As Jerry Azarkman watched new stores open in Phoenix and Tucson, Ariz., he felt proud that Curacao, the company he launched at the age of 24 with a mere $20 in his pocket, was beginning to expand beyond its Los Angeles roots.
But he was also concerned about the sales volume at these new stores. They just weren’t doing as well as the stores located closer to Curacao’s Southern California headquarters.
“The L.A. store’s volume is much higher,” says Azarkman, co-founder, co-owner and chief marketing officer for the Latino-oriented retailer that’s corporate name is Adir International.
“The number of credit applications approved at the Phoenix store is much lower than the stores closer to headquarters. Why is it smaller the further you go? All these things gave me a thought about the implementation of direction. The further you go, the communication kind of slows down, and it doesn’t get there.”
Azarkman wanted to turn that around and ensure that wherever he opened a store, whether it was next door to his office or 1,000 miles away, it would offer the same quality of product and service to Curacao customers.
“The biggest challenge is as you grow, your structure grows and there are more layers of management and communication,” Azarkman says. “That communication has to be the same from level to level all the way down to the front lines. The challenge is when the communication doesn’t get to the level you want it to get to.”
It’s a common problem for growing businesses and Azarkman wasn’t casting blame about it. He just knew that his 2,600-employee company needed to adapt and rethink its communication channels to ensure that everybody was on board with what was happening.
“I’m involved in the philosophy of the company, which is keeping employees motivated so they can do their jobs at a top level,” Azarkman says. “They really want to do that. They’re not doing it out of fear. They are doing it because they believe in it.”
That attitude would be the key to helping Curacao achieve continued growth.
Demonstrate your commitment
One of the biggest changes Azarkman made with Curacao was to change the company’s name. It may not sound that meaningful to the internal operations of a company to change the name from “La Curacao” to Curacao and redesign the company logo, but it provided Azarkman with a vehicle to demonstrate the company’s commitment to digging deep and looking for ways to provide even better service to its customers.
To get things rolling with this process, Azarkman brought in an outside consultant to make an honest assessment of what needed to change.
“We hired a company from the outside because you cannot believe in your own judgment,” Azarkman says. “You’ll create an impression that you’re much better than you actually are. It’s better for somebody from the outside to look at you than for you to look at yourself.”
The firm came in and set up focus groups in the communities where Curacao did business.
“They did focus groups with our customers, with customers that left us three years ago, with people who had never been in our stores and in communities that had never heard our name,” Azarkman says. “Out of that, we learned a lot about what the community thinks of us, what changes they are expecting us to do and what changes we have to do.”
The groups provided a great deal of feedback, including the suggestion that ultimately led to a new name and logo. It was a good foundation to begin transforming the business. But the key to providing what your customers are looking for is asking the question with the knowledge that you’ll need to keep asking it again and again.
“Expectations change with time,” Azarkman says. “You create an expectation, a standard, and then the next day, you have to go and create a much higher standard and create a ‘wow’ in the minds of customers that walk in the store. When they leave the store, you want them thinking, ‘Wow, I never thought I was going to get that value or that experience.’ To get to that point is a constant struggle.”
Earn employee support
Azarkman needed his employees to buy in to the pursuit of superior customer service without feeling as though they were being punished or forced into something that didn’t fit their skill sets.
“If they’re not buying in to it and they are going to be forced into doing something that they don’t believe in, it’s not going to happen,” Azarkman says.
There needs to be something out there, a reason to work harder and exceed customer expectation.
“What’s it in it for them?” Azarkman says. “What are they going to gain out of it? A better career path, higher income, more security, better stability for the company? You put all those things together, and you’re going to create a team that is really going to be motivated and dedicated and really cares about the company because they are part of the company. They are working there because they belong there. They are part of it.”
A comprehensive training program at Curacao, known as the University of Curacao, bolsters employee engagement. It helps promote an environment of learning and growing that Azarkman says is one of the keys to achieving growth.
“You need to know how to motivate people and get them to perform better,” Azarkman says. “You have to provide the tools that they need. Managers are tool creators. They create tools for their associates to perform. If they are creating the right tools and then people are using the tools that have been created for them, the success is going to be there.”
Azarkman refers to the sale of a television as an example of the outcome he seeks in training his managers and employees.
“Let’s take a Sony television,” Azarkman says. “You can buy it anywhere in town. You can go on the Internet and find 10,000 places to buy it. The difference is what is coming with that television. What value am I giving to that customer with that TV? What is the additional value?”
If everybody is thinking about ways to please the customer and is able to bring up those ideas without fear of reprisal, the result is a strong culture and a strong company that consistently exceeds expectation.
“It’s not that you create a ‘wow’ in the minds of customers and that stays,” Azarkman says. “Today, you’re meeting expectations. Tomorrow, it might not be enough.”
Don’t lead with fear
The effort to drive home that message to stores near and far away from Los Angeles and ensure that everyone is pushing toward those goals on a consistent basis has to begin with you.
“You have to make sure that all your executives are really buying in to it,” Azarkman says. “If anybody has a doubt or has something they don’t agree with, let’s put it on the table, fix it and make sure we all agree. Get one direction you can all agree on and go from there.”
If you want to learn what needs to be fixed in your business, you’ve got to be willing to accept criticism.
“The minute there is fear, all the communication channels are shut off and they are not going to be willing to open their mouths and discuss issues or concerns that they have,” Azarkman says. “If the leader is creating fear and the people have to work with that fear, it’s not going to last too long.”
Companies that insist on coming up with reasons why a problem doesn’t really exist are only setting themselves up for a bigger failure down the road.
“The communication will determine the success or failure of the company,” Azarkman says. “If there are real problems that need to be addressed and you don’t put them on the table, they will accumulate until there’s an explosion because people were afraid to bring it up.”
One of the solutions to the problem of lower sales volume in the Arizona stores was to enact rotating management teams between the more established stores closer to Los Angeles and the newer, less experienced stores in Arizona.
It’s a step that can help you better assess your team and weed out the people who aren’t going to be a part of your future.
“You need to check performance and evaluate each person,” Azarkman says. “You always have to create a bucket of people that are performing. Unfortunately, some do not perform no matter how much you try to educate and help them. So you have to let them go so you can keep your company healthy.”
Fortunately, Azarkman has more talented people on his team than underperformers who have to be let go. Curacao has more than 2 million credit applications on file and continues to expand. Azarkman says it all comes back to the philosophy of customer service.
“If the customer gets service above expectation, it means you’ve done something to maintain and keep that customer,” Azarkman says. “It’s small advice, but it’s big if you keep it in mind.”
How to reach: Curacao, (866) 410-1611 or
The Azarkman File
Jerry Azarkman, Co-founder and co-owner, Curacao
Born: Tehran, Iran. I moved to Israel at the age of 6 and grew up in Israel. I came to United States at the age of 21. There was a good community of Jewish people living in Iran before the fall of the Shah. There were probably about 1.2 million Jews there. My parents felt that it was going to extreme Islam already in those days. And in 1961, they decided it was not going to be a stable country to stay in, so we moved to Israel.
Education: I did three years of computer language study at Bar-Ilan University, Ramat Gan, Israel. It’s a university. I took some evening courses while I was in the military service.
Who has been the biggest influence on your life?
My father, Oscar. Any time I’m in a problem, I go back to things that he told me. The things I’m passing to other associates in the company, it’s come from the first lessons of motivation that my father passed to me and my brother.
What one person would you like to be able to meet and why?
Albert Einstein. First, I would like to see his philosophy about life, religion, God and how science is connected to religion. What did he really see? Maybe the guy is so extremely smart that he had to bring himself hundreds of levels down to talk our language so we could understand him. I would like to know what level he is.
Don’t be afraid to seek outside input.
Work with employees on new initiatives.
Don’t lead with fear.
Twenty years ago, McKinley Inc. was a company with 450 employees. Ten years ago, the company, which specializes in real estate investment and management, had a single operating platform for all of its businesses.
That was then, this is now.
Today, Ann Arbor-based McKinley has more than 1,400 employees and six different divisions contributing to its $273 million annual revenue figure.
It’s a long way of saying that growth has been a fact of life for CEO Albert M. Berriz. That’s a good problem to have, but it still comes with a series of challenges that must be met and overcome if Berriz is to have a financially and culturally healthy company on his hands for years to come.
“There are a couple of basic disciplines that we are very methodical about,” Berriz says. “One is we maintain a very flat organization. I believe that the distance from where I am sitting to where our customers are sitting is really no more than two heartbeats. I have six divisional CEOs who report to me, and they are flat with the people in the field, who are our customers.
“The second thing is, the six individuals who run each of the businesses have a lot of autonomy. They really get a lot of freedom to run their businesses as their own.”
For Berriz, managing growth is about managing the distance between people. Though he oversees a company with assets in 25 states, he wants as few levels and geographical barriers as possible to exist between management and field employees, between management and customers and between peer-level employees in the field.
But to maintain that type of connectivity, Berriz has needed to constantly work on strengthening his company’s cultural values and refining his communication strategy.
“Anything we do is really not top-down; it’s really integrated throughout the organization and is customer-driven,” Berriz says. “Everything we do needs to be driven by our responsiveness to our customers.”
