There really wasn’t a battle plan for what Brett Healy faced in 2009.
Healy is the president and CEO of Webasto Roof Systems Inc., a company that supplies sunroofs and other roof systems to auto manufacturers. Like just about every other auto supplier, Webasto was dealing with automaker bankruptcies, downsizing and reorganization, and the cascading effect it was creating throughout the industry.
“It involved lots of things that you weren’t going to find in a Harvard Business Journal review,” Healy says. “As we rolled into 2010, it was basically a matter of trying to keep people motivated, because people were very unsure about the environment. People needed to remain motivated around the idea that we still had a viable company, keeping them on task and focusing on getting back to normal business volumes.”
Motivation was a key aspect. Healy and his leadership team had to spearhead a period of consolidation in the company’s head count and plant capacity. Between 2008 and 2009, Webasto Roof Systems— the Michigan-based arm of German vehicle component manufacturer Webasto AG — had to remove three plants from production and reduce head count by 200.
If there was any good news, Healy had begun the consolidation ahead of the economic crisis, so he already had a plan in place for reshaping the company’s future. But when the crisis hit, it took Healy’s methodical plan and turned it into a scramble.
“I took this role at the beginning of 2008, before anybody even recognized a serious crisis was coming,” he says. “Just sizing the company, I knew we were heavy in terms of capacity. We had low capacity utilization in some of our plants. One of our consolidations was executed in 2008 in proper order, but as things started to deteriorate in 2009, we took a plan that was going to take about three years and had to accelerate it into about nine months.”
To get his people motivated, Healy had to restore their faith in the present. To keep them motivated, he had to build a better future.
As he started down the road of navigating his company through the darkest days of the recession, Healy had to take the most difficult step first. He had to admit to his people that the financial crisis was unprecedented in its scope, and management was getting an on-the-job education just like the work force.
In company meetings and his president’s round-table forum, which Healy holds monthly, he had to face his people with a combination of confidence and humility. He had to be a leader, but he had to admit that the company was sailing into uncharted waters.
“They were asking questions like, ‘We just had a layoff, is there going to be another layoff? Are there going to be any other plant closings?’” he says. “They saw that two of our customers (GM and Chrysler) went bankrupt and wanted to know what that was going to do to us. Those are three loaded questions.”
When faced with answering big questions about your company’s future, you really only have one recourse. You have to tell the truth, and do it without mincing words.
“We told our colleagues that we’ve never been through this before,” Healy says. “We’re checking with other people to see if anyone has information on how this happens, and based on our own knowledge of the business, we’re going to do A and B. And if that works, that’s fine. But if it doesn’t work, we’re going to try C and D. So you simply show your people what you’re going to do. There are companies that tend to have a culture of secrecy, and I really don’t subscribe to that. When people don’t know what is going on, they have a tendency to use their imaginations, and they can imagine things much worse than they really are. During that whole time, we remained focused on making sure everyone had the facts, and the facts were changing very quickly.”
Healy wasn’t trying to sugarcoat the situation, and he wasn’t trying to force his company to wallow in grim reality. What he wanted to do was give his people an accurate reflection of the challenges the company faced, then immediately get everyone focused on solutions to pull the company back to growth mode.
“All is not perfect,” Healy says. “I wasn’t trying to paint a rosy picture, but if you just keep talking to people, it does work. Whether you’re the janitor or VP of engineering, with us you’re going to hear the same exact presentation of our plans and objectives for the year. We had cards made up that put the corporate focus on one side and on the other side, we had our quality actions that drive success. We talk about this in great detail in our first company meeting of the year, and it will be the lead in our company meetings for the whole year. We’ll talk about how we’re doing compared to our corporate focus for 2011 and how we’re doing against the things we’ve been talking about.”
Form a strategy
In any crisis, you need well-defined strategy for the future, aimed at helping your company’s recovery. At Webasto, Healy used industry forecasts and data to formulate a strategy and give his people goals to pursue, both in the short and long term.
“We’re very data driven, because in the automotive world, there are some very good forecasting services,” Healy says. “We started our planning process by triangulating various forecasting services’ projections of volumes. From there, we already knew the projects we had been awarded, and we had a good idea of the projects we’re going to focus on in the future. That is the beginning of the business planning cycle. There are also some other items that go into that, in terms of buying behaviors, customer shifts in desiring various vehicle options, but basically, we start with a projection of what the volumes are going to look like and hone our strategy around that. It’s a five-year plan, and it goes into hyper-detail for the year that you’re in.”
Healy and his management team project their plan out as far as 20 years, though it’s a broadly defined direction at that point. The plan then comes down to 10 years, which is defined a little more, to five years, which gets into planning specifics and, finally, the well-defined one-year plan.
“The one-year plan is set in stone,” Healy says. “But as much as I say it’s set in stone, you still need the ability to move and adjust. It’s just that when you move and adjust, make sure your modifications are still within some guideline of business practice, so you don’t blow your brains out on any of your particular metrics.”
In a crisis mode, when dramatic change is often necessary, it can be difficult to decide where to remain steadfast in your leadership approach and where to change. Though you might be tempted to say you need to remain steadfast on matters of culture and mission, Healy says your budget is another good place to remain rock steady. Any plans you make will need funding to become reality.
“We’re sticklers for cost management and cost control,” he says. “But things change. Literally, by Jan. 2, something has already changed. You have to adapt to it but stay within the guidelines of your business plan. A great example would be capital budgets. We have not exceeded the capital budget plan since I’ve been running the company. To me, it’s pretty simple. It’s like a household budget. You only have so much money to spend, and if something changes in the environment, you have to reprioritize your expenditures. The new widget machine we desperately needed becomes a third priority because something with the ability to generate more growth and EBIT for the company has taken priority.”
When planning your company’s next set of moves, it’s OK to take a little bit of time, ponder the various scenarios and gather input — as long as the pause for research and introspection results in definitive action. Healy took decisive action to plan and communicate with his people. Without that action, his company’s confidence in him would have waned, and he could have become a less effective leader.
“What I have learned is that there is such a thing as acting too fast and moving too fast,” Healy says. “When I took this role, I always told myself that the most important thing is to be decisive. I still feel that is the most important thing, but I have learned over the past three years that it is OK to take a day to ponder something. I don’t think it’s OK to ponder for weeks and months, because people still expect you to act. A company is like the economy. It functions well when there is confidence. Confidence comes from people looking to the management team and feeling that these people know what they’re doing, are agile and decisive, and are looking out for them and the interest of the company.”
