode says. “The idea is to keep adding product that’s specific to the construction industry that has to do with the business side.”
How to reach: Foundation Software Inc., (330) 220-8383 or www.foundationsoft.com
17. Weatherhead 100
Bright Ideas Press LLC
Year founded: 2003
Sales growth: 184.54%
Co-Founder and President: Nancy McGraw
Bright Ideas Press publishes Simple Solutions, providing lifetime mastery through educational materials for K-8 classrooms.
As an elementary school teacher trying to find new ways to help her students remember what they learned, Nancy McGraw tried a different approach. Her approach happened to work and the results she saw were so great she decided to write her approach out for every grade level in her school.
Eventually, she got another teacher outside of her own school to try it as well. The school’s test scores improved dramatically and other teachers and principals in the area started asking if the approach was available.
That’s how Bright Ideas Press LLC, the publisher of Simple Solutions, a series of educational books for K-8 grade levels and subjects, came to fruition.
“It began with a passion for making a difference in the lives of children and still today it’s our company’s goal to try to help students feel confident and successful,” says McGraw, co-founder and president of Bright Ideas Press. “We try to get our books into the hands of as many students as we can across the country.”
In the company’s founding days, that task was easier said than done. A fellow teacher, Kim Dambrogio, who is co-founder and vice president of Bright Ideas Press, agreed to help McGraw publish the original book, but traditional publishers gave them a tough time. So the pair decided to publish the book themselves.
While the company is celebrating its 10-year anniversary in 2013, its growth to this point has been primarily word-of-mouth and the use of free trials.
“We give away free trials and people see that it improves their scores, and they buy it and they tell other people,” McGraw says. “That’s how we’ve grown as big as we are. It’s just word of mouth endorsements from other people and letting people try it for a year to see that what we are saying is the truth.”
The company’s growth has also been aided by the addition of employees who share McGraw’s and Dambrogio’s passion for education. However, that success has been accompanied by growing pains.
“We started as a home-based business and up until a year and a half ago, that’s exactly what we were,” Dambrogio says. “At that time we had nine people.”
In February 2011, the company moved into a commercial space and now employs 20 people.
“A lot of things have had to change,” she says. “It’s been a lot of human-resource type things such as employee handbooks and policies. That was a good transition for us and we had to shift our thinking and so did our staff. That was one of the most difficult things that we’ve faced so far.”
That challenge was enhanced by the fact that neither McGraw nor Dambrogio had a background in business.
“The larger you get the more important knowing things about business and marketing and things like that become,” McGraw says. “We had to learn on the fly.”
Despite any challenges or shortcomings the co-founders had to overcome, Bright Ideas Press has seen steady growth over its 10 years. It has moved from one math book product line to publishing several areas of study and is gearing up for the future.
“Across the country there is a very big shift in education right now toward something called the common core state standards,” Dambrogio says. “Right now, 46 states have adopted the same set of standards for curriculum in math and language arts. That’s a first for this country.
The company is in the process of coming out with a whole new line of math books to meet these standards and is looking to revise and rewrite its English series according to those standards as well. In addition, the company is looking to move away from print books to focus more on digital content.
“Schools and parents are asking for it, so that’s the direction we are going to be moving in,” she says.
The company’s current direction and growth has meant a lot to its co-founders.
“For me it means that the dream that I had initially of trying to help children be successful has multiplied exponentially,” McGraw says. “Hundreds of thousands of students are using our products each year. So it’s been great seeing the dream explode.”
How to reach: Bright Ideas Press LLC, (877) 382-7537 or www.simplesolutions.org
Content Marketing Institute
Sales growth: 1,684.28%
Founder and executive director: Joe Pulizzi
Content Marketing Institute runs the largest international event in content marketing, Content Marketing World, and the leading magazine, Chief Content Officer.
When Joe Pulizzi left a media company some six years ago to found what is now the Content Marketing Institute, he knew the traditional way that companies go to market was changing — and changing big time.
“Instead of mostly through advertising sponsorship of some sort, more and more of those companies were creating their own content, looking and feeling just like publishers, and that’s what content marketing is,” he says. “Basically, it is regular talk about small, big, medium-sized and large companies, saying, ‘Look, in order to get any kind of attention, we need to create valuable, relevant, compelling content all the way through the buyer’s journey.’”
Pulizzi also knew it wasn’t easy for companies to get their own content marketing rolling through websites and social media as well as other channels and they needed somewhere to go for help.
“Content marketing takes a lot of effort; it takes a lot of processes,” he says. “It’s multiple channels; it’s both strategic and tactical. And most companies are really bad storytellers — I mean let’s just put it out there. And that’s why they want to hand it over to someone else. There is such a huge need for education, and we are trying to fill that need.”
The crowning jewel of the Content Marketing Institute, of which Pulizzi is executive director, is its Content Marketing World events, held in cities such as New York, Sydney and Cleveland. The event is the largest in content marketing and grows each year. A Columbus version last year drew 1,000 participants. Pulizzi’s goal is 1,500-2,000.
CMI also publishes a magazine, Chief Content Officer, and does consulting for Fortune 1,000 companies, such as Petco, AT&T and Allstate.
