When Allen came on board, the nonprofit organization was providing services to 180 families. But he knew that there was still a long way to go, and in the past decades, his commitment to the organization’s mission has helped Hattie Larlham implement many new social enterprise ventures to help people with developmental disabilities live longer, richer lives.
Allen believes that to help people with disabilities feel healthy physically and emotionally, there must be more educational and socialization opportunities in their daily lives. However, social norms perpetuate the idea that people with disabilities are cannot execute jobs that require interaction with the public, so this sector is largely unemployed.
Allen has played a significant role in changing those misconceptions by leading Hattie Larlham to implement and oversee a variety of social enterprise programs -- including a pet boarding facility, a chain of local coffee shops and an art program -- that provide meaningful employment and engagement opportunities for people with disabilities. Allen and his team are driven every day by the effect these initiatives have in instilling people with disabilities with a greater sense of purpose and self worth. Today, as Hattie Larlham marks its 50th anniversary, it provides services for approximately 1,500 people with developmental disabilities.
In 2010, Allen recognized another opportunity to expand Hattie Larlham through a fourth social enterprise and formed Hattie’s Vending Co., which services 79 vending machines in the Akron area. Through collaboration with organizations such as universities and local boards, Allen continues to establish additional job placement opportunities for people with disabilities.
How to reach: Hattie Larlham, (330) 274-2272 or www.hattielarlham.org
Gary Schaffer wakes up in France most days out of the year even though Inmedius Inc., a provider of enterprise software solutions, is based in Pittsburgh. The president and CEO of the global company likes being centrally located.
In the mornings he speaks with India and in the evenings he calls the West Coast and his daytime hours are busy contacting everywhere in between.
“Our largest challenge is having a moderately growing company and a company that is worldwide and the challenge is dealing with the virtualization of our work force,” Schaffer says. “How do you keep everybody communicating and in sync with each other when you have offices around the world?”
It’s a challenge that Schaffer and his 75 employees are always looking to solve and improve within the company.
Smart Business spoke to Schaffer about how he keeps his global business in sync.
Synchronize processes. The more highly distributed you are, the more business process driven you have to be. If we’re all in an office together and we’ve got a business challenge, we can just lean over the cubicle and say something to our colleague. If you’re on the other side of the world and something has to get done, you have to have an agreed upon process that you all agree beforehand is going to happen.
As a small business you don’t necessarily want all the overhead of huge business processes. As a distributed small business, you have to have those processes in place. That’s another challenge. How do you deal with a small business that has the needs of a large business business process?
The first thing you have to do before you put a new process in place is agree on the process. Then monitor the process and document the process in either a task list or check list.
Make sure someone owns it. What I’ve found over the years is that without direct ownership by somebody, not by a group of people but by somebody, these things do not work well. You need to be able to hold one person responsible and one person needs to be empowered to make sure the process works properly.
Promote strong employees. Inmedius is really a niche software services business, so we don’t have a big pool of competitors we can pull from or necessarily people who understand or know our domain before they come to our company. We are actively promoting people in our company into different roles to take up more management roles. We had somebody that was in a finance role and was just moved to the director of operations. That’s because someone that was in finance over the years will understand our business, understand our products, understand our services, and understand our customers.
You need to sit down and systematically do ‘what if’s.’ What if we move Bob, who is a great performer in production, into a sales assistant role? What would that look like? What advantage would that give us? What disadvantage would that give us?
Some of these may be very unnatural. When you talk about product innovation, one strategy is to take all your assets, all your products that you own and say, ‘What would it be if we mixed this product with this product? What would that give us?’ Unless you do that systematically, you’re never going to come to those conclusions. You have to do them with people and roles too. You have to line up all your people and line up all your roles and say, ‘What would that look like with this person in that role?
Find the right people. Personality profiling is a must. That’s how you know what the best way to manage that person is. You have to also get a very good understanding of what work environments people work best in. You have to go beyond just skills.
Those other areas are as important, or more important, than the skills. Somebody could be a fantastic programmer but not a team player and they are on a team programming project and that’s not going to work out.
Somebody may be a great programmer but doesn’t like interacting with customers. So we better make sure we get them in the right role because if the role is to lead the programming group and be contacted by customers, the person is going to fail. You have to look at whether they need a structured environment or an unstructured environment. Different parts of your business have different needs.
HOW TO REACH: Inmedius Inc., (412) 459-0310 or www.inmedius.com
When Daniel Moore became president and CEO of Cyberonics Inc., a medical device company focused on epilepsy and other debilitating neurological disorders, in 2007, he faced a company that wasn’t growing and had several issues in need of fixing.
“The company had lost more than $50 million in each of the two prior years and owed $132.5 million dollars,” Moore says. “The first problem was a financial problem and the long-term viability of the business. The first job was to turn that around. Had we not done that, the company would have been out of business in 18 months.”
Cyberonics was forced to do layoffs to stay in business and dropped from nearly 600 employees to 430. Since then, Moore has emphasized a unified vision and a strong, open culture to get the now 530-employee company, which saw fiscal 2011 revenue of $190 million, back on track.
“You have to start with the vision,” Moore says. “What do you want this to become? Before I came into the company there were several members of the board who were new board members and we ensured that … we all shared the same vision.”
The company had been going in another direction which had led to some of the company’s challenges. It shifted gears and focused on epilepsy as a business. It was important for them to all be on the same page.
“The alignment has to be there at the top first,” he says. “I have been in situations where the board is not in alignment and if the board doesn’t have alignment, then the senior team is allowed to not have alignment and that trickles down throughout the organization. If you have the alignment and you share a common vision for what it is you’re going to do, that allows you to layout a plan in order to get to success.”
Communication during this process is crucial for alignment throughout the organization to occur.