Creativity is another key to crisis management. At Webasto, Healy tried to get everyone thinking about new ways to do things. He wanted everyone in the company to get into a problem-solving frame of mind. He wanted people who were willing to constructively challenge policies and processes. In one case, a responsive work force saved Healy a significant amount of money.
“We had quoted a project where a new mechanism was going to be required that was a pretty expensive investment,” he says. “The original review from our engineering department said it has to be new because eventually existing systems won’t work. But some of our colleagues outside of engineering challenged that paradigm and asked the test department to run a part with this existing mechanism on it. The test ultimately validated it and ultimately found out that the paradigms the engineering department had were not really accurate in that regard. It saved the company about half a million dollars and it used carryover standard parts.
“In that scenario, nobody did anything wrong. Engineering did what they were supposed to do. They followed the standards that had been set. But we had some people who embraced the idea of creativity, and we really try to promote that kind of thing.”
To promote it, you need to ask for it, keep asking for it and applaud it when you see it.
“We’ve got a long way to go to continue promoting creativity, but it starts from my level with a culture where that sort of thing is applauded when we see it. Whether it’s large or small, it needs to be recognized as a behavior that is appreciated in the company.”
It’s an approach that helped Webasto Roof Systems rebound to $380 million in 2010 revenue, up from $250 million in 2009.
“You always have to go back to what is important,” Healy says. “Go back to the basics when things get a little weird or a little cloudy. Just go back to the basic premises of the business and the values you are trying to promote. It’s really not that complicated. I think a lot of managers make it more complicated than it has to be.”
How to reach: Webasto Roof Systems Inc., (248) 997-5100 or www.webasto.us
The Healy file
Born: Evansville, Ind.
Education: Business degree, Michigan State University; executive management training at the Fuqua School of Business, Duke University
First job: I’ve been working since age 12, when I worked on a horse farm, taking care of the property.
What is the best business lesson you’ve learned?
I’ve worked for five or six managers in my career who were very influential in my creation as a CEO. I wouldn’t say all five were positive. I’ve learned as much from the negative traits of my managers as I have from the positive traits. I’ve learned not to take yourself too seriously and open yourself to criticism. If people are telling you something, it’s probably true, and you have to adjust the dials on your approach.
What traits or skills are essential for a business leader?
No. 1, common sense. No. 2, a sense of humor. No. 3, a keen interest in the company and the people who work there. No. 4, the ability to look at things through others’ eyes. And No. 5, an interest in a balanced approach to short, mid- and long-term objectives.
What is your definition of success?
The feeling that I enjoy what I do, that I made a significant contribution, which allows me the rewards to live outside my business life as to what I need. For a family, it’s the same thing. Balance and a priority to raise my kids the right way, teaching behaviors and expectations, and a partner in my wife aligned on the same channel of expectations.
David Harding knew there had to be a better way to reduce the stress at work. So he read an article about executive coaches, hired one, and set out to change the company culture with his newly minted purpose statement.
It was his “aha” moment. The revelation? Hiring the best people, trusting them and letting everyone share in the duties ? and share in the rewards.
“We dreamt that people would want to work here and would be lining up at our door to join the team,” says Harding, president and CEO of HardingPoorman Group, whose annual sales are about $30 million.
Once that vision is solidified, you develop the purpose. Harding finds this one fits the bill: “To make a meaningful difference in the lives of our employees.”
Finally, ask, “How can we deliver on that purpose?”
Then comes the action. Take away the autocratic management style. Put in a democratic style, where managers are allowed to run their departments. Take away the plant manager.
“We chose not to have one because everyone tends to go to him/her for answers,” Harding says. “Pretty soon you have a stressed-out person because the staff puts monkeys on his/her back.”
The culture revolution won’t be easy. It took Harding about two years to get his 154-employee graphic arts company turned around. Autonomy was especially problematic at first.
“It wasn’t a habit for them to make decisions, and so they would come to us and say, ‘What do I do here?’ and we would say, ‘You’re running the show; what do you think you do?’ and eventually, after you do that a few times, they understand: ‘OK, I need to be making my own decisions.’
“Instead of answering the question for them, you ask them to come up with the answer themselves. And nine times out of 10, it’s the same answer you give them, especially if they understand the vision of the company.”
Management, in a twist of the usual case scenario, should be accountable to employees, and not the other way around. This is the optimum way to benefit the customer.
“Think about it,” Harding says. “The people that can really provide value to a customer are the people that are closest to that process. In other words, the people that are closer to producing a product can probably provide more value quicker to a customer than managers. The reason is they work with that product every day and they know what improvements can be made. So it’s faster. They don’t have to go upstairs and say, ‘Is it OK if I do this?’ Of course they can do it. You should really turn the pyramid upside down and let them provide the value.
“In fact, there is a good book written on the subject called, ‘Employees First, Customers Second,’ and by making employees first they should know what the customer is wanting, too, and what the customer’s vision is, as well. So you have to connect them with the customer.”
If you hire the right people, it makes your job so much easier. Harding points out that his company’s turnover rate for 2010 was 9.1 percent. Statistics show that manufacturing companies average about 16 percent a year.
“There are a million things you can do to make sure a hire is a correct hire,” he says. “Pre-employment testing is one. Multiple interviews. Actually have the employee go through vocational-type tests.
“One time I even drove by an employee’s house, because it was a very important position I was hiring for,” he explains. “I actually could tell by the shape of his house and the garage whether he was an organized person or not.”
Did he get the job? Yes, and he’s now a partner.
How to reach: HardingPoorman Group, (888) 809-7741 or www.hardingpoorman.com
Bring on the feedback
Employee feedback through staff surveys will bring meaningful results in building a great company, says David Harding, president and CEO of HardingPoorman Group.
Each year, the 154-employee graphic arts company conducts a staff survey to evaluate where the company is headed and where it has been.
An outside firm conducts the process and answers are anonymous.
Some of the 35 questions include, “My supervisor is willing to listen to ideas I have about improving my job,” and, “I understand the values of this company and what is important to it.” Respondents agree or disagree on a scale of 1 to 10. Comparisons are made to previous year’s scores to see where improvement is needed.