Pulizzi finds some real challenges working with content marketing and larger companies.
“If you are a marketer in a midsized to large company, you are dealing with hugely complex content issues because in a larger organization now, content is the most political beast in the marketing department,” he says.
“It is owned by everybody, there are lots of feuds regarding it but there is no real strategy behind it in most organizations. Most of the time, the content creators in big organizations don’t even talk to each other. It’s just all over the place now. So what we really try to focus on are complex content issues and how as a large enterprise marketer you can really try to figure those out.”
While any size of business can find help at CMI, Pulizzi realizes that midsized or large companies and PR professionals are the organization’s secret sauce.
“That’s where we feel the bigger problems are — and also a lot more revenue because these companies have the money to spend on this,” he says.
If you haven’t guessed it by now, Pulizzi feels very passionate about content marketing. He takes the Content Marketing World stage wearing a burnt orange three-piece suit. It gets the audience’s attention that it might be wise to hold on to their seats for his message.
“You’ve got to be a little bit different from the rest, and that could be the things you wear, the colors you like, things you do,” he says. “And those are the people at least in our industry who are getting the most attention. They do things a little bit differently.”
That’s why good, creative, compelling content that answers customers’ questions serves to differentiate a company from its rivals.
“Why the heck would they spend time with you?” Pulizzi says. “There are 10 million other resources where they could go to but what makes yours the best?
“If you’re not offering compelling content, you had better start investing time to both have an understanding of technology but more importantly to understand what your content strategy is.”
His advice is a three-pronged approach.
“Let’s say, you want your website to get found in Google — that’s search engine optimization. You want to drive online leads — that’s lead generation. Or you want to be successful in your social media efforts.
“None of those three start without first a good content marketing strategy. Because what are you going to have to say? You have to have something compelling to say to drive your business objectives.”
How to reach: Content Marketing Institute, (888) 554-2014 or www.contentmarketinginstitute.com
When voters in the Cleveland school district approved its first operating levy in 16 years, it wasn’t an anomaly. It was recognition that Cleveland is and has been in a progressive mode — and the region is in motion as new projects are being planned, developed and launched.
Just as a first-ever coalition of business, labor, civic and clergy groups joined to support the schools, area companies have been hard at work to ensure this revival of Greater Cleveland.
Entrepreneurs have been innovating. Economic development has been on the front burner. Projects have been completed — such as the Horseshoe Casino. The Cleveland Browns have a new owner. And towering supports dot the downtown sky as the new Innerbelt Bridge starts to take form.
On the following pages, you’ll find the names, facts, figures and stories of 126 area companies that have also contributed to the resurgence by accomplishing outstanding percentages of growth. We recognize them for their contributions to our communities and their demonstrated strength of the entrepreneurial spirit in our region.
For instance, Magnus International Group Inc. grew an amazing 2,736 percent in the past five years. Most of that growth has taken place since 2010. Magnus at that point started concentrating on creating products for a new market segment – animal feed ingredients — and its business took off.
When Joe Pulizzi left a media company some six years ago to found what is now the Content Marketing Institute, he knew a change was in the air for marketing. The digital world was facing companies, content was king, and they had to get on board. CMI has grown 1,684 percent in the past five years, largely through its events, including Content Marketing World.
The Weatherhead School of Management at Case Western Reserve University and the Council of Smaller Enterprises are proud to honor the Weatherhead 100 class of 2012. Here are the class members.
In executive roles at Baker & Daniels LLP over the past 10 years, Tom Froehle had weighed in on some 20 inquiries from other law firms about possible mergers with Baker & Daniels.
However, none of those led to serious discussions until the economy began its downward spiral.
“What we saw during this downturn was that clients wanted to look much harder at value,” says Froehle, who was, at the time, chief executive partner at Baker & Daniels. “Law firms were consolidating, and quite frankly, clients were consolidating in terms of using fewer law firms and looking for firms that had more extensive depth and breadth. We told ourselves that rather than be reactive, we have to try to be proactive.”
That meant going on the offense to find the right partner to create a successful merger. So the Baker & Daniels team started sorting through offers to narrow down the prospective suitors. While doing so, they came upon a firm called Faegre & Benson, located Minneapolis. Froehle said Baker spent a great deal of time trying to identify a partner that it thought would be a good fit, although the leaders could only do so much in terms of looking at websites and seeking out information. They also turned to anecdotal information that they heard from people familiar with the firm. Then they spent a lot of time evaluating and talking with the Faegre & Benson leadership team about the firm’s culture and strategic vision to ensure, before they made a move, that there would be alignment.
Here’s how Froehle, now chief operating partner, and his team scored a win at the newly merged Faegre Baker Daniels LLP, in operation one year now.
Finding a fit
When the topic of a merger comes up, the process can often seem overwhelming, especially when companies of considerable size and expertise are involved. To make the task less intimidating, start by looking at companies in complementary markets to yours, those that occupy the same market position and that serve at the top of their market.
Comparing those statistics gives you a better chance of finding the right fit, and every place in which similarities are identified increases the odds of success. After determining which factors would make or break the deal for your company, it’s time to go through the list to match potential suitors with your company.