“Once you have alignment on here’s what we’re going to do, the second part of that … is saying what you’re not going to do,” he says. “If you do those two things, say what it is you’re going to do and then what it is that you’re not going to do … I think you’re on your way.”
During turnarounds and periods of change there is often opposition to that change. It was vital to Cyberonics’ turnaround to allow for constructive debate and a culture that stressed that importance.
“You want to have a culture where people are free to express their thoughts,” Moore says. “You want to have a culture where that debate is encouraged.”
Constructive and spirited debates are often a good thing. You have to understand that your idea or direction isn’t always the best or right way to go.
“You have to ensure that you have an environment for which [constructive debate] can happen and opportunities for it to happen,” Moore says.
It is up to the CEO to make sure the culture of constructive debate reaches everyone in the company.
“Speak to the benefits with sincerity, letting them know you believe we will be best if we utilize the intellectual capacity of all of our team members and help each other grow and develop by learning through sharing ideas,” he says. “If you don’t believe that openness and constructive debate are good and you have all the answers, there is a bigger issue and you’re that issue.”
You have to demonstrate the culture you want to see within your company and ensure it’s happening.
“Don’t put people down in discussion,” Moore says. “Acknowledge their input and let them know when you agree and they’ve changed your position and let them know when they haven’t and why.”
Whenever possible, show your employees they can change your mind.
“When you can show real world examples people see that you are willing to not have the final say in every matter and that you, as CEO, are not always right. It gives them confidence for future interactions.”
HOW TO REACH: Cyberonics Inc., (800) 332-1375 or http://us.cyberonics.com/en
To create a strong culture and one that directly affects the growth and performance of your company, you need strong employees.
“Get good people on the team and they will really make things good overall,” says Daniel Moore, CEO of Cyberonics. “It’s about that team coming together with their individual functions and putting it all together into the broader team.”
To get the most out of your employees, you need to make sure they are being challenged enough in their roles and have an opportunity to grow as the company does.
“To grow and develop people, you need to be honest with people as to where they are and you need to be honest with people as to where you see them being able to go,” he says. “We hold people largely accountable for taking control of their development plan. We create an environment where they can grow and develop, but they need to be the point person in their growth and development.”
Employees will only be able to grow if your company is behind them in that growth.
“You want to ensure you have an environment where people can get a variety of challenges. You want to provide that environment that allows for growth and development and you want to make sure people understand that it’s their responsibility to be in charge of their development.”
Eileen Gittins knew creating an online book publishing business meant she wouldn’t have physical stores where she could her meet customers face to face. And yet, she’s found other ways to reach out, from sponsoring international events to opening temporary pop-up stores in London and New York.
“Without having permanent retail locations, when you are an online brand like this whose product makes physical things, how do you get out there in the physical world?” says Gittins, founder, president and CEO of Blurb Inc.
And by answering the desire of digital consumers for shared, interactive experiences, she’s grown Blurb to $45 million in revenue in five short years.
Smart Business spoke with Gittins about how to build relationships with consumers as an online brand.
Focus on your customer. You are just uncommonly focused on the people, on your sweet spot. And just staying ahead of that is the way that you continue to become the one that matters.
For us, it’s the creative enthusiast and the creative professional markets. So we’re explicitly not focused on what others call the ‘chief memory officer,’ the mom at home who’s got 40 minutes to whip something out before the baby wakes up. That’s not our market. Our market is people who are creative at some level and who are really enthusiastic about their photography, their design — whatever it is, they’re into it — all the way up through creative professionals. When you focus your efforts like that, it becomes possible to stay ahead of the curve because you’re not spread too thin.
Build an experience. Instead of looking at this challenge as: We print books, so that’s the business you’re in, we said, ‘No, no, no.’ What this is about is experiences increasingly for people who are digital natives and they want an experience of making the book that frankly helps them relive the content, whatever it was — their trip to Jamaica, their family reunion, a recipe book, when they had that fabulous meal for Christmas every year when they were a kid.
We knew if we built an experience, where the experience of making the book was frankly as fun and rewarding as getting the book, then this would be the kind of product that people would talk about and it would get its own viral adoption.
Create opportunities to connect. Every year we have a big, worldwide competition called ‘Photography Book Now.’ It invites people all over the world at all levels of skill to submit their books in different categories. And it’s not just a competition online. … Last year we had meet-ups in 11 cities all over the world, so that there are opportunities for people to come and meet us and frankly for us to talk to folks who are customers or would be customers about their experience.
They feel a personal connection to this brand, and I think it’s because we enable them to do something that makes them look better than they ever thought.
This last year we had almost 40 percent of the entries from outside of the United States, which is why we go to Paris and Berlin and London and New York and L.A., Toronto, just all over the place in these meetups. So that’s a huge part of our approach to the markets. We joke here — but it’s not a joke — that offline is the new online for Blurb. Our books are physical, tangible things, and people want to meet up in physical space and check each other’s books out, look at books, hold books — hold them in their hands.
Share your passion. I joke that my title should really be chief storyteller not chief executive officer, because that’s how I manage and lead is through stories, great stories that help people understand why things matter, instead of just the data telling them why things matter. When there’s an emotional component to that, it’s memorable and actionable.
The first thing that we look at in terms of hiring people is passion … and the reason for that is if you are passionate about something, anything, whether it’s skydiving or making cupcakes, then you are going to have a lot of empathy for our customers, who are extremely passionate about the thing that they are making. You get it. You just get it. So that’s like music is to you. That’s like skydiving is to you. This is somebody’s passion.
How to reach: Blurb Inc., www.blurb.com
Eighty percent of Court McGuire’s communication with clients is done either through Facebook or texting.
“Our clients kind of know how we communicate, because it’s not like it’s the fax, the typical phone call, the typical e-mail,” says McQuire, president of Boca Raton-based Green Advertising. “Nowadays it’s a text. It’s a Facebook message or it’s a privatized YouTube channel.”