“We take the average of all 12 questions about the manager and put it on their review,” Harding says. “That way we are telling the managers what’s important.
“The manager can see what his department’s low areas were. Then he can set a plan, or we can set a plan with him, for how he is going to increase those scores this year. You’re benchmarking the company. You can benchmark the manager.
“I’m proud to say that every year our numbers have improved,” Harding says. “I would hope that if you asked our staff if they ‘bought in to’ our culture, they would overwhelmingly say, ‘Yes.’”
How to reach: HardingPoorman Group, (888) 809-7741 or www.hardingpoorman.com
Rose International has come a long way from its early days in 1993 when corporate headquarters were housed in the basement of Himanshu Bhatia and her husband’s home in Chesterfield.
“It was just me and him,” Bhatia says. “Starting yourself, you have to do everything and you have to do all the functions. Cold calling, selling, interviewing, bookkeeping and management — everything is on your own shoulders.”
Flash forward 18 years and Bhatia leads a 5,000-employee business that specializes in consulting and IT professional services with offices across the country and around the world. It’s a completely different world as she now has clients that include AT&T, Chevron, Verizon and the U.S. Army and U.S. Air Force.
But the principles of relentlessly pursuing growth and always providing opportunity to employees have remained the same through it all.
“The main thing is sharing the vision with all your people and then treating customers and employees both in an equally important way,” says Bhatia, the company’s co-founder and CEO. “If you offer the right opportunity, provide Rose to be a ladder for success for all the people coming in, if they see it as a place where they can grow as individuals and improve their careers, whether it’s the financial returns or their own personal satisfaction and growth, I think that’s very important.”
It hasn’t always been easy and Bhatia vividly remembers challenges such as the buildup to Y2K in 1999 and 2000, which turned out to be much ado about nothing. She remembers the bursting of the dot com bubble and the financial meltdown of just a few years back.
The key is sticking to what you believe in and never losing sight of your goals. Here are some of the principles that Bhatia has followed to help Rose International serve as a great opportunity for her employees to grow and prosper.
Deal with it
Do you ever feel stress in trying to lead your business? If you do, perhaps you need to see what Bhatia has to say. Because she doesn’t believe in it. Ever.
“I don’t think there is a reason for stress,” Bhatia says. “It’s just a matter of managing issues on a daily basis and dealing with it. As a leader, it’s a major responsibility on your shoulders to practice the behavior you want others to follow. So you cannot have outbursts like that. It would be totally irresponsible as a leader to do that. If you handle things in a calm manner, you’re encouraging that kind of culture in your company.”
It’s not Bhatia lives in a bubble or wears rose-colored glasses to work each day. She experiences challenges and hurdles at Rose International, just like the leader of any other business does.
Take the regular power outages that crop up at her company’s offices in New Dehli, India.
“The power goes for many hours and people aren’t able to log into the system,” Bhatia says.
Sounds like a big problem, right? Bhatia doesn’t sweat it.
“That’s the cost of doing business in India,” Bhatia says. “We handle issues on a daily basis. We have issues there where market wages are changing on a rapid basis. There are different issues there. Are we able to catch each one of them in an instant? No. We do our best.”
You can drive yourself crazy if you worry about every last thing that is happening in your business. But in the process, you’ll set a bad example for your people and create a sense of panic in your organization.
“If you want to grow your company, you cannot be everywhere all the time,” Bhatia says. “You have to put the right incentives and the right leadership, management and team structure in place. As big as we are now, we have all the processes and functions defined and delegated.”
If you’ve done a good job assigning responsibilities and putting good people in place to handle their job function, you should be able to handle problems that come up relatively smoothly. When you do need to step in, don’t make it bigger than it needs to be. Your goal should be to get to the root of the problem.
“It’s getting all the parties involved and having an open and calm discussion,” Bhatia says. “It’s really getting to the cause of the issue rather than the result.”
Now certainly, the challenge increases when Bhatia has a problem in New Dehli and she’s in St. Louis, literally on the other side of the world. But Bhatia says she takes the same approach to a problem there as she would at the corporate office.
“In today’s day and age with Internet and e-mail, I don’t know if it’s as much of a problem being connected with people in different cities and locations,” Bhatia says. “At a work level, you are always sharing information.”
And it’s that information that can be the key to maintaining connectivity, no matter the physical distance.
“The teams have their own sense of achievement and celebration and all that, but it’s definitely shared,” Bhatia says.
Get good people
You need to know what you’re looking for when you decide to hire new employees. Everybody wants to hire a good person who will blossom into a great contributor and take your company to the next level.
The truth is some of the clues to making a good hire are not that hard to decipher.
“People that have changed jobs many times, I would not pick those,” Bhatia says. “There obviously isn’t that much patience in that individual to try to make it work. That’s one trait. Look at the depth of experience within the company. If they’ve been able to grow into positions of more responsibility and take on additional responsibilities, that’s a very good sign. That’s a good trait to look for.”
These are things that can be easily gleaned from a resume. But that’s obviously only one part of the process. The questions you ask during the interview can also be revealing.
“Where do they see themselves in five years?” Bhatia says. “Then you know what kind of career ambition they have. What kind of growth do they anticipate for themselves? Does that align with what you have to offer?”
This gets into another important and sometimes overlooked aspect of the hiring process. You can’t just dwell on the opportunity you’re looking to slot this person into and how they will fit into your plans and make your company better.
“It has to be a good match for them to be happy here, as well,” Bhatia says. “It’s not just that we’re getting a good person. Will they be happy here? That’s important. If you hire them and they are not happy and you are, they are going to leave.”
The key to solving this potential hiccup is looking beyond the immediate need that you’re hiring for. If you have an immediate need, you want to make that a priority. But you should also begin thinking about where else this person might fit in your company.
“It really creates a lot of opportunity for our own employees because we don’t hire from the outside for senior positions,” Bhatia says. “We grow our people and if we see talent within, we promote from within for senior positions. That’s very exciting for our people.”
That’s where finding a good match becomes important. If you identify someone who is looking for growth opportunities, and you have growth opportunities to provide, chances are it will be a good fit.
“The growth is very exciting for all our employees because we promote from within so everybody is excited equally, whether they are in any of our 18 offices around the world,” Bhatia says. “They are equally excited about growth. Through all the discussions and meetings, it’s contagious. Believe it or not, people do get that energy.”