“We looked at firms that appeared to have a similar qualitative excellence,” Froehle says. “There is some pretty good data in terms of rankings in those things that can help you identify companies from a qualitative standpoint.”
Then it’s time to look at culture to determine whether there is a good fit.
“On the cultural front, some things will stand out,” Froehle says. “Baker & Daniels was founded in 1863 and Faegre & Benson in 1886. So you had two very long-standing firms. Both firms had histories of civic involvement, with people committed to the community; they did pro bono and were diverse, and we saw really similar cultural values there.”
The next step can command the most time of anything else in the process. It’s time to get beyond the facts and figures and meet with the players face to face.
“A lot of it is just spending time with people; certainly both leadership teams should spend a lot of time together,” Froehle says. “We had what turned into an opportunity when we started discussions in 2010, but there was a client conflict situation that we just couldn’t resolve. That client conflict went away in early 2011, and we recommenced discussions. I think the fact that we had a pretty extended amount of time to spend with each other and to get other partners involved in those discussions helped us figure out whether we thought there was going to be a compatible culture.”
Froehle says it is valuable to flush out concerns early, rather than to wait until after the merger vote occurs. The goal was to combine the firms and the way they did things, so a lot of time was spent early in the process talking about how to develop the best governance structure for a new firm. But instead of taking one thing intact from one firm and another thing from the second firm, they instead approached it to determine what made the most sense so that they could tell the partners what the new firm would look like.
In effect, they built a model of the new company.
“By having that in place, and then being able to share with partners at both firms, ‘OK, here is what this new firm looks like,’ was really helpful in terms of allowing people to deal with the hard part about change, the uncertainty. Although we still have plenty of uncertainty, we tried to provide a real framework of what this is going to look like.”
Working it out
The last task is to determine the mix. This may be the most important task as you discuss common goals to reach a consensus.
“There were those who wanted to do something to not just get bigger but to actually help us serve clients better, and we saw some real synergies and opportunities to combine strong practices that would make even stronger practices,” Froehle says.
“Look for opportunities to complement and supplement strengths in each firm. We had no geographic overlap. Sometimes when you have offices in the same geography, it causes real friction in terms of how you deal with that. We didn’t have any of that, and so we had a lot of additive benefits. I think when people saw that and saw the opportunities to work together, they found that they like each other.”
Froehle says one of the fundamental underpinnings of the merger was the ability it created to serve clients better by providing broader and deeper expertise across a wider range of services. Helping employees understand that and the positive opportunities created has been an important piece of helping them get comfortable with the new organization and create a culture of excitement about being able to better serve clients. Even before the combination was complete, Froehle and his team set in writing what the expectations were of the partners.
“It has been a way for people to buy in to, ‘Here’s what we all expect of each other,’ and that’s been very useful,” he says. “This year, we are in the process of doing a similar thing for our associate lawyers in terms of trying to be much more definitive about what those expectations are, and that is going to be something that was necessarily different from what we had in either of the legacy firms.”
The other issue to address is the clients, as they need to be reassured that their relationships with the firm will not be changing for the worse.
“We went to our top 100 clients over the course of a year to talk about the combination,” he says. “It was interesting to share feedback with other folks in the firm about what we were hearing. Many clients were excited to hear about the new capabilities that were part of the combination. That has been really positive.”
Spread the good news
After the dust has settled and a single company is arising, the task turns to communication and feedback. Sharing positive news goes a long way toward reinforcing the common culture that is being developed.
“We try to open every meeting we have of any kind of group with a sharing of good news,” Froehle says. “These are things that are happening across the firm and with a real focus, at least this first year, on things that involve collaboration of people from the two different legacy firms.
“Those examples have been really helpful to others, who may say, ‘Wow! Somebody I know down the hall has been working with somebody I don’t know and that’s been a really positive thing that will help me be more inclined to step out of my comfort zone.’”
Froehle says that the effort to share good news about effective client collaborations, an additional focus on travel to allow people at the different locations to meet one another and other communication about what was happening across the firm were geared to help people recognize that there was a developing sense of a singular, combined culture. The feedback from those who have had those interactions and the opportunities to connect with each other have all been very positive and have helped to reinforce the internal message.
While recognizing that it would have been easier in some ways to maintain the status quo, Froehle says the long-term benefits of this approach are going to be very positive for the 1,600 employees.
“Obviously, it required the people and the leadership teams from both firms to have that mindset going in, but once they got that mindset, it became really exciting to think about creating something new.”
How to reach: Faegre Baker Daniels LLP, (317) 237-0300 or www.faegrebd.com
The Froehle File
Chief operating partner
Faegre Baker Daniels LLP
Born: Grand Forks, N.D., but I really only lived there for a couple of years. I grew up in and had all my schooling in Bloomington, Ind.
Education: Undergraduate degree at Indiana University in Bloomington and my JD from the University of Michigan in Ann Arbor.
What was your very first job?
My dad operated a small store that sold hockey equipment, so from the time I was about 12 I worked there. My dad ran the business and I sort of helped. I really just learned a lot about customer service, how important each individual customer was and how you could really make an impact on each individual customer’s experience by how you responded. The individual experience of working with customers was really valuable.