By keeping Green Advertising on the pulse of the new media and marketing initiatives that resonate with today’s consumers, McQuire and Green’s founder and chairman, Phyllis Green, have both kept the firm relevant as well as grown the business to $42.5 million in revenue in 2010.
Smart Business spoke with Green and McGuire about how new media has changed the advertising industry and how it’s changing brand communication.
What are the advantages of advertising in today’s media environment?
McQuire: What’s happening is that interactive or online or social media has a new layer to it that traditional advertising and broadcast never had. It doesn’t play a passive role. It has to play as a participant.
To reach your very specific consumer will be a little bit more homework and a little bit more challenging, but the good news is you can do it better and more effectively and find out what kind of analytics and performance tracking we have in their consumption of that media.
Interactive has a very unique thing. It levels the playing field. So if you’re Joe Shmoe with a concept and a business or you’re a multimillion-dollar New York Madison Avenue company, you can compete head to head with paid search, with the big dogs.
What’s on the horizon for brand communication?
Green: Our clients used to say, ‘Oh we need a brochure.’ Now we’re telling them, ‘No, you don’t need a brochure. You need a video.’ That’s how people are consuming content. They are reading it less. They want to see it. They want to understand it better.
McQuire: Video in social media is huge. A lot of people just think, ‘Oh, it’s my status on Facebook,’ but people are so interested in videos that make them laugh or think or educate them. … We bust our butt on lots of video content, because that’s what’s really emerging as the best return on investment for brand communication.
What is the key to a successful online media strategy?
McQuire: It’s performance tracking. If you are doing interactive and you’re doing social media, and if you are even doing broadcast, you have to be able to performance track your media. Years ago it was much more difficult to do, but with the online component you know where [customers] are coming from, when they’re interested in buying, who they are, where they are located.
Should companies try a social media strategy on their own?
McQuire: It doesn’t take one person. It really takes a team. … Often I have that problem where it’s, ‘Eh, we don’t want to pay a social media retainer. We’re fine with just these fees for broadcast.’ And we have to say, ‘Well look, you’re going to create an orphan to your brand. We need to know that mommy and all of her kids have the same message and the same mission.’ So we really have to convince them that to take on social media, ‘Yes, we can make it affordable for you, but no, you can’t do it as well as we can.’
What advice would you give clients and firms in regards to advertising today?
McQuire: They have to embrace new media, emerging media. They have to embrace interactive advertising. They have to be very open to the idea that there’s not just one way to reach my market. Now there are many ways and I need to spend some time and understand it.
Green: The market tells you what’s happening and the economy tells you and clients tell you, and you have to be a good listener — keep your ear to the ground...In today’s competition, our vision is ‘We’re only as good as we are today.’ And everyone here has bought into that.
How to reach: Green Advertising, (561) 989-9550 or www.greenad.com
Delegation is the essence of leadership. It is the soul of management and the empowerment of the organization. Those who will not delegate cannot lead, cannot manage and cannot help grow an organization through the empowerment of its most important resources and assets.
All leaders and organizations achieve their goals and their visions through their people. The strength of an organization comes from the diversity, not the conformity, of its skills and capabilities. An organization is a team of individuals with unique gifts, backgrounds, personalities and strengths. The key is to realize that all of these individuals, with all of their unique strengths, are using their energy working toward the same goal of completing a project, improving the bottom line or growing the organization.
Who to choose
The first key to delegating is choosing the right people to whom any authority or responsibilities will be delegated. There is such a wide spectrum of people ranging from the outspoken to the reserved, from extroverts to introverts, from technicians and administrators to marketing and sales to management, from experienced to relatively newer staff that no cookie-cutter approach could ever be effective or successful. But certain character traits surface in successful examples of delegated authority.
The right attitude is one of the most important aspects to be considered. To determine someone’s attitude, their beliefs must be determined. Beliefs govern behaviors and behaviors determine what someone becomes — attitudes are begotten from beliefs.
Attitude is also a function of character, personality and core values. You can’t readily or easily guide a rude, dishonest, abrasive, amoral, insensitive, bigoted, lazy or narcissistic person to be polite, virtuous, genial, principled, thoughtful, tolerant, energetic or selfless. This is an assessment that has to be personal and delicate. If you fall short today, you might learn, grow and become the superstar of tomorrow.
For some people, good character and simple human decency are not in their current nature and may never be. But many people are self-starters and self-motivated, flexible and adaptable, they do take responsibility and admit mistakes, are energetic and resourceful, are goal-oriented and achievement-driven.
It’s this kind of person to whom we must ultimately delegate authority. So, the people you recruit and select today will largely determine the culture of an organization, the service an organization renders to the public, and the reputation and success the organization will enjoy or endure in the future.
Once you’ve identified the correct person to delegate responsibilities and authority to, you can’t just throw tasks at them. You must use one-on-one mentoring, group learning, team dynamics and on-the-job experience to guide and shape the capabilities of the person to make sure the task will be successfully completed. The proper budget, technologies and facilitating and enabling support must also be provided.
Effective communication is imperative in a delegation situation. The delegator should not dictate the communication, rather, the delegator should inquire, question, guide and support the chosen person to clarify and enhance mutual understandings, agreements and accomplishments.
Just as the delegator should not dictate communication with those to whom they delegate tasks, they should also not lapse in communication. Delegation is not an abdication. The person to whom something is delegated takes on some of the responsibility and accountability of the task, but the delegator must take responsibility for making the decision — be it good or bad — of whom to transfer power to.
You must always remember: Everyone who has responsibility is always responsible to someone else. And, you are all working together to empower your organization or realize a goal. There is no greater joy than seeing your company soar on the wings of people you have empowered by trusting and delegating responsibilities and authority to.
We end as we begin. Delegation is the essence of leadership. It is the soul of management and the empowerment of the organization.