Don’t stop growing
Do you struggle to maintain energy and excitement in your work force? Maybe it’s because all you talk about is how tough it is out there and offer excuses as to why your business can’t compete in today’s market.
“Just wanting growth and not doing anything about it is not going to bring growth to your company,” Bhatia says. “I see a lot of companies and entrepreneurs that get to a comfort level and they don’t want to grow any further because it’s beyond their comfort zone. They don’t want to take any risks beyond their local market or put in the investment for future growth. Any time you want to grow, you have to invest heavily into it for the growth to come.”
Rose International operates largely on an IT system that was conceived in the company’s earliest days. It has continued to grow and improve over the years and that effort to keep making it better is part of what drives Bhatia and her employees.
“As we’ve grown, we keep developing it,” Bhatia says. “It’s quite a complex system, but it’s absolutely essential to our growth.”
You need to constantly have goals out there for your employees to pursue. It builds loyalty, motivation and excitement to keep them reaching further ahead.
“The personal growth of an individual has to be tied to the company’s success,” Bhatia says. “Once that connection is there, if the company does well, everybody in the company does well at a personal level. Once that is tied and that connection is there, people pay attention because it means their bottom line.”
So as you offer excuses about why your company can’t grow beyond where it’s at now, you deal one more blow to employee drive and enthusiasm. It’s also a message that you’re sending to your customers.
“As far as clients go, it’s very important to give them value and if they are trusting you and giving you the contract, it’s important that you fulfill and perform beyond expectations,” Bhatia says. “They want to see us handle more and more and help them in areas that they envision doing. Since they are familiar with us, they would rather do that next leap with us than with another outside company. It’s just good overall for us and everybody involved.
“Invest your profits back in the company to support growth. Hire the right individuals and research the market you want to grow into.”
Keep an eye on what’s happening in your market and share your findings with your people. Show them that you’re excited about where your business can go and that you’re excited to have your people go along for the ride.
“Keep up with the latest market trends to be able to streamline your own efforts in a way that is most progressive for you and your team,” Bhatia says. “Know the next trend that might be coming into your industry and keep up with it so you’re not caught flat-footed. … If you want to do it, I’m sure companies would find a way to do it.”
How to reach: Rose International, (636) 812-4000 or www.roseint.com
The Bhatia File
Himanshu Bhatia, Co-founder and CEO, Rose International
Born: New Dehli, India.
Education: School of Planning and Architecture, New Dehli, India; Master’s in information systems, University of Missouri-St. Louis.
What was your very first job?
I worked as an architect in New Dehli. I was 22. In India, people don’t do jobs until you’ve graduated. In IT, we’re building software systems, and it has different components that come together including the databases and the programs. In architecture, your building is actually a building, so there are many components that go toward that. You’re working with a development process that is essentially the same.
What is one of your biggest personal goals?
Having Rose be a truly global, large company with tens of thousands of employees.
What were you interested in when you were growing up?
I was interested in business and I was fascinated by the information and technology revolution. This isn’t college I’m talking about, because we had one computer for the whole college. Coming to the U.S. and going into that field was exciting.
Bhatia on growth: There are very small businesses that in their own way are successful at a small size. But in our industry and our space and our markets, where things are changing on a regular basis, it’s very important to be a certain size and to be bigger and be there for the next change and market that might come.
Mike O’Neill does not consider himself to be a micromanager. But when he sees people at Switch: Liberate Your Brand, who are, it doesn’t make him uncomfortable.
“Micromanagers are great if you can line that skill set up with a need that you have in your organization,” says O’Neill, partner and CEO at the 100-employee experiential marketing agency. “In our organization, the people who tend to be more micromanaging among us tend to end up in the execution side of our organization and at the project level, not at the management level. It doesn’t work.”
The lesson here is that you need to give people a chance to succeed and find their sweet spot in your organization. Sometimes the person you have at your disposal just needs to find the right place to apply their talents.
“There are people that are in this organization who are very good, but they are the kinds of people who just seem to be wired where they have to have their hands in everything,” O’Neill says.
“How we’ve handled that is that person manages the project managers because the project manager has to keep track of a tremendous amount of detail and be very organized and really does have to be involved in all aspects of a project. The trick is to line those folks up with a position in the company where that’s a plus and not a negative.”
Get more people involved in personnel decisions such as making hires and awarding promotions to help discover where a person’s talents can best be put to use.
“Anytime we’re hiring someone or considering a significant promotion where we are going to put them in a leadership position, we tend to have them talk to a lot of people,” O’Neill says. “We’re interviewing right now for someone in business development. I’ll guess and say that person has probably met with eight different people from Switch.”
Whether it’s you that is doing the hiring or promoting, or someone else in your company, that second or third opinion can be crucial to putting a person in the right spot.
“I’ve hired people that I was convinced when I hired them, ‘Oh my God, this guy or this girl is just going to be a rock star,’” O’Neill says. “And it turns out they weren’t. And then I’ve settled for people that turned out to be great. You have to recognize it’s sort of a ‘one plus one has to equal three’ situation. The one dynamic that you don’t know is what they are going to be like working here. They worked some place else, they did a great job and they have a great track record. But every organization is just a little bit different.”
If you bring someone in and it’s clear they aren’t working in their present position, and can’t really seem to find another position that fits them, you need to move them right back out.
“You demonstrate to people that you’re serious about it,” O’Neill says.
But before you take that drastic step, make sure you’ve given that person an honest chance to succeed. If your decision is based less on performance and more on a personality conflict between you and the individual, it could lead to problems down the road.
“You have to manage the personal chemistry part of it and the needs of the business and find the balance between the two,” O’Neill says. “If I’m here picking on someone I don’t like and making it personal and never taking them seriously because for some reason, I don’t like them, people are going to look at that and go, ‘Oh, well, that’s our culture here. You’re either in the in crowd or you’re not.’”
How to reach: Switch: Liberate Your Brand, (314) 206-7700 or www.liberateyourbrand.com
Think before you speak
Mike O’Neill likes to tell a story about Winston Churchill and a long speech the famous British politician once delivered.