Promote your core values
Though Berriz gives his division heads a high level of autonomy regarding how they manage, he still requires them to hire, make decisions and lead based on McKinley’s core values and core purpose, which is posted on the company’s website: “To enrich the quality of life in our communities.”
Berriz wants his executives to lead with their own leadership styles, but he has learned that a company will not be able to grow and adapt effectively without every employee’s compass arrow pointing in a common direction. That fact only becomes more critical as your company continues to expand and add people.
“While I’ve basically given them liberty to run their businesses, and I’m not a micromanager, we do still have a commonality regarding what the core values are and what the core purpose is,” Berriz says. “Even though each member of my team might be hiring differently, their standards are the same and the core values that they’re hiring for are the same.
“That is how you continually promote your core values throughout the organization. Even though we’ve grown to 1,400 people, when we do employee surveys, it’s not uncommon for 90 percent of our employees to have a full understanding of what our core values and core purpose are.”
When McKinley’s management talks about those values to the company’s employees, they use individual examples whenever possible. Berriz says if you can put a face on the behavior you want emulated, it has a much better chance of taking root and becoming something that your company embraces as it grows.
“It has to be something that is done throughout the organization, as opposed to top-down,” Berriz says. “If you look at our core values and the things that signify our core values, we helped to reinforce them by talking about individual people in the organization. We didn’t just write it on the wall. We actually took examples of great people in the organization and used those examples to help fashion our values.
“Say we have an employee named Jeff, and we want to have Jeff as our positive example. We ask what makes Jeff a great person in the organization. That is how we got our core values. We didn’t do it backwards, just by coming up with things and writing them on the wall. You take a look at your seasoned people in the field, people who are successful and embody certain positive characteristics, and say ‘That is how we want our people to be.’”
Hire with a purpose
If your culture is both formed and driven by your people, you need to hire managers and employees who embody the traits and principles you want to emphasize. Technical skills can be taught, but values, ethics, adaptability and a willingness to put the customer first are, in most cases, a product of personality before training.
Identifying and hiring the best possible management team members is a crucial first step. If they are on board with your cultural principles, they’ll hire like-minded people as part of their teams, and those people can, in turn, attract more of the same — a factor that can work to your advantage in a big way if you are eyeing a period of aggressive growth.
“Great people attract great people, and that’s huge, because you can’t have an organization like ours with mediocre people,” Berriz says. “And once you have great people, they expect to retain the great people they’ve hired.
“I think one of the biggest reasons people leave or stay with an organization is their boss. The six CEOs I have serving under me all have very high standards, so they serve as the litmus test. They are going to be the ones who expel mediocre people and attract great people.”
Berriz says you should never forget that any given person’s impression of the company, its mission, its values, its growth plans, and his or her relevance to accomplishing it all is predicated largely on the boss-employee relationship. It’s why each person at every level of your organization needs to strive to embody and lead by your company’s values.
“Associates can know the name of a company, they may understand what a company does, they may know their job,” Berriz says. “But at the end of the day, the real relationship is with their boss.
“If it’s a sour one, their view of the company and what the company does will be sour. If it’s a good relationship, their view of the company is a good one. That’s why people stay with or leave a company because of their boss. It’s rarely because of other issues.”
Berriz takes that philosophy a step further, trying to promote a positive relationship between upper management and all McKinley’s employees in the field. He sets the tone himself by setting up multiple channels for communication and dialogue focused on the company’s present and future growth plans.
“There is a difference between autonomy and not having a common culture,” he says. “One of my most important responsibilities is attracting and retaining great people, and I need to do that culturally — not just with my six CEOs, but I have to do it right down through the organization.”
Berriz describes himself as an “old-fashioned guy” when it comes to communication. He prefers in-person interaction whenever possible, but given the number of people McKinley employs and the size of the company’s geographical footprint, it’s impossible to maintain a consistent level of personal contact with every associate in every corner of the company.
Berriz has needed to find other ways to engage his people. One of the primary ways he’s attempted to bridge the gap is by embracing social media as a communication tool.
“For instance, if you go to my Facebook page now, you will see news about what is happening in the company,” Berriz says. “I’m making four or five posts today to Facebook, and my Facebook page is tied to our company website, as is Twitter. So if you are a team member and you want to stay in touch, you can go to my Facebook page. If I didn’t put that effort out there, if I didn’t utilize those social media platforms, I don’t think my communication would be as effective.”
Berriz has recognized that a large percentage of his workforce is composed of those who came of age in the era of the Internet. Younger employees have lived their entire professional lives in an environment that includes high connectivity through electronic media.
If you are going to connect the company’s purpose to younger workers and maintain a dialogue with them, you need to consider the value of Facebook, Twitter, blogs and other electronic media platforms in your communication strategy.
“A big portion of our population at McKinley is in the 18-to-35-year-old category,” he says. “That means social media and how we are communicating in real time can be very powerful in terms of developing and maintaining a common culture. I travel around, but there is no way that I can touch every person in the company through traveling. You have to make other efforts, otherwise you’ll be out of touch.”
How to reach: McKinley Inc., (734) 769-8520 or www.mckinley.com
The Berriz file
Albert M. Berriz, CEO, McKinley Inc.
History: I was born in Havana, Cuba. My family moved to the U.S. in 1959, when I was three years old, as a result of the revolution in Cuba. I grew up in Miami, where I graduated from the University of Miami with a degree in architecture and engineering. I later received an MBA from Northwestern University.
What divisions do your CEOs oversee?
We have five real estate divisions — two commercial and three residential — and one division that covers acquisitions, finance, partnerships and new ventures. Five of them are based out of the Ann Arbor office, but they are never here. They are always out in the field. We have one individual covering the Carolinas, Texas, Nevada and Arizona; we have one individual who does Florida, Michigan, Indiana, Illinois; and another one who has a third overlaid geographically.
For me, nowadays, it doesn't really matter where they live. I have one CEO who works down in Florida and actually keeps an apartment down there, which is great because that person stays closer to our people and closer to our customers.
What are the keys to staying in touch with your direct reports?
It is all personal. I am on the phone with a few of them every day, or talking in person once every couple of weeks. I am very connected with those people. I am not a micromanager, it is not my style, but we have an understanding and expectation of what the results need to be and what the culture needs to be. But after that, it is really up them to lead in their own style.
What are those conversations like?
It is very high-level. We have a very transparent organization, so you are either on or you’re off. We have dashboards here that are always available in real time, so I am always aware of good or bad developments. So the results part is easy, and the culture part is easy too, because I have a good sense of what is happening in the organization.
We have a well-run organization, so I am mostly focused on the future, where we are headed in 12 months, in five years and 10 years, as opposed to the problems of today. If there is an occasional problem today, I will deal with it, but to be candid, the problems are infrequent, so they are seldom an issue.
Define your company’s purpose.
Hire people to fit that purpose.
Utilize multiple avenues of communication.
Shelly Sun was quite confident that BrightStar Care would emerge from the 2008 recession intact and ready to grow. The challenge was convincing employees and franchisees that the health care staffing solutions provider could achieve such a daunting goal.
“Access to financing to start franchisees had dried up and was completely unavailable,” says Sun, the company’s co-founder and CEO. “That meant our ability to grow and add new franchisees to fund improvements in our system had declined.”
As a CPA, Sun decided to put her experience in the financial realm to use and tackle the financing issues. She asked her franchisees and employees to look at what they could do to increase efficiency on their end.
“I really empowered my team to take on those initiatives and work with the franchise advisory council on key sets of goals that were going to move the profitability and top-line elements of the model forward while I focused on capital access,” Sun says.
Through it all, Sun demonstrated her confidence. But it was the steps she took and the action that followed her words that enabled everyone else in the organization to feed off of that confidence and become believers themselves.
“It’s really important to spend time helping every employee understand what makes a business tick and how their role in the greater ecosystem can make a difference every day,” Sun says.
The result of the collaborative effort is a company that has bounced back and is poised to grow from 250 to 300 locations by the end of 2013, including new locations both in the United States and overseas. BrightStar has about 60 corporate employees and 25,000 employees in its overall system.
Sun says a key to BrightStar Care’s continuing success is a culture that has prepared employees to be ready to adapt.
“We’re rarely doing the same thing three months from now that we were doing three months ago,” Sun says. “We’re just not that type of culture. We’re an ever-changing culture. We believe the way to be the leader in this industry is to continually be improving what we do and the outcomes we deliver for the franchisees and consumers we serve.”
Here are some of the ways Sun uses employee engagement to help BrightStar succeed.
Focus on solutions
You’ve got to empower employees and give them opportunities to discover the solution to problems on their own. But that doesn’t mean they have to be completely on their own. Whether it’s you or a supervisor, employees who are developing still need the support.
“I use a 1-3-1 approach with my people,” Sun says. “For every one problem that they have, they need to bring three possible solutions and one recommendation. If someone walks up to me with a problem, I’ll say, ‘OK, great. Go think about that problem a little more. Think of three possible solutions and a recommendation. Then let’s sit down and talk about it.’
“I won’t let you follow through with a poor recommendation. It’s likely one of those solutions or a combination of them is going to get us there. We continue to reinforce that thought process, engagement and ownership at the employee level. We have every manager within our organization do that with their people.”