Thomas M. Nies is the founder and CEO of Cincom Systems Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. To learn more about Nies, go to http://tomnies.cincom.com/about/
When David Lingafelter became president of Moen Inc. in late 2006, the flow of prosperous times had been replaced by a plug of economic uncertainty.
Moen’s business is faucets, sinks and accessories, and it’s significantly dependent on the U.S. new construction market, which started declining in October 2006 and rapidly continued downward throughout 2007. That was hard, but then the global financial crisis hit, too.
“Just when we thought, ‘OK, is this thing going to bottom out,’ the rest of the world takes a dump,” Lingafelter says. “Everything else just goes in the swirling uncertainty. Consumers back even further away, so a business that was many, many years of record sales, year after year, you have this transition. That’s been the toughest challenge.”
Add to that, this entire decline was happening as Lingafelter was taking over his new role as president.
“The normal thing of going from a product manager to a president has its own challenges, but those are manageable compared to a business environment in one of your core markets in one of your core segments declining 70 percent,” he says. … “Most people say, ‘Wow — good timing.’”
While it was challenging, it wasn’t all hopeless. The company was strong in other areas, and he recognized that, as well.
“We’re a billion dollars,” Lingafelter says. “We have a highly recognized consumer brand, and we have a good team. So it wasn’t, ‘Oh my gosh — let’s start over.’ It was, ‘OK, what’s changed, what is changing, what does the trajectory look like, and what does that mean to us?’”
What that meant was sticking to what had gotten the company where it was — good strategic planning and accountability.
“It’s not that we’ve done it differently because of that, but it’s just more important, and what we’ve done throughout the year is we’ve had to iterate more,” he says.
Moen’s approach to planning involves aligning the leadership team, diverging and converging, prioritizing initiatives and then measuring. Sticking to this process, even in the challenging times of the past few years, has helped Moen continue to build its $1 billion brand.
“We’re still bullish on our growth in China and with the retail markets — it continues to grow as consumers look for that value in do-it-yourself,” he says. “It’s good. It’s not double-digit growth, but we’re positive. We’re positive on our growth opportunities in places, but we’re not out there spending way ahead of the growth, so we’re continuing to be cautiously optimistic.”
Align your team
Before you can do any game-planning, your leadership team has to understand what’s guiding the process.
“First and foremost, your leadership team is aligned,” Lingafelter says. “If your leadership team is not aligned, then they’re coming in with different headsets. They’re coming in with different glasses on.”
This is the time to look at your vision, mission and strategic initiative pillars to understand why you’re in business and what the purpose of your organization is. Keeping these elements at the forefront of each executive team member’s mind will ensure that your team stays on the same page.
“If everybody says, ‘OK, yes, we understand our vision, yes, we understand our mission, yes, we understand our goal, [and] yes, we believe in our strategic initiative pillars,’ then you get better alignment,” he says. “Then you have a balanced discussion. It’s still not easy, but having those guideposts to help you through the decision process, I think, is key.”
If your team isn’t aligned already, Lingafelter says you have to recognize it’s not going to happen quickly.
“You can’t do it in a [single] meeting,” he says. “It’s not like we’re going to set the vision from 9 to 10. It’s not a completely evergreen process because you don’t want to change it all the time, but I think you have to have a disciplined process of understanding your marketplace, understanding your opportunities, understanding who you are and have enough vision to say, ‘Here’s the direction that we want to go,’ and that process you need to have as much fact-based information as you can.”
At Moen, the company’s three main strategic initiatives are growth, business improvement and organizational excellence, so anything the company as a whole does has to support one of those initiatives. Then that cascades down to each business unit level, and anything that unit proposes must also support one of those three initiatives.
“We use the same language as it moves through the organization,” he says. “Common language makes communication a heck of a lot easier.”
If you can start with these commonalities, the entire process of prioritization and planning is going to be a lot easier.
“It must start with leadership alignment,” he says. “If you don’t have that, you don’t have a prayer because everybody will communicate differently. It’s OK to have a different style, but your fundamental message has to be around those strategic guideposts and those initiatives.”
Diverge and converge
Once you’re aligned with what your vision and mission are, then you have to lead your team through a process of diverging — brainstorming — and converging — bringing everyone back together again to decide what’s most important.
“The diverge and converge can happen at the team level, the group level or the corporate level,” Lingafelter says. “The process is the same — it’s exactly the same — if you boil it down.”
Often you’ll have to facilitate this process yourself because it’s not something that comes naturally to many team members.
“Allow them to diverge on the facts, and then you converge on to your strategy,” he says. … “[It’s a] process that says, ‘OK, this is what we’re going to do. We’re going to talk about our marketplace, and we’re going to get information on our marketplace — let’s all get on the same page. Let’s talk about the company. What are we good at? What are our strengths? What are those things that we think are our competitive advantage and how do those marry up with the marketplace?’”
The amount of people that you involve in this process depends on the size of your business.
“It’s tough to do on your own, but I would say, no matter what, get multiple heads in there to help you at least with the assessment because a lot of times, different views get you to a different place,” Lingafelter says.
For Moen, this happens across the organization at the business unit level.
For example, if one business unit says they want to grow with new construction plumbers, they may start by brainstorming what they know about them. What are the facts? What are the trends they’re seeing? What do they think the future state as it relates to that specific area looks like?
“This is not days and days,” he says. “It’s let’s spend a few hours talking about this, and then you get to the next session, and someone facilitates and says, ‘Let’s take off our headsets and let it run.’”
Sometimes, you need to do some pre-work to these sessions. In those cases, Lingafelter says unit managers may ask their team to brainstorm on their own and come to the table with their top 10 things that they think are challenges with new construction plumbers.
From there, the diverging has to end, and the converging begins.
“Then you do simple things like, ‘Let’s prioritize all these ideas. What do you think? Let’s bring it in a little tighter,’” he says. “It’s not rocket science. You just need to facilitate through the process.”