“His handlers came up to him afterward and said, ‘Boy, that was a really long speech,’” says O’Neill, partner and CEO at Switch: Liberate Your Brand. “And he said, ‘Yeah, I’m sorry I didn’t have enough time to prepare a short one.’ He meant it takes time to really focus things down and make those choices about what’s most important to talk about.”
When you’re looking to get your people engaged in some aspect of your business, you need to think before you speak.
“You have to be selective,” says the leader of the 100-employee experiential marketing agency. “You can’t have 10 priorities. If you have 10 priorities, you have no priorities. We try to really hone stuff down and say, ‘Here’s what we really want you to know and remember.’ We usually do that at the beginning of the year and then we get together at least once a quarter to update people on how the year is going.”
Pick things you want to focus on and then keep people informed about what’s happening in those areas.
“You’ve got to be really explicit about your objectives,” O’Neill says. “It’s getting everybody in the company feeling like they are working for the same company and going in the same direction.”
Dan Smith has learned a lot from his father about how to be a better leader. But it’s not all business when they speak by phone several times a week.
“We’ll talk about everything,” says Smith, new president of Columbus operations for GSW Worldwide. “Fun things, sports things, a little bit of work but a nice balance.”
It’s a similar sense of balance that Smith infuses into the way he communicates as leader of the 350-employee health care advertising agency.
“He used to tell me if you’re spending as much time listening to something as you are communicating it, that’s how you’re going to learn and advance the organization and get a broader set of views,” Smith says.
Here’s how Smith has quickly meshed with employees in his new role.
What is your primary role as company president?
Represent the organization as to what its purposes are and the way it’s supposed to behave. You go to some of the responsibilities that the position holds, at least in our office, it’s to lead and develop an annual business plan and execute that. I do wake up each week, each month, each day thinking about how I’m going to contribute toward and then how our leadership team is going to contribute toward the annual plan we put in place to drive growth, to surprise and delight our existing clients and bring new clients to our organization. It starts to move toward where you’re trying to move toward impacting three or four really critical success factors that you think are really important for your agency to be successful based off the objectives you set for the year. It sounds simple. But the leader has to be one that is indirectly working and guiding the plan that is in place and doing it by example.
How do you put your stamp on the business?
It would be a mistake or almost a bit selfish for me to place a stamp or marker on the business just to change. The change that you put forward has to be purposeful. Not change for change sake, but change to do something that is positive for the organization. You have to look back to where we are. I don’t think GSW needs big changes right now. We had a very successful 2010. We need to grow from that and capitalize on where we are, but we’re coming from a position of strength. My initial view will be to continue to advance what’s already been a high-performing organization. Be consistent with the plan we have in place. My role will be to apply my time and focus the leadership against three or four key things and deliver against those. The change part of it has to come naturally.
How do you stay in touch with your people?
As we intensify around mobile and constant communication, there’s a greater push to be speaking and directing information. We’re not taking as much time as we could to listen and formulate great thoughts and directions. You see all the cars in the parking lot and you realize you have some deeper accountability to helping guide as a team everybody that comes to work every day. It’s important to communicate and explain to the broader employee base leadership changes, new and modified roles and responsibilities, as well as identify the organization’s priorities for the year. How you do that is really dependent on the size of the organization. Remain visible and accessible to the staff. The announcement is one vehicle that should be used. But it shouldn’t stop there. It’s just the beginning.
Size: About 350 employees
About Smith: I’m a Buckeye to the core, huge Ohio State fan. Columbus is home. I’ve raised two boys here, and they love it, and this is just a fantastic place to live. I love its location and what it has to offer. It’s kind of a hidden gem.
How to reach: (614) 848-4848
If you asked your employees, would they be able to tell you your firm’s core objectives?
Do you know?
Simply put, a core objective is a critical force that drives the company. Yet every day businesses operate without a solid sense of their core objectives. Many companies don’t know the role core objectives play or how they form its underlying foundation.
It is a well-known fact that Southwest Airlines considers flight turnaround time to be one of its core objectives. Many Southwest decisions support this turnaround objective, including the hiring of in-house mechanics and cross training of all personnel. The flight and ground crews understand the importance of the objective and work together to ensure turnaround times are met, and because the objectives are measurable, flight-by-flight performance is published for all to see so teams clearly know if they have met their objectives, and they can make adjustments if they have not.
The reality is there are generally four or five objectives that drive each firm. Because every business is different, it’s important to identify which objectives are critical for your business and your customers. The further removed your core objectives are from your customers’, the more opportunity you provide a competitor to step in and close the gap. A good example is when the domestic automotive market let the Japanese step in between it and its customers. While quality was not a core objective in practice of the domestic automakers, it was for customers. So when Japanese automakers took advantage of this disconnect, they turned an entire industry on its head.
Once your firm has identified its four or five key objectives, there are several strategic mapping methods you can use to your match core and customer objectives. My firm uses a COAR map designed by CASE Weatherhead School of Management’s Sayan Chatterjee. It is designed to map the relationship between four areas: customer outcomes, company objectives, activities and resources.
Here’s an example of how this works:
Let’s say your entrepreneurial 10-year-old wants to earn some extra money this summer by operating a lemonade stand. If we asked a 10-year-old (and we did) what his or her core objectives would be, the answer might be: Repeat customers, great lemonade and make a profit.
If we asked the 10-year-old’s customers for their core objectives, they might say: Lemonade that is readily available, great taste and reasonable prices.
In this case, the 10-year-old’s core objectives match the customer’s objectives. With the objectives in hand, effective activities follow easily: recipe, location and cost-effective supplies. Every decision this 10-year-old makes should then align with the established core objectives. If your company’s core objectives are to make a profit and enjoy repeat customer business by selling superior lawn services, the activities and resources that you assign to ensure you have superior lawn services will determine how successful you’ll be in achieving repeat business.
We like the COAR map because it illustrates the interconnections between the customer and the company’s objectives, the core metrics that we should track and the financial allocations for activities and resources that support the objectives. Understanding the connections between customer and corporate objectives, activities and resources is imperative for long-term business success. Once you’ve aligned these connections, you’ll have a good handle on the driving forces at work within your firm.
Victoria Tifft is founder and CEO of Clinical Research Management, a full-service contract research organization that offers early- to late-stage clinical research services to the biotechnology and pharmaceutical industries. She can be reached at email@example.com.
Let’s say you can pitch your business like Moses delivering the Ten Commandments ? your passion and energy will make a believer of just about anybody. Unfortunately, there is only one of you, and there are multitudes of people who need to hear your message.