It’s easy to talk about, but Sun says it’s often much harder to follow through when the pressure is on and it feels like a problem needs to be solved right now.
“What’s hard for most leaders, and I’m no different, is it’s often faster to solve a problem for an employee than it is to let them think it through on their own,” Sun says. “But the outcomes are so much more sustainable for me in following that 1-3-1 approach wherever possible.”
Another thing to keep in mind is that delegation can come with urgency. If something needs to be done more quickly, tell the person that they need a solution tomorrow instead of next Wednesday.
The key is to make sure on an ongoing basis that you’re making time for your people, specifically your direct reports, to help them and to support them in helping their team members.
“I block time on my calendar so that 10 percent of my time is spent with each of my five direct reports,” Sun says. “When I lose sight of that because of other things going on, the ripple effect of that will begin to show up two to four weeks later. ... Make sure you’re dedicating time to your people.”
Keep looking for talent
Sun loves to see people who are already on the team blossom and fulfill or even exceed their potential. But she’s always keeping her eyes open to bring new people in who can join the team and make the company even better.
“I won’t go recruit a specific individual because I likely know their peers or their boss and so that would be inappropriate to do that,” Sun says. “But I might post on my LinkedIn status that we’re seeking a new director of field support for the West region. And within 12 hours, I might have eight people who are in my network reach out to me and say, ‘I’ve been waiting for an opening to work for BrightStar. You guys have such a great reputation.’”
The key to generating those kinds of feelings about your business is to have a strong culture where employees are eager to welcome new people aboard.
“It’s important externally for the leader to be very articulate about the vision and strategy of the organization,” Sun says. “It’s equally important, if not more important, to be able to do that internally so employees understand where they are at is the best company they could possibly work for. That way, they are talking to friends and family about how great it is to work at BrightStar. That’s how you get great future employees.”
Sun says networking isn’t just about talking to people about job openings that you have today or will have tomorrow.
“You never know where an opportunity is going to arise or what a relationship is going to lead to,” Sun says. “We all have a lot to learn from one another, and we need to enjoy that journey along the way.”
Make your company desirable
You’ve got to think beyond what you do each day to crank out your products and services. Who benefits from the things your company makes? What difference do your employees make in the lives of others? Those are things you need to think about if you want to build a strong culture that can withstand challenges like a recession.
“You need something that people are looking to get behind,” Sun says. “If they are a really talented individual, salary usually isn’t the reason people take jobs or keep jobs. They want to respect the company that they work for. They want to be proud to talk about it with their family at the dinner table. They want to understand where and how they are going to grow with the company.”
Don’t be mysterious about your company’s growth plans. Be clear about the plans and clear about what steps employees can take to be part of those plans.
“What’s the future state of the organization?” Sun says. “Is it planning to grow, add new business lines and new brands? If exceptionally talented people come in at a lateral level, do they have the opportunity once they prove themselves to move up because the company is going to be different and growing and expanding in future years?”
While a good culture alone isn’t enough to drive a company to success, a bad culture can easily poison a workplace and make it nearly impossible to succeed.
“You’re not going to keep the best people if you’re telling them from A to Z what to do and you’re not empowering them to make their own impact and their own difference every day,” Sun says. “As the leader, I set the direction and the vision clearly enough where they can tell it’s Swiss cheese. But I’ve empowered them well enough to be able to know that they have a significant role in plugging those holes.”
And when the times turn tough, show faith in your employees that they have what it takes to pull your company through to the other side.
“Our people saw we were in it with them and we weren’t cutting people,” Sun says. “That empowered our people to want to go even further than the extra mile. We would remain loyal to them and they would remain loyal to us and give us the extra effort to help our franchisees succeed and get to the other side, no matter what that took. They knew we were making sacrifices to not cut staff to keep our profits in line with where they had been historically and let profits suffer.”
How to reach: BrightStar Care, (866) 618-7827 or www.brightstarcare.com
The Sun File
Shelly Sun, co-founder and CEO, BrightStar Care
Born: Knoxville, Tenn.
Education: Bachelor’s degree in accounting, University of Tennessee; master’s degree in accounting, University of Colorado
What was your first job?
I worked in a shoe store, Franklin Shoes. I spent every paycheck on shoes. I’ve had a strong work ethic from a very young age, and I’ve always had a shoe fetish, too.
Who has been your biggest influence?
My father was a very strong workaholic and entrepreneur, so I always saw the work ethic and determination. But for me, it’s about trying to balance having both the success that a great business can deliver while also having people like and respect me — respect being more important. That includes my own family.
Who would you like to meet and why?
Marshall Goldsmith. He’s one of my favorite authors and has written some of the most impactful business books for me personally — being able to take some of what he has written for everyone and be able to talk about my specific circumstances as a leader in my organization. It allows me to look at how I could more specifically apply great leadership principles that have been helpful in the abstract, but would be even more helpful in the specific.
Give employees a chance to solve problems.
Articulate your strategy.
Make your company a great place to work.
As a 20-year veteran of the insurance industry, Charlie Rosson has seen his fair share of financial uncertainty, economic downturns and business struggles. So when he was promoted to CEO of Woodruff-Sawyer & Co. on Jan. 1, 2008, Rosson recognized rather quickly that his tenure was going to coincide with all three.
“Right from the start, like everybody, we were thrown a pretty difficult set of circumstances to deal with,” says Rosson, CEO of the San Francisco-based insurance services firm. “So many businesses were impacted in terms of their sales and access to capital and their business overall. The recession impacted our clients directly, and we were challenged to respond to that by coming up with more aggressive programs for them to quickly save them money and to help a lot of them through survival mode.”
Although clients were losing revenue and facing serious financial struggles of their own, the firm still needed to find ways to keep business profitable. But many clients could also no longer afford the firm’s services and products at the same rates or prices as in the past.
Like most professional service firms, Woodruff-Sawyer needed to find ways to keep clients’ businesses afloat but also avoid losing their business.
“Obviously, we had to become more efficient in the way that we do business, and we had to recognize in a lot of cases our clients weren’t willing or didn’t have the wherewithal to pay the same type of fees or commissions that they might have before the difficult time,” Rosson says.
“The way we would structure an insurance program before the financial crisis or before things got really difficult obviously wasn’t implacable anymore. So we had to kind of come to terms and help them with declining values and property, shrinking payrolls and overall downturn.”
Finding creative ways to deliver the same types of programs for clients more affordably wouldn’t be simple, especially because each client’s business was so different.
Rosson knew that the firm needed to work much more closely with clients to figure out win-win solutions.
“We had to negotiate greatly reduced premiums for them and come up with coverages that met their needs but were at a price point that they could afford,” he says.
So as Rosson and his team began talking with clients about their changing risks and opportunities, they also asked each client for a list of must-haves.
“We really had to dig in and find out what are the things our clients truly value and what things are sort of “nice to haves” that they didn’t value as much, and frankly, weren’t willing to pay for,” Rosson says.
“We’re fortunate that the clients we serve we have a great relationship with and normally have a pretty deep dialogue with them and attempt to fully understand their business,” he says. “So we can go in and talk about the services we deliver, how they’re delivered and how the team is structured, then drill into what things are important to them. Then we ask them honest questions about what things they can live without.”
Knowing your customer’s “deal breakers” can help you pinpoint the exact value that you add for them, allowing you to identify and recommend business solutions that are cost-effective but that still meet that customer’s needs.
“What clients are looking for is value, and in our case, it’s quality of advice,” Rosson says. “It’s how do we help our clients become more successful? And oftentimes when we partner up with them and really understand their business, we can help them execute a strategy that maybe they wouldn’t be able to execute without us.”
You may see opportunities to meet the future needs of your customers as trends emerge of where their businesses are moving and as new technologies come along. For example, the recession spurred the firm’s investment in technology to help address client issues.
“The current generation of buyers has already adopted technology as a core part of the way they do business, and that curve is only going to get steeper as newer generations come into the workforce and become leaders of companies,” Rosson says. “They’re going to expect that they can interact with service providers and professionals through some sort of technology medium. They’re not going to expect the traditional back and forth model that’s defined our industry for quite a while.”
Trim the excess
Once you identify your clients’ pain points and priorities, you can begin looking for ways to serve their needs more efficiently.
Rosson realized that although Woodruff-Sawyer continued to deliver valuable services and advice for clients, the firm could save time and cost by streamlining its approach — as could its clients.
“We had to get much more efficient in terms of the way we structured our teams, and we had to use technology in ways that we hadn’t before, in terms of delivering things through the Web that may have been done before either face-to-face or through some other lower-tech way to deliver service and advice,” he says. “So we are using technology in different ways, and we’re just more careful in terms of how we assign resources to client teams.”
Rosson restructured the company’s practice teams to put the focus on having the right people in the right roles, instead of just more bodies, to cut down on unnecessary costs.
“Don’t get swept away by how much revenue you think somebody can generate or how dazzling somebody is,” Rosson says. “Really do your homework and find out what that person is all about. Are they really a fit for the organization? Do they really have the client’s best interests at heart? Can they collaborate well with others? Those are really important things.”