Whom do you admire in business?
I really admire John Lechleiter, Ph.D., who is the CEO of Eli Lilly and Co. I admire his vision and his ability to help people in the company to understand what an important role they can play in the world in terms of a pharmaceutical company. I often think people are not all that excited about that but he really has talked about innovation and how they are helping change lives. I think he has done just a really marvelous job of doing that.
What has been the best business advice you ever received?
Two things. One, communication is important. Somebody once told me that no matter what you think, it probably takes you 10 times to say something before people really hear it, listen to it and understand it. The second is to remember that everything you do sends a message to those people around you. That is something I think we often forget.
What is your definition of business success?
Because it is a little bit different, the organizational hierarchy, I think a big part of my view of success is when my partners feel like they have succeeded or at least when they feel like they’ve been a material part in achieving that success.
Robin Sheldon had reached a critical point in the life of her business.
Through her strong will and determination, she had built Soft Surroundings from a small business that produced a single catalog for women’s clothing in 1999 to one that has seasonal catalogs, a chain of retail stores and an e-commerce website.
She didn’t do it entirely on her own, but Sheldon was definitely the driving force behind the company’s growth. However, she was beginning to realize that if she wanted the company to continue to expand, she was going to need some help.
“When you are part of a creative process as well as the traditional business side of the business, it’s very hard to let go of getting your fingers into absolutely everything,” says Sheldon, the company’s president and founder. “But there comes a point when you realize that you’re putting your business in jeopardy by doing this.”
Sheldon needed to get more people involved in the management of the 530-employee company. She also had to find a way to prioritize the really important things that needed to be done and separate those from the tasks that either could wait or didn’t need the same amount of effort to complete.
“So what that led to was the assessment of the type of people we needed to be hiring with what particular skill sets,” Sheldon says. “For myself, it was a matter of setting up my goals with parameters and guidelines that would get me to the point where I could let go.”
The challenge for Sheldon would be setting up that structure so she could get more comfortable with delegating tasks.
Know your priorities
Part of the problem Sheldon has when it comes to delegating is the high level of confidence she has in herself.
“I have an expectation of myself that is probably way too perfect and hard for anybody else to achieve,” she says. “I’m going to expect more from myself than I am from anybody.”
The result is that Sheldon believes she can do it all. And she saw no reason why it couldn’t be done to the absolute best of her abilities. But she finally started to understand that perfection isn’t always necessary.
“I realized I have to be satisfied with ‘good enough,’” Sheldon says. “I have to identify the few areas where it had to be great.”
There are certain tasks in any business that don’t have anything to do with the customer and have a negligible effect on the bottom line. These are tasks that just need to be done.
“You’re not going to drive yourself over the edge of the cliff trying to make it perfect,” Sheldon says. “You can get it ‘good enough,’ and that’s going to be good enough.”
Then there are things such as the photography that appears in her seasonal catalogs.
“We spend a great deal of money and time on our photography to give the customer an aspirational experience that is emotional so she forms a connection with the product,” Sheldon says. “She understands we are trying to do more for her than just sell her stuff. That’s a place we don’t give. You don’t want to settle on things that are integral to your brand.”
The solution for Sheldon to determine what requires maximum effort and what just needs to get done is a formula known as good, better, best.
“When people come to me and say, ‘I have 10 things that I’m supposed to have done in 48 hours,’” Sheldon says. “I’m being told that all of them are equally important. I ask them to go back and discuss it and come back and tell me if it’s a good, better or best. That helps people a great deal. Sometimes you have to talk to other people involved to see if you’re headed in the right direction.”
It was a lesson Sheldon wanted to impart on her team, but one she also needed to try to follow herself.
Have a plan for delegating
The next step for Sheldon was to accept that within those priority tasks that need to be done right every time, it would be OK to delegate.
“It’s a process,” Sheldon says. “You have to put some good planning behind it. But in order to do that, you have to have the right people. You have to have a very clear understanding of what motivates each individual person. They are not the same. You can’t treat them the same.
“You have to learn each person and figure out how you’re going to make them happy in what they are doing, productive and wanting to do more.”
One of the biggest mistakes you can make in business is assuming that with a few brief words in your office, an individual can take a task and run with it.
“You can ruin a perfectly good career if you take somebody who is a super performer for you and you elevate them into a management position and don’t give them any management training,” Sheldon says. “Before you know it, you have a perfectly good person who has such good skills, but now is floundering in the job because you didn’t give him or her any management training.”
Develop a plan for the person you want to give responsibility to and then share your plan with that person. Take the time to see how the person feels about it and go over areas that you’ll need to work on with the person.
“I have high hopes for being able to give you some new responsibility and I know you’re up to it,” Sheldon says. “I’m thinking this is the area that we will work with and here’s the goal. Let’s sit down together and come up with how we’re going to do this.”
A key barometer that helps Sheldon know if she’s done her job training or if she needs to do more, or perhaps has chosen the wrong person, is whether she hears her name invoked as tasks are being worked on.