Yes, technology has changed business communication, but one fact remains as true for you as it was for Moses: nothing beats word of mouth. For that, you need people – advocates ? and you need to arm those advocates with memorable messages about your organization.
Who are your potential advocates? Any person within your company or outside of it who can speak on your behalf ? customers, vendors, clients, employees, salespeople, service reps and so forth. Advocates are invaluable when you’re implementing a particular strategy or promoting a new product or service. But just as important, advocates can build ongoing buzz for your business by passing along positive messages about your company whenever the opportunity arises.
To arm your advocates most effectively, think like a politician. Give your advocates talking points ? succinct, specific messages that support the larger story. You can give different advocates different talking points, but don’t give any one person more than three. The following types of talking points are especially memorable and persuasive.
Statistics, trends, and other numbers
People remember numbers, whether it’s calories or horsepower or hamburgers served. To find the numbers just mine your own data. Has business increased 20 percent each year? Did you receive 15 e-mails from satisfied customers in a single month? Do you have 36 positive ratings on Yelp? Are 80 percent of your clientele return customers? If your business is too new to have impressive numbers of its own, broaden your search to the field. Find statistics that support the cost-effectiveness or other benefits of businesses like yours.
Politicians seek endorsements of influential groups and individuals to add credibility to their campaigns. Third-party validation is just as effective in promoting your business. Within your organization, that might mean a vote of confidence from various departments or from clients; but keep in mind that it must be specific. Telling your employees that you’re getting positive customer feedback is nice, but vague. Instead, give your team leaders specific talking points to pass along, such as, “The president of Able Corp. said this was the fastest turnaround of any company he’s hired. He’s thrilled.” For advocates who will be spreading the word to the outside world, think like a movie marketer and provide “blurbs” from your most impressive clients or from positive coverage in print or on web sites. Comb consumer review sites for memorable quotes that you can turn into talking points. For example, “One customer called us the da Vinci of carpet cleaners.” Obviously, awards you have won are the most succinct and impressive type of third-party validation.
The longer you have been in business, the more talking points you can develop from your track record. Have you been in the same location for 10 years? Have you met every deadline for the past six months? Is yours a family business that goes back two generations? Encourage your best customers and clients to visit sites like Yelp and Angie’s List, where their positive reviews will build an instant track record if your business is new or fortify your track record if you are already established.
It’s worth taking the time to brainstorm talking points about your business in general, particularly important upcoming projects, as well as to list all the people who could be your advocates. Keep in mind that the folks your advocates talk to will also be able to spread the word, meaning they will then become your advocates. That’s why your talking points must be easy to remember. Keep them brief and use a colorful quote or a specific number to make them go a long way.
Chris St. Hilaire is the author (with Lynette Padwa) of 27 Powers of Persuasion: Simple Strategies to Seduce Audiences and Win Allies (Prentice Hall Press). He is an award-winning message strategist who has developed communications programs for some of the nation’s most powerful corporations, legal teams, and politicians. Reach him at firstname.lastname@example.org
Eric Graf, president and CEO of Ritzman Pharmacies Inc., had to make the tough decision to close a store and combine two others because of the economy. However, Graf didn’t turn his back on those employees and found ways to retain them for when good times returned.
Graf, who leads 160 employees at the pharmaceutical company, understands sacrifices have to be made in business. He also knows that when times are tough you have to be strong and resilient.
“Like everyone else, we had to look at our business units and look where there was profitability and where there was not and where we could make better use of that,” Graf says. “Fortunately, we had some positive solutions to those challenges.”
Graf says the process wasn’t easy, but his decisions paid off in the end.
Smart Business spoke to Graf about how to handle the good and the bad in business.
How did you keep morale up as you were eliminating stores?
We were very cognizant of the impact to our employee morale within the company. Fortunately, as we downsized, we also knew that we had this startup, cold-start opportunity in a new location. So we bit the bullet and retained all those associates from the closed business unit from December until April when we opened the new business unit. That was huge in speaking to our people. You try to be upfront. You try to be present and not sitting way in the back so that you’re available and putting your face on things. You have to express things to them one on one rather than through memos. You have to make sure you have a presence with the associates.
What is important to keep in mind during tough times?
You have to stay with your core beliefs, your vision, mission and your core values. You try to live those as best you can. Those values serve you well in positive times when you’re asking for more because you’re short-staffed because growth is coming faster than you can keep up with. But it also serves you well in the negative times when you are making adjustments that can impact you negatively.
How do you keep employees informed about what’s going on within the company?
One of the things we do … is we publish our financial information throughout the organization. Everybody sees our revenue, our cost of goods, all of our top-line issues compared to budget, compared to prior year — they see those on a weekly basis. When it came time to close that store, there was no mystery. Everybody had seen the sales taking a dive and had seen that how could the store become financially viable. When they see that trend compared to other trends or other stores, they realize that something needs to happen there. That openness with financial information is very critical and people knowing and understanding why you’re making the decisions that you’re making is important.
What helped you recover from tough times?
It’s always key, especially as times get tighter and tougher, that you have strong vendor relationships. A vendor relationship is very much a two-way interaction. Whether it’s a good day or a bad day … you need to negotiate smart, not just strong. I recently read a quote from Indira Gandi that said, ‘Old leadership used to be about muscles and new leadership is about people and relationships.’ So while you’re striving to get a good cost and a fair deal, you need to be bringing value to them in terms of what you’re seeing in the marketplace. You need to be giving them feedback to improve themselves.
When you started seeing success again, how did you maintain it?
You have to build on that foundation. You have a heritage of different key strengths and that goes back to your mission, vision and core values. You look at the reasons for success and it comes down to your associates and how you serve your customers and what your priorities are there and how you deploy your assets.
Even though things are a little tougher, you have to look for those people who can get out there and find more opportunity and develop more business for you instead of pulling back on that.
HOW TO REACH: Ritzman Pharmacies Inc., (330) 335-2318 or www.ritzmanrx.com
From Brian L. Davidoff’s perspective, leaders lean toward two extremes — autocratic or democratic. Their organizations, then, are either flat or pyramidal.
He aims for the middle at Rutter Hobbs & Davidoff Inc.