Another way Rosson saw to improve efficiency was integrating technologies that could make communication more user-friendly for clients. Most of the technologies Woodruff-Sawyer has deployed are collaborative, meaning they enable communication between clients and associates outside of the traditional email and face-to-face meetings. In addition to saving its clients cost and time, many changes have streamlined the firm’s processes overall.
For example, the firm now issues all of its certificates online and deployed a portal called Passport, which permits document sharing and collaboration with clients over the Web to expedite projects.
Since seeing the positive impacts, Rosson has continued to pursue a direction that involves technological innovation. Recently, the firm launched an online portal for small businesses called, BizInsure, hired a chief information officer and has made investments in online business to ramp up its overall technology component.
“I’m absolutely convinced that emerging technology is going to have a disruptive impact on our business,” he says. “And I believe it’s going to be in a positive way, and we’ll be right there to capitalize on it. The way that we’re going to interact with our clients in the future is going to be different that our traditional model.”
Enable a responsive culture
Of course, it’s difficult to devise efficient and cost-effective solutions for clients if you don’t empower employees to be creative and test their ideas. Businesses that run their organizations with a heavy-handed, top-down leadership structure can easily stifle the kind of creative, engaged culture it takes to provide the most value to clients, Rosson says.
“To be a top-tier professional services firm, by definition, you want to have professionals — and you need to treat them that way,” he says. “The way to treat them that way is to respect what they do and be there if they need advice and guidance. You have to have a certain amount of structure, but listening and not being overly prescriptive or top-down in our approach has really paid dividends.”
Rosson avoids a command and control culture at Woodruff-Sawyer by furthering the firm’s corporate vision to remain an independent brokerage firm. Being a 100 percent ESOP firm gives the company a flexible infrastructure where top people feel empowered to make decisions and operate with more freedom, he says. With no shareholders, employees are able to focus on the client and do things for clients that might be difficult under a different leadership structure.
“We’re able to do things for clients in terms of being flexible and the people who are working with clients have a lot more authority to get things done for them, deploy resources and make decisions that our competitors who might have a different ownership system can’t,” Rosson says.
“Our independence is a key part of our competitive advantage and a big part of our culture.”
The independent structure has also helped the firm attract talented employees who value autonomy and the ability to be responsible to a client’s needs. And for companies that can’t do an ESOP, leadership comes into play even more. As a CEO it’s important to set the tone for your direct reports and other employees by showing that you trust their decision-making abilities.
“I truly believe that we have the best people in the industry,” Rosson says. “These are people who have arrived at a place professionally. They don’t need me to look over their shoulder or a leader to second-guess what they are doing.”
Rosson says in the future, the firm will continue to be prudent and watching the bottom line while making investments in technology and internal perpetuation to keep the firm independent. By successfully delivering insurance services in an efficient and user-friendly way for clients, the firm has not only retained clients, it’s also been extremely successful in adding new business.
“The vast majority of our growth is organic growth through just going out and telling our story,” Rosson says. “With a lot of our competitors, and the large ones, it can be very difficult or very expensive to access very sophisticated resources. What we do is deliver those same resources or the same level of advice — or even better — but do it in a way that’s less expensive and much more user-friendly.”
As a result, Woodruff-Sawyer has grown its revenue approximately 40 percent since 2007, generating approximately $70 million in revenue in 2011.
“Like so many businesses, the downturn forced us to work smarter and more efficiently and embrace technology,” Rosson says. “As the economy has slowly improved and our clients’ businesses has improved, we’ve found that we’ve been able to leverage our technology and we haven’t had to increase our costs at the same rate that maybe we would have. So we’re actually seeing that our business is healthier now, after the downturn, than it was before.”
How to reach: Woodruff-Sawyer & Co., (415) 391-2141 or www.wsandco.com
- Ask customers where your business provides the most value.
- Utilize technology to cut down on time and cost in customer interactions.
- Empower employees to help clients by avoiding a top-down culture.
The Rosson File
Woodruff-Sawyer & Co.
Born: San Jose, Calif.
Education: B.A. in history from UCLA
On growth: If you’ve got a very strong core business — I’m so bullish on the insurance business — you don’t need to take on too much debt or be overly grandiose in your expansion plans. Expansion and acquisitions all should be driven around acquiring people who fit into the organization, really bring something to the table and add to your organization rather than just executing a geographic growth strategy or putting pins in the map. All of your expansion should be for the right reasons, with the right people with client in mind, rather than trying to fill out (geographically) with different offices all over the place.
What is your favorite part of the business?
The best part of the business is getting out and meeting with clients and prospects. That’s why most of us got into this business and what really drives the passion for it. A lot of our relationships with clients go back 10, 15 and 30 years even. That’s the most fun part of it. I think it’s also really gratifying to successfully run the business and see the impact that you can have on employees’ lives.
What would you be doing if not for your current job?
Teaching English in Argentina
What one part of your daily routine would you never change?
Interacting with our clients and prospective clients
How do you regroup on a tough day?
I try to exercise every day.
What do you for fun?
Cooking, traveling, reading, coaching kids’ sports
It looked to be another great year for Republic Steel.
Coming off its 2005 acquisition by Industrias CH, S.A de C.V. (ICH) — a fast-growing steel producer and processor based in Mexico City — the company had cleared up all its previous debt, the steel industry was flush with opportunity, and as the new
was laser-focused on building a strong team and investing in best-in-class facilities to position the 125-year-old steelmaker for growth.
And that, of course, is when everything went south.
“After October 2008, the whole world changed for the industry,” says Vigil, who joined the Canton, Ohio-based steel company in 2005. “The recession threw us a curveball that we were not planning. I don’t think we were looking ahead. We had really relied on intelligence based just on market view.”
As the largest maker and supplier of special bar quality (SBQ) steel in North America, Republic produces steel for applications such as automotive and energy. It has been developing its steelmaking practices for more than a century. But even a company with annual sales of more than $1 billion wasn’t immune to the shock of the 2008 financial downturn.
Declining demand and struggling customers, who were urgently looking for ways to cut costs and scale back, hit the company hard. Almost overnight, Republic Steel saw its volume of business nosedive.
Streamline your structure
Not yet knowing the full scope of the downturn, Vigil knew that Republic Steel — like its customers — needed to cut costs to minimize the financial fallout. So the first step was to look for ways the company could streamline plant operations.
“At that point, the volume with the plants that we had had a lot of fixed costs,” Vigil says. “We were forced to shrink our footprint to be able to manage our costs and have a profitable business.”
Increasing efficiency without sacrificing quality can be tricky. You need to examine the profitability of every segment of operations thoroughly. First, identify the areas that have the most efficient costs, and second, identify where costs overlap. This process allows you to consolidate the most efficient operations and shut down equipment and functions that no longer make sense.
By making these changes, Republic Steel was able to shrink its footprint to that of a much smaller company in a short time period.
“That was a very different situation for us from 2005, but it was also a very good experience for us to try to model our business for the future,” Vigil says. “It allowed us to look at things in more detail and understand our business and our cost and the opportunities that we had to be more efficient.”
Taking cost out of operations not only allowed the company to produce SBQ steel more efficiently, but it also freed up resources, which Vigil reallocated to enhance the company’s quality, delivery and range of products in its SBQ steel business to provide more value to customers.
“We have to be right there with them making a product that suits their needs,” Vigil says. “Our No. 1 qualification or differentiation in the market is our ability to work with technicians of our customers to develop the products that fit their needs and then produce them consistently with a low cost and high quality and delivering them on time.”
When you’re not making a commodity, you need to be more focused on quality and continuously improving your products to stay competitive, Vigil says. The key to staying relevant was investing in the company’s strengths, such as its years of experience in the steel industry. The fact that the company’s Canton plant was the first-ever producer of SBQ steel provides it with a strong competitive advantage.
“Our brand has good recognition, and we continue to build on that by making our customers really comfortable in the long run that they have a true partner with Republic Steel, a company that knows what it wants and that can adapt to the changing market as needed,” Vigil says.
“With more than 125 years of know-how, you get a very good result. You can continuously provide the same quality that your customers are used to with more efficiency. It allows you first to be more competitive in the marketplace and maintain and improve your quality in the product.”
Since 2005, Republic Steel has reinvested close to $130 million in new equipment and new processes into its core Northeast Ohio facilities, which include plants in Canton, Lorain and Massillon, Ohio. In 2012, the company also announced that it would invest more than $87 million in a new electric arc furnace and equipment at the company’s Lorain, Ohio, steelmaking facility — a move that is adding approximately 450 employees.
The company chose the Lorain plant for the investment because of its close proximity to the existing customer base and to other Republic Steel facilities. Having a smaller physical footprint allows you to allocate resources to growing areas more easily to develop strong teams, while delivering a consistent experience for customers.
“We see a strengthening automotive industry as well as a lot of growth in the energy sector side through the gas horizontal drilling process,” Vigil says. “We see ourselves in a very good position to serve those markets in the long term.
“It gives us an opportunity to serve our customers with more product and a very solid footprint in the long run. Our customers have a supplier that has no debt and that is investing in its business. So we feel that our customers see us as a long-term partner, and they can stick with us for years to come.”