From there, that business unit will come to the corporate level with, say, its top three things they want to do because they feel those are the priorities as it relates to new construction plumbers. That unit would then take those three items to the corporate level and talk about not just the ideas but what they think they can return on each item and how much each will cost.
“They’ve gone through diverge, converge and this is what they’re recommending they can do,” he says. “It’s not hard, but it’s a process — you have to have a discipline.”
By doing this within each business unit, it helps the corporate level not get bogged down in initiatives that aren’t very important and focus on what will be most beneficial.
“We’ve done this long enough, and our people are seasoned enough to know that wish lists aren’t going to fly,” he says. “The more confusion that they create, the less likely they are to get their initiatives communicated.”
After every unit brings its top initiatives, from there, the leadership team has to prioritize which initiatives out of all of those most-important ideas to focus on.
“When you’re talking about strategic tradeoffs you’re not diverging anymore,” Lingafelter says. “You’re trying to converge on the decision.”
At this point, every business unit has identified what its most important priorities are, but now you have to take it a step further.
“It’s not like we have a bunch of initiatives — ‘Oh, some of these aren’t so important,’” he says. “No, we neck it down to the most important initiatives. So you say, ‘OK, now we’re going to neck it down to only the most important, and you have to make prioritization discussions.”
The vision, mission and strategic initiatives drive those discussions and help identify where tradeoffs will be. This process starts with discussion to identify the facts.
“You try to get everything on the table — have the conversation about tradeoffs,” he says. “Listen to the downside. Otherwise, if we don’t do this, here’s the implication, and you have to vet both of those because a lot of times, the premise on the upside is probably higher than it actually is, and the scenario downside is probably lower than it actually is, so as leaders, you have to try to manage the message or manage the communication a bit. It’s probably not that bad, and it’s probably not that good.”
First, he looks at what the costs are for each initiative. It’s important to look at total costs — operational, finance, IT, human resources, etc. — not just what’s on the surface, and include any of those in the total cost. Then you have to look at what the returns on those investments are.
“A lot of it comes back to getting results,” he says. “If you say, ‘Look, is this in a shorter-term strategy, where it’s within the calendar year? Is it a longer-term strategy? Is it further out than that? Is it changing our positioning?’ You look at how long it takes for that to pay off, and we make calls that way.”
You also have to look at what your company’s strategic initiatives are that everyone was aligned to.
“A vision and strategic initiatives don’t just tell you what to do — they tell you what not to do,” Lingafelter says. “When you’re making tradeoffs without having guideposts, you can naturally steer off course. You have to have leaders that say, ‘OK, wait a minute, let’s remember — what’s our strategic initiative? What’s our focus? How is this relevant?’”
For example, at Moen, Asia is a growth market for the business, so they’ll make investments there, even if they could get a higher payback somewhere else. Sometimes that means cutting one business unit’s budget to fund that other initiative. Someone may get upset and ask why his or her budget is getting cut when three of his or her projects have a higher return than what the company is doing in Asia. But Lingafelter explains to people that the company will still fund that Asia initiative because its strategic guidepost says it wants to grow internationally and diversify from U.S. new construction.
“You come back to those guideposts,” he says. “You come back to those decisions. You know why? Because everybody had the same glasses on when you elected that process. It may not have been exactly the way they thought, but everybody needs to be aligned so you can have rational versus emotional discussions.
“This is not a perfect science. It doesn’t come without stress. It doesn’t come without discussion. Compromise can be dirty sometimes, but you can end up in a better place. I believe that. Taking your marbles and going home because you’re not getting everything doesn’t work.”
It’s important as the leader that you properly facilitate this process so everyone has the opportunity to share what their priorities are and why they think they’re important.
“You try to facilitate consensus and communication because I have very skilled, very smart and very capable people, and you don’t want to disenfranchise them in the process,” he says. “You don’t want people taking their marbles and going home, so you continue to go back to, why is it important? Is it a growth initiative? Is it a business improvement initiative? Cost, quality, service, new products? Is it organizational development?”
You also don’t have all the time in the world to have these conversations and make these decisions. At Moen, they’re constrained by when they have to provide guidance to the parent company, Fortune Brands. It’s important to communicate those time constraints as well so people understand when the stopping point is.
“There are hard stops,” he says. “This is the decision time frame. This is when we need feedback. This is the discussion we’re going to have. This is the prioritization discussion we’re going to have, and we have to stick to those timelines.”
Lastly, you have to look at your budget and what, of all your ideas, is feasible within it. Fortune Brands has a performance expectation for Moen to get results, so he can’t get caught up in something that is risky or too expensive.
“It isn’t a wish list, but it’s a heck of a lot more than we can afford,” Lingafelter says. “It’s prioritized because it’s a strategic initiative that we’ve talked about. There’s never enough funding. This is no different than any other business. The government can print money — we can’t, so we have to control the budget.”
Once you’ve heard all of the initiatives and looked at the facts, then it’s time to make the important decisions of what to focus on and communicate that to your team.
“You try to listen and then repeat back, ‘OK, this is what I’ve heard. I think these are the tradeoffs, and I recommend this is how we go forward,’” he says. “Are there times a leader just has to say, ‘We’re going north?’ Absolutely.”
Taking this approach to prioritization is also helpful when last-minute opportunities arise long after you’ve done your planning.
“That gives you things on deck, too,” he says. “You can say, ‘We have a few extra dollars, where do we go?’ It’s not, ‘Oh my god!’ We can say, these are the three things on deck, and let’s go fund them.’”
Once you choose your top initiatives, then you have to make sure that people focus on them and follow through.
“Every initiative has the ability to track it,” Lingafelter says. … “Each initiative rolls back, at the end of the day, to growth, business improvement or organizational development.”
For example, a metric in organizational development could be that every employee has an individual development plan. A way to measure that is to say that every employee will have an IDP by March 1.