“If it’s too flat, you can’t get decisions made and it takes too long,” says the law firm’s managing director. “If the pyramid is too steep, you aren’t hearing the feedback sufficiently of the other folks. Good managerial decisions are the culmination of input from the balance of the organization.”
The law firm started out purely democratic about 35 years ago. But as it grew and young lawyers brought new perspectives, Davidoff realized not everyone would reach consensus on every issue.
Here’s how he manages his firm by considering every voice.
Spread the responsibility
When we look at younger lawyers or lateral partners to bring in, we look at people who can develop a book of business. We’re really hoping that the person that we bring in, ultimately, will become our longtime partner. One of the key elements of that is either that person has, if they’re more senior, or if they’re a junior lawyer, that we think they have the capability to develop a book of business.
All of our partners generate business. Many law firms … are structured where you have two, three, maybe half a dozen people who are the apex of the pyramid, and all the work flows down through them — that is not our structure. That has given our firm a lot of stability, and that — particularly in these turbulent economic times — has been attractive to other lawyers when they see if just one person left, the firm’s not going to fail.
Manage for the future
Many smaller firms have failed because of a model where you have two or three senior folks who generate the business who have not done a good job of transitioning the operation of the business to a younger generation. A lot of my job is making sure that the younger folks get into managerial roles at the firm so that when my generation’s no longer around, there’s someone else there. What we do is manage for the future.
Part of it is bringing them into various organizational committees in the firm. For example, we have a firm retreat coming up and the default might have been (having) myself organize the whole thing or maybe one of my senior partners. But what we did was we brought in one of our younger partners. He’s not doing it blindly by himself —obviously, I’m actively involved in that — but he is the one who’s responsible for putting it all together with our input, and that’s given him insight into the firm about, ‘Oh, this is there, that’s there, these structures are in place.’
Give newcomers voices
When we bring new people in, I ask them after they’ve been here for three or four months for their best practices: What have they seen in other organizations that we could do better? You really have to be open to hearing the alternatives, not to have a paradigm that, ‘This is the way it was, so this is the way it has to be.’ If you’re open to those possibilities and alternatives, you’re going to have a more successful organization.
It doesn’t mean that you swerve one way or the other. You need to have a stable ship. But you need to chart a course that has the voices of everybody.
You need to have a decision-making process, but you need to hear what’s being said and that, to me, is the key element. Making the decision is actually not that difficult if you’re open to hearing what’s being said.
Having other people know that you have heard what they’ve said [matters]. You aren’t always going to agree with them, but if they’ve had an opportunity to state their piece, that goes a long way to building consensus even if you don’t agree with them because the next time you’ve got to reach an issue, the fact that they’ve been heard is key. The ultimate decision of management is really a conglomeration of what everyone’s voices are. You’re going to have a whole lot different input and ultimately management needs to chart a course, but it shouldn’t be a course that they’ve independently set.
How to reach: Rutter Hobbs & Davidoff Inc., (310) 286-1700 or www.rutterhobbs.com
Thomas J. Neri was facing two problems when he took over as president and CEO at Lawson Products Inc. First, he had a work force that had lost its desire to be innovative and wasn’t feeling any pressure to rediscover its passion. But that paled in comparison to the second problem, which was the fact that his company was being targeted by the federal government for improper selling practices.
It was under those inauspicious circumstances that Neri began his tenure at the top of Lawson, an industrial distributor of maintenance and repair supplies. The tricky part for Neri was that despite a seemingly obvious major problem, he still had to convince some people in the organization that changes were needed.
“The biggest challenge was building that burning bridge for the organization to say, ‘Look, we’re not as good as we thought we were and we have to change,’” Neri says.
“How do we get back to being what we need to be? How do we convince our customers that we are going to be a valuable and reliable partner? So you had the culture change. You have working through this legal issue. The other side is looking at what sort of people we were going to need to run this organization going forward.”
It wasn’t going to be an easy fix at the company, which now has 1,010 employees and 1,200 independent field sales agents. Neri needed to clean house on the senior management team and find people who could be more aggressive about growth, but do it in a way that would avoid any future entanglements with the federal government.
“We had to be very honest with ourselves and with our employees and our agents and, to some degree, our customers and our vendors that we weren’t as good as we thought we were and we were going to be much better,” Neri says.
You might be surprised to learn that as he began his effort to lead Lawson Products through this storm, Neri says he didn’t really feel fear.
“At the end of the day, you just have to say, ‘I’m open to changes,’” Neri says. “‘I’m open to opinions. I’m open to being entirely wrong.’ But what you hope to find is a compass heading that is the right way. It’s not going to be the exact map because it never is. Once you’re comfortable with the compass heading, you just have to charge ahead with it. The worst that happens is you get fired.”
Build your case
Neri did have to make wholesale changes on the senior management team, but the firings were not the first thing he did upon taking the helm at Lawson.
“There were a number of people that I was not sure if they would make it or not or would buy in to the vision,” Neri says. “So we didn’t make a lot of initial changes in the first six months in personnel. But once we got the story out as to what the burning platform was and where we had to go with it, it became fairly clear that we had to change people out if we were going to get there.”
When you’re dealing with a crisis, you need to approach it with patience and honesty.
“As we began to make some of these changes, we simply told the organization, ‘Not everyone is going to have a job when we’re done with this. We don’t know who will and who won’t,’” Neri says. “But what we did say is we’re going to provide training for everybody for some of these new positions and we’re going to pick the best that we can.”
As Neri began to talk about the areas in which the company had lost its way over the years, he bolstered his words with financial data.
“You use some very basic financial measures and performance measures as it relates to customer service,” Neri says. “Most of those are fairly easy to get. So the story came out pretty clear that at least in comparison to our competitors, we weren’t performing very well.”
He also reached out to customers and got some feedback from them about their perceptions of Lawson Products.
“The results came back and were pretty stunning for all of us in the organization, even those of us who were only here a short while,” Neri says. “A lot of our in-house perceptions were certainly not what the customer thought of us. When we thought we gave great customer service, it came back, ‘Well, it was OK,’ but it certainly was no better than other people. So as you start feeding them real data and real information, then you start applying day-to-day world things that they do, they start to see that we don’t measure up and some of the things that we do inside don’t seem to make a lot of sense.”
The lesson here is that when you’re trying to make an argument, you need to build a case and gather information and data that supports your cause. Then ask the people you’re presenting to, if they have concerns, to make their case as to why they think you’re wrong.