Look to your core
When your company is facing market volatility, past plans and strategies may get tossed out the window rather quickly. To ensure that Republic Steel didn’t lose sight of its identity in the chaos, Vigil used the company’s core values to guide the strategy — specifically two values passed down from its parent company, ICH.
The first was carrying a debt-free balance sheet.
“When we acquired the company in 2005, we inherited some debt from the previous administration,” Vigil says. “We worked very hard to pay it off with our own resources and some support from the parent company.”
Even when the company was losing volume during the recession, Vigil wasn’t willing to take on debt in favor of gaining more financial flexibility. In fact, he says borrowing money often results in the opposite outcome for companies by stifling their spending. Carrying zero debt allows you to make decisions without dealing with banks or lenders.
“Some companies have different opinions about debt, and in certain cases, it allows companies to be flexible and grow faster when an opportunity comes, but we still have that flexibility because having no debt makes us attractive to banks,” Vigil says.
“The recession has been the best proof of the strategy. We tested it through this downturn, and we were able to manage through the recession a lot better than some other companies who have big debt or a lot of interest to pay.”
As a result, the company has been debt-free since March 2006, operating as a true cash-flow company.
“It makes us a stronger company, and it allows us to keep reinvesting even in the downturn because the money that we generate is really for us and not to cover any debt obligations that we have,” Vigil says.
The second core value that helped guide the company through the recession was having a diversified mix of sales. Carrying a wide range of products makes the company a one-stop shop for many customers. So even in the downturn, Vigil continued to make investments to expand Republic Steel’s capabilities in emerging markets, such as natural gas and energy.
“The volatility in our customers’ industries continues to be something that we’re monitoring very closely,” Vigil says. “The economic situation worldwide, starting with Europe being so volatile, continues to have a big effect on our customers’ ability to project their levels of operations.
“Having a more diversified mix of sales allows us to not have all of our eggs in one basket and participate in different industries, and we’re able to better ride the cycles. We, as a company, believe that if we stick with those two values — remaining debt-free and continuing to have a diverse mix of sales — we can deal with the volatility in different markets.
“We’ve prepared our company to be better geared to react now than we were in 2008. Through these changing circumstances, we’ve created a more flexible company with the investments that we’re making, allowing us to grow our strength faster.” ?
How to reach: Republic Steel, (800) 232-7157 or www.republicsteel.com
1. Find ways to cut cost by shrinking your footprint.
2. Allocate resources to growth areas.
3. Guide your strategies with core values.
The Vigil file
President and CEO
Born: Mexico City
Education: Universidad Anahuac in Mexico City
What is one part of your daily routine that you wouldn’t change?
I like running every morning before going to work; it really makes a difference helping me start every day with great energy and a clear head ready for business.
Best piece of business advice:
I’ve benefited a lot from the experience that my team brings to my decision-making process. That saying that more heads are better than one — that does apply in practice. It’s particularly important in soft science to surround yourself with good members willing to openly give their take on problems so that together you come up with the best solutions.
What do you do for fun?
There is no better way for me to spend my time when I’m not at work than with my wife and kids. From training for a marathon with my wife, to being attacked with toy swords by my three and four year old boys … it’s the best time of my day!
All you need to do is look around to realize that the world is changing at a pace faster than anyone could have imagined. Every day, competition increases and the rules of engagement are rewritten. Keeping up with the Joneses is no longer enough to ensure survival.
Those manufacturers that understand how to remain in a state of constant adaptation have learned that this may be the only true key to thriving in the new economic realities of the global economy.
In the links below, we highlight 17 manufacturers that have taken steps to get ahead of change and forge their own paths. These award winners, honorable mentions and panelists for the 2013 Evolution of Manufacturing Conference, presented by Cuyahoga Community College, are truly setting the pace for others in this region. And we even identified a handful of companies that were engaged in initiatives “of note” to tell you about.
The conference is designed to recognize and showcase manufacturers and technology companies that have adapted to competition in a global economy through improved operations, new technologies, products or services. The 2013 program focuses on the continued evolution to advanced manufacturing with a focus on breakthrough concepts, transforming old-line manufacturers into high-tech manufacturers and what it takes to remain competitive and relevant in a new manufacturing age.
This year marks the 14th year of this annual event. This year’s honorees are culled from an extensive nomination and selection process which began in early fall and ended in early December.
Congratulations to the honorees and honorable mentions.
Click the links below to read the individual profiles for all of this year's honorees.
2013 Evolution of Manufacturing - Panalists
Tom Salpietra, president and COO, EYE Lighting International
Eric Lofquist, president and CEO, Magnus International Group
Suzy Remer, owner and CEO, Midwest Box Co.
2013 Evolution of Manufacturing - Winners
- ArtiFlex Manufacturing LLC
- R.W. Beckett Corp.
- H.C. Starck Inc.
- RBB Systems
- Saint-Gobain Performance Plastics
- Superior Products LLC
- Visual Marking Systems Inc.
- Voss Industries Inc.
2013 Evolution of Manufacturing - Honorable Mentions
2013 Evolution of Manufacturing - Manufactures "Of Note"
2013 Evolution of Manufacturing - Sponsors
Later this month, these three regional executives will participate in a panel discussion at the 2013 Evolution of Manufacturing Conference, presented by Cuyahoga Community College. They will address a topic every manufacturer faces: adapting to the 21st century manufacturing world.
Smart Business asked each panelist to share his or her thoughts in advance on what’s changed and how he or she has addressed it.
president and COO,
EYE Lighting International
Q: What is the most significant challenge EYE Lighting has faced over the past few years?
A: Solid-state lighting, made up of LEDs or light-emitting diodes, was developed more than 50 years ago. However, it has only been within the last year or two that SSL technology has made its way into general illumination in the home and in commercial and industrial applications. The price premium in adopting SSL is still somewhat controversial, but in time, it will become a more affordable option. In the meantime, customers are demanding other energy-saving solutions in the form of traditional types of lighting.
EYE Lighting’s business strategy has been in the roadway, commercial and industrial markets. Over the last two years, we have been shifting our focus away from the older forms of bluish and yellowish lighting to ‘white’ ceramic technology and to solid-state lighting. We continue to make investments in R&D and manufacturing so that we can maintain our lead in providing high-quality, value-added lighting solutions for our customers.
Q: How has this better positioned you for long-term operational sustainability?
A. We manufacture more than 70 percent of our volume in Northeast Ohio with a dedicated and experienced labor force. Over the last couple of years, we have engineered new products and developed more efficient processes, retraining our employees to meet the needs of our changing environment. Our ability to make these changes and still sustain our company culture lies in our passion for continuing to subscribe to lean manufacturing and operate under our various ISO certifications. We are proud of our rigorous approach to ISO 9000-Business, IS0 14000-Environment, and OHSAS 18000-Health and Safety.
Q: With all these changes, how do you continue to adapt?
A. We must continue to expand our offering of various products and services, rethinking our strategy every couple of years: Are we on the right track? How can we enhance our competence? Should it be organically or through an acquisition? What other kind of improved business model can we develop? How will e-commerce and social media affect our go-to-market tactics?
These are the questions we continually challenge ourselves with on a continuing basis. Sometimes just by self-examination, the answers are fairly clear. At other times, we need to venture outside into other industries and businesses to know how they are handling their changing environment. In the end, we allow ourselves to learn and improve upon the experiences of others.
Q: So what big initiatives is EYE Lighting undertaking this year and next?
A. Our strategic initiatives over the next couple years encompass significant investments in ceramic HID and LED technology. We know our customers want energy-savings solutions, yet they want to maintain a high level of quality and performance across all their lighting needs. We will expand our sales personnel and our marketing campaigns, including our activities in e-commerce and social media. We are very excited about the contributions EYE Lighting can make to the marketplace, and we owe much of our success to our employees and our dedicated customer base.
president and CEO,
Magnus International Group
Q: How has Magnus evolved over the past few years to meet growing demands in your industry?
A: Founded in 2007, Magnus initially focused on transforming petroleum-based co-products into liquid fuels and other carbon-rich materials. Eventually, we moved from traditional petroleum-based products to processing vegetable oils and naturally derived emulsions into natural waxes for items such as fire logs and candles.
The company’s most notable innovation came in 2010, when we vertically integrated our operation to convert discarded food industry co-products into unique, natural animal feed ingredients. Since then, Magnus has grown substantially by turning leftover raw materials — like restaurant fats, oils and greases, and sweets from food manufacturers — into healthier, tastier feed for the dairy, cattle, poultry and swine industries.
Q: How has this better positioned you for long-term growth?
A: Today, 90 percent of our product development is now on the animal nutrition side of the business. This sector is more predictable, profitable and stable than other industries in which we’ve worked, and there is less overall market pressure.
Our production facility is as diverse and as flexible as ever. Magnus’ ability to come to market quickly with one-of-a-kind, high-value animal feed ingredients has been critical to our success and the success of our partners.
The opportunities to collaborate with the world’s leading food companies, both as suppliers and customers, have been incredible. Magnus’ complete transparency and unique profit-sharing structure creates a difficult-to-duplicate business model that clients find attractive on several fronts. I think we offer the best product-price balance, boutique processing ability and special production techniques.
Q: So with all these changes, how do you continue to adapt?