“‘Robin says,’” Sheldon says, repeating the phrase she doesn’t want to hear. “If I’m hearing that too much, it means people aren’t taking responsibility for their own work and they aren’t becoming their own experts. They are having to rely on my name to get their jobs done.”
Sheldon’s goal is to make sure the person has all the knowledge and skills to make it happen on their own.
“They don’t need to use my name,” Sheldon says. “They will build their reputation and their confidence by saying, ‘This is what we need to do, and I believe this is the way for us to do it.’”
Help your people
If you run into a situation where you have a leader who isn’t invoking your name but is struggling with the role of leadership, you need to step in and give them some support. Sheldon recalls a manager he was training who wasn’t getting respect from the people she was trying to lead.
“She had to follow up on projects and things that needed to be taken care of regularly,” Sheldon says. “She just couldn’t get their respect. We worked on that for six months together.”
What Sheldon found was that this new leader was struggling with the language she used to engage people in tasks.
“One of the areas we dug into was, ‘How do you get your point across in a pleasant way? How do you get people to want to help you and want to do what you need them to do?’” Sheldon says. “There’s a whole psychology there, and we studied it. Now she is a power negotiator, and she’s still here.”
The act of delegating has to be about more than just you saying to your employees, ‘Hey, you need to do this now.’ It’s a process that you have to be actively engaged in if it’s going to be successful.
“For me, things get tested,” Sheldon says. “It could be our clothing design. It could be our creative print design. It could be copy. It could be many things. As soon as I can get to a comfort level where I’ve seen it go the way I’d like it to go three or four times in a row, then I back off. I only check every now and then.”
When you do check in on how your people are doing, don’t just look for problems.
“None of us probably give positive feedback as often as we should,” Sheldon says. “If your business is moving fast, chances are you might be leaving that out and that’s so important. Along with positive feedback is making time to care about these people.”
The numbers show Sheldon is making the right moves with her business as the company hit $120.8 million in 2011 revenue. Two new stores were announced in Boston in September, and Sheldon feels good about the future. She says keeping it fun will be a big key.
“If you don’t allow people to feel they are having some fun in their job, you may lose them sooner than if you give them a little relief now and then,” Sheldon says. ?
How to reach: Soft Surroundings, (800) 240-7076 or www.softsurroundings.com
The Sheldon File
president and founder
Born: New York
Education: University of Denver. I was actually working on an English lit degree, which had nothing to do with what’s happened the rest of my life. I wanted to write, but not in journalism. I was not a business person or thinking about business much at that time. It’s an unusual situation, not one that most women would find themselves in today. It’s interesting how somehow the business finds you.
What was your first job?
I was a research assistant to a newspaper in Long Island, N.Y. I started to fall in love with the written word. I have a book that I’m working on and I do it when I get a moment to breathe. Maybe I will get to finish it someday. It’s a mystery, certainly fiction.
What is the best advice anyone ever gave you?
In the world of business, it’s, ‘Know your customer.’ I guess that came from Dennis Pence, who is president and chairman of Coldwater Creek. If you can put yourself in your customer’s shoes and see what you’re doing from their perspective, it will change the way you do things and it will make you more successful. We all get lost in our own little world and think we know why we’re doing things. Sometimes we’re doing things that the people we’re trying to do them for don’t want.
Know what tasks require maximum effort.
Help your people achieve their potential.
Make sure you praise a job well done.
Steve Davidson wanted to do a better job of listening to his franchisees at Robeks Corp. It was the biggest complaint he heard upon taking over as president and CEO of the smoothie franchise chain, which has 116 stores around the world and nearly 1,000 corporate and franchise employees.
Franchisees were frustrated that the previous leadership regime didn’t take advantage of the depth of knowledge they gain each day from interacting with customers across the country.
“You have a lot of very bright, talented and creative people in your franchisees with lots of great ideas,” Davidson says. “They like to implement those ideas, and they are businesspeople. The challenge is to channel those ideas in the right direction to make them productive and utilize them as best as we possibly can.”
Davidson wanted to give franchisees an outlet to share their bursts of inspiration. But any system he put in place needed structure so that the great ideas could be researched and implemented and the suggestions that wouldn’t work could be gently turned down.
“There are so many ideas that, in order to be cohesive, we can’t implement them all,” Davidson says. “There are disappointments for some franchisees if they have a great idea that they think will work in their particular store in a particular part of the country; it just may not be something that works universally.”
If he chose to do nothing, turning a deaf ear to the ideas that were out there, Davidson risked damaging the Robeks brand.
“The franchisees will implement these things on their own and then you find different stores all going in different directions, which is not good for a chain,” Davidson says.
Davidson wanted to make it work and wanted to make franchisees feel like the valued part of the team that he believed them to be. He felt the best way to do that was to go out and share his thoughts face to face.
Be a good listener
Davidson has seen companies hold conventions for its franchisees where everyone in the organization converges on one location for a few days to talk about how great their company is.
“There is a big dog and pony show in Las Vegas or Chicago or wherever,” Davidson says. “I’ve done a number of those in my life with other companies, and I find them to be much less intimate. There are opportunities for about three days for everybody to get excited and then everybody goes back into their old routines again.”