“That’s a metric,” he says. “That means you have to spend one-on-one time, you have to establish an IDP, log an IDP — those kinds of metrics have to be tied to your initiative.”
It’s critical to take the time to put in some sort of way to measure each initiative.
“If you’re not disciplined with prioritization and establishment of initiatives and tying a metric to it, then it will be tough to track,” he says. “Are you executing and exceeding or excelling in your initiative? You have to just be disciplined to say, ‘OK, here’s the initiative, what’s the metric — how are you going to measure it? What’s the cadence? Again, it sounds simple, but everybody has to have that same headset of process of here’s how I want to present my initiatives.”
At Moen, a new three-year strategic plan is completed every year. That plan is put in a binder or spiral bound, and each initiative is given its own page that outlines the key action, the things they’re going to do to reach it and the timing.
Then, when Lingafelter meets with the person in charge of that particular initiative once or twice a quarter, he asks how they’re doing with it in regards to both progress and timing. Each initiative is coded with green if it’s on track, yellow if it’s a little behind and red if it’s falling behind or being killed. If it’s red, then he discusses the reasons — did they have enough resources? Is the situation different than they originally thought? Have business conditions changed? Or did you just miss it?
“As long as you don’t have too many, then you move on,” he says.
Each initiative will have a plan not just for that current year but also for each year in that three-year plan.
“They’re much more detailed than the next year — a little less detailed the next year and a little less detailed the following year,” he says.
As the company moves through its strategic plan for that year and prepares the next three-year plan, because metrics are such a crucial part of measuring progress, Lingafelter can adjust numbers up or down as needed so that the next plan is likely to be achieved. For example, in the fourth quarter of 2008, numbers got worse, so he adjusted the numbers for 2009 to reflect that.
“It’s generally one of two things — most recent performance and trend lines,” he says. “We look at how we did last month, how is the quarter going and how does the future forecast look. We do a lot of modeling, so we look at what’s happening in the market and we say the trajectory looks like it’s going to be up, flat or down, and we make adjustments based on that. We use a rearview mirror on performance and we use the windshield on forecasting and trend lines so we have that dialogue all the time.”
While this is a lot of work and requires a lot of give, take and communication, Lingafelter recognizes that this process is why Moen and his 3,000 employees are still doing well despite its largest market being down.
“When your culture is built around this kind of teamwork, it helps,” he says. “Leadership’s job is to continue to facilitate that and continue to lead. I think our organization has done a heck of a job through the adjustments that we’ve had to go through.”
How to reach: Moen Inc., (440) 962-2000 or www.moen.com
Companies often launch special project teams, task forces and committees to get important work done. Often it makes great sense: charter a small group with a distinct purpose, let them work quickly, and get their findings/recommendations.
These special teams offer tremendous advantages. They give executives the chance to observe different people’s performance. Special groups can bypass the bureaucracy and avoid organizational churn that mainstream efforts can stir up. There are all kinds of benefits for using special teams.
However, lurking behind the launch of special project teams may be an unacknowledged dissatisfaction with those accountable for that work. Rarely are there honest conversations with them about why the project team is being launched instead of asking them to either perform or oversee the work. Rarely are they given such caring feedback, which might help them to actually get better.
Let’s consider a few real-life examples:
A team is formed to evaluate a potential joint venture in China. (The head of strategy and business development group were bypassed for this important work.)
A small group is assigned to evaluate the organization’s culture change needs. (The CEO lacked confidence in the human resources organization but that feedback was never shared directly with HR. It was, however, shared obliquely with others when they asked why HR was not leading this effort.)
A team is pulled together to determine if a new product line, targeting a growing demographic, makes sense. (Corporate’s new product development group and head of innovation were both bypassed when this project was launched. And the special team was told to keep its work confidential until they were told otherwise.)
You have to stop and ask: was a special project team really necessary in each of these situations? Or did the executives opt for special teams because they lacked confidence that those normally responsible could perform the quality of work they were seeking? And if they lacked such confidence, did they give the individuals who hold those jobs the respect of telling them, which would have been a step toward helping them get better?
I would say this: If, in fact, the special project teams are a workaround, then the first one who needs to change behaviors is the executive in charge. Delaying the dealing with a performance issue or competency gap only perpetuates mediocrity in the organization, and weakens the leader’s effectiveness. Imagine if the whole organization did that same thing.
Another issue to watch for is how implementation of project team recommendations are handled. Because the team was structured from the outset to work in parallel to the core organization, there is no “permanent home” or ownership for what is recommended, let alone what is implemented. This is a serious problem, because the game is won or lost on execution, not on the greatness of the ideas.
So what should your takeaways be? First, sometimes using special project teams is exactly the right thing to do. However, before you launch a special project team, task force, or committee, ask yourself: are you working around a capability or performance gap in your own organization? If so, have you dealt with the people/performance concerns directly — in a caring, yet clear and constructive way?
And second, if you want to be a respected leader whom others look up to, and if you want others to freely discuss the “real issues” and to address performance issues, you need to be the first in line to model the right behavior. As a leader, people are watching you for cues all of the time. Be the leader you want and expect others to be.
Leslie W. Braksick, PhD is the Co-Founder of CLG, Inc. (www.clg.com) and author of Preparing CEOs for Success: What I Wish I Knew (2010) and Unlock Behavior, Unleash Profits (2000, 2006). Dr. Braksick coaches and consults with top executives and their boards on issues of leadership effectiveness, succession, and strategy execution. Braksick can be reached at firstname.lastname@example.org.
Stan Hasselbusch always looks for the next way to keep his company growing and expanding its presence. L.B. Foster Co., a manufacturer, fabricator and distributor of products and services for the rail, construction, energy and utility markets, acquired Portec Rail Products last year as a way to improve its product line. Part of the company’s strategic growth plan is to grow through acquisition and Hasselbusch made good on that strategic goal.