A: Moving from petroleum-based inputs to sustainable global products has focused us even more on product quality. We recently became ISO/FSSC 22000-certified, which is the leading worldwide standard for food safety management. Achieving and maintaining that standard means we’re operating at a higher level of detail and quality systemwide. Now, all employees individually commit to a plant quality and safety pledge as a minimum requirement for being part of our work community. The net result has been increased product quality, enhanced customer and end-user satisfaction and measurable, award-winning growth in customer-shared revenue.
Q: As you look to the future, what significant initiatives is Magnus looking at for this year and next?
A: Our goal is to produce one new branded, natural product per quarter from prime and secondary co-products. Many of these will be exclusive animal feed ingredients. At any given time, we could have three to five different products under development. Some won’t make it past the lab stage — we have a strict, rigorous testing process — and some might not survive the market. But one or more will gain traction, and we’ve learned for that to happen, we need to always have a selective stable of products under consideration.
Why? Our future growth depends on constant innovation and remanufacturing. We need to be nimble to respond to unanticipated opportunities and have short uptime on new processes and products … all the while maintaining the superior product quality and service for which we’ve become known. We will stay ‘lean’ and ‘kaizen’ in our production strategies and continue to find groundbreaking ways to rescue landfill-bound feedstocks and convert them into renewable products.
owner and CEO,
Midwest Box Co.
Q: What have been some of the most significant challenges you’ve faced recently with Midwest Box Co.?
A: I became sole owner in August, and business has bounced back to almost pre-recession levels. But with our customers skeptical about their future business, ordering has changed. We now see very exacting ‘just-in-time’ ordering.
For our noninventory customers — those who do not use our warehousing program — we now need to be able to manufacture and ship product based on shorter lead times. For our inventory program, we find more customers are choosing this option to take advantage of price breaks and instant availability of their product.
Customer service is another area where change is happening quickly. It is more important than ever to be able to respond to a customer’s needs immediately. Many customers seem to wait until the very last minute to order and require us to fulfill their needs quickly. This has taught us how to be more flexible and responsive to our customers’ needs. We have inventory notifications that help our customers manage their ordering. We have developed delivery ability that allows us customer access in a more timely and efficient way.
We also acquired the Walford Industrial Park. We had been tenants here for more than 30 years. As owners of the park we can now expand to meet any future growth without moving.
Q: How has the economy played a role in changes you’ve made?
A: Pricing had become quite a challenge. In the past, we could develop a relationship with a customer based on our quality, service and competitive pricing. Staying true to our commitment of quality and service has worked well for us. But today, we find customers who leave us due to perceived cost savings and then return after discovering that the quality and service of the company they left us for are not the same.
That’s something we’re addressing this year, so the biggest initiative for us now will be cost reductions. Margins have been squeezed. We are trying to be as aggressive with our vendors as our customers are with us.
Q: Let’s look back in time a bit. Midwest Box Co. has a rich history in this region, correct?
A: Yes. It was founded in 1964 by my father, Marvin Hecht. We started as a short-run supplier and have grown to become Cleveland’s oldest and largest sheet plant. As I mentioned, I became sole owner last year but came on board with my dad and sister in 2002. Before that, I was involved in high-end retail. I didn’t really grow up in the business like many other second-generation owners have.
Around the time I joined my dad and sister, my father decided to purchase the industrial park where we were located, Walford Industrial Park. It has been put up for auction, and he thought it made sense. After my dad purchased it, he turned to me as we were leaving the auction and said, ‘Suzy, do something with this.’ So I ended up spending a lot of my time getting the park filled with tenants who needed industrial space. It wasn’t easy, so I decided to think differently and become a bit more innovative. Today, we have an eclectic mix of tenants, including Ray’s Mountain Bike Club. And these days, I spent all my time managing our real estate and running the company.
Click the links below to read the individual profiles for all of this year's honorees.
2013 Evolution of Manufacturing - Winners
- ArtiFlex Manufacturing LLC
- R.W. Beckett Corp.
- H.C. Starck Inc.
- RBB Systems
- Saint-Gobain Performance Plastics
- Superior Products LLC
- Visual Marking Systems Inc.
- Voss Industries Inc.
2013 Evolution of Manufacturing - Honorable Mentions
2013 Evolution of Manufacturing - Manufactures "Of Note"
2013 Evolution of Manufacturing - Sponsors
The times were tough for Roeslein & Associates in 2001. Sales had grown from just more than $1 million in 1990 to some $20 million in 2000. Now the volume of work was practically nonexistent.
“When you go without work for almost a two-year period and you use up every bit of retained earnings that you had, it starts to challenge your own beliefs,” says Rudi Roeslein, founder and CEO for a company that engineers, fabricates and constructs unitized modular industrial systems. “We were faced with this real identity crisis of was it all smoke and mirrors? Was I just delusional?”
Indeed, Roeslein and his company were in pretty dire straits. He let two members of his management team go and the six who remained each took a 30 percent pay cut. Roeslein and his partner, who only owned 25 percent of the 250-employee business, did not take any pay for 18 months.
“I said, ‘I’m not going to force you to do it,’” Roeslein says. “He had a family and both of us had kids at the time. We had the same bills that everybody else has. We just had to live on whatever we took out of the business previously in earnings. We tried to keep as many people as possible.”
As hard as he was working to keep the business going, Roeslein also had to fight the perception that it wasn’t ever going to get better. He had complete confidence that he would make it work, but it wasn’t shared by everyone.
“When people see that, how do you keep them enthused?” Roeslein says. “You start letting people go, and (others) want to bail out. They want to leave.”
As it turns out, Roeslein was right and his company did survive the business drought and emerge on the other side, growing to a $100 million organization today.
But Roeslein emerged a new man and a new leader. He was willing to look at himself in the mirror and ask the question that few brash, successful entrepreneurs ever want to ask of themselves.
“The big soul-searching that I did was, ‘OK, once I get out of this, even if we get the business, what am I going to do differently so I don’t get into this predicament again?’” Roeslein says. “That’s where you have to identify what are the necks in the hourglass? Am I the neck in the hourglass? I came to the conclusion that I was because of how I managed my business.”
The transformation began in 2002 with a realization that Roeslein needed to get his people more involved in guiding the business.
Empower your people
As Roeslein looked at his role in leading his company, he began to understand the problem.
“I wanted all customers to discuss their opportunities with me,” Roeslein says.
He had a CFO who handled the day-to-day personnel issues and Roeslein managed the engineering, business development and product management. But he also did selling and implementing and wanted in on every sales discussion.
He realized that had to change.
“You have to get over your own ego and really accept that maybe you’re the problem and not the solution,” Roeslein says. “Maybe the solution is right in front of you because you have all these brilliant employees and you’re just not releasing their talent.”
So as things began to pick up, Roeslein appointed the six managers who had been department managers and made them directors.
“I assigned specific customers and accounts on a regional and global basis, regardless of whether they were technical or nontechnical,” Roeslein says. “I divided it among them.”
The key to making this work was that Roeslein didn’t just call them into his office, tell them about the change and then expect them to figure out how to do it on their own.
“I said, ‘I will mentor you for a period of a couple of years,’” Roeslein says. “‘I will go with you to these customers, but ultimately, I’m turning these customers over to you. I’m turning these projects over to you. Then you guys figure out how to complement each other. Figure out who is best at construction, engineering and business development. One of you is going to become the president of the company.’”
It was a bold move, but Roeslein quickly knew it was exactly what his business needed.
“We quickly became a $100 million company, which under my leadership and style, probably never would have happened,” Roeslein says. “We would have been stuck at $20 million to $25 million because that’s what I could manage and that’s what I could keep my thumb on and have enough daytime hours to manage.”
If you feel like your company is stuck, it could be that you’re unwilling to let the people you’ve brought in to work with you and for you stretch their legs and use their talent. You’re only one person and if you keep all the important work to yourself, your company is severely limited in how much it can grow.
“You have to take the risk,” Roeslein says. “Put those people out there. Put them on the front line, put them in difficult situations and see how they respond. From that, you can start to formulate a plan as to who your leadership is and who your next generation is. That’s what I’ve challenged my six managers to do.
“Give guys an opportunity. Challenge them and push them beyond what you believe they can do and see what they can do. If you just keep them on the bench, they’re never going to be able to demonstrate their capabilities and you’re never going to know.”
Back up your words
If Roeslein had talked to his people about having a bigger role in the business or being empowered but continued to make the same decisions he had always made and lead the way he had always led, his company would not have grown.
“There are signals and indicators that employees read,” Roeslein says. “You say certain things. But it’s eventually what you do. What we did was we engaged them in a concept that signaled that we believed there was a future.”
That engagement was made with his six directors but also with every employee who had concerns about the company’s future during those dark days.
“Why would I have them working on all these improvements, cost reductions and things that work toward the future?” Roeslein says. “What I really focused on was let’s build and work toward the future. The future is confident, as far as I’m concerned. Why would I risk every penny that I have and everything I’ve worked for if I didn’t believe in it?
“That resonated with my employees and certainly with six out of eight managers.”
It resonated even more with those six directors when Roeslein rewarded their hard work and effort in getting the company turned around.