Davidson thought a better approach would be to hit the road with his executive team and make personalized, less formal visits to various Robeks locations across the country.
“They were much smaller, much more intimate meetings, and they were in much smaller rooms so we had more one-on-one contact with people,” Davidson says. “It was much less dog and pony show and much more direct communication.”
When Davidson and his team of four to five people would visit a location, he wanted to make it clear that it wasn’t a site review. He wasn’t going around with a white glove trying to nail people for petty mistakes.
“It was about the franchisees,” Davidson says. “It was about us being out there. We did some presentations to talk about what the company was doing, but we spent a lot of time just listening. Our Q-and-A sessions were quite long.”
Davidson wanted to set the tone that even though these franchisees weren’t technically his employees, they were part of the Robeks team. And just as he was making himself available to the leaders of each location, he wanted to impress upon those leaders how important it was that they do the same with the people who reported to them.
“I wasn’t the only one up there,” Davidson says. “I got members of the various departments up there as well. They learned from the very beginning that not only was I open to direct feedback and sometimes attack, particularly in the early days, but I also expected every member of the team, the department heads, to make themselves available in the same context.”
A big part of Davidson’s approach was the priority he gave to listening. During his first 90 days on the job, listening was pretty much all he did when he came into work or went on his road trips across the United States.
“I sincerely took their input, took copious notes and made it clear that I wasn’t going to make any decisions and wasn’t in a hurry to make any changes, if I was going to make any at all, until I had an opportunity to meet as many stakeholders as I could,” Davidson says.
When you step into a situation where employees are calling for change, the easy thing to do is often to respond with change. But if you implement change without a real understanding of how things work in the organization, it could easily come back to haunt you.
“I stuck to my guns and said, ‘OK, I recognize that there are urgent matters, but I want to make sure I fully understand the issues and how any decision I might make may impact the whole organization,’” Davidson says.
Build the respect
As Davidson seeks to build relationships with his franchisees and learn more about the organization, he also seeks to build trust. He takes the approach that his people want to accomplish the same thing he does, which is to position Robeks to be successful.
“My approach to empowerment and to get the best out of people is to trust them immediately,” he says. “If we communicate clearly in terms of what the strategy and direction is, after we’ve spent as much time as we can listening and making sure we’re moving in the right direction, we believe we’re going to be followed.”
He does offer a caveat, however, to this philosophy.
“You’re not going to give someone so much rope that they can take risks that would bet the farm,” Davidson says. “You give everyone a tremendous amount of latitude, but you check in with them. I guess it’s called delegation.”
He wanted to continue the dialogue that had been established through his road trip meetings, so Davidson began forming committees to give people a clear voice in what happened in the company. There was a tactical marketing committee, a strategic marketing committee, a supply chain committee and an IT committee, just to name a few.
The committees were populated with people who Davidson felt could serve not only their own best interests but those of their direct reports as well.
“These various committees deal with key areas in our business where the key indicators tend to lie,” he says. “We have a supply chain committee, and we schedule that meeting once a month. If we have issues that are important to talk about, we set the agenda and we meet. If there is nothing going on, we cancel the meeting because we don’t want to have meetings just for the sake of having them.”
If you cancel meetings when there is no business to be conducted, you don’t send a bad message to your team. You actually send a positive message that you’re cognizant of their time and doing what you can to maximize it.
“That assures that meeting is a meaningful meeting and will be held if we clearly have issues,” Davidson says.
The IT committee is a prime example. When Robeks was implementing a new point-of-sale system, there were a number of issues that needed to be resolved.
“Now that we have resolved most of those and things are fairly routine, we disbanded or at least suspended that committee,” Davidson says. “We could always reinvigorate it at any point in time if some issues started to crop up again.”
The message he has focused on conveying is that he is there to help his franchisees make the business better, whether it’s meeting one-on-one or forming a committee to solve a problem.
“It opens up the communication, and you find fewer people are intimidated by, ‘Oh my gosh, this guy is the CEO,’” Davidson says. “I still get that to some extent from franchisees who will call me and they’ll say, ‘Hey, I know you’re busy. I don’t want to take up too much of your time.’ I’m always very careful that I let them know right up front that their issues are my issues. Don’t ever apologize for calling me about anything.”
As Davidson looks at Robeks today, he sees a company that is much more collaborative and empowering. Contests have been held for new product ideas and have generated a lot of enthusiasm, giving customers curiosity about what they’ll find on the menu the next time they come to the store.
“Once we’ve listened and got that input, the key is getting back to the franchisees and telling them where their ideas are and what we’re doing with them,” Davidson says. “If they don’t get answers back, they stop giving us ideas. We want the ideas because they are the lifeblood of our business.” ?
How to reach: Robeks Corp., (310) 727-0500 or www.robeks.com
The Davidson File
Born: Sun Prairie, Wis., a town just northeast of Madison.
Education: Bachelor of arts in social psychology; MBA, University of Wisconsin
What was your very first job?
I was 14, and I went to work in Lake Mills for the summer. I worked on a feeder pig farm.
What did you learn from that experience?