“We looked at a half-dozen different companies,” says Hasselbusch, president and CEO. “We looked at companies that were primarily related to the rail industry, and we weren’t going to be foolish and we did a lot of due diligence. We were looking for something that was going to make a sizeable contribution to our organization.”
Portec Rail Products was a company that fit all those requirements. A $100 million company also based in Pittsburgh, Portec is one of L.B. Foster’s biggest acquisitions. Hasselbusch knew it was going to take a lot of hard work and time to integrate the organization, but it would help continue the growth of a company that saw revenue of $475 million in 2010. Here’s how he did it.
Plan your acquisition
Acquisitions can’t be taken lightly. They can allow your company to grow, offer new products or reach new customers. They are a crucial step in growth, and they need to be given the time and effort to be done right.
“You have to really do the due diligence and have patience,” Hasselbusch says. “Having patience is something that if you’re going to have a growth strategy, you’re just not going to grow for the sake of growing, you’ve got to have patience.”
Planning out the various stages of an acquisition will help you navigate through what is often a very long and difficult process.
“Plan for what you need to do,” he says. “Make sure you have a very strong strategic plan. It’s got to have how you’re going to go through an acquisition, your diligence plan, your integration plan and your plan going forward. There’s a lot of planning and then it’s following through with strong execution.”
Hasselbusch and his team referenced the plan and kept patient while looking at companies that were going to benefit them and fit well within their organization.
“We’re not going to step out of our wheelhouse,” he says. “We’re not going to go out and do something that’s not familiar to us. We are basically in three products. About 45 percent of our business is in rail, about 45 percent of our business is in construction products and about 7 or 8 percent is in tubular products. But really our focus is in the rail side of the business and in the construction side of the business. So when we go looking for acquisitions and growth in our company, that’s what we’re looking for.”
You want to look for companies that will be a good compliment to your existing business and help continue your growth.
“Our strategic objective in the railroad side of our business is to strive to become a premier distributor of products beneath the wheel,” he says. “[Portec] had a couple of products that really played into that very well. They had a large presence in what’s called friction management. Friction management is lubrication of the wheels and the rail to minimize friction and slows down the wear of the wheel and the rail. That’s an up-and-coming market.”
Having an understanding of your market is a big part of the planning process, as well. Hasselbusch knew what part of the rail market they wanted to expand upon, and Portec was the company that offered those products.
“You need to know the market you’re going to serve,” Hasselbusch says. “You have to understand the markets that you serve if you’re going to be successful in the first place. You need to be able to know what you can do internally from an organic standpoint or what needs to be looked at outside of your current organizational set up.”
Portec fit the plans Hasselbusch and the company had to move forward with for growth in the rail industry.
“Looking at Portec, it really looked fine,” he says. “We liked the size of it. We liked the fact that it does have a global presence or at least is a springboard to get into the global market. They do a lot in the service sector, which compliments what we’re doing. They have good research and development and engineering, which compliment some of our efforts very well. They have products that we can use in our bag of tricks of rail products and we liked their people.”
Finding a company that matches up with your own is the most important part of an acquisition. The company you acquire has to be complimentary in the things they offer or make.
“You have to understand how they are going to compliment or strengthen your business,” he says. “You want to look for companies that would be accretive. You’re going to look around a lot. You have to ask yourself how the product will complement what you’re currently doing.”
It is also critical to find a company that has a similar culture. If cultures are too different, the acquisition will be extremely hard to make work.
“You have to look at the people,” Hasselbusch says. “You have to look at the people so when you buy an organization it’s going to come in and you can grow together. You can’t lose focus. One of the big things we are seeing during this integration is how the cultures match up.”
Communicate growth plans
Communication plays a big role in growth and especially in mergers and acquisitions. Hasselbusch constantly communicates the company’s plans for growth to his employees.
“We’ve always … expressed to them the importance to grow,” he says. “One of the areas of our strategic plan to grow is to grow through acquisition. They know that that’s always going on, that we’re looking at people. [Our employees] know that we are always looking for ways to grow the company. You have to communicate this all the time.”
During an acquisition process there are a lot of moving parts and a lot of variables that constantly need to be addressed. Communicating often is the only way to keep things going smoothly.
“You have to over communicate,” he says. “You have to make sure everyone in the company is aware of what’s going on.”
L.B. Foster has town hall meetings twice a year where everyone in the company gathers to hear what’s been going on in the organization. At the end of those meetings they have a Q&A session where employees can comment on what things have been happening throughout the year.
Integrating two companies together takes a lot of hard work and dedication. The process can’t be rushed. Nothing good will come out of an integration if it is forced or rushed.
“It’s very time consuming and you have to be prepared for that,” Hasselbusch says. “There’s just a lot of work to do and it doesn’t stop. It doesn’t stop in the diligence phase, it doesn’t stop as you go forward and you close and it doesn’t stop through the integration. It really steps up and you’ve got the deal down and you take a deep breath and it’s not over — it’s just starting.”
Patience and communication are extremely important while trying to successfully bring two companies together.
“Communicate on both sides with your company and theirs,” he says. “There’s a lot of hard work and a lot of patience that’s going to be required and you can’t over communicate. You’ve got to be prepared for that. If you’re going to do it and do it right, you’ve got to put the time in and it’s got to be quality time. It’s not going to start by itself.”
Nothing is more important than communicating and getting to know the company you have brought in.
“When you bring in a company that’s 20 percent of the size of your current organization, it can be a challenge,” he says. “You have to stress communication. You can’t overdo communication. You have to take the time and put forth the effort to get to know them. That’s the only way you can do it.
“You have to communicate with them and try to understand them and where they are coming from. You can’t spend enough time with the troops. You have to be out with them and press the flesh. That’s the ultimate communication. You have to do that a lot.”