“These guys are going to sacrifice a tremendous amount of their lives to this company,” Roeslein says. “I told them a portion of their bonus each year could be applied toward ownership of the business. You’ve already made a huge sacrifice taking a 30 percent pay cut for two years to keep our business alive. Here’s your reward.”
The directors took advantage of the offer, buying out Roeslein’s partner and eventually reducing Roeslein’s share of the business from 75 percent to 51 percent.
“I don’t want to sell this business to outsiders,” Roeslein says.
Build for the future
Just as Roeslein mentored his six directors, he expected them to do the same for another group of leaders.
“If we want to grow the business to the next level, each of you needs to mentor six people,” Roeslein says of his message to his six directors. “That is the next step in the evolution of this company. You mentor six people, and you get the same level of confidence in them that I have in you.”
You’ve got to approach your business as though it were a team and you all make contributions to that team or you’re going to run into problems.
“It’s easy to be a really good guy and smile when things are great,” Roeslein says. “But when things are really bad, that’s when you find out your own character and your own ethos.”
So when failure occurs, approach it with the perspective of how the team can improve instead of focusing on the person who screwed up.
“Every leader needs to put their employees in a situation where they can succeed,” Roeslein says. “When they fail, they need to recognize they are part of the failure. You can’t have your people be so concerned about, ‘What are we going to do if we fail?’”
Roeslein says running a business is a lot like the whitewater rafting he used to do in Colorado and Utah.
“You’re just slowly going down the river and the sun is shining and you relax and your mind wanders,” Roeslein says. “Then, all of a sudden, you hit those rapids and those giant holes, and it scares the hell out of you. You wonder if you’re even going to make it through. It’s how you perform and how you treat everyone during those periods that really forms your character.”
How to reach: Roeslein & Associates Inc.,
(314) 729-0055 or www.roeslein.com
The Roeslein File
founder and CEO
Roeslein & Associates Inc.
Born: Salzburg, Austria. I was born in 1948 and came to the United States in 1956. I remember seeing the Statue of Liberty. One of my most lasting impressions was the train ride to St. Louis with my face plastered against the window looking out at the countryside. I didn’t speak a word of English.
Education: Bachelor’s degree in electrical engineering, Saint Louis University.
How did your childhood shape you? All of us had this work ethic where we believed no one was going to take care of us. We had to take care of ourselves. Kids can be cruel. Me and two of my German friends, instead of the three Amigos, we were the three little Nazis. So we went through some tough periods.
But I think the great equalizer for me was always sports. I started playing soccer at an early age and when you’re very good at something, kids accept that you’re good at that and a lot of that other stuff goes away.
Did the tough times then help you deal with them better now? I didn’t look at it as leaving long scars. Did it toughen me up and make me more able to take ups and downs in life? I think so. But I’ve never looked back and said, ‘Gee, those kids that held me down and tried to carve a swastika in my forehead were bad kids.’ It was just a sign of the times. Things were going on and you just fought your way through it and just keep on going.
Who has been the most influential person on who you are? My father. He’s the example of a completely selfless person. His whole life was focused around us.
Let people put use their talents.
Mentor leaders through growing pains.
Reward employees who help you meet goals.
It was a tough decision for Lizanne Falsetto, one that had the potential to go badly whichever way she decided to turn.
On one hand, she could continue selling the popular thinkFruit bar and risk confusing other customers who latched onto thinkThin as a company that makes snack bars that are low in sugar and high in nutrition.
Or she could drop the fruit bar, which had more sugar than Falsetto wanted in her products, and make a statement about thinkThin’s commitment to its brand name. She just had to hope that customers would appreciate the commitment more than they would mourn the loss of a popular product.
“It was very hard to explain the future of the vision because everyone just saw the numbers,” says Falsetto, who founded thinkThin in 2000. “Even the board saw the numbers. But I was adamant that this was about future growth. This was where the brand needed to be for the future to communicate one simple message that thinkThin is the weight wellness brand.”
Falsetto ultimately decided to drop the thinkFruit brand and hope that her customers would understand. Three years later, the 300-employee company seems to be doing OK without it.
The company is ranked No. 4 out of 119 national competitors in its segment, according to SPINS, a market research and consulting firm for the natural products industry.
The key to maintaining success will be Falsetto’s ability to keep her finger on the pulse of her customers and remain proactive about what they want from her brand.
“It’s about leveraging industry trends and really watching what’s happening and seeing the future before it gets there so you can be ahead of the curve,” Falsetto says. “Those are probably the two biggest parts of leadership.”
Here’s a look at how Falsetto makes tough decisions and grooms her people to meet their full potential to help thinkThin keep growing.
Let people do their jobs
Falsetto was confident in her decision to drop the thinkFruit brand. But she didn’t approach the decision-making process with her leadership team exhibiting an attitude of “I’m the boss and this is what we’re going to do.”
“I let the team, the executives that run their departments, speak for their department,” Falsetto says. “If I can’t rely on them to do that, then I don’t have the right people. I can’t be everywhere all the time. If I can’t open up the trust and let them see that I believe in what they are doing, then I’m not doing a very good job.”
So if there’s going to be a presentation on marketing, it’s the VP of marketing who leads the talk — the same thing with operations or any other department in the company.
The meetings are a visible demonstration of Falsetto’s philosophy to empower her people to do what she’s hired them to do and to take advantage of the unique expertise they possess.
She recalls an analogy her father once made about a business being similar to a basketball team.
“He would say to me, ‘You know, you have the two guards, the two players underneath and the center, and you look at that team and say everybody has to touch that ball to get it in the net,’” Falsetto says. “It’s very similar to business to me. I kind of look at building a team with individual skills, and I’ve gotten much better at finding what the skills are for the moment and what the brand needs.”
She says the key thing to think about with this analogy is that not everybody has to be able to shoot from the outside, have a good inside game and play great defense. If you take advantage of the skills each person brings to your business, and you’ve done a good job trying to fill your needs, you have an effective team.
“You don’t need to have everybody understand everything,” Falsetto says. “They need to have a passion in what they understand and what they bring to the table. That’s really important.
“A marketing head might not completely understand what’s going on in the financial world and doesn’t understand the details of accounting. But accounting really doesn’t understand marketing. They just know the numbers behind it. But together, there’s a passion.”
You get people who love what they do and you let them do it to the best of their ability, and then you do what you do best. You be the leader who brings it all together.
“If I see there is something that needs to be sewn in between the departments, then I will definitely bring it to the table,” Falsetto says. “How does that operations decision reflect on the sales side? Obviously, we’re all intertwined. It’s my job to make sure we’re all seeing the connection to that big pie. It needs to be one vision, but together, they all have a different piece of that vision to get there.”
When you operate that way and you have a tough decision to make, you can feel more confident in your ability to work through it because you know that you’ve got the best information at hand to help you make the right decision.
“When you surround yourself with really wise people, you are wiser and you make smarter moves,” Falsetto says.
Enhance your talent
The search for talent begins when you look beyond the slot you need to fill in your organization and think about what skills a person could bring to your business — and you talk to them about it and make them feel like an important part of the whole operation.
“People want to work for a company that has a purpose,” Falsetto says. “Every person around the table that works with you, if they feel like they have a stake in it, if they own it like you do, it becomes easier to communicate on that basis. They are in. It’s really important to empower them around you so that you can put your ego in check yourself.”
Falsetto regularly speaks with her employees about their own futures and what they can do collectively to make that future better, both for the business and the individuals.
“I have different tiers of goals for employees, and when I keep bringing them back to those tiers of goals, it puts it in perspective,” Falsetto says. “Did we successfully do this? Can we go back and look at this again? It’s organizing the goals per employee and making sure you come back to touch on those with them. It’s when you don’t communicate with employees that they start to wonder.”
Alignment is obviously crucial when it comes to personal and business goals. If the personal goals don’t match up with the goals of the business, then you’re not going to accomplish a lot. So you take the time to get updates and make sure everybody is on the same page and you don’t worry if you have to make course corrections along the way.
“ThinkThin is going to own the weight wellness sector. That is my goal,” Falsetto says. “What falls underneath that vision could change depending on what is happening.
“It could slightly tier to the left or the right, but yet the main vision is still there. It might be communicated differently. It might look a little different when you get there because of the roadblocks you must conquer to achieve the true vision of what you’re doing. But it’s ultimately having the steps of the goals to get to the topline vision.”
Don’t be afraid to let go
As the company founder and CEO, Falsetto spends a lot of time thinking about what she can do next to keep her business growing.
“What else can I make?” Falsetto says. “What other kind of flavor bar would people want? What’s unique? So that’s always something that I think you become better and better at. I think it’s surrounding yourself with people who are in the industry, knowing your customers and keeping hold of your vision.”
Falsetto knows what her place is in the company, but she has to rely on those conversations and relationships with her people to know where they stand. And there comes a time with some people where they just can’t grow anymore with you.
“Like they say, you only have your personal assistant in that chair for three years and then you move them to a new position,” Falsetto says. “You always want to rotate certain positions to be able to have them strive to be either better within themselves or bring some new depth to that position.
“When an employee feels that they can’t grow any more within the company, it’s better that I don’t find a place for them. I let them grow on their own. When you maneuver your business around that individual, you disrupt everything.”