“We held a lot of employee and department meetings or a lot of different meetings with larger groups and small groups and began to lay the case out for them in relatively straight-forward terms,” Neri says. “We were pretty open in listening to what they had to say. We would lay out a problem or an issue and say, ‘OK, we believe this is right solution. You tell us why it isn’t the right solution and if it isn’t, tell us how you’re going to correct it.’ That first step is convincing them there is a problem, but the second step was going to them and having them help us tailor-make some of those solutions.”
Find people in the company who can help you make the case for those solutions that you support.
“I tried to find people who had been with the company for quite some time and were influencers throughout the company,” Neri says. “Even though they may not necessarily have agreed with all the changes, what I did was spend quite a bit of time with them convincing them that they can be a big part of it.”
It’s OK to seek out help if that help can make it easier for you to get things done.
“I tried to find four or five of those influencers who can make the case for me and had a lot more validity with the older organization because they knew them better,” Neri says. “When you talk about honesty, it takes quite a long time to get people to trust you. Until you get that trust built up, you need some other people in the organization to do that for you.”
When you’ve made that effort, look at where things stand and then plot your next step.
“There was a large cadre that said, ‘We don’t believe we’re as bad as we are,’” Neri says. “We don’t see the need for change and we don’t like the change you’re talking about.’ The old analogy is, ‘The train is leaving the station. Either get on or step off.’”
Manage the message
As you begin to roll out the next step, your plan for recovering from a crisis, you need to put a great deal of thought into how it will be presented and how it will be received by your employees.
“It really starts with our director of communications,” Neri says. “Part of this is making sure your messages are the same messages and you’re not contradicting each other. Part of it was putting a calendar together and saying, ‘OK, here are the messages we need to get out and here is the information or feedback we want to get back from them.’ So a calendar was laid out, and I would spend a great deal of time on the content, especially on the town halls. I would spend a lot of time going over the communication and what the presentations were and who is giving the presentations.”
You need to talk about the actual rolling out of information and the logistics involved in doing so, in addition to the meat of your plan.
“What’s the rollout look like for the next six months?” Neri says. “What are you going to be saying to the organization? How does that tie into the corporate initiatives? Then as we get closer, what are we going to roll out next month?”
You need someone in place who can help you manage your message. It’s critical that this is someone who you’re willing to listen to and abide by, even if you don’t always agree with them.
“You’ve got to really organize how messages get out and how you get feedback,” Neri says. “You do want someone who is adept at being able to work with you for about a month or two and can begin to understand your style. Someone who can understand that how I give a speech is different than how someone else gives a speech and that my writing style looks like this.
“They have to feel that same freedom to be able to say, ‘Yeah, I know you like to say it that way. But it really comes across badly. I really would like you to try it this way.’ It really becomes a symbiotic relationship. You’ve got to have confidence in each other and trust each other’s opinions.”
What you’re trying to do is create a picture of what it’s all going to look like when you’re finished with your plan.
“It doesn’t have to be that solid of a picture, but it has to give people an idea of where this is heading to,” Neri says. “My style is to say, ‘Here are the guts of what it is. Now I need your help in reshaping that and changing the face of it a little bit.’ You do have to give them some sense of what it’s going to be like out there.
“Just as importantly, what is going to be my role in this? Why is it going to be a benefit to me if you make these changes? What do I get out of this from a working perspective or a career environment perspective? You have to do both of those in tandem. People aren’t really sold until they understand how it impacts them.”
To help in this process, Neri transitioned his human resources department into an employee advocacy department.
“That position had a dual reporting relationship to myself and the chief operating officer,” Neri says. “I made it clear one of the responsibilities of HR is to be an employee advocate and to do outreach programs to make sure that people are being talked to.”
As you move into the execution stage of your plan, make sure your employees have a major goal that helps tie all their efforts together. At Lawson, this goal was helping the customer.
“We went into a lot of explanation as to what that really meant at every level,” Neri says. “If you worked in the warehouse and you were lifting boxes or sorting things, we made it very clear to you how important that job was and how it translates into customer service.”
Keep in touch with your direct reports and encourage them to do the same on down the line as to the progress your people are making in their jobs.
“I will sit with the managers every once in a while and say, ‘How do you think Scott is doing?’” Neri says. “Is he meeting all the goals that we have? Are we pushing him along strong enough? Are we giving him the training?’ Based upon the conversation with those individuals, I’ll know whether they are having those conversations with those people.”
As Lawson entered 2011, Neri’s efforts were showing results. Net sales increased from $301.8 million in 2009 to $316.8 million in 2010. The federal investigation resulted in a $30 million penalty in 2008 that was paid over three years.
Neri is confident better days are ahead and are the result of a changed corporate mindset.
“Your jobs are very important, but what’s more important is who you are and how you go about that job and your attitude that you carry with it,” Neri says. “I’m a big believer that attitude is far more important than the technical skills.”
How to reach: Lawson Products Inc., (847) 827-9666 or www.lawsonproducts.com
The Neri File
Thomas J. Neri, President and CEO, Lawson Products Inc.
Education: Bachelor of science degree in accounting, University of Illinois at Urbana-Champaign
What was your very first job?
I was a paperboy for either the Daily News or the [Chicago] Tribune. What I learned was I really didn’t want to do that because my dad was not going to get up at 3 in the morning to help me wrap papers.
Who has had the biggest influence on you as a leader?
Sam McKeel. Sam had been publisher at the Philadelphia Inquirer for a long, long time. He retired and he came to the Sun-Times in 1989 or 1990. He taught me that the most important thing about leadership is who you are — not skill set, not who you know, not the technique. Being a leader is really about being a people person and understanding how you can achieve things through other people. You’re very limited in what you can achieve yourself. He just taught me a lot of good lessons.
What one person would you like to meet from all of history and why?
Winston Churchill. The thing that fascinates me is that he had such a checkered career. He was someone born with a silver spoon. He failed miserably during World War I. He failed in a number of different areas. He was out of favor politically for 30 years.
When World War II started, they brought him back in, and he was probably the strongest voice of freedom in resisting the Nazi party. After the war, he was shuffled off again. It would be fascinating to talk to someone who had seen the bottom and seen the top several times and always managed to move forward in his life.