Integrate your teams
When it comes time to integrate the newly acquired company into your own, you have to be willing to take time and plan how you want to make the process work.
“There’s got to be a very detailed integration process,” Hasselbusch says. “You’ve got to be able to nail that. If you lose that, you’re going to take a long time catching up.”
For Hasselbusch and his senior executive group, the first step of integration was visiting several of Portec’s facilities around the country and internationally to get a feel for the operations and people.
“It was very important for me and my senior executive group to spend some time visiting each one of those facilities because at the end of the day, it’s about the people,” he says. “You can have ideas and you can have approaches and you can have plans, but it’s about the people.”
Throughout all the hard work and planning that goes into an acquisition, you also have to create buy-in for the future of the two companies.
“The integration has been a lot of hard work, but there’s been a lot of buy-in on both sides and there’s been a lot of working together,” he says. “There are certain compromises that you have to deal with, and it’s a give-and-take process throughout. That’s the big thing — bringing people together for a common cause.”
Another aspect of compromising during an acquisition is finding the best practices between the two companies. It is very easy for the acquiring company to keep doing things how it always has. However, that won’t improve your company and it won’t help the integration process if you don’t consider all avenues.
“We’ve spent a lot of time trying to better understand their operations at their plants,” he says. “We really looked at this and we’ve told the people at Portec that we’re looking for best practices. It’s not our way. We’re going to look at you, we’re going to meet you, we’re going to try to understand you and we’re going to try to meld the best practices.”
It takes full understanding of each company in order to decide what practices can be improved and what practices to keep. It takes careful consideration on both sides.
“We’ve not gone into this integration like it’s our way or the highway. It’s looking at it from both sides. They do some things in engineering and research and development that we can benefit from. We do some things in operations that they can benefit from. You’ve got to dig in. You’ve got to really understand the cultures, you’ve got get to know the people, and better understand the products.”
The willingness and ability to keep your mind open and listen to what everyone involved in the process has to say will help you make the integration a better and quicker success. “You’ve got to go in there with your eyes wide open,” Hasselbusch says. “You have to open up and listen. We’re not saying that our way is the right way. Sometimes you’ll agree and sometimes you’ll disagree and all you can do is reach a middle ground. At the end of the day, at some point you’ve got to come on board and you have to move forward and you have to move forward together.”
HOW TO REACH: L.B. Foster Co., (412) 928-3505 or www.lbfoster.com
The Hasselbusch File
President and CEO
L.B. Foster Co.
Born: Cedar Rapids, Iowa
Education: Attended the University of Dubuque in Iowa. He went to work for L.B. Foster straight out of school. He started in 1972, and it’s the only place he has ever worked as a professional.
What was your very first job, and what did you learn from it?
I delivered newspapers. I took away from that experience how important people are.
Who is someone you admire in business?
Warren Buffett. I really like his approach. It’s a very wholesome and down to earth approach and he has been very successful. I find him very interesting.
If you could invite any three people to dinner, who would they be?
Babe Ruth, John Kennedy and Michael Jordan. My wife would have to be there, as well.
If your day is off to a bad start, how do you turn it around?
I go in my office, take a deep breath and start all over again. We are really fortunate here. There is a light attitude throughout and there is a lot of humor in the office. There are always going to be good and bad days and you just have to be tolerant and try to work through them...
It wasn’t too long ago that we had to eliminate the use of offensive language from the workplace, bringing an end to the old way of doing business. But we missed a certain four-letter word when we cleaned up our office talk. Can't is just as vile to the business environment as any other four-letter word. It facilitates resistance against change and hurts our ability to receive the gift that change brings – the opportunity to reevaluate and improve our business models.
Training teams to get past can't allows businesses to respond quickly to the ever-changing markets in which we operate.
The first step is to create a culture that embraces change. When faced with a challenge, the tendency is to first focus on what can’t be done when we should instead be seeing what is possible. Change is a chance to take a deeper look at your business, your customers and your environment to make sure the business model meets the needs of your target market.
For example, when Hurricane Ike and the recession dealt a double blow to my Houston-based yacht sales company, we updated our sales strategy. We created customer support programming that put us ahead of our competitors, who had little success with hurricane clearance sales in a devastated community.
Change provides the opportunity to make competitive gains by being the first to create new approaches and develop innovative solutions. Today’s most successful organizations are driven by people who understand the value of change and thrive off of it, instead of responding to it with can’t.
In order to overcome the destructive can’t attitude, you must challenge it. Can't holds us back because it focuses us on all of the problems instead of the solutions, which prevents creative thinking. Being blind since birth, I’ve heard this word a lot in my life. Whenever I was told I couldn't do something, I learned to ask, “Why not?” In doing so, I eventually found that I could succeed if I stripped away the menacing roadblock of can’t.
This approach has proven effective for solving problems in both business and personal pursuits. Every time employees or team members say “can’t,” respond with “why not?” Plow the path to creative and innovative solutions by throwing out objections and turning the focus to how.
Most importantly, eliminate the distraction of can’t by implementing a creative thought process and motivating your team to understand and believe that all things are possible. This is done by facilitating discussions and challenging your team to tear down convention and remove preconceived thoughts to enable fresh, creative ideas to flow.
When evaluating the current business model, ask your team to define the problems and come up with potential solutions. Challenge each team member to write five answers on sticky notes and place them all on a board. Then do it again. After a few iterations, all preconceived solutions are on the table and you can move to new creative ground. The result will be a new business model backed by the synergy and fresh thinking that has emerged within the group.
When you eliminate the negativity of can’t among your team, you set the stage for a brighter, more productive future for your organization.
Vince Morvillo is founder of Sea Lake Yacht Sales and an entrepreneur and motivational speaker based in Houston. He was the first blind person in history to win a national sailing championship. To contact Vince, visit www.VinceMorvillo.com.