Certainly when someone leaves who you’ve grown attached to, it can be emotional. But it helps to view it as a positive event. You helped this person grow and now they are taking what they have learned and applying it to continue growing.
If you’re constantly focused on bringing new talent in and helping existing talent thrive, your business will benefit from your efforts.
“You just strive to be better and better at it,” Falsetto says.
How to reach: thinkThin, (866) 988-4465 or www.thinkproducts.com
The Falsetto File
founder and CEO
Education: I’m a high school graduate. I was a basketball player, and I had a college scholarship offer. I had an option to go to a community college orSeattleUniversityand play basketball. I turned it down because I had a modeling contract on the table, and I decided I would rather travel the world.
What was the biggest takeaway from your modeling career? I didn’t do modeling to be famous because I knew I never would be famous. It was about making the money, it was about traveling and it was about the culture of where I was at. All of that really taught me the vision of looking ahead and thinking about where I want to be.
Who has been the biggest influence on you? My father has been the biggest influence on me. He is no longer with us as it’s been eight years since he passed. But he said many things that were very wise. My dad said, ‘You need to follow your dreams. When you follow your dreams, you will be successful.’ The other thing he said to me was if you ever lose those butterflies before a board meeting or before anything you’re doing, you have to stop and think about what you’re doing because you’ve lost the passion. Those things are so vivid in my head.
What one person past or present would you like the opportunity to talk to? I was thinking Margaret Thatcher. I just am in awe of her and think she’s a brilliant woman, very strong and statuesque. She really held true to what she believed in. But Lady Diana would be the other. The challenges that she was thrown into were not a choice.
Don’t get too locked in on the numbers.
Let your people use their talents.
Don’t shake up your team to keep someone.
Stacy R. Janiak was not thinking about becoming managing partner of the Chicago office at Deloitte & Touche LLP when she joined the accounting firm in 1992.
The graduate of DePaul University just wanted to do her job and make a good impression on the people who had hired her. But it was an impression left on her by a mentor who she had just come to know who shaped both her future and that of the firm in the years ahead.
“Within a month of my joining the firm, a woman who I held in high regard who was a manager at the firm turned in her resignation and said she was going back to school to get an advanced degree,” Janiak says. “She confided in me and said she just felt like she wasn’t sure she could do what needed to be done to make partner.”
Janiak had arrived at Deloitte at a significant point in the firm’s history. Leadership had become aware that the employee turnover rate was significantly higher for women than it was for men, and it had them concerned.
“There was a perception that women were leaving to just go home and have babies,” Janiak says. “Finally, there was a question that then CEO Mike Cook laid out. He said, ‘Do we really know that?’”
A study was commissioned, and it was discovered that many women who left fit the description of Janiak’s mentor, who just felt there wasn’t an opportunity to grow and advance in the organization.
“They were going to work at other places they found more amenable to their personal goals and work goals,” Janiak says.
Deloitte leadership wanted to change that. The Initiative for the Retention and Advancement of Women was created to help ensure more opportunities for women, but it was more than that. It was launched with the idea of bringing more diversity and inclusion into every aspect of the way Deloitte did business.
“Each business is being impacted by the changing marketplace, by the changing consumer and by the changing demographics of the population, wherever they are selling their wares or services into,” Janiak says.
“Do you really understand how all of these factors are influencing your ultimate business? Isn’t it logical, given the changing nature of all of those factors, to have some of that change represented in the people who are working in your organization so you can better react to them and better position your products and services for the consumers of the future?”
The move to make inclusion and diversity a priority put Deloitte in a strong position to help many who were poised to lose their jobs at the former Arthur Andersen LLP in 2002.
“We distinguished ourselves on a number of fronts, but that was one of them as people looked at where they might extend their career in that particular situation,” says Janiak, who became managing partner of the Chicago office in September 2011. She is also the central region managing partner for audit and enterprise risk services.
In these turbulent times, when fortunes can change overnight, Janiak says Deloitte’s ongoing pursuit of diversity is more than just a feel-good story for the firm and its 3,800 employees. It’s a vital part of being successful company.
Focus on relationships
One of the biggest initial drivers that led Deloitte to get focused on being more diverse and inclusive was the money invested and talent that for years had been allowed to just walk out the door.
“We’re investing all these funds in very talented individuals who are walking out the door and, oh by the way, those individuals bring different and unique skill sets to us as a group that help us relate better and perform better with our clients,” Janiak says. “So why shouldn’t we address this?”
As Deloitte looked at its company and the way it did business, leaders realized that they were missing a crucial point of perspective in the way they operated the firm.
“Twenty years ago, I think you could have asked a group of partners at Deloitte, why should we focus on the women who are leaving?” Janiak says. “They are leaving. Let’s focus on the women who are staying.
“But now you really are missing something by not having a group of people at the table that is reflective of your buyers or the purchasers of your products and services. Force the conversation to what ways you might increase your internal diversity to have those ideas around the table.”
Each industry is different, but whatever business you’re involved in, communication and relationships are going to play a critical role in whether you succeed or fail. The easier it is to find common ground with your customers or potential customers, the better off you’re going to be.
And as you provide a more diverse front for your customers, you create more opportunities for your people at the same time and give them a reason to stay and grow in your organization, which helps you grow too. It becomes cyclical.
“If I take Deloitte as an example, one of the big pieces of data we looked at was how much we were investing in all our people to prepare them and train them and how much we could achieve from a revenue perspective if we were able to retain some of those individuals one, two, three or four years longer than we were at the time,” Janiak says.
“How did that change our overall organization by enhancing the level of experience before they chose to go pursue a different alternative career path?”
Janiak speculates that had Deloitte not changed, she probably wouldn’t be in the position she is in today. But she adds that it’s not solely about creating opportunities for women like her. It’s about adapting and positioning your company to succeed in a constantly changing environment.
“I don’t know if I would have stayed in an environment that was not inclusive and as flexible as it is,” Janiak says. “And I think given how the world has changed, you could probably say that about a lot of the men too. There are just as many men who struggle with family and just management of all these competing priorities. I think we’d look a lot different. I don’t think we’d be as successful, and I don’t think we’d have as much fun as we’re having.”
Set the tone
If you want to promote a culture in which everyone plays an important part in your company’s success, you’ve got to make it a personal priority to instill that culture.
“A big mistake would be making it a program versus being able to describe the business imperative,” Janiak says. “Describe why it is valuable to the organization and demonstrate that. How are you developing people on your own teams that you have responsibility for?
“It’s critical that the tone is set at the top and that leaders are held accountable for their progress. It’s important that it is on the agenda of the CEO. If you relegate it as a program and have it be several layers removed from the CEO, that could be a big mistake.”
Talk about the tangible reasons why it’s important that employees and leaders consider diversity in everything that they do.
“Our potential clients are asking, before awarding significant project work, what is your commitment to diversity and how do you demonstrate that?” Janiak says. “If we don’t have a compelling track record and story to tell, we’re not in the mix. Clients who are committed to it and see it as a core value want to be working with an organization that also shares that core value, and so it’s a competitive advantage.”
You’ve got to find a way to integrate it into your culture as a way of doing business, rather than something you’re going to try for a little while before you return to what you did before.
“It’s a strategy,” Janiak says. “Whether you’re including it as part of your talent strategy, your human resources strategy, your sales strategy, there are different ways to look at it and however your organization responds to strategic direction and execution of that strategy, that’s how you should say it. It should be similar to other core strategies that you disseminate through your organization.”
Janiak says she takes her role very seriously as a role model and figurehead for anything she tries to do at Deloitte.
“I view it as one of my roles is to make sure I’m present at the various functions of our business resource groups, which represent all kinds of different folks within our organization,” Janiak says. “It’s important that I hold myself accountable to having diversity on the teams that I’m responsible for — because people look at that and they say, ‘OK, not only does she say this is important for us to do, but she’s doing it and demonstrating support.’ People pay more attention to what you do than what you say.”
How to reach: Deloitte LLP, (312) 486-1000 or www.deloitte.com
The Janiak File
Stacy R. Janiak, managing partner for Chicago office, Deloitte & Touche LLP
Born: Aurora, Colo. It’s right outside of Denver at a U.S. Air Force Base. My dad was a mechanic in the Air Force.
Education: Bachelor of science degree, commerce, DePaul University, Chicago
What was your very first job and what did you learn? The very first job I got paid for was babysitting. I babysat twice a week for the people across the street and earned $1 an hour to feed them dinner, bathe them and get them to bed. That was a pretty good deal.
It was just the concept of going out and having people trust you with some authority at a young age.
Even though it was across the street and you had your parents as the backup, you were in charge. People had expectations. I was going to feed the kids and wash the dishes and they trusted me to do that and expected me to do that.
Who has been the biggest influence on who you are today? My mom. Her name was Rose. She was born in the early 1950s and contracted polio when she was 11 months old. To hear her describe it, it was almost like having AIDS back when people didn’t understand it. You were just ostracized.
She was told she would never walk without braces and she kind of made up her mind that she would not have that be. She is a very resourceful woman that was not given a great lot in life physically. She has made up for that in many ways. She’s the reason I believe there is always a solution and there is a way to get people to it.
Think about what customers expect to see.
Be out front and visible when big changes.
Don’t spare the legwork on strategies that may take time to mature.