When you’re 14 living in a mobile home when you’d rather be visiting your girlfriend, it’s a very lonely place to be. But aside from that, even at 14, they trusted me a great deal and gave me a great deal of responsibility. I was impressed by that. It had a strong impact in terms of my views on trust and where that fits in the work world.
Who has been the most influential person in your life?
Francis Sheehan. He was a chemistry teacher at the senior high school in Sun Prairie. He was also the coach, but he was responsible for managing the city public swimming pool. For whatever reason, he came up in my life many times. When I needed a job, he would find me a job. Whether it was the only bicycle cop Sun Prairie ever had for the kids who rode bikes in the summer, to being a manager and lifeguard at the swimming pool, to taking care of athletic facilities at the senior high school. He just kept popping up in my life at various places. It was almost like he was a guardian angel. He seemed to be there whenever I, as a kid, needed some male adult direction and supervision and guidance.
Don’t act before you have the facts.
Give your people a chance to prove themselves.
Don’t waste anyone’s time.
It was a bitter pill for Robert Pasin to swallow.
Radio Flyer Inc. had spent decades producing millions of its iconic red steel wagons for children across the United States. The children who grew up with them had bought them for their children and those kids bought them for their kids. It was a tradition that could go on forever, or at least that’s what the company had let itself believe.
But as the 1990s began, a new wagon, one made out of plastic, had begun appearing in stores and was an instant hit with consumers.
The part that was most painful to accept for those who worked at Radio Flyer was that they had not made this new plastic wagon. Even worse, as they looked at the way their company was set up, they weren’t even capable of competing by making a plastic wagon of their own.
“We were a manufacturer, a steel stamper, and that’s what we were really good at,” Pasin says. “The way we were running the business was we were looking at what we could make in our factory and then figuring out if we could sell it.”
This mindset led the company to start a line of wheelbarrows and garden carts in the 1950s to go along with its wagons, all of which were made out of steel.
“We weren’t in touch with the external environment as much as we needed to be or should have been,” Pasin says. “So we weren’t talking to consumers. We weren’t asking moms what they wanted in a new wagon. That’s why we were really caught off guard.
“If we had been doing those things, we would have known that this is something that consumers wanted.”
This was the challenge that faced Pasin, grandson of company founder, Antonio Pasin, less than a year after taking over the company as its CEO.
“There was justifiable fear,” Pasin says. “We were scared that we weren’t going to stay in business.”
Accept the challenge
The fear was palpable around the offices of Radio Flyer. Complacency had played a role in where the company now found itself, but Pasin and his team had to find a way to get past that. They needed to act quickly if they were going to save this company that had become such a symbol of 20th century Americana.
“We had to come out with a plastic wagon if we were going to stay in business because this was where the market was going,” Pasin says. “The challenge was that we really never had sourced a product before. Everything we had ever done, we made it ourselves. We didn’t have anybody in our company who knew anything about plastic, and we didn’t really have a product development team.”
Pasin didn’t try to sugarcoat the daunting challenge that Radio Flyer faced.
“We were just really honest, and we said, ‘Here are the facts, here’s what we’re going to do, and we’re going to keep treating people here as well as we possibly can,’” Pasin says.
It was an urgent time, no doubt about it. But Pasin didn’t feel it was time to panic, and he wanted to make sure his people didn’t feel it either. Plastic wagons were on everyone’s mind, but Pasin was also thinking about mission, vision and values. These things would play a big part in the company’s approach to making plastic wagons.
“We went through a process that included everyone in the company,” Pasin says. “The best way to achieve change is to involve everyone in the change as much as possible. In our case, we were changing the culture, and we asked everyone a lot of questions over the course of a year.
“We had a companywide discussion and it started with, ‘What was the company like on the first day you started?’ We got vastly different answers from people who had been here for 40 years and people who had been here for months. But while the answers were different, there were these recurring themes that kept coming out.”
Those themes were integrity, passion and excellence. Radio Flyer had indeed dropped the ball by not staying in touch with its customers as their needs and desires changed. But the products the company was making were as well-made and strong as they ever had been. And that was something to build upon.
“It just became very evident that we had this great bedrock of a culture to build on, and it was really powerful,” Pasin says. “No matter what, there’s got to be some gem in a business or hopefully more than one gem. Otherwise, you’d be out of business. There’s got to be something good in there. The task of the leader is to find that gem. Figure out what’s unique or different about it and then build on it.”
Pasin saw how strong his team was and the talent that each person brought to the table. He just needed to figure out how to take all of those pluses and use them to build a process to make plastic wagons and then stay in touch with consumers to be more proactive and less reactive about the next big thing.
“If the leaders can go through in a very methodical and thorough way and unearth all that information, it becomes very clear what needs to be done,” Pasin says. “It doesn’t mean what needs to be done is easy. It’s very difficult or it already would have been done.”
Set clear goals
Pasin wanted goals to be much more structured and clearly stated at Radio Flyer. It would help the company make a great plastic wagon, and it would ensure that, decades later, the company would not find itself in a similar situation of being out of touch with its consumers.
“Everybody in the company has five goals,” Pasin says. “Those five goals line up with the team goals and the team goals line up with the company goals. So there’s tremendous line of sight and alignment throughout the company for what we’re working on. ‘Here’s what I’m working on and here’s how it’s impacting the success of the business.’”
As a business, when you set goals, it’s critical that they align and that they be meaningful. Otherwise, what’s the point?
“They have to meet the SMART criteria,” Pasin says. “S is for specific. M is for measurable. A is for achievable. R is for return on investment. T is for time-bound. We work really hard to make sure everybody’s goals are smart in that way.”
There were some people in the company who provided evidence that they weren’t a good fit for what needed to be done going forward.
“I had a couple of guys say, ‘OK, now that we’re going to have these goals, how much more am I going to get paid?’” Pasin says. “I said nothing. These goals are not above and beyond. They are not extra. This is the most important stuff you’re supposed to be doing in your job. Those people aren’t in the company anymore.”
Make tough decisions
As the company got into the details of making plastic wagons, Pasin gradually began to realize that a big change was going to have to be made: Radio Flyer was no longer going to be a manufacturer.
It happened over a period of years, but it was clear if the company was going to make plastic wagons and branch out into tricycles and scooters too, something had to go.
“There is no way a company our size can be great at all those things,” Pasin says. “One of the questions we asked ourselves to help us get clarity was if we weren’t doing this today, would we start doing it? And the answer was so clearly no.”
Pasin wanted to build relationships with design firms and have product development teams that would have their fingers on the pulse of consumers. In order to do that the right way, manufacturing would have to be cut.
“What are we passionate about?” Pasin says. “What can we be best in the world at? What drives our economic engine? Those three questions are huge questions. We decided that what drives our economic engine is profit per product. Not profit per product line. We had a lot of products we were losing money on.
“We decided we’re not going to do that anymore. We’re going to be much more rigorous on making sure that here’s a revolutionary idea for the business. We’re going to make money on everything we sell.”
Twenty years after the company faced its demise, Radio Flyer is flying high. Sales that were only $20 million in 1992 now top $100 million and the 70-employee company’s debt is minimal.
Pasin credits the success to a methodical approach that has the company positioned better than it’s ever been to continue growing.
“I would just sit down and list out on paper what I thought all the biggest problems in the company were and then I would do a ranking of what are the biggest problems,” Pasin says in offering advice to other leaders who find themselves in a tough spot. “Usually the biggest problems relate to the biggest opportunities. Then I would go to my team and say, ‘Hey guys, here’s what I think are our biggest problems and how we can make them opportunities.’” ?
How to reach: Radio Flyer Inc., (800) 621-7613 or www.radioflyer.com
The Pasin File
Education: Bachelor’s degree in history, University of Notre Dame, MBA, Kellogg Graduate School of Management, Northwestern University.
What was your very first job?
My first job was working on the packing line in the factory. I was 18.
Did you see yourself becoming the CEO?
I would say no. I was starting to get very interested in the business, and I saw myself working in the business, but not necessarily as CEO.
What one person would you like to have met in the world and why?
The first person that comes to mind would be my grandfather — I could have lunch with him and talk to him about what’s happening in the business and ask him questions about his early experiences. I never got a chance to do that while he was alive. I think it would be fascinating at this stage of my life to be able to do that.
Pasin on building a good team: The most important thing is are the people committed to where the company is going and are they highly committed to doing a great job. If I were ever to go into a turnaround situation, that’s the first thing I would do. For the ones who aren’t, move them out of the company as fast as possible. It’s the best thing for the company and it’s the best thing for those people. If they are not committed and into their jobs, they are just dying a slow death of meaningless work. I’d much rather have them do that somewhere else or find meaningful work that will make them happy.
Medical Mutual, along with our co-founding Pillar Award partner SBN, proudly presents the annual Pillar Awards.
In the January 2013 issue, we honor 24 finalists representing a diverse group of companies and organizations of varying sizes. While they may be different in many ways, one thing that they all have in common is their commitment to strengthening the bond between the for-profit and nonprofit worlds.
This is an important conversation, and at this year’s event, we intend to explore it.
It occurred to us many years ago that few things are more meaningful and important than investing time and resources in supporting our community, and we felt the need to honor companies and their employees who have gone above and beyond the call. While support and direction come from management, companies are only as great as their employees.
For that reason, we are quite proud to present the Medical Mutual SHARE Award. This unique award was founded to recognize companies whose employees best exemplify the ideals of Medical Mutual’s own employee SHARE Committee. SHARE stands for serve, help, aid, reach and educate, and it is the heart and soul of Medical Mutual’s charitable giving effort.
On behalf of Medical Mutual and SBN, we hope you enjoy reading about these great companies and we offer congratulations to all of our Pillar Award recipients.
president and CEO
The Central Ohio Class of 2013 Finalists
REA & ASSOCIATES NONPROFIT EXECUTIVE DIRECTORS OF THE YEAR
KENT CLAPP CEO LEADERSHIP AWARD
NONPROFIT BOARD EXECUTIVES OF THE YEAR
KENT CLAPP CEO LEADERSHIP AWARD and MEDICAL MUTUAL SHARE AWARD will be announced the night of the event